Capacity (minors only) — practice questions

Capacity: Tom is a minor (under 18).

Classification: Sale of goods — assess whether necessaries under s3 Sale of Goods Act 1979.

Necessaries test: (1) Suitable to minor's station in life — wealthy student may need formal wear; (2) Actual requirements at time — Tom already owns several suits, so jacket may not be a necessary (Nash v Inman — excess clothing not necessaries).

If not necessaries: Contract is unenforceable against Tom. Tom may return the goods (and may be ordered to do so under s.3 Minors' Contracts Act 1987 if equitable).

If necessaries: Tom must pay reasonable price, not necessarily the agreed £800.

Conclusion: The tailor will likely fail to recover the £800. The jacket is probably not a necessary given Tom's existing wardrobe. The contract is unenforceable.

Issue: The issue is whether the apprenticeship contract is binding on Aisha, a minor.

Rule: This is a contract of apprenticeship, which falls into the category of 'beneficial contracts of service'. For it to be binding, the contract as a whole must be more advantageous than disadvantageous to the minor.

Analysis & Calculation:

1. Identify Positive Terms:
   • Wage: Aisha earns a weekly wage of £200. Annual wage = £200 x 52 weeks = £10,400 per year.
   • Training: She receives specialist training valued at £10,000 per year.
   • Experience: She gains valuable industry experience.
2. Identify Onerous (Negative) Terms:
   • Deductions: The company can deduct up to 40% of her wages (£80 per week) for minor breaches. This is a harsh and potentially unfair penalty.
   • Restraint of Trade: A 5-year restriction on performing for other companies after the contract ends is extremely long and could severely limit her future career prospects. This is likely an unreasonable restraint of trade, especially for a young artist.
3. Weigh the Terms: The court will balance the benefits against the burdens. While the total annual financial benefit appears to be £20,400 (£10,400 wage + £10,000 training), the onerous terms are very significant. The punitive deduction clause and, most importantly, the excessively long 5-year restraint of trade likely make the contract oppressive.

Conclusion: Following the principle in De Francesco v Barnum, a court would likely find that the contract, when viewed as a whole, is not beneficial to Aisha due to the oppressive and unreasonable negative terms. Therefore, the contract is unenforceable against her. Aisha can repudiate the contract and will not be bound by its terms, including the 5-year restraint.