CapacityThe fifth element to a contract is capacity. For a contract to be legally binding both parties must have the capacity to understand the contract and must be of legal age, in most cases 18. But if the contract is of a necessity to the minor it can become binding or it is ratified by him/her when he/she turns 18. Although there are four exemptions to these rules: (Green, 2013)
1. An infant who contracts for ‘necessaries” is bound by that contract. ‘Necessaries’ are not confined to things which are needed to maintain life, but include things that are used to maintain the infant in question at the standard of living which he/she enjoys. 2. Where the minor enters a contract for an apprenticeship or some other agreement is his/her future benefit. 3. A third exception is those contracts which involve a continuing obligation and contracts where a minor acquires property of a permanent nature. A minor can buy shares in a company or join a partnership. 4. On reaching 18, a minor may elect to confirm an agreement made previously, so that he/she becomes legally bound by the terms of the contact. This is known as RATIFICATION. |
Cases |