SCOPE OF THE QUESTION

The question requires to explain the meaning of Contractual Capacity and discussion on
Contractual capacity of a Minor and person of unsound mind both under the common law and in
Tanzania.
INTRODUCTION
Contractual Capacity, the minimum mental capacity required by law for a party to enter to a
contract to be bound by it1 . Under the common law recognizes minor and person of unsound
mind as among the people who can’t enter into contract. For a person to have contractual
capacity must have rational capacity that a person must be able to make sound judgment, a
person cannot be able to make a sound judgment if is either a minor or unsound mind. According
to section 11(1)2 which provides that
“Every person is competent to contract who is of the age of the majority according to the
law to which the subject, and who is of sound mind, and is not disqualified from contracting by
the law to which he is subject ”
So for a person to enter to a contract must be on the age of majority and of sound mind.
Minor, is a person who has not attained the age of majority. According to section4 3 state that a
person who has not attained the apparent age of eighteen years and the terms "infant" and "infant
child" shall be construed accordingly. Under the common law it provide a minor in traditionally
is any one of the age of 21 and In 1969, the Family Law Reform Act reduced the age of majority
to 18, and replaced the term ‘infant’ with ‘minor’, and then in 1987, the Minors. The Contracts
Act repealed the Infants Relief Act 1874, and restored the common law, which Still governs
contracts made by minors today.4
Unsound mind, A person of unsound mind is that one who is not of sound mind 5. According to
section 12(1)6 which provide that
“a person is said to be of sound mind for the purpose of making a contract if at the time of
making the contract is capable of understanding it and forming a rational judgment as it to effect
upon his interest”.

1
Http://www.ShusEdu.com
2
The Law of Contract Act Cap
3
Interpretation of Laws Act Cap 1 RE. 2019
4
Elliott Catherine, and Quinn Frances, (2009), Contract Law 7 th Ed. Pearson Longman pg.70
5
Nditi NNN. Law of Contract, the open University of Tanzania Pg. 76.
6
The Law of Contract ACT CAP 345 RE.2019
 There for if a person is of unsound mind neither be able to understand nor to form rational
judgment at the time of forming a contract as provided by section 12(3) that
“A person who is usually of sound mind, but occasionally of unsound mind may not make
a contract when he is of unsound mind.”

MAIN BODY.
The following are contractual capacity of the minor under common law and the position in
Tanzania.
Under common law the general rule a minor contract are voidable and are binds to both
parties, also minor contract can be terminated at any time before minor reach the age of 18 years
or soon after it is responsible for him are terminated. Contract voidable by a minor may acquires
interest into a contract may be partnership agreement, contract involving land, purchases of
shares in a company, or marriage settlement. 7 This declares to be a voidable contract and a minor
will be allowed to end such contract at any time and the law requires such minor to do so during
infants or within reasonable time after attaining majority age. In the case of Steinberg v Scala
(Leeds) Ltd8 the plaintiff, a minor, bought shares in Scala. These shares were not fully paid up,
which means that a company issuing such shares can subsequently demand from a shareholder
payments up to the nominal value of the shares: for example, if a person pays £1 for a share
which has a nominal value of £2.50, she can be asked to pay a further £1.50 at a later stage. Scala
did make such a request, and Ms. Steinberg paid a further £250. The court case arose because she
later decided to reject the contract, and wanted her £250 back. Her claim failed: the court held
that although terminating the contract meant she was free from any future obligation to make
payment, she could not get the £250 back because there had not been a total failure of
consideration. She had the shares, so she had got something in return for her money.

The following are the exceptions in which a minor can enter into a valid contract under the
common law.

