7. Capacity and Privity of Contract

7. Capacity and Privity of Contract - Capacity and Privity...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Capacity and Privity of Contract Contracting Parties Definitions i. Privity is the legal term for a close, mutual, or successive relationship to the same right of property or the power to enforce a promise or warranty. ii. Only parties to a contract (individual or corporation) is allowed to sue or be sued under a contract; third parties are not allowed to sue or be sued under a contract. Incapacity Purpose : To protect the inexperienced (minors) and vulnerable(mental disorders or intoxication) individuals. The contract can be either void or voidable. Minors Definition: Anyone under the age of 18 (Singapore) from 9 March 2009 , 18 (Malaysia & UK) General Rule: i. Contracts entered into by a minor are not enforceable against him to protect the minor. Protects minor from more experienced parties who may take advantage of their minor. (This applies only when contracts are executory.) ii. Minors only allowed to set up his minority as a defence , while he has yet to perform his obligations. iii. If the contract is executed, the minor cannot recover money paid or goods delivered unless there has been a total failure of consideration on part of the other party. Case: Steinberg v Scala (Leeds) Ltd (1923) – minor tried to recover money paid for shares (partial payment) but court rejected because she had consideration from the company. She could terminate the contract and free herself from the liability of paying for the balance price of the shares. iv. Adult parties are ALWAYS bound by contract Exceptions – where contract is binding and enforceable against a minor: a) Contracts that bind a minor b) Contracts voidable by a minor c) Contracts ratified by a minor
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
a) Contracts that bind a minor (2 types) 1) Determining whether the goods or services are necessaries at “law” 2) Does the minor have actual needs for the goods or services Burden of proof: on the adult party. 3) Does the goods or service benefit the minor 1. Beneficial contract for necessaries General Rule: i. Unless minor is bound, traders will not give a minor credit for their necessaries If the minor withdraws from the contract just because he is a minor, other traders will not be willing to supply the minor with goods in the future ( detriment). ii. The terms of the contract must benefit the minor iii. The minor is only liable to pay a reasonable price when the contract for necessaries is delivered by adult party (executed). a) Executory contracts for goods: Minors are not binded b) Executory contracts for services: Minors are bounded (education) – Common Law Case: Roberts and Gray (1913) s 3(3) SGA – “Where necessaries are sold and delivered to a minor … he must pay a reasonable price for the” iv. Loans for necessaries: Not enforceable ( Darby v Boucher (1694)) a. Determining Necessaries Necessaries: Goods supplied or services rendered S 3(3) UCTA (Singapore) on necessaries– goods suitable to the condition in life of the minor concerned and to his actual requirements at the time of sale and delivery.
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern