question archive Contractual Capacity To enter into a contract, parties must have contractual capacity
Contractual Capacity To enter into a contract, parties must have contractual capacity
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Contractual Capacity
To enter into a contract, parties must have contractual capacity. The parties must have the mental ability to understand their rights and obligations under a contract so that they can comply with the terms. One of the limitations on capacity is the ability of minors to enter into voidable contracts.
In Florida, and most other states, one who is unmarried and has not reached the age of 18 years is deemed to be a minor, i.e., subject to the disabilities of nonage. Among the disabilities of nonage is the incapacity to make a binding contract. Because their contracts are voidable, minors and their legal guardians have the right, until a reasonable time after their reaching the age of majority, to disaffirm, or avoid, their contracts.
However, if a person or business provides a person who lacks contractual capacity with necessaries, they may recover the reasonable value of such necessaries irrespective of the existence, or nonexistence, of a (voidable) contract respecting those necessaries.
A necessity has been defined as something necessary to the position and condition of the minor. Every case stands upon its peculiar facts and reasonable necessities, according to the circumstances of each case; and there is no positive or iron-bound rule by means of which it may be determined what are or what are not necessaries. Typical necessities include "things for bodily need food, support and maintenance, clothing, medicine and medical attention, and lodging." To enable a minor to contract for articles as necessaries, he or she must have been in actual need of them, and obliged to procure them for himself or herself.
Consider this scenario: Sarah, a 16 year old living in Florida, had been living with her parents all of her life. She decided that she wanted to move out and get away from her parents and be on her own. Sarah's parents did not "kick" her out of their house and they kept her room waiting so that she could return to their home at any time.
Sarah signed a contract for 6 month lease of an apartment. No adult signed the lease as a guarantor.
Sarah changed her mind about living on her own after three (3) months. She returned to live with her parents. She stopped making any rent payments after she moved out of the apartment.
Sarah's landlord sued her for breach of an apartment lease and unpaid rent.
Sarah argues that she should be able to void the lease contract because she was a minor when she signed the lease. The landlord argues that Sarah, at the very least, owes the reasonable value of the rent because lodging is a "necessity". Sarah argues the apartment was not a "necessity" because she had a place to live provided by her parents at the time she signed the lease agreement and during the time she lived in the apartment . She argues that the apartment was not "necessary" to her position and condition as a minor at the time she signed the lease.
How would you rule if you were the judge in the case? **Support your answer with legal reasoning.**
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Judge's decision
Based on the facts provided Sarah is not bound to the lease agreement and she did not breach the lease agreement contract. This is because as an infant she had the ability to avoid the contract since it is avoidable according to contract law. Moreover, the apartment does not qualify to be a necessity since Sarah did not need the apartment because she had a room at her parent's house.
Step-by-step explanation
The issue, in this case, is whether Sarah is bound to the lease agreement or not?
Contract law defines a minor or an infant as any person who has not attained the age of 18 and the contracts entered into by such persons can be void, voidable, or binding depending on its purpose or nature. Binding contracts include contracts of beneficial services, for the supply of necessaries, and contracts for the supply of other necessaries. An infant is legally bound to any contracts that are binding as stated in the Sale of Goods Act. The Sale of Goods Act states that an infant will be held liable when he or she is supplied with such necessities up to the amount the court considers considerable. Therefore an infant is liable to not the agreed price but what the court will consider as reasonable. Contract law renders certain contracts entered into by infants voidable. That is, an infant is allowed to repudiate the contract during infancy. By avoiding the contract the infant is able to escape its liability and therefore cannot be sued on it during infancy. Examples of voidable contracts include lease or tenant agreements, contracts to purchase shares, and partnership agreements. If an infant does not repudiate a contract during infancy or within a reasonable time after attaining the age of majority, he or she will be held liable. This rule was held in Davis v. Beynon-Harris.
From this case, Sarah was an infant when she signed the lease agreement, and therefore this contract is voidable at the option of Sarah. Since Sarah had a room in her parent's house this cannot be considered a necessity since she was not in actual need of it as was held in Nash v. Inman. Sarah repudiated the contract during infancy before attaining the age of majority and cannot be sued for breach of the contract. Moreover, the lease agreement entered into by infants is voidable and therefore Sarah had a right to avoid the contract.
Based on the facts provided Sarah is not bound to the lease agreement and the landlord cannot sue her. This is because she repudiated the agreement during infancy and the apartment was not a necessity since she had a room in her parent's place. Therefore she cannot be held liable for breach of a contract or the rent.
