For a valid contract to be concluded, both parties must possess the capacity to contract. Capacity to contract refers to a party’s ability to adequately express their understanding of the nature and effect of the conclusion of the contract. The general rule is that all natural persons have inherent legal capacity; however, their status is what will determine their contractual capacity. This article seeks to explore the contractual capacity of minors and whether it is possible to hold them accountable to a contract.

Limited capacity and the status of Minors

When a party has limited contractual capacity, it means that they may only conclude contracts with the assistance or consent of another person who possesses full capacity to contract. This is because it is assumed that these parties although, having the ability to understand the nature and effect of a contract, lack adequate judgement skills that would ordinarily allow parties to contract fairly.

In terms of section 17 of the Children’s Act 38 of 2005, as amended, minors are children between the ages of 7 to 18 years old. When a minor concludes a contract, they are required to obtain the consent of their parents or guardians, or in special cases, they may approach a court for assistance. Hence, the status of a minor informs us that they only have limited contractual capacity. Unassisted minors, therefore, cannot be bound by the terms of a contract.

Available Remedies

As stated above, the contractual capacity of a minor is dependent on the consent of their guardian or parents. Consent may be obtained before or after the conclusion of a contract. Therefore, if a party unknowingly contracts with a minor who has not yet obtained consent, the contract may still remain valid and enforceable if the parent/guardian subsequently ratifies the contract. The effect of ratification is retrospective, and the contract will be deemed to have been valid from the time of conclusion.

Additionally, a party that has unknowingly contracted with a minor may make use of the restitutio in integrum principle. In a case where performance in terms of a contract has been rendered, the court may order that each party returns to each other the performance rendered so that the parties may return to their status prior to the conclusion of the contract.

Finally, should a minor fraudulently misrepresent their minor status when concluding the contract, the innocent party may hold the minor accountable to the contract on the grounds of unjustified enrichment. To prove unjustified enrichment, the innocent party must show that the minor had misrepresented their adult status and that the innocent party relied on this misrepresentation to their detriment. The innocent party must also prove that the minor has been enriched by the contract while the innocent party was impoverished. Should the innocent party satisfy these requirements, the court will set aside the minority status of the minor, and the contract will remain enforceable on the minor.

Conclusion

Minors cannot conclude a valid contract without the consent of their parent or guardians. As indicated previously, this may be obtained before or after concluding the contract. It is important to ensure that such consent is expressed clearly to avoid unnecessary future disputes.

Written by Thandi Makasi, Candidate Attorney, Schoeman Law