This chapter examines the law governing contracts made by minors, or by persons who are mentally afflicted or drunk. It also considers the present position of corporations, who make contracts outside the limits set out in the formative document.
Chapter
13. Capacity of Parties
M P Furmston
Chapter
7. Incapacity
Jack Beatson, Andrew Burrows, and John Cartwright
This chapter discusses the grounds of contractual incapacity. It considers contracts made with the Crown and public authorities; corporations and incorporated associations; minors; and persons lacking mental capacity and drunken persons.
Chapter
21. Capacity
This chapter discusses the issue of capacity. The general rule is that contracts are valid but unenforceable on minors (persons under 18 years of age). However, they are enforceable against adults, and a minor can ratify a contract upon attaining the age of majority so that the contract is enforceable against both parties. At common law, mental incapacity is not by itself a reason to set aside a contract. But if the other party knows, or ought to know, of the mental incapacity, then the contract can be set aside. The Mental Capacity Act 2005 makes it clear that a person who lacks capacity must still pay a reasonable price for necessary goods and services.
Chapter
4. Intention to be legally bound, formalities, and capacity to contract
Robert Merkin KC, Séverine Saintier, and Jill Poole
Course-focused and comprehensive, Poole’s Textbook on Contract Law provides an accessible overview of the key areas of the law curriculum. This chapter examines the requirement that there must be an intention to create legal relations and specific requirements of form, such as writing, for an agreement to be enforceable as a legally binding contract. Traditionally, this intention to create legal relations is determined objectively using two presumptions that can be rebutted on the evidence. First, it is presumed that there was no intention to be legally bound in the context of social or domestic agreements. Secondly, it is presumed that the parties to commercial agreements intended to be legally bound unless there are clear words indicating the opposite, such as the existence of an honour clause. In addition, some contracts require particular formalities to be binding. The chapter outlines some examples of these and discusses the consequences of non-compliance with the formality requirements. It also considers the capacity rules in contract (i.e. a party’s ability in law to contract) and the effect of incapacity on a contract, focusing on contracts made by minors (persons below 18 years old). The chapter concludes by discussing electronic signatures and the implications of e-commerce for formality requirements in contracts.
Chapter
4. Intention to be legally bound, formalities, and capacity to contract
Robert Merkin, Séverine Saintier, and Jill Poole
Course-focused and comprehensive, Poole’s Textbook on Contract Law provides an accessible overview of the key areas on the law curriculum. This chapter examines the requirement that there must be an intention to create legal relations and specific requirements of form, such as writing, for an agreement to be enforceable as a legally binding contract. Traditionally, this intention to create legal relations is determined objectively using two presumptions that can be rebutted on the evidence. First, it is presumed that there was no intention to be legally bound in the context of social or domestic agreements. Secondly, it is presumed that the parties to commercial agreements intended to be legally bound unless there are clear words indicating the opposite, such as the existence of an honour clause. In addition, some contracts require particular formalities to be binding. The chapter outlines some examples of these and discusses the consequences of non-compliance with the formality requirements. It also considers the capacity rules in contract (i.e. a party’s ability in law to contract) and the effect of incapacity on a contract, focusing on contracts made by minors (persons below 18 years old). The chapter concludes by discussing electronic signatures and the implications of e-commerce for formality requirements in contracts.
Chapter
15. Remedies providing for specific relief and restitutionary remedies
Robert Merkin KC, Séverine Saintier, and Jill Poole
Course-focused and comprehensive, Poole’s Textbook on Contract Law provides an accessible overview of the key areas of the law curriculum. Equitable remedies that provide for specific relief refer to remedies for breach of contract which compel actual performance, rather than simply compensating for loss caused by breach. Compulsion of performance may take the form of claiming an agreed sum, a claim seeking specific performance, or a claim seeking an injunction. The claim or action for an agreed sum gives effect to the claimant’s performance interest by ordering the party in breach to pay the liquidated sum (debt), his agreed performance under the contract. The chapter examines the remedy of specific performance as a court order that compels actual performance of agreed obligations (other than payment of the price). As an equitable remedy it is available at the discretion of the court, but only when damages would be an inadequate remedy. This chapter also examines remedies providing for specific relief and restitutionary remedies, the latter of which refer to recovery based on failure of consideration and quantum meruit. Finally, the chapter examines the availability of specific compensatory remedies in instances where there is no financial loss, namely the exceptional remedy of an account of profit or the remedy of ‘negotiating damages’—and their relationship.
