CENTRAL UNIVERSITY

FACULTY OF LAW

MIDSEMESTER ASSIGNMENT

NAME: NASH KYEREMEH

STUDENT ID: LAW/23/02/0143

PROGRAM : LAW OF CONTRACT 1

COURSE TITLE: LAW105

LEVEL: 200

SEMESTER: 1ST SEMESTER (WEEKEND SCHOOL)

DATE : 22/12/2023

COURSE CO-ORDINATOR: MR. BAFFOE BONNEY

QUESTION: 3. CAPACITY TO CONTRACT

Datame, a fifteen year old JSS Graduate entered into an apprenticeship agreement with
Bolga Smock Designs Ltd (BSD Ltd) to learn how to design smocks. The agreement
stipulates that Datame shall not be entitled to any allowance during the period of
apprenticeship and that any income that he earns from designing smocks will accrue to
BSD Ltd even if he did so outside of his normal hours of work and used his own
materials. The agreement also provides that he shall be prohibited from learning smock
design patterns from any other designer except BSD Ltd during the subsistence of the
agreement and three (3) years thereafter. While the apprenticeship agreement was in
force, Datame entered into a contract with Tindaana & Co. for the supply of cotton yarn
and dye worth GHC10, 000,000.00 on credit, which he used to design smocks during
weekends for sale. He had informed Tindaana & Co. that he was 21 years old and a
manager of BSD Ltd. He had made a profit of GHC5, 000,000 from the sale of smocks
he made with the material procured from Tindaana & Co. but refuses to surrender this
amount to BSD Ltd in breach of the apprenticeship agreement. He has also defaulted in
paying Tindaana & Co for the cotton yarn and dye he bought from them. BSD Ltd and
Tindaana & Co. are now seeking to enforce their respective contracts with Datame.
Advise them. (25 marks)
AREA OF LAW:

This question seeks to test my knowledge on the Capacity of a minor to

contract specifically when the contract falls in the category of beneficial contract of

service or apprenticeship, Trading Contract and what the effect would be on the contract

if the minor fraudulently misrepresents his age.

ISSUES

• Whether or not the fraudulent misrepresentation by Datame of his age as 21

years absolves him from any liability of the two contracts entered with BSD

Ltd and Tindaana & Co.

• Whether or not the term of the contract (any income that Datame earns from

designing smocks will accrue to BSD Ltd even if he did so outside of his

normal hours of work and used his own materials in this case the Ghc5,

000,000 profit) can be enforced.

• Whether or not Tindaana & Co can successfully enforce their contract (the

repayment of the Ghc 10,000,000 worth of cotton yarn and dye given to

Datame on credit) with Datame.

ANALYSIS

• Introduction

In contract law freedom to contract is a well-established liberty that is enjoyed by

all parties, however, due to the vulnerability of some category of persons in the world

for example minors and mentally incapacitated persons certain laws have been enacted

to protect such persons from unfair and unnecessarily harsh contracts which seem to

take undue advantage of those in this bracket. These category of persons are assumed
to lack the mental ability and the experience to guard their own interest and therefore

stand the risk of falling in the hands of stroppy men who will take advantage of their

vulnerability. Therefore, the law is well laid that any contract entered into with a minor

or a mentally incapacitated person if considered as a whole is deemed to be

unreasonably and harsh will not be valid, binding and an enforceable agreement on such

a person. This question seeks to test my knowledge on the law that governs contracts

entered into with one of the group of persons who fall in the category enunciated above

thus minors.

In Ghana the position of the law on who a minor is and at what age a person can

be deemed a minor is still unclear because there are conflicting definitions in some

statute given the age of majority as 18 whilst others still maintain the common law

position of 21years. In absence of statutory provision that unifies this position, the

common law age of majority thus 21 years has been accepted as applicable in Ghana.

Therefore, a person who is below the age of 21 years in Ghana is a minor due to this

fact he cannot enter any contract that will be binding and enforceable on him.

Although this is the general rule, the law deems some contract with a minor as

exceptions to the general rule since they are necessary for the survival and well-being

of the minor. In such circumstances the principle is that if the contract enter into with

a minor falls under this exception and when construed as a whole it discloses that it

is substantially to the benefit of the minor, the minor will be liable for such a contract.

Examples of contract under this exception include contracts such as necessaries,

beneficial contract of service or apprenticeship and voidable.

