“The Education Low-Pced Books Scheme is {und bythe Oveneas Develonment ‘mnie 2 prof th Bea ‘taker sabe owepiedueabngged ‘om of Bash publish texthoaks 0 Stud ia dvstoping soon. Below 2 lis of wome other books ana pushed oder LBS tpi Bailey and Guan Smith & Raley 08 The Modern Kags Legal Stem Sheek Mawel Bromley nd Love ‘roms Fy Law Bonereorh Farmstoa ‘ChshiyFfon and Frumston’s Screen on ‘he Concept of ae Grioré Umer Pes Hayton Meza’ Manual the Law of Ral Prom Sree & Maelitevens Hesston and Bockey Simon and esinn on he Law of Tors Sheers ware Sas Inacio ahi Law Mone EeoRcevortn nd Mores Company La Shoat Mwelsioves Marty 1 rat Appa viene fscesone Pes uly andthe Law of Tre incre harlesworth’s usiness Law jfteenth Edition AUL DOBSON 118 ince nm Barter, Westake Saiat fc dat Deparenent of Law at Pye of Wet London ‘LIVE M. SCHMITTHOFF TIM LLD (Londen) DR. UR (Brin) DAEShe Hon TEs. DDRES hs Hope, WstingPoewor in International Basins Lae 1 Gea Ta, Eamon Profesor of Lam, Unversity of Kent San aes Prfewor of aw, Runr-Unineraat, Bochun {ittlan Brfswor af the Cay of Londo Poyethnic [LBS] cues: rorwaisinem Educational Low-Priced Books Scheme funded by the British GovernmentGarren S| CAPACITY TO CONTRACT ‘A nason, aan infantis sribd in the Family Law Reform At Too) enon snot reached henge of yoy. Ta ae was reds from 20 8 yes By the Ae of 1965. A Person stains majority a he commencement of hi hse Birthday (9) ofthe 182 A), ‘Ae seerl les minor ot Bound by any conrct made during hs maori To thse ree un exceptions: contra for LS ee ‘nature; certain contracts which are voidable. " Necessaries ‘The term “necessaries” isnot restricted to things which are required 10 maintain a bare eisence, suchas bread and clothes, but includes articles which are reasonably necesary to the minor having regard to is station in if. A watch, for example, and sich things as a transistor radio ora moto yee may well be considered to be necesaries, but not artes of mere adorament and lxury ‘An engagement rng may bea necessary, but nota diamond neck lace bought fr the minors fancse. Goode are not the only neces Saris. The hire ofa cac may bea contract for necessaries. “Tho Sale of Goods Act 1979, s3(3) gives the following definition ‘of neessries supplied toa minor or toa person wha by reason oF ‘mebta incapacity or drunkenness incompetent to contact: “necessaries” means goods stable tothe condition in fe {of the minor or other person concerned and to his actual quirements at the tine of the sale and delivery: ‘When the necessaries are goods, the minors able only when the goods are (@) suitable to his condition init; 6 Minors (b) necessary tie requtements a the time of sales (6) necessary to his requirements at he time of delivery (Saleot Goods Act 1979, 5.33); and (@) goods with which he was at sufficiently supplied athe ime ffsale and delivery. A minor must pay a reasonable price for necessaries supplied to him. Although the goods supplied maybe within the clas of neces- fare, they may not be necesary fo the particular minor, because ny ofthe four requirements et out above are not ull, 1. a minor who was am undergraduate at Cmteide, bought eleven {anyway fo He wa atthe ie aqua proved th el eet ce ars ae a SS a ahem: Nash ean 1082 KB 1-8 Unde the tans ‘BAC bors Canrat AGt IM, he minor otal now be oxered fo fern te wasnt oP 71 pot) {Educational and employment contacts forthe minor’s benefit Not every contract forthe benefit ofa minor is binding on bin. Bu coniasts for his education, sevice or apprenticeship, or for enabling him to earn his ving (other than tang contracts) are Dinding ules they are detrimental tothe interests ofthe minor, ,,amiso ho was profesional otr, eld apc fom the Bish Tonia Board unde the terms of wea his money was obestoppedst hie BeNsgsalicd In a Gosng ath he mor snjuaiied andthe Board Mavild te money ated to ecovee Hel the contact as for Ws wept weeding on hums Docs, Whe Cay Sadi ( 1995] 1B 10 3 minor aged 19, the won of wealthy ad