Many a time, when people (including lawyers) talk about the best interests of a child, they mainly focus on family or criminal matters. However, very little attention is given to issues regarding commercial transactions that minors engage in. In fact, it is said that “the law of ‘minors’, or ‘infants’ contracts is very complicated.” [1] The root of this complication is the fact that the law desires to protect minors on one hand whileas it still wishes to safeguard the interests of traders on the other.[2] This begs the question, where does the balance lie? More complications can be speculated due to the great technological advancements in the trading sector whereby almost anyone can purchase anything online with great ease.[3] Therefore, this imperatively demands scrutiny be done on the laws relating to the formation of contracts with minors.
At common law,
a minor or infant can simply be defined as a person who has not reached the age
of majority, i.e., one who is not an adult.[1]
Such a person is below the age of legal competence.[2]
Under the Kenyan Constitution, the term adult means ‘an individual who has attained
the age of eighteen years’.[3]
The Constitution goes ahead to define a child as an individual who has not attained
the age of eighteen years[4]
and therefore it is safe to say that the terms minor, infant and child denote
the same thing under the Kenyan Law.
In general,
capacity is an essential element of a contract. It is a requirement that for
one to enter into a legally binding contract, that person must be legally
competent.[5] For this reason, age becomes a very key factor when one seeks to examine the capacity of
a party entering into a contract. What then happens when a minor enters into a
contract?
Depending on the
various classes of contracts, minors’ contracts are regarded as either binding
or voidable at the option of the minor[6] but binding upon the other party.[7]
The only binding contract for a minor is one for necessaries.[8]
This type of contract cannot be voidable at the option of a minor hence,
once entered into, it is enforceable with age being immaterial. Thus, this paper
examines the different kinds of contracts for necessaries as well as the
remedies available in case a minor breaches such contracts.
CONTRACTS FOR NECESSARIES
As observed, at common law,
contracts for the supply of necessaries to minors are binding. This is to mean
that they impose legal obligations upon the minor which must be fulfilled.
Moreover, the common law position has been echoed under Section 4 of the Sale
of Goods Act which stipulates that:
(1)
Capacity to buy and sell is regulated by the
general law concerning capacity to contract, and to transfer and acquire
property: Provided that, where necessaries are sold and delivered to an infant
or minor, or to a person who by reason of mental incapacity or drunkenness is
incompetent to contract, he must pay a
reasonable price therefor.
(2)
Necessaries in this section mean goods suitable to the condition in life
of the infant or minor or other person, and to his actual requirements at the time of the sale and delivery.[9]
Particular emphasis must be given to Sub-Section (1) as it provides that in case a minor enters into a contract
for necessaries, that contract is binding and he must pay a reasonable price
for the commodity or service. What then is a reasonable price? The Act answers
this by stating that such is a question of facts and it depends on the
circumstances of the case.[10] This may be determined as per the terms of
the contract, valuation or by observing the prevailing market price.[11]
In the second part of the Section,
the Act defines what necessaries are. In essence, they include goods suitable
to the condition of life for the minor and those that are his actual
requirements at the time of sale and delivery. This provision imposes a burden
upon a plaintiff suing a minor and alleging that the contract was for
necessaries to prove that it was so at the time of sale and also at the time of
delivery.[12] To
summarize, the legal meaning of this word is founded on the common
understanding of the term.
Therefore, necessaries consist of
food, drink, clothing, medical attention, and a suitable place of residence
even though liability for necessaries is not limited to articles required to
sustain life.[13]
Actually, in some cases, this term is not limited to the ordinary things that
sustain life but also depends on the ‘rank, position, fortune, earning capacity,
and mode of living’ of the parents as it was held in an American court.[14]
One peculiar issue that must be
elucidated is the distinction between the term ‘necessaries’ and ‘necessities’.
Minors can only be held liable for contracts for necessaries and not
necessities.[15]
The word necessaries as a legal term of art encompass different things
depending on the minor’s station in life or the peculiar circumstances at the
time of the contract.[16] On the other hand, necessities are goods or
services that must be provided to safeguard basic needs and sustain life.[17]
Two classical cases are important to demonstrate this distinction.
