Lecture Notes: Capacity to Contract

Introduction

• Capacity to Contract: A critical element of a valid and binding contract.
• Age of Contractual Capacity in Ghana: Governed by common law, set at 21 years.

Age of Contractual Capacity

• Common Law Rule: Age is 21 years.
• Repealed Laws: Interpretation Act of 1960 and Company’s Code of 1963 are repealed.

Contracts Involving Minors

• General Rule: Contracts cannot be enforced against minors but can be enforced by minors against adults.

Exceptions to General Rule

1. Contracts for Necessaries

   • Can be enforced against the minor.
   • Definition: Goods suitable to the condition and requirements of the minor.
   • Reference: Sale of Goods Act, 1963.

2. Beneficial Contracts of Service

   • Includes apprenticeship and service contracts beneficial to the minor.
   • Extended to contracts allowing minors to earn a living through a profession.
   • Case References: De Francesco v. Barnum, Doyle v. White City Stadium Limited.

3. Voidable Contracts

   • Involve a minor gaining a permanent interest with ongoing obligations.
   • Binding unless repudiated by the minor.
   • Examples: Purchase of shares, marriage settlements, land leases.
   • Case Reference: Steinberg v. Scala.

4. Loan Contracts

   • Generally non-recoverable, except for necessaries.
   • Student loans under the Student Loan Scheme are enforceable.

5. Misrepresentation by Minors

   • Contracts remain unenforceable even if a minor misrepresents age.
   • Equity allows for property restoration if identifiable.
   • Case Reference: Leslie Ltd v. Sheill.

Specific Performance and Liability

• Specific Performance: Minors can enforce it if they have fully performed their obligations.
• Liability for Torts: Generally liable unless directly arising from non-binding contracts.

Mentally Incompetent Persons

• Contract Validity: Generally voidable unless the other party knew of the incompetency.
• Lucid Intervals: Contracts during these periods are binding.
• Liability for Necessaries: Payable regardless of supplier's awareness of the incompetency.
• Case Reference: Imperial Loan Co v. Stone.

Intoxicated Persons

• Contract Validity: Similar to mentally incompetent persons; voidable if intoxication impairs understanding and is unknown to the other party.
• Liability for Necessaries: Obligated to pay if supplier expected payment.
• Case Reference: Matthews v. Baxter.

Conclusion

• Importance of reviewing laws and cases related to capacity.
• Prepare for next lecture on Cy D.