Business Law
Contract An agreement that is enforceable in a court of law
A contract is legally binding only when it contains certain factors:
Capacity The legal capability of entering into an agreement; some individuals, such as minors, and mentally incompetent or intoxicated persons, are not seen in law as having the capacity to enter into a contract.
Legality The purpose must be neither criminal nor against the public good.
Consensus There must be complete agreement, or consensus, among the participants.
Intention The intent must be that legally enforceable obligations will result from the agreement.
Consideration All parties must offer a consideration, which is the price paid for a promise, something of value of promised or paid that is taken to indicate that the person has considered the agreement and consents to be bound by it.
Capacity includes: minors, mentally incompetent people and individuals who are intoxicated.
Age of Majority The age at which a person is recognized as an adult according to the law of his or her province.
Minor A person who has not attained the age of majority according to the law of his or her province, and therefore is not legally an adult.
Each province and territory in Canada sets its age of majority. A young person who is legally a minor in one province may be considered an adult in another.
In general, the courts are unlikely to enforce a contract against a minor.
It doesnt matter if a person appears to be over the age of majority and the other party to the contract honestly believes that the young person is an adult. This is true even when the minor has deliberately lied to or misled the adult.
If a contract is cancelled by the court, the minor is entitled to have any money paid refunded, but must return the goods purchased.
Parents of a minor are not liable unless they had previously authorized the contract. If a parent co-signs a contract, or persuades the other party that the parents have accepted responsibility for it, they can be held liable.
Repudiation (anticipatory breach) an indication by a party that he or she will not go through with the agreement as promised.
Minors Contracts for Necessities
Contracts that involve matters necessary for the minors survival can be enforced by the courts. Necessities are those things which are needed for everyday (food, clothing, shelter, education, medical care, job training, and other programs).
Necessities The basic goods and services required to function in society
Minors must fulfill any contracts they make for necessities.
A minor only has to pay a reasonable price for the necessities. The court will reduce the price if it is not a fair one.
It is up to the other party to prove that the contract is for necessities [next page]