LAWS 203 - Incapacity

Front

What does s 85 of the 2017 Act state?

Back

That an individual is still considered a minor, until they reach 18 years of age.

Front

How did the case of Morrow build upon this point?

Back

In the case of Morrow, the court held that even if a minor is indebted to a company, if the company neglected to check whether the other party had the mental capacity to contract, and ended up contracting with a minor, then that contract may be unenforceable.

Front

What does ss 86 - 91 of the CCLA state?

Back

That there is a presumption that if a contracting party is of minor age, then that contract is legally unenforceable.

Front

What is the first exception to ss 86 - 91?

Back

Under s98, if the caregiver of a minor submits an application to the district court, to validate the contract that the minor has entered into, prior to offer and acceptance, then a successful application will result in a legally binding contract.

Front

What is the second exception to ss 86 - 91?

Back

Under ss 92, there are two types of contracts that have a presumption of being enforceable in opposition to the minors best interests. These include: Employment Agreements and life assurance agreements.

Front

What is the exception to this exception?

Back

A court can order the cancellation of a s92 contract, declare it as being unenforceable, and provide compensation to the minor, if it finds (under s93) that the terms of the contract were cruel and tyrannical, or that the minor's consideration for the contract was excessively disproportionate.

Front

How can this ss 86 - 91 of the CCLA lead to unjust outcomes for the parties involved?

Back

This presumption assumes that the contract is unenforceable if it conflicts with the minor's best interests, but is enforceable even if it conflicts with the other party's best interests.

Front

What are some of the ways that the court can enforce such contracts with minors in order to mitigate this risk?

Back

Under s 87 a court of law is permitted to determine whether the contract with the minor was honest, honourable, and rational, in accordance with s 90.

Front

What if the contract is fairly reasonable?

Back

If it is, then under s88 the court can order that the contract be enforced as a whole or only partially, even if it contradicts the minor's best interests.

Front

What if the contract isn't fairly reasonable?

Back

If not then terminating the contract is something that the court can order under s89.