Applying this law to the facts at hand DATAME is a minor because he is 15years of

age which fall below the majority age of 21 years. Any contract entered with him by

an adult will not be binding unless the contract falls in the exceptions enumerated

above and when the contract is construed as a whole it discloses that it is substantially

to the benefit of Datame.

Issue 1

Whether or not the fraudulent misrepresentation by Datame of his age as 21

years absolves him of any liability of the two contracts he entered with BSD Ltd and

Tindaana & Co.

Rules/Laws

It was held in the case of Leslie v Sheill1 when a minor fraudulently mispresents

his age to an adult party to induce the adult party to contract with him which is

ordinarily unenforceable against the minor, the contract remains unenforceable against

the minor despite the fraud. The minor is not liable in tort or deceit because the cause

of action in tort arises directly out of the contract which is not binding on the minor.

Although the minor has fraudulently misrepresented his age he could not be compelled

to restore whatever he got out of that deceit, allowing such an action would constitute

an indirect way of enforcing an otherwise unenforceable contract. This was a case

where a firm of registered moneylenders sued the defendant who was a minor for the

payment of two loans each of £200. At the time of obtaining the loan, the defendant

misrepresented his age to the Plaintiff as being of full age.

This common law position has been noted to be unfairly harsh on adult parties

who genuinely believed in the truth of the representation made to them by the minor

and thereby entered such contracts. Due to this equity has made some advances in

certain circumstances to prevent an infant from profiting from his own wrong (fraud or

deceit).

Therefore, the law under equity is that, where a minor obtain property (whether

consisting of goods or money) by means of fraudulent misrepresentation of his age.

The minor will be compelled to restore unto the deceived person provided that the

1 Leslie v Sheill (1914) 3.K.B.607

 property is identifiable and still in the possession of the minor. This was the position

of the law in the case of Lamphire v Lange2 and known as the doctrine of equitable

restitution. With this doctrine the rule is that if the minor has spent the money or sold

the goods obtained by fraud he cannot in anyway compelled to pay the money or an

equivalent sum or replace the goods from his own resources since that would

constitute repayment which will be an enforcement of an unenforceable contract.

Again in the case of Leslie v Sheill stated above restitution stops where repayment

begin. There is no question of tracing the money and no possibility of restoring the very

thing that was obtained by fraud.

The above rules established show that when a minor fraudulently induces an

adult to enter a contract with him, the adult party cannot rely on the doctrine of equitable

restitution to recover either the amount or goods except in the unlikely event that the

minor still has in his possession the identical notes, coins or goods given to the minor .

According to Dowuona-Hammond C 3 , in her article “Towards a Uniform Age of

Majority in Ghana: Rethinking the Contractual Capacity of Minor” this position of

the law empties the remedy of almost all the practical context restitution since the rules

seems to ensure that the adult party can seldom recover the money owed or goods sold

but is further disabled from recovering any property purchased with the money

borrowed or good sold under false pretence.

Application of the law to the facts

From the fact Datame misrepresented his age of 15years to BSD Ltd and

Tindaana & Co to be 21years and that induced the two companies to contract with him.

Therefore it would be deemed that the two companies (BSD Ltd and Tindaana & Co)

contracted with Datame genuinely believing in the representation made to them by the

2Lamphire v Lange( 1879) 12 ChD 675

3Dowuona-Hammond C, “Towards a Uniform Age of Majority in Ghana: Rethinking
the Contractual Capacity of Minor” (1996-1999) 20 U.GLJ 62-77.
minor. Due to this fact of fraudulent misrepresentation it is necessary to find out

whether Datame will be liable for any breach of contract on his part.

Applying the law above and specifically relying on the case of Leslie v Sheill

at common law the two companies cannot enforce any term of the contract against

Datame because he is a minor and the contract they entered into was directly out of the

contract which is not binding on the minor, therefore, the contract remains

unenforceable against Datame despite the fraud. Datame is not liable in tort or deceit

either.

Equity provides a window of opportunity known as the doctrine of equitable

restitution which is only opened to the two companies (BSD Ltd and Tindaana & Co)

if they can prove that the Ghc 5,000,000 profit earned by Datame from the smock made

with his own resources and outside work hours and the Ghc 10,000,000 worth of cotton

yarns and dye given on credit are identifiable and still in the possession of the Datame.

