LEGAL CAPACITY AND MINORS

In Australia, a Contract is only valid if all parties involved have the capacity to contract. A person who does not have the maturity or ability to fully understand the agreements made with others is considered to lack the capacity to contract, and contracts made with these people are generally unenforceable. Persons under 18 years old are one of these groups of people. This is because they may not have the experience or knowledge necessary to make an informed decision about a contract. For example, a 16 year old may not be able to understand what it means to enter into a binding agreement until they reach the age of 18. In general, contracts made with minors are not legally binding.

There are a number of reasons why the law restricts minors from entering into contracts. Firstly, children may not have the experience or understanding to make informed decisions. They may also be vulnerable to pressure or manipulation from others.

The general rule at common law is that a contract made by a minor (a person under the age of 18) is voidable. There are, however, a number of exceptions (some of which now have statutory force).

In some cases, a minor may be able to enter into a contract if they receive independent legal advice and the other party to the contract agrees. Additionally, some contracts made by minors may be enforceable if they are for necessary items such as food, clothing or shelter. Lastly, contracts made for educational purposes may also be valid.

Contracts that do not fall within any of these exceptions are generally considered voidable. This means that the minor can choose to either cancel the contract or continue with it. However, the Courts treat 'voidable' in this context differently from voidable as normally understood in contract law. Where the contract results in the minor permanently acquiring property (eg land) or involves ongoing obligations (eg partnerships), then the contract is binding unless and until voided. All other contracts entered into a minor are not binding unless ratified (taking positive steps to affirm) by a minor when they become an adult.

The legal professionals at Wallace Law Group are equipped with years of combined experience to provide you with the best advice on your legal matter. If you need assistance with drafting or enforcing your contracts call Wallace Law Group today on 1300 011 123.

Please note that this article is written as an informative piece and that you must not take the contents of this article as legal advice. Wallace Law Group accepts no liability from your reliance on this article.