7
Hussain .S. Mohammed and Magee .A. Mudhihiri, (2013), General Principles of Law of Contract in Tanzania, Law
Africa pg.78
8
(1923).
Contract for necessary goods and services, under section 3(2)9 provide that goods suitable to
the condition in life of the minor or other person concerned and to his actually requirement at the
time of sale in delivery. It therefor include more than just such essentials as food, shelter and
clothes and in deciding the issue the courts can take into accounts to the social status of a
particular minor, terms which might considered necessaries for a working class child may
nevertheless be necessaries for one from a wealthy background. When deciding if a contract is
one for necessaries, the courts first of all determine whether the goods or services are capable of
amounting to necessaries in law, and then consider whether they are in fact necessaries as far as
the minor before them is concerned. The tests are notoriously difficult to apply, but effectively
mean that a minor will be bound by most consumer contracts, but usually not by commercial
ones.10 In the case of Nash v Inman11 a Savile Row tailor supplied a Cambridge undergraduate
with ‘eleven fancy waistcoats at two guineas each’. When the tailor sued for payment, the
student claimed that the contract could not be enforced against him, as he was a minor (at this
time people were considered minors until the age of 21). The Court of Appeal held that although
the goods were suitable to the young man’s ‘condition in life’ (he was ‘the son of an architect of
good position’), they did not satisfy the second limb of the statutory definition. They could not
be regarded as suitable to his actual requirements at the time, because his father had given un
contradicted evidence that he already had a sufficient wardrobe of clothes. Therefore the contract
was not binding.
Contracts which are beneficial to the minor, Minors are also bound by the contract which are
beneficial to them. In practice this generally means contracts of employment under which a
minor gains some training, experience or instruction for an occupation an apprenticeship would
be a common example. In the case of Clements v London and North Western Railway Co 12a
minor made an agreement under which he gave up his statutory right to personal injury benefit,
but gained rights under an insurance scheme to which his employers would contribute. It was
held that the rights gained were more beneficial than those given up, and so the contract was, on
balance, for the minor’s benefit and therefore binding.
Position in Tanzania.

9
The sales of goods act of 1979.
10
Elliott Catherine, and Quinn Frances, (2009), Contract Law 7th Ed. Pearson Longman pg.70
11
(1908)
12
( 1894)
In Tanzania the laws recognizes the contract of the minor as void this is according to section
11(2)13 which provides that
“An agreement by a person who is not hereby declared to be competent to contract is
void”
The following are exceptions which makes the minor contract to be valid and binding
under the position in Tanzania.
Contracts which a minor is supplied with necessaries of life, A minor who forms or enter into a
contract of necessaries of life will be liable under that agreement and should make compensation
or to pay for reasonable price of the necessaries of life. Also the necessaries which are termed
here are shelter, clothing, food, and education this is provided under section 68 14 which provides
that
“Where a person incapable of entering into a contract, or anyone whom he is legally
bound to support, is supplied by another person with necessaries suited yo his conditions in life,
the person who has furnished such supplies is entitled so be reimbursed from the property of
such incapable person. ”
Also section 415 provides that “The minor shall not escape liability yo pay the price for his
necessaries of life on the ground that he was given such necessaries while he was a minor”.
Where the minor deceive(cheat) the original age,a minor may deceive his age to the extent
that the major belief that he is not a minor. Under the law of Tanzania this is known as fraud as
defined in section 17(1)16 which provides that ““Fraud” means any of the following acts
committed by a party to a contract or with his connivance, or by his agent, with intent to deceive
another party thereto or his agent, or to induce him to enter into contract. So where the minor
commits fraud in due to that the major believes that the minor is at the age of the majority, then
the agreement formed by that minor will be enforceable and voidable, it is voidable when a such
majority doesn't know that he entered into a contract with a minor, but if he knows that he
entered with a minor then a such contract will be decrared void.