If this is proved then Datame will be compelled to pay the profit or an equivalent sum

or replace the goods due to the fraudulent misrepresentation made by him.

Issue 2

Whether or not the term of the contract (any income that Datame earns from

designing smocks will accrue to BSD Ltd even if he did so outside of his normal

hours of work and used his own materials in this case the Ghc5, 000,000 profit)

can be enforced.

Rules

The general principle when it comes to beneficial Contract of Service or

apprenticeship is that it is binding on the minor if when construed on the whole are

substantially beneficial to the minor. This principle has received judicial blessings in
the cases such as Clements v London & Northwestern Railway 4 , De Francesco v

Barnum5 and Doyle v White City Stadium Limited (1935) 1.K.B.1106.

Beneficial Contract of Service or apprenticeship is a type of contract which falls

under the exception to the general rule which states that contract entered with minors

by an adult party is not binding on the minor but the adult party. Such contracts are

binding on a minor if he contracts because it is in the interest of the minor to be able to

obtain employment, learn a trade or acquire some instruction or training from a

professional, this interest can only be achieved by the minor entering into a binding

contract with his instructor or trainer in form of an apprenticeship or contract for

service. The law considers the learning of a vocation or profession a necessary evil for

the survival, economic wellbeing and stability of a minor.

This was illustrated, in this case of Clements v London & Northwestern

Railway, the minor was a railway porter who agreed to join an insurance scheme which

demanded that he gave up any claim of injury which he is entitled under the

Employment Liability Act. This rights under this scheme seems to be more beneficial

than the one under the Act. The court held that construing the contract on the whole

it was held that the contract was beneficial to the minor and therefore binding on the

Minor.

The court held in the case of De Francesco v Barnum that when the provisions

of the contract between the minor and the adult party is construed as a whole, the

contracts entered into by a 14years old girl is harsh, unreasonable and not beneficial

to the minor, therefore, not binding on the minor. This was a case where a 14 year

old girl entered into a contract of apprenticeship for 7 years to be taught dancing. The

terms of the contract were that she cannot get married during the period of

4 Clements v London & Northwestern Railway (1894) 2Q.B.482

5 De Francesco v Barnum (1890) 45 Ch.D.430
6 Doyle White City Stadium Limited (1935) 1.K.B.110
apprenticeship, the infant cannot receive any professional engagement without the

Plaintiff prior consent, the Plaintiff was not bound to provide the infant with

engagements while she was employed, the allowance was reasonable law and the

contract could be terminated at any time when the Plaintiff considered the infant unfit

for the stage dancing.

The case of Doyle v White City Stadium Limited, however, established an

interesting position that dilutes the general position, thus the terms of the contract can

be unreasonable and harsh but to the extent that it is substantially beneficial to the

minor, the minor will be liable and the contract binding on him. This was a case where

an infant, professional boxer, entered into a contract to fight for £ 3,000, win, lose or

draw subject to the rules of the British boxing board of Control. One of the rules stated

that a boxer who is disqualified in a fight would forfeit his purse. The boxer was

disqualified for hitting below the belt. It was held that the rules of the Board were on

the whole for the benefit of the minor who was a professional boxer since it encouraged

clean and fair fighting. Therefore the infant is bound by the rules of the contract even

though in the instance it operated against him.

Application of the law to the facts of the question

The facts seems to suggest that Datame is in apprenticeship and therefore the

contract between him and BSD Ltd is a beneficial contract of service or apprenticeship

which falls under contracts which are under the exception to the general rule of capacity

of a minor to contract. This makes Datame liable to the contract only if construed on

the whole is substantially beneficial to Datame who is a minor.

A critical look at the rules binding the contract thus Datame shall not be entitled

to any allowance during the period of apprenticeship, any income that he earns from

designing smocks will accrue to BSD Ltd even if he did so outside of his normal hours
of work and used his own materials. The agreement also provides that he shall be

prohibited from learning smock design patterns from any other designer except BSD

Ltd during the subsistence of the agreement and three (3) years thereafter. An

agreement such as this only sets out to unjustly enrich BSD Ltd on the strength of

Datame skills which is purely disadvantageous to him. To the extent that three (3) years

thereafter the terms remain binding on Datame is harsh, unreasonable and not beneficial

to him.

