Can a minor enter into a contract?

The legal position

Full age. A person attains full age at eighteen (Age of Majority Act, s 2).

Void contracts. Under s 19 of the Infants Act, three kinds of contract entered into by a minor are absolutely void: contracts for the repayment of money lent or to be lent, contracts for goods supplied or to be supplied (other than necessaries), and all accounts stated (that is, agreed statements of the balance owed on an account). The minor cannot be sued on any of them.

Necessaries. Where necessaries are sold and delivered to a minor, the minor must pay a reasonable price for them (Sale of Goods Act, s 4). That price may differ from the contract price. Necessaries are goods suitable to the minor's condition in life and to the minor's actual requirements at the time of sale and delivery. The seller bears the burden of proving both elements, including that the minor was not already adequately supplied with goods of that kind. Articles of mere luxury are always excluded, although articles of utility that are costly may in some cases qualify.

Voidable contracts. Certain contracts confer on the minor an interest of a continuing nature, such as a lease, a partnership, or a holding of shares. Such a contract binds the minor unless the minor repudiates it before attaining full age or within a reasonable time afterwards.

Contracts binding on the minor. A contract of employment, apprenticeship or training binds a minor if, taken as a whole, it is substantially for the minor's benefit. A trading contract does not bind a minor, however beneficial it may be. Examples include the purchase of stock for a business, or the hire of equipment to be used in earning a living.

Ratification after full age. No action may be brought on a promise made after full age to pay a debt contracted during minority, or on a ratification made after full age of a contract entered into during minority (Infants Act, s 20).

Practical implications

A business that extends credit or lends money to a person under eighteen does so at its own risk. The contract is void, and the price of goods other than necessaries cannot be recovered by action.

A misrepresentation of age does not alter the position. A minor who obtains a loan by falsely claiming to be of full age cannot be compelled to repay it. Where a minor has obtained goods by such a misrepresentation and still has them, the court may order the goods to be returned, but it will not order the minor to pay their value.

The protection conferred on a minor is a shield against enforcement. It does not confer a general right to a refund. Where a minor repudiates a contract, money already paid is recoverable only if there has been a total failure of consideration, that is, only if the minor received none of what was bargained for.

Recommended steps

A business that contracts with persons under eighteen on credit or on continuing terms should verify the customer's age at the outset. Where the customer is a minor, the parent or guardian should enter into the contract as the principal party, whether as buyer or borrower, rather than as guarantor. A guarantee of a debt that is void against the minor may itself be unenforceable.

Contracts of service with young persons, such as athletes, performers and apprentices, should be drafted on fair terms that are demonstrably for the young person's benefit. An oppressive contract of service will not bind the minor.

A person who has recently attained full age and is asked to confirm a debt incurred during minority should note that such a confirmation cannot be sued upon. That does not extinguish liability for necessaries already delivered. Nor does it release the person from a lease or similar continuing contract that was not repudiated within a reasonable time after attaining full age. Advice should be obtained before any new document is signed.