Entering into a contract with a minor is generally unenforceable against the underage child. However, there are a couple of exceptions. And, while some believe there should be more exceptions, it does not appear as if Australian legislatures will be changing these restrictions any time soon.
Currently, contracting with a minor is governed by Minors (Property and Contracts) Act 1970 No 60. Generally speaking, the Act only allows for contracts with minors for the following:
- Contracts for employment
- Contracts for necessities
In reviewing the scope of these two areas it is easy to see why exceptions were created for employment and necessities. Minors, particularly those sixteen years and older, tend to want to start working in order to afford some of the luxuries that parents might not be willing to foot the bill for. In the case of hiring a minor, the exception does still give some protection to the minor. The contract cannot be unfair or oppressive and the minor retains the right to repudiate the contract when they reach the age of majority. If they do not repute it at that time, it remains a binding contract.
Contracts for necessities include a variety of needs a minor might have. However, it is important to note that if the minor is receiving the same necessity via another means, the new contract for the necessity might not be deemed necessary. Ordinarily, necessities include the following;
- Health care
- Extracurricular activities (including music lessons, art classes or sports)
Generally, contracts made with minors that tend toward necessities or are generated as the result of employment, are voidable. This means that if you contract with a minor for either employment or necessities and the minor reneges on the contract, you will not be able to enforce it against them.
However, there are a couple of possible exceptions to this general rule. The first exception can occur if you have contracted with the minor and the guardian or a guarantor for the minor. In this instance, if the minor decided to renege on the contract you might have a claim against the other signatory. A second exception can occur if the contract is for land or possibly a partnership between an adult and a minor. In this second instance, the contract remains viable until the minor takes the proper steps to avoid the contract. Until then, it is possible that the contract can still be enforced.
Finally, it is possible for a contract with a minor to be enforceable if one of two circumstances occur. First, if the minor after reaching the age of majority affirms the contract. It is always best that the affirmation by the minor is given in writing and evidence their capacity to fully understand and enter into the now enforceable contract. The other possibility of enforcement is if the minor enters into a fresh agreement while still a minor. However, this is not acceptable in all parts of Australia, so it is important to inquire with a professional knowledgeable in the area of contracting with a minor.
In all instances involving contracting with a minor for employment or necessities, it is important to remember that in the event the minor reneges on the agreement, it is unlikely you will have any recourse to enforce the contract.
If you find yourself in need of assistance with this or any other legal issue, please contact the law offices of Owen Hodge Lawyers. At Owen Hodge, we are always happy to assist clients in understanding the full ramifications of any and all of your legal needs. Please feel free to call us at your earliest convenience to schedule a consultation at 1800 770 780.