Contract Law and Minors

Contract Law and Minors

Many businesses and individuals will agree contracts with minors whether it’s for education, training, employment or something else. Before we explore the different elements of contract law that relate to minors, it is first important to understand what we mean by the term ‘minor’ in English law. 

contract law and minors

The Births and Deaths Registration Amendment Act (No1) 2002 states that a minor is anyone who is under the age of 18 years. There is also another term that you should be familiar with and this is the age of majority. This refers to anyone over 18 years of age. Before 2002 the age of majority was 21.

There are many situations where you may need to enter a contract with a minor such as when they buy certain products and they need to agree to the terms and conditions of the sale. Or, they may be asked to enter into some form of agreement for a warranty on an item they have bought.

Sport is another example where a minor may need to enter a contract, perhaps as a sponsor to a football club, employment or scholarship.
You can enter into a contract with a minor or someone under the age of majority but there are particular rules that you have to abide by.

Rules for Contracts with a Minor

The formation of contracts for minors will follow roughly the same rules as it does for anyone over the age of 18. The basic principles must be in place for a contract to be valid. At the very least there should be an offer, acceptance and an intention to enter into a legal contract. All three of these must be present in order for the contract to be valid.

Even if these three elements are present, the law will assume that certain groups of people do not have the capacity to enter into a legally binding contract. If you have a contract and all of the three elements are present, it may still not be watertight if the contract is with a child under the age of 7 years, the contract is with an individual who has been diagnosed as mentally insane or individuals who do not have good enough judgment because their thinking is impaired through drugs or alcohol.

In a legal sense, it is often assumed that a minor does not fully understand the implications of a contract.

Contract Implications

Irrespective of any clauses which have been incorporated into the contract to act as a safeguard for the person issuing the contract, if a minor does not understand the implications of entering into the contract, they will be fully protected by the law.

Furthermore, a contract with a minor can be deemed void if the minor wishes to do so and they can at any time before they reach the age of majority and for a reasonable time after the date, they turn 18. Minors don’t need any justifiable reason to void a contract, they can do so for whatever reason, if they believe that the contract no longer serves them or proves to be advantageous.

Exceptions for Contract Law Minors

While there are various safeguards in place to protect minors, there are exceptions to these rules. This can be a grey area but there is one particular exception that is applicable in contracts with minors.

These rules cannot be applied in a contract that relates to service, apprenticeships or education. The reason for this is simple. These types of programmes or initiatives are in place to benefit minors in some way, allowing them to acquire skills, earn a living or obtain a qualification. These types of contracts are all beneficial to the minor so it would be unfair and untenable to justify a minor being able to freely void this type of contract.

However, the minor must be old enough to understand the implications of entering into the contract, even if it’s one that will be of benefit to them. If the child is not old enough to understand then this exception will not apply, and the contract can be void by the minor in the usual way.

Court Enforcement

Even if a child is old enough to understand the contract they are entering into and it is something that would benefit the child in some way such as education, training or employment, the courts can still enforce the contract if needed. However, the courts would never force someone to carry out a contract against their will. The court would not order that the contract be performed, but they would instruct that damages are payable.

A good safeguard for all parties when entering into contracts with minors is to incorporate a guarantor provision. A guarantor is a responsible person, over the age of majority and typically a parent or guardian. This doesn’t detract from the fact that the primary person in the contract is the minor, it will just mean that provisions are in place if, for example the minor defaults on a payment then the guarantor will become liable.

Parents, Guardians and Contracts

One of the safest ways to enter into a contract with a minor is to arrange for the parent or guardian to act on behalf of the minor. However, sometimes issues can arise with this because the parent is not liable in the contract unless they act as the child’s agent. Furthermore, the contract cannot be validated by authorization or consent from the parent or guardian.

To avoid problems associated with this, good practice would suggest that you incorporated a clause into the contract that states the parent would remain liable if any breach of contract is caused by the minor.

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