13
Law of contract Act
14
Law of contract Act
15
The sales of Goods Cap 214 RE 2019
16
Law Of contract Act
The contractual capacity of the persons of unsound mind both under at common law and in
Tanzania.
Presumption of Sanity.
As a general rule all persons are presumed to be sane mindful at all the time. There fore there is
no need of testing the brain or mind of the party before forming forming the contract. There is no
legal requirements of the proposer to require the proposed to produce medical certificate to prove
that the proposer is of sound mind. All the persons at all time are presumed to be very sound
mind.
But if it’s later discovered that at the time of formation of the contract the party was of unsound
mind, that is where the agreement becomes void. This is according to section 12(3) 17 which
provides that;
“A person who is usually of sound mind, but occasionally of unsound mind, may not make a
contract when he is of unsound mind.
Under the common law the general rule is a person of unsound mind is competent to contract
although he may avoid his contract if he satisfies the court that he was incapable of
understanding the contract and other party knew it.18 The contract will be voidable at his option
where it becomes binding on him only if he affirms it19. And where one party incapable thought
mental disability of understanding the nature of transaction, but the other party does not realize
the court will ignore the incapacity20. In Hart v O’Connor21 the Privy Council held that a person
of unsound mind was bound by his agreement to sell some land because, when the contract was
made, the buyer did not realize that the seller had any mental incapacity.
Position in Tanzania, The general rule is a person of unsound mind is provided in s.11(1) read
together with sub section (2)22which provides that
S.11(1)“Every person is competent to contract who is of the age of the majority according
to the law to which he is subject, and who is of sound mind, and is not disqualified from
contracting by any law to which he is subject.

17
The Law of contract Act [CAP.345 R.E. 2019]
18
Signh. Avtar (1989), Law of Contract 5th ed., Eastern Book Company pg.124
19
Ibid, pg 124
20
Elliott Catherine, and Quinn Frances, (2009), Contract Law 7th Ed. Pearson Longman pg.75
21
(1985)
22
The Law of Contract Act Cap 345 RE. 2019
And section 11(2) which provides that “An agreement by a person who is not hereby declared to
be competent to contract is void.
Exceptions In Tanzania, A person of unsound mind can enter in a binding contract where by at
the time of forming a contract he is of sound mind, this is to say a person of unsound mind can
only enter into a contract if is capable of understanding it and forming a rational judgment,
section 12(2)23 provides that
“A person who is usually of unsound mind, but occasionally of sound mind, may make a
contract when he is of sound mind ”.
Also a person of unsound mind can enter into a contract for necessaries of life 24 such as food,
shelter, clothes, and health services. Under this exception in Tanzania position a person with
unsound mind can enter into a contract when a such contract includes the necessaries of his or
her life.
CONCLUSION
Generally, a minor is a person who has not attained the age of majority to enter into a contract
and the age of majority is 18 years, and in common law a person of un sound mind is competent
to enter in to a contract and that contract may be voidable and in Tanzania a person of unsound
mind may enter into such contract the contract will be declared void. Also there are some of
general rules and exceptions that regard to contractual capacity in minor and of unsound mind.

REFFERENCE

STATUTES
Law of Contract Act Cap 345 RE. 2019
The sales of goods act of 1979.
The sales of Goods Act 2019
Interpretation of Laws Act Cap 1 RE. 2019

23
The Law of Contract Act [CAP.345.R.E 2019]
24
Hussain .S. Mohammed and Magee .A. Mudhihiri, (2013), General Principles of Law of Contract in Tanzania, Law
Africa pg.79
CASES
Steinberg v Scala (Leeds) Ltd(1923).
Nash v Inman(1908)
Clements v London and North Western Railway Co(1894)
Hart v O’Connor(1985)
BOOKS
Elliott Catherine, and Quinn Frances, (2009), Contract Law 7th Ed. Pearson Longman.
Nditi NNN. Law of Contract manual of the open university of Tanzania.
Hussain .S. Mohammed and Magee .A. Mudhihiri, (2013), General Principles of Law of
Contract in Tanzania, Law Africa.
Signh. Avtar (1989), Law of Contract 5th ed., Eastern Book Company.
ONLINE MATERIALS
Http://www.ShusEdu. Com

TABLE OF CONTENT
 INTRODUCTION
 Scope of the question
 Meaning of contractual capacity
 Meaning of minor
 Meaning of unsound mind
 MAINBODY
 The following are contractual capacity of the minor under common law and the position
in Tanzania.
 The following are the exceptions in which a minor can enter into a contract.
 CONCLUSION
 General over view of the work.
 REFFERENCES
 All sources cited in this work