The term a minor, infant or a young person in this context refers to anyone under the age bracket of eighteen to twenty one years; this the age bracket of many students. Specifically, the status of "minor" is defined by the age of majority. A contact does not exist simply due to there is an agreement between two people. The parties to the contract must be set to enter into a lawfully binding agreement. This is hardly ever stated explicitly except it will usually be able to be inferred from the circumstances in which the contract will be made. A contract is created when an offer from one party is accepted by the other party. A contract can be made to a single person or a group. Not all people, like minors, are entitled to enter into a valid contract. There are two types of contracts associated to the young people; the consent of each parties entering into a contract must be genuine, as this may lead to breaching the contract. Some contracts will not be enforced by the law; these are classified as illegal and void contracts. Also the minors can ratify or disaffirm other contracts depending on the circumstances (The law of contract, 2010: pg 20).
Some people are not totally free to enter into a valid contract. The contracts of the following groups of people involve problematic consent: minors or young people; persons with a mental impairment; bankrupts; corporations or persons acting on behalf of a company; and prisoners (QLRC, 1993: pg20).
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Young people or minors
According to law, the term minor (or young person or infant or infancy) is used to refer to a person who is under the age in which one lawfully assumes adulthood and is legally awarded rights given to adults in the society. Depending on the area of jurisdiction and application, this age may be different; however it is usually marked at either eighteen or twenty one years. In particular, the category of the minor is defined by the age of the majority.
In most nations like Australia, Croatia, India, the United Kingdom, Canada and New Zealand, a minor is at the moment defined as a person under the age of 18 years. In the United States, where the age of the majority is set by every particular state, the term minor generally refers to someone under the age of 18 years, but it can be used in specific areas to describe someone under the age of twenty one years.
In other places, in the criminal justice system, the term a minor is not completely the same, since the minor may be tried for a crime and punished as a juvenile or as an adult more often than not only for extremely serious crimes such as murder. Thus the exact ability of the young people to bind themselves and to be bound to a contract is limited but it is also unclear because no single Act of Parliament completely covers this area of law (QLRC, 1993: pg20; ppt slide 2).
Binding contracts and minors
Contracts for the provision of necessaries or basic needs will usually be binding. Although, there are no hard and fast rules in place to be used to classify what is "a necessary". It includes the variety of things the young person needs to live a reasonable lifestyle: like education, medicine; food, shelter, health and clothing among others. It will also comprise of any contracts concerning to the young person's education, apprenticeship, or something close to that, if it can be proved to be of benefit to the minor. The minor entering into an agreement in these circumstances will be held bound or responsible to pay a sensible price for necessaries actually sold and delivered (QLRC, 1993: pg24).
Non-binding contracts and minors
There are two classes of agreements that are not binding to the young people, they include: contracts that are not for necessaries; and contracts for the repayment of cash or to be lent i.e. any form of credit contract. In circumstances where a young person has already paid cash under a contract which is not binding, the cash will not be recoverable unless no benefit was received by the young person. However, the young person can refuse to make any more payments under the contract. Still after a minor has turned eighteen, he or she cannot confirm an earlier contract and then be bound to it. Under such circumstances, any amount of cash paid by the young person may be recovered (QLRC, 1993: pg27).
Entering into a contract involves the aspects of free will and the appropriate understanding of what each of the parties is doing. Thus the consent of each of the parties to a contract must be clear. It is simply where the vital aspect of consent has been given is there a contract to which the parties are abound to. The eventual end results of establishing that no proper consent was known to enter the contract are matters dealt with when considering remedies for breaching the contract. The right consent may be affected by any of the following factors: false statements, duress, mistake and undue influence.
It is only a few types of oversights that will make the contract to be non-binding on the parties to it: these are mistakes that go to the very foundation of the agreement. An illustration is when an individual signs a written document by mistake believing that it relates to something totally different from what in fact it does relate to; in this circumstance the person will not be bound by it. In contrast, if a person who signs a document believing it to be a contract does not read the terms and conditions that person will be bound by the contract and will not be entitled to plead mistake. Other factors may also be relevant to a successful plea of mistake (QLRC, 1993: pg 30).
There are serious false and minor false statements that might be made by parties entering into a contract. A variety of outcomes flow, according to the seriousness of the false statement made. False statements might be made where either: the parties come to agree and contract because one of them has been provoked to agree by a statement of fact that is not true; or the parties have agreed and there is a contract, but the statements or terms in the contract exist only because one of the parties has made a false statement.