workd-famous comedian fasm wr i hed become etange sped for Natal Assan for Fiebre snd Ou C. sends eonret wth pubes fr the Faso ol hs sutotnogranby, ehh contract be afer wg 0 a0 Tiare conract nas badingom he mer, fr assim fox coma forse that wood este hn to ermB ving and sport his Ty ad fe was contac forbs benette Chapin ese Pronin (Pabst) 128 [966 Ch. 7, A contrat relating tothe minors education which snot det tal to his interests can be enforced although it isto be per sd inthe future, eg contract by a minor billiards payer ton Capacity Contract, tour and play ilar matches witha wel-known expert (Roberts Gray [1913] 1 KB, 520) Tn these cases, the contract a a whole is forthe benefit ofthe minor willbe binding on him, although partalat parts fi, such fs restrictive covenant not wo compete wit his employer, may be susinst his interests. I, however, the clauses ia the agreement ‘hich are adverse to the minor's benefit are clearly soverable from {he rest, the minor will aot be bound by the adverse clauses. ‘Similany, an arbitration cause in an apprenticeship deed has ‘ben held tobe fr the minor's benefit and to be binding on him (Slade v. Merodent Led 1953] 2Q.B. 112, se p. 72, pst ‘Acontrat of pprenticeshipisacontractofspecial character. it isbroken by the master, th apprentice can claim damages nt only {for is os of earings forthe remainder of his traning period, but also forthe diminution of his fture prospecs (Dunk v. George Waller Son Li. [1970]2 0.8. 16). ‘When & minors engaged in trade, contracts entered into by him. in the way of histrade, however much for his benefit they may be, fre not binding on him. He ie therefore not able to pay for good bought for trading purposes, or, if he is haulage contractor, for 2 ‘motor lory obtained under ahie-parchase agreement (Mercantile Union Guarantee Corp. Lid v. Ball 1957] K-B. 438). Volidable contracts ‘When a minor acguites an interest ina subject of «permanent nature, which imposes a continaous Lab on him, the contrat ‘ansotbe enforced egnnst him daring minoriy.Butalterhe attains fall age, it wl be binding on him unles he avoids it within a reasonable time (Edwards. Carter [1893] A.C. 360). Examples ot these coatrct are: leases, partnerships andthe bokng of shares in company. A foraight fore sting hi marca minor took lease of “Tipe yt tr be wat sued for current ent, Hel, b was able athe avons ws bg om Nm is etd titi nonsonabe ine uf tang major: Dave ¥. Beynon Haris (ss 7TcR 4 a ‘Aminr who was spater ina partner ook 0 tops oad be pstzetsip upon easing say be wath inble rt debs n epi inttercame ta: Cnd Haro (25 Recovery bythe minor ‘Money pid ya minor ander a contrat whch ot binding 08 ima Bedvead ym oly there has bon compete fnfre of onseration. S., amine, aed oak 01 srs in. company ad pid 10 08 sie Sheen edo he re Wh ior he tacoma an bronght an acon (1) renver the money ‘lente for decrotionthasbe wes oc babe or ae eal ‘a Pn th hed some marke value 5. cold nt ever BONY a ott sash wan ot bor uae cl Stabe Seale Gia 9232 Co X, amine, agreed wih Yt become the tenant of ote and ‘10g forbs mre herein He pid 8 on scout, and afer OSEPOg Se ct and ung the fue fo some months, wo 10 recone the ta nee pel be could ot recover mony pai for someting, PES) Sed: Veen. Canal (189) 0.8.0. 166 Sinilary fa minorhastaken the benefit ofa vod contract forthe sole of goods oer than necessaries he cannot retain the goods and cover the money he has paid fr them. “Rgsia, fs minor delivers goods under a contract which is not binding on him, he cannot recover them back unless there isa ttal falure of consideration Inadequacyof consideration snot enough (Pearce v. Brain [1929] 2B. 310) Recovery against the minor {ne case where a minor not bound bya contact the Minors) Contacts Act 1967, 53 gives the court power, it considers it just land equitable to do30, 10 require the minor to return ay property acguted by him ander the contract or aay property representing ‘Obviously the court would not make sch an