ELEMENTS OF A VALID

CONTRACT(CONTINUA
TION)
 4. CAPACITY TO CONTRACT
(a)Minors
The age of majority for contractual purposes is 21 years under the common law
which is applicable in Ghana.
 
The general principle at common law is that contracts entered into between a
minor and an adult are not binding on the minor but binding on the adult party. In
order words, a contract entered into between an adult and a minor cannot be
enforced against the minor, but can be enforced against the adult.

There are however certain categories of contracts which are deemed under the
common law to be binding on the minor. These are as follows:
(i)Contracts for necessaries
Such contracts are binding on the minor and he is liable to pay a reasonable price for the
goods.
The definition of necessaries is provided for under section 2(3) of the Sale of Goods Act, 1962
(Act 137) as follows:
‘necessaries are goods suitable to the condition in life of the person to whom they are
delivered and to his actual requirements at the time of delivery’

• The term generally refers to those things without which a person cannot reasonably exist
and include food, clothing, lodging, education, and other essential services such as medical
services, as well articles and services necessary to maintain the particular person’s station
of life (wealth and status).
• See Chapple v Cooper (1844) 13 M & W 252, where a married minor entered into a
contract for the purchase of a coffin to bury her husband. It was held that the contract was
one for ‘necessaries’ and the minor was liable to pay for it.

• For the minor to be liable, it must be established that not only are the goods suitable to his
condition of life but also to his actual requirements at the time of delivery. See Nash v
Inman(1908) 2 KB 1
• The wider principle however is that no contract is binding on a minor is binding on him if it is
prejudicial to his interest. In other words, if the terms are too harsh or onerous. See Fawcett v
Smethurst (1914) 84 LJ KB 473

(ii)Beneficiary Contracts of service

This generally refers to apprenticeship contracts. The law recognises that it is in the interest of
the minor that he should be able to obtain employment, learn a trade or acquire some training
for a profession.
The principle therefore is that where an infant enters into a contract of apprenticeship or
contract of service under which he receives instruction or training, the contract is binding on the
minor, provided that the terms of the contract, construed as a whole, are substantially beneficial
to the minor.
See Clements v London & Northwestern Railway (1894) 2 QB 482
compared to De Francesco v Barnum (1890) 45 Ch D 430

NB- At common law, the principle which makes a beneficial contract of service binding on the
minor does not extend to trading contracts.Thus an infant is not liable for goods supplied to
him for the purpose of trade or for damages if he fails to deliver goods that he has contracted
to sell as a trader. See: Cowern v Nield(1912) 2 KB 110
( iii)Voidable Contracts
They are described as such because they are binding on the minor unless and until he repudiates
the contract during his minority or within a reasonable time after attaining majority. Examples
include, lease agreements, purchase of land and subscription for company shares.
Voidable contracts are contracts by which the minor acquires an interest in some subject matter
of a permanent nature, which gives rise to continuous or recurrent obligations.

(b) Contractual capacity of mentally incompetent persons

A lunatic is a person of unsound mind, a mentally incompetent person, an insane person or one
who is not compos mentis. The contractual capacity of mentally incompetent persons is
governed by a number of rules formulated by the courts. The common law position is stated in
Imperial Loan Co. v Stone (1892) 1 QB 599 as follows ‘ Unsoundness of mind would… be a good
defence to an action upon a contract if it could be shown that the defendant was not of a
capacity to contract and the plaintiff knew it.
 ( c) Contractual capacity of drunken or intoxicated persons
The contractual capacity of drunken or intoxicated persons is generally said to be that same as that of
the mentally afflicted. If at the time of the contract, a person was so drunk or intoxicated as not to
know the consequences of his act and his drunkenness or intoxication was known to the other party
at the time of contracting, the contract will be deemed to be voidable at the instance of the drunken
or intoxicated party. The drunken party however has the option of ratifying the contract when he
becomes sober, so as to make it valid.
See: Matthews v Baxter (1873) LR 8 Exch 132
(d) Legal capacity of companies in Ghana
All the powers of a natural person of full capacity (Section 24 of the Companies Act). The company does
not have the capacity to enter into contracts not connected to its authorised business ( section 25).
Otherwise it is ultra vires, with legal consequences.

(e)The Legal capacity of Partnerships in Ghana

 5. CONSIDERATION
Consideration means an act or an object that is given out exchange for a promise.
According to Treitel, consideration is something of value in the eye of the law that is given for a
promise in order to make the promise enforceable as a contract.
In Curie v Misa, consideration was defined as:
‘ A valuable consideration, in the sense of the law, may consist either in some right, interest, profit, or
benefit accruing to one party, or some forbearance, detriment, loss, or responsibility, given, suffered,
or undertaken by the other.’
The doctrine of consideration has to do with the reason why the courts will enforce a contract.
Rules governing consideration
(a)Consideration need not be adequate, fair or reasonable but must be sufficient
See Adjabeng v Kwabla(1960) GLR 37 H.C- The defendant bought a land from the father of the plaintiff
for £ 40. The plaintiff brought an action alleging, inter alia, that the consideration for the sale was
inadequate (he thought that land was worth £200). The court held that in the absence of fraud or
misrepresentation, inadequacy cannot be a ground for avoiding a sale validly made.

Chappell & Co Ltd v Nestle Co. Ltd (1960) AC 87; (1959) 2 All ER 701
(b) Consideration must have value
Value means any lawful benefit which a promisor derives from the promisee who has
complied with the request of the promisor.
Value also include detriment to the promisee as a result of relying on a promise, even if it
does not produce any tangible or obvious benefits to the promisor or detriment to the
promisee.
(c) Consideration must be lawful
See Kessie v Charmant
(d) Consideration must not be past
Past consideration is when the acts constituting the consideration are wholly performed before
the promise is made. See Roscorla v Thomas (1842) 3 QB 234 and Eastwood v Kenyon 11 Ad & EI
438

Exceptions to the past consideration rule

(I)Acts specifically requested by promisor
See Lampleigh v Brathwaite (1615) Hob. 105

(II) Act done by way of business and the parties understood at the time of performance that the
act was to be remunerated and the payment, if promised in advance would have been legally
recoverable.
See Re Casey’s Patent, Stewart v Casey
(e)Executory Consideration
It refers to a binding promise to perform an act in the future. The consideration is not the actual
performance of the act, but the promise to perform it. E.g if you refuse to attend class I will pay you
some sum of money for that. The promise to pay the money in the future is the consideration for the
act of not attending class is executor in nature.
 
(f) Executed Consideration
It refers to an act that has been performed (executed) in exchange for a promise.Unlike executory
consideration, executed consideration deals with an act which has taken place or been performed. An
E.g Kofi promises to further his studies if Kwame offers him a car. When Kwame provides the car it
becomes an executed or performed consideration and that makes Kofi’s promise to further his studies
binding.