Capacity

capacity of an indiv. (has legal capacity)

-*Not a minor, sane, sober (has a clear mind and fully understand the legal implications of his decisions at the time of entering the contract

Minors (havent reach the age of majority)

< 21 yrs old (1993 case of Rai Bahadur Singh v Bank of India

Under Section 35 Civil Law Act (contract with a minor who has attained the age of 18 shall generally hv the effect as if the minor is of full age EXCEPT

-contracts for the sale and purchase of land

-contracts for the leasing of land for more than 3 yrs

-any contract whereby the minor’s beneficial interest under a trust is sold or transferred or pledge as a collateral

-contracts to alter the terms of a trust or made the trustee deliver the money or property to the minor

Under section 36 of the Civil Law Act

allows a minor who has attained the age of 18 to bring legal action as if he/her were the full age

minor entering contract with adult (under pressure)

1.valid and binding on the minor

2.not binding unless ratified by minor

3.binding on minor unless repudiated

Valid contracts with minors (legally binding on minor)

1.contracts for necessaries

2.beneficial contracts of service

Contract for necessaries

-minors purchase goods/services which are necessary to maintain a particular life-style

-contract will be binding on minor

-minor pay at a reasonable price, not contract price

An adult enforce a contract for necessaries binding on a minor (Sales of Goods Act 1979)

case: Nash v Inman [1908] -must fufill all 3 points

-goods sold are necessaries

-minor has not alr been adequately supplied with such items at the time of their delivery

-goods hv been sold & delivered (contract must be executed and not executory which means the future)

beneficial contracts of service (legally binding on minor)

1. contract of apprenticeship (an agreement to provide training for a trade/profession to minor)

2. contract of education (agreement to teach a minor)

3. contract of employment (agreement to provide a minor with experience in a trade or profession in return for a wage)

-conditions of a contract between an adult and a minor favor the minor

Doyle v White City Stadium [1935] -pg 55

-contract between a minor and a professional boxer and the British Boxing Board of Control

-contract stated boxer will not be paid if he was disqualified during the fight

-encouraged clean fighting and taught the minor to be proficient in the art of boxing

-binding on minor

Chaplin v Leslie Frewin (publishers) Ltd [1966] -pg 55

-tell his life story in return for payments on book sales

-experience gained frm the contract could hv helped the minor to launch his own career as an author

-binding on minor

contracts that are not binding on minor ratified

-minor needs to cfm original promise he made under the contract after he becomes an adult (either verbal or implied by action or signing)-means giving consent

ratification

continue to pay instalments for car upon turning 18 yrs old

-confirmed his original contractual promise made when he was a minor

contracts are binding on minor unless repudiated (refuse to carry out). Also known as voidable contracts

Davis v Beynon- Harris [1931]

Precautions adult shld take when contracting with a minor

-check age of the party

-request a person at full capacity (minor’s parent to contract on behalf of the minor)

-obtain a warranty frm a person at full capacity (minor’s parent) for all the moneys owiing by the minor bunder the contract

mental disorder/ drunk (party has no legal capacity, the law will protect the incapacitated person)- contract can be voidable

-the drunk party did not understand the nature of the contract made

-other party to the contract was aware of the person’s incapacity

exception of non-necessaries made by a mentally ill or drunk person

-binding on him/her party if he ratifies the contract at any time afterwards when his state of mind has become clear again. The contract is deemed as valid, and the incapacitated person is bound to pay a reasonable price for the goods or services provided

The capacity of corporations

-company has a legal identity, which is separated from the individual ppl who formed it

-hv legal capacity to enter the contract and to own property under its own name

The capacity of corporations

-has the power to sue/sued

-will not affect personal assets of the indiv inthe company

ultra vires (the capacity of corporations)

company has acted beyond the scope of its powers

purpose of ultra vires rule

limit the company capacity

formation of companies and the ultra vires rule

-by statute (Public Utilities Board which was set up by enactment of the public utilities Act)

-powers of a statutory corporation stated in the contract

-apply ultra vires

-contract voided

formation of companies and the ultra vires rule

-under the authority of statue

-private company (2 or more ppl get tgt to form an incorporated company by putting their name on MOA and register the company under Registry of companies and businesses

sales of goods act

define neccessaries as goods suitable to the condition in life of the minor and to his actual requirements at the time of the sale and delivery

contracts between minors and adults for non-necessaries are usually not binding on minor unless ratified