Week 8 Lecture slides

Week 8 Lecture slides - LAW101 Law, Business & Society Week...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
1 LAW101 Law, Business Week 8 Contract Law - Making contracts Part 3 Contracts BASIC ELEMENTS OF CONTRACT FORMATION Contracts Then, TEST FOR VALIDITY CAPACITY The law holds that some individuals lack capacity to contract. This is primarily for two reasons: 1. Protect Individuals 2. Protect Society CAPACITY Do the parties to the contract have full contractual capacity? – Only normal, sane, sober, adult person has FULL capacity to make a contract. – Means that they have the ability to understand what it is that they are entering into. CAPACITY Do the parties to the contract have full contractual capacity? – Under common law and (in some states statute law) classes of people are treated as NOT having full contractual capacity which affects the VALIDITY of any contracts entered into by those persons.
Background image of page 1

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

View Full DocumentRight Arrow Icon
2 CAPACITY Minors A minor is anyone under the age of 18 years. Minors (Property and Contracts) Act 1970 (NSW) Capacity – Infants/Minors • Full contractual capacity from 18. • Persons under 18 years of age are considered infants or minors. • The law relating to capacity of minors is found in: – Common law – Statute in Vic, NSW and SA Capacity – Infants/Minors Common law - Valid Contracts • Can be created by –the infant paying cash or –entering into: • contracts for necessaries • beneficial contracts of service ± If it is a contract for necessaries – goods and services essential for reasonable comfort - the minor must pay a reasonable amount. ± If it is a beneficial contract of service - contract of employment, apprenticeship, training or education - it is enforceable ± Cash transactions – a minor is bound even if not for necessaries Capacity – Infants/Minors Infants – NSW legislation New South Wales • In NSW the law relating to the contractual capacity of infants is regulated by the Minors (Property and Contracts) Act 1970 (NSW) making contracts either valid or void.
Background image of page 2
3 Infants – NSW legislation New South Wales • It attempts to make infants liable in contract if they understand it is for their benefit: Homestake Gold of Australia Ltd v Peninsula Gold Pty Ltd (1996) Infants – NSW legislation New South Wales The legislation can be summarised as follows: Any contract entered into by a minor is ‘presumptively binding’ if it is beneficial. In deciding what is beneficial the Courts have regard to the fairness and reasonableness of the terms. Infants – NSW legislation • The onus is on the person who wishes to establish that the contract is binding. The court considers: – The age of the infant; – The type of transaction; – The station in life of the infant; and – The fairness of the bargain. Capacity - Corporations • Corporations have virtually the same legal capacity as natural persons under section 124 of the Corporations Act 2001 (Cth). • Incorporation under the Act gives a
Background image of page 3

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

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 06/16/2010 for the course LAW 121 taught by Professor Aresa during the Spring '08 term at Uni. West.

Page1 / 9

Week 8 Lecture slides - LAW101 Law, Business & Society Week...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online