Capacity in contracts –
Natural and Corporate Persons can enter into contractual capacity:
o Mental disability
o Intoxication
o Minors
Intoxication and mental disability
A contract will be valid and binding unless:
The person was unable to understand nature and consequences
of the contract, and;
The other party was aware of this fact
In such circumstances, the contract is voidable, and the affected party can repudiate it
Capacity of minors:
Key rule: Contracts do not bind minors (Family Reform Act 1969, s1)
However, the enforceability of a contract with a minor will depend on the type of
contract that it is:
Valid and Binding
o Contracts for necessaries
o Beneficial contracts for service, apprenticeships, education and training
Natural and Corporate Persons can enter into contractual capacity:
o Mental disability
o Intoxication
o Minors
Intoxication and mental disability
A contract will be valid and binding unless:
The person was unable to understand nature and consequences
of the contract, and;
The other party was aware of this fact
In such circumstances, the contract is voidable, and the affected party can repudiate it
Capacity of minors:
Key rule: Contracts do not bind minors (Family Reform Act 1969, s1)
However, the enforceability of a contract with a minor will depend on the type of
contract that it is:
Valid and Binding
o Contracts for necessaries
o Beneficial contracts for service, apprenticeships, education and training
