What is a minor?
A minor is a person under the ‘age of majority’. In England and Wales, the age of majority is 18, as set under the Family Law Reform Act 1969.
How is a valid contract formed?
To form and enter into a valid contract, an offer to contract must be made, this must be accepted, there must be an intention to enter into a legally binding contract, and there must be consideration (ie some value must be exchanged). To learn more about what this entails, read How to form a valid contract.
The law presumes that certain people cannot enter into contracts. These include:
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minors
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anyone who lacks mental capacity
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anyone under the influence of drugs or alcohol
That being said, any minor can enter into a legally binding contract, but more rules than usual apply to determining when such contracts are legally binding, to rebut the presumption that minors cannot enter into contracts. Essentially, minors are awarded greater protection than anyone over 18 due to their age.
Are contracts entered into by minors enforceable?
The law presumes that minors do not fully understand the implications of a contract. This means that, regardless of what is written in a contract, minors will be protected even if this disadvantages the party they are contracting with.
Contracts with minors are voidable (ie they are valid but can be ended). This means a minor can cancel a contract at any time before turning 18 (and for a reasonable period afterwards) without a valid reason. However, the other party cannot cancel the contract.
What contracts are voidable by minors?
There are two classes of voidable contracts:
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those binding on a minor unless they are repudiated while the minor is under the age of 18 or within a reasonable period after turning 18, and
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those that are not binding unless the minor ratifies them after turning 18
Repudiated contracts
A minor can repudiate a contract (ie express their intention not to fulfil the contract) at any time before turning 18. They can also repudiate a contract after tuning 18, provided they do so within a reasonable period (depending on the situation's specifics). If this is not done, the contract will become binding.
The most common types of contracts that fall into this category are contracts for the acquisition of an interest in property of a permanent nature. This includes:
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share purchases
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land purchases
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property leases
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partnership contracts
Ratified contracts
A ratified contract is one in which the minor recognises the binding obligations placed on them in the contract after turning 18. In other words, they accept the contract as binding and enforceable.
Most contracts minors enter into fall into this category.
When is a contract with a minor enforceable?
While contracts with minors are generally considered voidable, there are certain exceptions to this position. These include:
Contracts of employment, apprenticeship, or education
If a minor enters into a contract of employment (eg working under a zero-hours contract), apprenticeship, or contract for the provision of education, this will be enforceable, provided the contract provides some benefit to the minor. For example, a salary.
This is because the organisations that enter into such contracts for employment, apprenticeship, or education require a degree of certainty that the contract is binding to enable the minor to (start to) earn money.
Necessary contracts
A minor is able to enter into a contract for necessary goods and services. Under the Sale of Goods Act 1979, minors will be expected to pay a reasonable price for such necessary goods and services.
Examples of necessary goods and services include:
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food and drinks
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clothes
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accommodation costs
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medicine
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contracts for legal or medical services
Necessary goods and services are those that are purchased for real use by the minor (ie not goods or services that are only ornamental or for convenience).
A contract for necessary goods or services is only enforceable if it is for a minor’s benefit.
Can the courts enforce contracts with a minor?
Even if a minor is deemed to understand the nature of a contract, and the contract was beneficial to them, the courts are unlikely to order the performance of the contract. This is due to public policy reasons, under which the courts will not force someone to continue in a personal contractual relationship (eg an employment contract) against their will. However, the courts may order damages for breach of contract.
To help avoid difficulties when contracting with a minor, it is a good idea to include guarantor provisions in a contract. A guarantor is a party to a contract over the age of 18 who assumes responsibility for the minor’s contractual obligations (eg monthly rent payments). Guarantors for minors will often be their parents or legal guardians.
Asking for a guarantor does not change the fact that the primary person in the contract is the minor. Instead, it provides additional security for anyone contracting with the minor.
For more information, read Guarantors. Do not hesitate to Ask a lawyer if you have any questions about guarantors.
Overall, while a minor can sign a contract, the contract may not be legally enforceable. Understanding the laws around entering into a contract with minors before you sign such a contract as a minor or with a minor will help you make informed decisions and protect your interests. If you have any questions or concerns, Ask a lawyer. Use our Bespoke drafting service if you require a contract for a minor.
