People under the age of 18 (called 'minors') do not have the same full contracting power that adults do. They can still make contracts, but there are special rules.
In general, for a contract to be binding, the minor will have to affirm the contract, that is, agree to be bound by it, after turning 18. A minor cannot be forced to affirm a contract, so there is a certain risk in contracting with a minor other than as described below.
On the other hand, although many contracts cannot be enforced against a minor, the minor can still enforce the contract against the other party.
Some contracts are binding on the minor without the minor affirming them. For example:
- A minor can make a legally binding contract for goods or services that are usual or appropriate to their way of life (called 'necessaries'). These will be such things as food, clothing, accommodation, medical care, school requirements or sporting goods appropriate to their age and their standard of living. 'Necessary' goes beyond things which are essential for survival and includes things which it would be normal for the minor to have and use at the time the contract is made. A minor can also make a valid contract for services of instructional or educational benefit, which could include such things as music lessons, sports coaching, educational tutoring, etc.
- Contracts which give the minor some continuing legal obligations are binding unless the minor chooses to opt out of the contract before, or reasonably soon after, they turn 18. This is called 'avoiding' the contract. Examples of these types of contracts are contracts of business partnership, or contracts to lease land. If the minor avoids the contract, he or she is only responsible for the obligations which have already arisen, not for any future ones. They cannot avoid past obligations or get back money they have paid out in respect of these. However, the minor may be able to get a court order for the return of their property, previously transferred under the contract, on fair terms.
- A minor may make a binding contract with the consent of a court. The minor's parents can apply on his or her behalf, if the minor wishes to be bound; or the other party can apply, if he or she wants to make the contract enforceable against the minor. If the court decides to approve the contract, it will then be legally binding [Minors Contracts (Miscellaneous Provisions) Act 1978 (SA) s 6].
- A minor's performance of a contract may be guaranteed. If the adult party to a contract wants greater security in contracting with a minor, they can ask the parents (or some other adult) to guarantee the minor's performance of the contract. The minor's legal position is unchanged, but the guarantors take on a separate obligation of their own. If the minor does not do as the contract requires, the other party has a separate right to sue the guarantors for any loss.
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