Relying on the case of De Francesco v Barnum the contract between BSD Ltd

and Datame construed on the whole is harsh, unreasonable and not beneficial to the

minor and therefore not binding on the Datame but to the extent that the fact disclosed

that Datame misrepresented his age to BSD Ltd as being 21 years, relying on the case

of Leslie v Sheill and Lamphire v Lange discussed in the first issue above, the minor

will be compelled to restore unto the deceived person (BSD Ltd) the property in this

case of the GHC 5,000,000 profit made from the sale of the smocks, Datame made

outside of his normal work hours and with his own resource provided is identifiable

and still in Datame possession. From the fact Datame has not spent the profit neither

has he changed the nature and form of the money in any way. He still has it in his

possession and for that matter BSD Ltd will succeed in the action in equity to enforce

the recovery of the GHC 5,000,000 profit made from the sale of the smocks, Datame

made outside of his normal work hours and with his own resources.

Issue 3

Whether or not Tindaana & Co can successfully enforce their contract (the

repayment of the Ghc 10,000,000 worth of cotton yarn and dye given to Datame

on credit) with Datame.

Rules

Trading contracts unlike beneficial contract of service or apprenticeship departs

from the normal rule under beneficial contract of service or apprenticeship. Under

Trading contract the general principle as enunciated in the case of Cowern v Nield 7 is

that they are generally not enforceable against a minor who enters such a contract with

an adult because they are not classified as necessaries. Necessaries are defined as those

things without which a person cannot reasonably exist and this includes food, shelter,

clothing, education, training in trade and medical services. Hence the law raises an

absolute bar against trading contract liability leaving the adult party with no remedy

whatsoever even where the terms of the contract are fair and beneficial to the minor

trader. A minor trader cannot therefore be sued for the payment of goods delivered to

him for the purpose of trade.

In the case of Whywall v Campion 8 it was held that the law on trading contract

is based on the old century’s common law position which state that the law will not

suffer an infant to trade which may be his downfall. According to them the rationale

behind this rule is that an infant who trades risks his capital and therefore must be

protected unlike if an infant exercise some professional or calling he may incur

expenses but he does not risk his capital (Treitle G.H. The Law of Contract9 ). In the

case Mercantile Union Guarantee Corp. Ltd v Ball 10 which reiterates the rule stated

about, an infant a haulage contractor, was delivered some materials on hire purchase by

a lorry for the purpose of his trade. The infant failed to meet the payment and he was

sued. The court held that the contract, being a trading contract was not enforceable

against the infant to that extent not bounding on the minor.

7 Cowern v Nield (1912) 2 K.B 419,422

8 Whywall v Campion (1738) 2 Stra. 1083
9 Treitle G.H. The Law of Contract, 9th Ed,p.487

10 Mercantile Union Guarantee Corp. Ltd v Ball ( 1937) 2K.B.498,( 1937) 3 All E.R.1
Application of the law to the fact in the question

From the facts Datame entered a contract with Tindaana & Co. for the supply

of cotton yarn and dye worth GHC10, 000,000.00 on credit, which he used to design

smocks during weekends for sale, this establishes clearly that it was a trading contract

since he is earning a living from that trade. On the authority Mercantile Union

Guarantee Corp. Ltd v Ball, Tindaana & Co cannot succeed in their action against

Datame for the recovery of the Ghc10, 000,000 given to him on credit for the purchase

of cotton yarn and dye because the law raises an absolute bar against trading contract

liability with a minor leaving the adult party in this case Tindaana with no remedy even

though the terms of the contract were fair and beneficial to Datame in such trading

contract.

But will the fraudulent misrepresentation by Datame give Tindaana & Co some

remedy? The answer is no at common law but even with equity which gives an

opportunity the rule is that the minor will be compelled to restore unto the deceived

person provided that the property is identifiable and still in the possession of the

minor. But per the facts Datame has used the cotton yarns and dye to produce smocks

thus the form and nature of the goods has changed and to that extent according to

Lamphire v Lange, Tindaana cannot succeed in any action to recover their payment of

GHC 10,000,000 despite the fraudulent misrepresentation.

General Conclusion/ Advice

BSD Ltd can enforce the contract between itself and Datame (recovering the Ghc

5,000,000 profit from Datame) due to the fraudulent misrepresentation made by the

minor under equity but

Tindaana & Co cannot rely on same defence (fraudulent misrepresentation) to enforce

their contract with Datame because the form and nature of the goods have changed
from mere cotton yarns and dye to smocks. To that end the contract is not

enforceable.