MINORS: LACK OF CAPACITY

Minors are persons below the age of 18. The law limits their contractual capacity so as to protect them against bargains which are unfair or improvident; at the same time, it seeks to avoid unnecessary injustice to adults who deal fairly with minors. The practical importance of the subject has been reduced by the lowering of the age of majority (Family Reform Act 1969, ss 1, 9) (formerly 21) and by changing social conditions (see Allen v Bloomsbury Health Authority [1993] 1 All ER 651, 661); but it is far from negligible in relation to (e.g.) employment contracts and the activities of under-age entertainers or athletes.

A minor is bound by contracts for necessaries; his liability was said to arise for his own good (Ryder v Wombwell (1868) LR 4 Ex 32, 38), on the theory that the supplier would not give credit unless he could enforce liability. Necessaries include goods (Sale of Goods Act 1979, s 3(2)) and services (such as education and medical or legal services) (Helps v Clayton (1864) 17 CBNS 553; Roberts v Gray [1913] 1 KB 250; Sherdley v Sherdley [1988] AC 213, 225) supplied to the minor. They are not confined to necessities but extend to goods or services suitable to maintain the minor in ‘the state, station and degree … in which he is’ (Peters v Fleming (1840) 6 M & W 42, 46); but ‘mere luxuries’ (Chapple v Cooper (1844) 13 M & W 252, 258) cannot be necessaries. The supplier must show that the goods or services are not only capable of being, but that they actually are, necessaries at the rime at which they are, or are to be (see Roberts v Gray, n 1051; Nash v Inman [1908] 2 KB 1, 12), supplied (Nash v Inman, n 1054). The minor is liable for no more than a reasonable price (Sale of Goods Act 1979, s 3(2)) where this is less than the contract price. If an adult pays the supplier, the minor must reimburse the payor (Earle v Peale (1712) 10 MoD 67) (to the extent that the charge was reasonable); and if an adult lends money to the minor to enable him to pay for necessaries the lender can sue on the loan to the extent that it is so used.

A minor is bound by a contract of employment if it is on the whole for his benefit (Clements v London & North Western Rly [1894] 2 QB 482; Mills v IRC [1975] AC 38, 53; for statutory regulation, see, e.g. Employment of Children Act 1973). So long as this requirement is satisfied, he is bound even though some terms of the contract are disadvantageous to him (as in the Clements case above) so long as they are nor harsh and oppressive (De Francesco v Barnum (1889) 43 Ch D 165; cf Goodwin v Uzoigwee [1993] Fam Law 65). These principles apply also where the minor is not strictly an employee but enters into a contract by which he makes a living as (e.g.) an athlete, author or entertainer (Doyle v White City Stadium Ltd [1935] KB 10; Chaplin v Leslie Frewin (Publishers) Ltd [1966] Ch 71). But he is not liable under ‘trading contracts’: e.g. where goods are sold by (Cowern v Nield [1912] 2 KB 491), or supplied to (Mercantile Union Guarantee Corp Ltd v Bell [1937] 2 KB 498), him in the course of his business.

Other contracts

A contract outside the above categories does not bind the minor unless he ratifies it after reaching full age (see Williams v Moor 91843) 11 M & W 256); but it does bind the other party (Bruce v Warwick (1815) 6 Taunt 118; but specific performance is not available to the minor: Flight v Bolland (1828) 4 Russ 298). Money paid or property transferred by the minor under such a contract cannot be recovered back by him merely on the ground that the contract did not bind him (Wilson v Kearse (1800) Peake Add Case 196; Corpe v Overton (1833) 10 Bing 252, 259); whilst conversely property in goods which are its subject matter can pass to the minor by delivery in pursuance of the contract (Stocks v Wilson [1913] 2 KB 235, 246). Property can similarly pass from him under such a contract (Chaplin v. Leslie Frewin (Publishers) Ltd [1966] Ch 71).

Liability in tort

A minor’s contractual incapacity cannot be circumvented by suing him in tort merely because the act constituting a breach of an invalid contract amounts also to a tort (Fawcett v Sinehurst (1914) 14 CBNS 45; Ballet v Mingay [1943] KB 281). He is liable in tort only for doing something wholly outside the scope of the acts envisaged by the parties when they made the contract (Burnard v Haggis (1863) 14 CBNS 45; Ballet v Mingay [1943] KB 281).

Liability in unjust enrichment

A minor can sometimes be ordered to make restitution in respect of benefits obtained by him under a contract which cannot be enforced against him because of his minority.

Minors’ Contracts Act 1987, section 3(1)

In the situation just described, this subsection gives the court a discretion ‘if it is just and equitable to do so’ to ‘require [the minor] to transfer to the [other party] any property (‘Property’ here includes money: see Law of Contract, Minors’ Contracts (Law Com No. 134, 1984) para 4.21. 1081) acquired by the [minor] under the contract, or any property representing it’. Thus if non-necessary goods have been delivered to the minor and not paid for, he can be ordered to restore them; if he has resold them, he can be ordered to restore the money or an object bought with it. But no such order can be made once he has dissipated the thing obtained or its proceeds since in that case there is no longer any ‘property obtained’ or ‘property representing it’ on which the order can operate. The order must be one to restore property, not to pay for it out of the minor’s other assets. Where proceeds have been paid into the minor’s bank account, the distinction between these two concepts may be hard to draw; and the court will in such cases make the order only if to do so will not amount to indirect enforcement of the invalid contract.

Effects of minor’s fraud

A minor is not liable on a contract merely because he had procured it by a fraudulent misrepresentation (typically as to his age) (Bartlett v Wells (1862) 1 B & S 836); nor does the misrepresentation make him liable in tort for the value of what he had obtained (R Leslie Ltd v Sheill [1914] 3 KB 607). In equity, such fraud gives rise to liability to restore what has been obtained (Clarke v Cobley (1789) 2 Cox 173); but there is no need to resort to this jurisdiction now that such restitution is available, without proof of fraud, under the Minors’ Contracts Act l987. The interest of the equity cases lies in their insistence on the nature of the liability as being (like that under the Act) one to restore (not to pay for) benefits obtained. Hence to the extent that those benefits have been dissipated there is no liability to restore in equity (R Leslie Ltd v Sheill [1914] 3 KB 619, doubting this aspect of Stocks v Wilson [1913] 2 KB 235, 247).

Restitution at common law

A minor may be liable to make restitution in respect of a benefit obtained by him under an invalid contract: e.g. where he has been paid for goods sold by him under a trading contract but not delivered. According to one case (Cowern v Nield [1912] 2 KB 419), he is so liable only where he is guilty of fraud; but it would be more appropriate to restrict the remedy to cases where the benefit so obtained its proceeds, remained in his hands so that, where the benefit had been dissipated, the liability could not be enforced against his other assets. In the absence of fraud, the adult could seek restitution under the 1987 Act 1090; but that remedy is discretionary while the common law remedy, which is preserved by s 3(2) of the Act, lies (where available) as of right.