In the case of Ryder v Wombwell[18]
where a minor had a total annual income of £500 and who had purchased fine
jewellery from the plaintiff, the court held that such, although they may not be
viewed as necessities, they were necessaries since the defendant was a son of a
deceased baronet and had moved into the ‘highest society’.[19]
The second case is that of Nash v Inman[20]
where a minor, who, as an undergraduate student had gone into a tailor shop
to purchase clothes on credit which he failed to pay. The father
of the minor was called to the court as a witness and demonstrated that the
minor had enough clothes according to his position in life. The court held that the
contract was not for necessities hence it was voidable at the option of the
minor. The clothing was of ‘an extravagant and ridiculous style having regards
to the position of the boy’.[21]
Having tried to define necessaries,
another critical question emerges: What happens if a minor borrows money for
payment of necessaries? The rule that answers is found in the law of equity. Normally, at
common law, such a contract cannot be enforced and the money cannot be
recovered simply because there is the risk that such money may be ‘borrowed for
necessaries but laid out and spent at a tavern’.[22] In equity, however, if it can be proven that the money was entirely spent on
necessaries, the lender of the money stood at the place of the person paid and hence entitled to be repaid.[23]
Finally, contracts for necessaries
include contracts of employment and training.[24]
Such a contract must be for the purposes of obtaining instructions or education
for the minor to acquire skills that will be essential later in his
professional journey.[25]
In a case where a minor had entered into a contract of employment with a railway
company and agreed to the terms of its insurance policy, the court held that the
minor was bound by his promise and therefore had to pay.[26]
In spite of the fact that this
paper does not intend to cover the complex legal principles available when it
comes to employment for minors, it recognizes the fact that nowadays minors are
being engaged in employment contracts in the world of arts and technology. It
must further be noted that under the Kenyan Employment Act, employing minors is
illegal for children under the age of 13 years.[27]
If the child is between the ages of 13 to 16, he or she may be employed for
light work as long as it does not affect his or her health or interfere with
his or her education.[28]
Such a contract, other provisions of the law notwithstanding, must be oral and
not written.[29]
The issue of employment for children is a very delicate matter in the realm of
labour law and human rights.
Various complexities (or rather
contradictions) can be observed in the existing Employment Act on this matter.
For example, the Act defines a child as one who is below the age of 18 years[30]
yet leaves out the requisite provisions in cases where a child between 16 to
18 years of age enters into an employment contract. The research done herein cannot adequately handle the whole matter since doing so will be drifting away from
the main issue: Contract for necessaries with minors as parties. Therefore,
stating the underlying legal stipulation is sufficient to demonstrate the
dynamics involved.
With that, it is apparent that the
scope of the term ‘necessaries’ is very subjective hence its application varies
from person to person and from case to case. For that reason, courts must be
very careful with how they handle matters of contracts between whom one or more a minor. They must acknowledge that every time a matter involving a child is
being dealt with, it must be done in consideration of the best interests of the
child. Further, they must strike the balance between the interests of the
child and those of the trader or employer with whom a child enters into a
contract with.
REMEDIES
As it has been illustrated, the
interests of the trader must be safeguarded where a contract between the trader
and a minor is binding. The remedies that are available for the binding
contracts may exist either in common law or at equity. The phrase ‘for binding
contracts’ here is used very deliberately because courts will be reluctant to
issue a remedy for a contract that is not binding since doing so shall seem
like enforcement of a void contract.[31]
This will be contrary to the existing principles governing the law of contracts
at common law.
i.
Remedies at Common
Law (Legal Remedies)
At common law,
the only available remedy for breach of contract, in general, is damages. In many
texts, the remedy of damages is discussed as applicable against any party that
breaches a contract as long as the breached contract is binding.[32]
Damages act as an indemnity in that they prevent the innocent party from
suffering the loss that is caused by the breach of the innocent party.[33]
In the words of Lord Atkin, ‘damages for breach of contract were in the nature
of compensation, not punishment’.[34]
The issue of age is immaterial when damages are awarded against a party.
However, damages can only be awarded if the contract was valid and binding.[35]
Courts at common law will not entertain a matter involving a void contract.
ii.
Remedies at equity
(Equitable Remedies)
There are different remedies
available at equity. These remedies include specific performance, injunctions,
rescission, and restitution. From the very outset, it is important to note that
at equity, the court conducts itself in a very discretionary manner when
awarding its remedies.[36]
Parties in a matter before an equitable jurisdiction must know that they are
not entitled to equitable remedies even if their matter succeeds since it all
depends on the opinion the court forms.[37]
This is because courts exercising
equitable jurisdiction are in pursuit of ensuring that fairness and justice are
arrived at.
