This article explains the critical legal matters that organisations and individuals should be aware of when entering into a contract with a minor. It discusses the issues that can arise as well as different ways of dealing with those issues.
A minor is someone under the age of 18 years according to a definition under the Births and Deaths Registration Amendment Act (No 1 of 2002). This is called the age of majority. The age of majority was reduced from 21 to 18 years by this Act.
More recently however, the law now uses the word 'child' to refer to an under age person previously referred to as a minor. This is confusing because in common language we would probably not refer to a sixteen or seventeen year old as a child. So it is common to continue to use the word 'minor'.
To form a legally binding contract there must be three things: an offer, acceptance and an intention to create a legally binding contract.
The law presumes that some people do not have the power to make contracts. These people are:
- children under 7 years
- people who are mentally insane
- people who are under the influence of drugs or alcohol
A minor can therefore, enter into a contract. However, the law also assumes that a minor cannot understand the implications of a contract. So, whatever caveat is drafted into the contract, they will remain protected to the disadvantage of the other party.
Further, a contract with a minor is voidable. That means they are able to cancel any contract at any time before reaching the age of 18 and for a reasonable period after that time. There is no requirement for them to have a justifiable reason for this, it can be done on a whim or where it may be advantageous to the child to do so.
Problems arise unexpectedly. It is obvious that a child cannot get a credit card in their own name, but they could borrow or steal one. You may be unable to enforce a contract on a borrowed card unless you could prove that it was a term of the agreement that the person was over 18 years old. The sale of goods on a stolen card would be void from the outset.
Fortunately, the situation is not quite so clear-cut for all contracts with children. There is one key exception to the general position outlined above and this relates to contracts of service, apprenticeship and education with children. The rationale behind this exception is to give organisations certainty when entering into a contract with a child that enables them to earn their living or to start to do so.
Such a contract is likely to be binding on a child provided it is beneficial to them. This exception will always be subject to the child being at least old enough to understand the nature of the contract they are entering into - if they are not, the contract will fall outside this exception and be voidable in line with the general position.
A court would not force any person (whether it be an adult or minor) to carry out a contract for personal services because as a matter of public policy parties should not be forced to continue in a personal relationship against their will. Therefore the only remedy is of damages arising from breach of contract.
First, obtain a personal guarantee from a parent. This sounds perfect, but it is not. There have been cases in court where the judge has said that a parent cannot be held responsible automatically for the contract of a minor because that defeats the fundamental proposition that a minor cannot be bound.
However, it is our humble opinion that a modern judgement would not follow that and the parent would be bound - at least if the contract was reasonable in the round.
Better, is for the parent to enter into the contract in their own name. If a parent buys an expensive electronic item from you, then what they do with them after that is up to them.
Many websites discourage use by children at the start of their terms and conditions. That is also a good way to make clear that you will not sell to minors.