Privity And Capacity - Contract

PRIVITY AND CAPACITY CAPACITY PRIVITY Who has the legal ability to enter into contracts Who can enforce a contract Limited Capacity to Contract Have MENTAL CAPACITY but not LEGAL CAPACITY Minors Convicted Criminals Aliens Bankrupts Have LEGAL CAPACITY but not MENTAL CAPACITY 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: PAGE 67 * Contracts with minors are voidable at the option of the minor - but the adult is bound SS? Goode v Harrison EXCEPTIONS: 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 property. 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 therefore. 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 minor? 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? PAGE 68