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Privity And Capacity Notes

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This is an extract of our Privity And Capacity document, which we sell as part of our Contract Notes collection written by the top tier of Griffith University students.

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CAPACITY PRIVITY Who has the legal ability to enter into
contracts Who can enforce a contract

Limited Capacity to Contract

Convicted Criminals
Bankrupts Have LEGAL CAPACITY but not
Mentally Ill
Under the influence of alcohol or durgs

Minors: *
* Law Reform Act 1995 (Qld)
o S17
The age of majority is 18 years.
The law aims to:
o Protect minors
o Protect adults who contract with minors
Contracts with minors can be:
BINDING Contracts for necessaries
Beneficial contracts of service VOIDABLE
Contracts which are binding unless
repudiated by a minor during minority or
within a reasonable time after turning 18

Contracts which are NOT binding unless
ratified by the minor within a reasonable
time after attaining adulthood

General proposition:


Contracts with minors are voidable at the option of the minor - but
the adult is bound
SS? Goode v Harrison
o Contracts for the supply of necessaries
o Beneficial contracts of services Necessaries:
Necessaries are those without which an individual cannot reasonably exist.
Articles of mere luxury are always excluded, though luxurious articles of
utility are in some cases allowed. - Chapple v Cooper *
* SS? SS?
SS? Common Law:
o Articles needed to maintain a particular person in the "state,
station and degree in life in which he is"
SS? Peter v Fleming
Sale of Goods Act 1896 (Qld)
o S5: Capacity to buy and sell

1. Capacity to buy and sell is regulated by the general law
concerning capacity to contract, and to transfer and acquire

2. However, when necessaries are sold and delivered to an infant,
or to a person who by reason of mental incapacity or drunkenness
is incompetent to contract, the person must pay a reasonable price

3. In this section - necessaries means good suitable to the
condition in life of such infant or other person, and to his or
her actual requirements at the time of the sale and delivery
Two questions to answer:
o Is the item capable of being a necessary?
SS? Question of law - court will decide
o Can the thing properly be regarded as necessary for this particular
SS? Question of fact - decide by looking at minor's situation
Plaintiff has the onus of proof
o Ryder v Wombwell
Minor already supplied with necessaries
o If a minor has already been supplied with a particular item it will
be difficult to show that a later contract was for necessaries
SS? Nash v Inman Is Transport a Necessary?


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