Adult Content: Contracting Capacity of Minors

Lucy Meredith Lucy Meredith 14th November 2022

When the clock strikes midnight on someone’s 18th birthday, that person reaches majority. Since the passing of s.1 of the Family Law Reform Act 1969 the age of capacity has been 18, with anyone under that age being described as a “minor”. Whilst those who have reached majority can normally enter into any contract they choose (however ill advised), the position is more complex for those aged under 18.

 

I recently dealt with issues of capacity in a claim for hire charges following an accident. The claimant was 17 at the time and his solicitors tried to get around the problem of his age by having his mother sign the hire documents as his “litigation friend.” On behalf of the defendant, I succeeded in having the hire agreement deemed unenforceable. But what should the minor claimant and his representatives have done?

 

Statute is limited in this area - beyond the 1969 Act and some analogous guidance in the Mental Capacity Act 2005, we fall back on the common law. The general rule is that contracts made with a minor are voidable at the minor’s option: they don’t bind the minor but do bind the other contracting party. For some (normally for permanent interests – property, shares, marriage settlements etc.), voidable means binding unless repudiated as a minor or within a reasonable time of turning 18. For most types of contract, however, voidable means not binding unless specifically ratified after turning 18.

 

That general rule can be impractical so there are two exceptions where a contract will bind a minor: (1) contracts for necessaries and (2) beneficial contracts.

 

The first class, contracts for necessaries, covers the bare essentials of life: accommodation, food, clothing, medical and legal services, and not much else. The contract must not contain harsh and oppressive terms such that it is not, overall, a benefit to the minor. There are some very amusing historical cases about fancy waistcoats, flying lessons and a sports car but for my purposes, Fawcett v. Smethurst [1914] 84 LJKB 473 established that credit agreements do not count as contracts for necessaries.

 

The second class, beneficial contracts, generally covers education, apprenticeship and employment. The contract itself must be beneficial to the minor. 15-year-old Wayne Rooney was not bound by a contract with his agent because the agent did not provide any training (although he was bound by the contract with his club, which did). On the other side of the fence, The Kinks were bound by their contract with a company as manager because that was analogous to a contract of employment.

 

A parent cannot simply enter a contract on their child’s behalf. An adult can act as agent for a minor but that must be proper legal agency or a power of attorney and does not avoid issues with capacity and enforceability: it binds the adult only insofar as it would have bound the minor.

 

The legal position is a tricky one and specific advice should be sought. In general terms, I would recommend setting up a formal agency relationship, having a parent or guardian sign any documents as agent, and ensuring that witness statements are prepared by both minor and agent. If, as happened in my case, the minor turns 18 before the proceedings are heard, they can ratify the contract upon reaching majority which will render it enforceable. They should be offered specific and careful advice, however, because that will involve acceptance of the liability. Those seeking to make a contract with a minor should consider their options carefully because often the result will be a lopsided contract which binds only the adult.