The second point to note is that in awarding these remedies, the doctrine of mutuality applies especially when it
comes to the remedy of specific performance.[38]
This doctrine states that if one party to a contract is entitled to specific
performance, so ipso ipso facto is
the other, for the equitable remedy, if it exists at all, must be mutual.[39]
The court, therefore, asks itself, ‘Can this remedy be enforced against the other
party if the positions of the parties can be reversed?” If the at equity the
equities are equal, then the court must be sure that what it rules against one
party can also be enforced on the other party if the outcome would have been in
favour of the other party. Due to this, specific performance cannot be issued
as a remedy against a minor nor can a minor pray to the court to issue the
same against another party.[40]
Sometimes, the contract entered
into may be void and dismissing a matter solely on the ground that it is
unenforceable may be unfair and unjust to the innocent party (an adult).
Leaving this unsolved will not only motivate minors to enter into contracts
with malice at the expense of the party they engage with.[41]
For this reason, the remedy of restitution was crafted by equitable courts to
remedy this challenge. For this remedy to be issued, fraudulent activities of
the minor must be demonstrated.[42]
Therefore, a minor who fraudulently
purchases goods and services resulting to a void contract shall be held into
account when this remedy is issued against them.
In summary, courts will consider the facts of the case in order to exercise their discretion while awarding equitable remedies. Proper emphasis must be given to the point that specific
performance cannot be issued against or in favour of a minor because there is lack of mutuality. With that established, it can be said that equitable remedies
are available with the limits set out in legal principles.
CONCLUSION
This paper has explored the concept
of binding minors’ contracts with regard to necessaries and the general rules
that form the basis of legal and equitable remedies that can be issued against
a minor. It goes ahead to acknowledge the various gaps surrounding minors’
contracts, especially in modern employment laws as well as in the issuance
of remedies. What stands out in pursuit of filling these gaps is the principle
of ‘the best interest of a child’. However, the balance must be stricken between
the interests of a trader and those of a child. These issues identified open up
chances for more research and development.
BY MUNGAI K
[1] ibid
[2] ‘Minor’,
Black’s Law Dictionary (6th
edn West Group 1990).
[3] Constitution
of Kenya 2010, Art 260.
[4]
ibid
[5] Richards
(n 1).
[6]
Richards (n 1) 111.
[7] Halsbury’s
Laws (12th edn, 2017) vol 57, para 698-1421.
[8] Ibid.
[9] Sale
of Goods Act, s 4.
[10]
Ibid, s 10 (2).
[11] Ibid,
s 11.
[12] Beatson
et al (n 2) 234.
[13] ‘Necessaries’,
Black’s Law Dictionary (6th
edn West Group 1990).
[14] Caruso v. Caruso, 102 N.J.Eq. 393, 141
A. 16, 19.
[15] Beatson et al (n 2) 234.
[16] Peter v Fleming (1840) 6 M&W 42.
[17] Beatson
et al (n 2) 234.
[18]
(1868) LR 3 Ex 90.
[19]
Ibid
[20]
[1908] 2 KB 1.
[21] Nash (n 23).
[22] Earle v Peale (1719) 91 E.R. 336.
[23] Marlow v Pitfeild 24 E.R. 516.
[24] Richard
Stone and James Devenney, the Modern Law
of Contract (11th edn, Routledge 2015) 62.
[25] Emily
Finch and Stefan Fafinski, Law of Contracts (5th edn, Pearson 2017)
27.
[26] Clements v London and North Western Railways
Company [1894] 2 QB 482.
[27]
Employment Act 2007, s 56 (1).
[28] Ibid,
s 56 (2).
[29] Ibid,
s 57.
[30] Employment
Act 2007, s 2.
[31] See:
Beatson et al (n 2) 242 see also: Stock v
Wilson [1913] 2 KB 235.
[32]
See: Finch (n 28) 190.
[33]
ibid
[34] Addis
v Gramophone Co Ltd [1909] AC 488.
[35] Ewan
McKendrick, Contract Law: Text, Cases,
and Materials (5th edn, OUP 2012) 755.
[36] Paul
Davies and Graham Virgo, Equity &
Trust: Text, Cases, and Materials (OUP 2013) 85.
[37]
Ibid
[38] Abdulzak Mbarak v. Faraj bin Ahmed el-Aweni (1956)
EA 120.
[39] Ibid.
[40] Flight v. Boland (1828) 38 E.R. 817.
[41] Beatson
et al (n 2) 243.
[42] Ibid.
Comments
Post a Comment