order where the minor “has paid forte property. Tt i tll the case, however, thatthe person who contacted wit the minor can easly make a loss. out of thewhole transaction, eg. the minor bas consumed or disposed of the property and has notobtained any replacement property. There IS no power to order the minor to pay compensation and theres 90Capacity 19 Contract power to make the minor able ia tort where this would be an Indirect means of enforcing te contrat. So 4 noe, by fraudulently rpeseating himself toe of fll ge {dulce to eg nm £40, He retin rep and sted or) Kayden nisentesentton or iterative. (money had andreeted {05 tse He the contact vasot bing vpn. and. wasn abe torepy the £40. The wo clamsbyL- were vec meas of eforeing the ona and hey foes LeveL v. Shell 14] 3B. ‘Where the performance, andnot the conclusion, ofthe contacts in issue it, however, sometimes possble to make a minor who ‘Ganot be made Hable in contract lable in tort The tests whether the at done bythe minor was done in performance ofthe contrast, though wrongfully, or whether it Was something never contem- plated by the contact at all ‘A minor hired a mate ndinjsred er though immoderte riding. Hed, nw nt lle: Jnnings Rural (198) 8 TR 35 ‘A minor hice io set nin reach of contract parted wth io X. Hed hewostale, beech paring ith there was outsie he ona ‘Uogether Bale Ming) [193] 1 B28 Recovery agnnst a guarantor ‘Asa general rule someone who guarantes someone css bts not liable on his guarantee unless the person whose det i guaran= {eds himself ible. Thus, for example. a bank which lent money toaminorand tookfrom an adalta guarantee ofthatloan, would be table to enforce either the loan or the guarantee. The Minor” Contracts Act 1967.2 altered that position, so that where the only ‘eason a contractcan not be enforces thatthe party tobe sued was minor at the time the contrect was made, any guarantee ofthe ‘minors ability is now enforceable. Conroranions ‘A corporation i a artificial person created by lw. Its distingt ‘rom the individual persons who ate members ofthe corporation, and has legal existence separate and apart ftom them. Salomon, «bot manufcturer, was ibe omer ofa profitable snes Corporations n _Atatine when ean hisbasies were erect solvent he somnerted is ‘Snes ne a company med by sates He tok 2000 shares and Weed fv caren ook one ac a that une the minim numberof Sharcoldrs nal companies was seven). No ther aes were fed Stlomon ao fesed& debenture tothe amount of £1000, Later the ‘Sapam became solvent Held Salomon could prove the debenture is ‘he nlency of he company, The ane man company” ws 8 p08 ‘Bicenc ini tom the cotrllg shareholder Salomon ¥- Solomon & CocLid (897 AC 2 ‘A corporation may be (i) body incorporated by royal charter (i) a company formed by special Act of Parliament: or (i) 8 ‘Company repstered under the provisions of the Companies Acts 184810198 Lifing the veil Th company law in exceptional cases the vel of corporateness is sifted and the separate personality ofthe company i disregarded. Examples of these exceptions ae: (a) Insome cases the legislature as ited the veil. inrequit= ing holding and subsidiary companies to prepare soup (0) ifthe controling sharcholder uses the company as his agents (6) tthe corporate form s abused for an unlawful or improper purpose Me. Lipman speed to sell some propery to Me and Mis Jone, Mr. ign no peor he cmt md an nse rope to pve company tat was whol owned and contol EPR purer att asacton was to delat the purchasers caim or ‘oulife perlrmence Tedd th private company was a sham 10 std ‘Giorectet ofthe squtahe rma of specie performance ands orer epee pertrmahee was pant ans ME Lipman sd the private ‘Spy foes Lape (982) 1 8K. Contractual capacity ofa corporation ‘The contratl capacity ofa corporation i imites {by natural limite, bythe fact that tis an artificial and nota fl person, A corporation can only contrat through an agent, dithereforetcannot enter iat any contract of astrily personal