False statements bring out the issue of whether or not a contract exists. A court can view the contract as void and unenforceable for very serious false statements. The effect is that monetary damages sufficient to place the offended party back to their original position must be paid.
In other instances, the court will find the contract valid but the wronged party will be entitled to reject the contract or to treat it as at an end. Here, monetary damages sufficient to place the wronged party in the position they would have been in, had the contract been properly completed, must be paid (Oliver, 1983: 45; Kelsen, and Trevino, 2005: 67).
Where a false statement has put the offended party at a disadvantage or caused him some loss, but not much damage has been done to justify ending the agreement, then the contract will be valid and the offended party will be bound to the contract, but he will be entitled to sufficient monetary damages to make up for the loss suffered as the effect of the false statement.
The most important factors to be considered to determine the level of seriousness at which a false statement will be viewed include; a condition or a warranty false statement; and the type of false statement made (The law of contract, 2010: par. 30).
Types of false statement
In order to obtain a loan, it is possible that a minor may engage himself in issuing of false statements which may give a wrong implication of his/her age. The following are of the forms of false statements which can be made.
To show deceit, it is necessary to testify that the person making the declaration knew it was false, never believed in its truth, or knew it might be false and thoughtlessly went ahead without caring whether it was true or false. Though it's difficult to prove fraud, however once proved, the innocent party can rescind the contract or sue for damages for deceit or both.
It occurs where the false statement is made with no purpose to deceive. An innocent misrepresentation could nonetheless be a serious false statement or a breach of warranty. The extent of seriousness will be determined by an assessment of all the conditions of the agreement. The party that will be proved innocent and without negligence, the only available remedy is rescission.
It arises where one party to the agreement is under a special duty of care to the other party. This special relationship is held to exist where: the person making the false statement alleges to have some special skill not in others; and that person was set to exercise this special skill on behalf of the person to whom the false statement was made. Once again, the level of seriousness of a false statement made in these circumstances can vary. Where there is a serious breach, the innocent party can rescind the contract and recover damages for negligence (The law of contract, 2010: par. 35).
Illegal and void contracts
Not all contracts will be enforced by law. In situations where the contract is illegitimate, this may influence its enforceability. Contracts that are illegitimate by statute will be standardized as to enforceability by the statute; hence the statute needs to be read and understood. Contracts totally outlawed by statute will be void, whether the parties know of the illegality or not. However, where one party performs an otherwise legal contract in a manner that breaches legislation, the other party, if having no knowledge of the facts giving rise to the illegality, can still enforce the contract or recover damages for breaching it. They may also recover money or other property transferred under the contract.
Agreements made void by statute are treated in a different way; though they remain valid contracts, they cannot be enforced by the courts. Again, the precise extent of the enforceability of, or the revival of any cash paid under a void agreement will depend on the exact statute. Other types of contracts that are contrary to the public good are illegal at common law. The unlawfully created contracts are usually void and cannot be enforced by either party at ordinary law. Thus, property or money transferred can't be recovered (QLRC, 1993: pg33; The law of contract, 2010: par. 40).
A person or a minor who is entering into a contract ought to read the terms and conditions that he or she will be bound by the contract hence won't be entitled to plead mistake. Relating to the case of Ong, it means that the local bank agreed to give a loan to Ong to assist him in paying for his educational expenses which Ong discovered later through the email to have been a guarantee of the loan contract. In such a case Ong is not bound to repay the loan because he entered the contract at a time that he was a minor; he never understood the terms of the contract.
Also the local bank is bound to the contract i.e. to write off the loan because it assumed that Ong will repay the loan in future; the local bank did not take time to make Ong understand the terms of the contract (Smith 2002: par. 10; ABA, 2003: pg33).
Some groups of people are not totally free to enter into a valid contract, like the minors. There are serious false and minor false statements that might be made by parties entering into a contract. A minor refers to a person who is under the age in which one legitimately assumes adulthood and is legally awarded rights given to adults in the society. Minors can enter into: binding contracts- for the provision of necessaries; and non-binding contracts- contracts not for necessaries and for the repayment of cash or to be lent. For the parties entering into a contract, the aspects of free will and the appropriate understanding of what each of the parties is doing must be clear; since any mistakes committed will make the contract to be non-binding on the parties to it. Also, there are serious false and minor false statements that might be made by parties entering into a contract. A variety of outcomes flow, according to the seriousness of the false statement made e.g. a contract can be declared as void or illegal. It is recommended that the terms and conditions of the contract should be made clear to the minors to avoid cases of breaching the contract, making it void or illegal.