Law 251 Contractual Capacity

CONTRACTUAL CAPACITY
MINORITY, INSANITY, INTOXICATION, & OLD

PERSONS
RECAP
From formation and definition of a contract we remember some
of the elements of a contract as:
1)
Offer
2)
Acceptance
3)
In accordance with certain formalities
4)
Within the limits of contractual capacity
5)
With intention to be bound or create a legally binding

agreement etc.
CONTRACTUAL CAPACITY
With contractual capacity the burden of proving
lack of capacity lies with the party setting it up as
a defence.
So if you say I was intoxicated or a minor or
insane and therefore our contract is not
validProve it!!
MINORITY
1) General Principle: A minor is considered immature
throughout his years of minority and therefore NOT
bound by his contracts.
2) Children under 7years are considered infants and
have no contractual capacity.
3) In terms of the Childrens Act of 2009, in Botswana a
person is considered a child until reaching the age of
18.
TWO categories to examine

1)Contracts
with unassisted minors

2)Contracts with minors assisted by
guardian
Contracts with unassisted minors
General Rule: Contracts made by an unassisted minor are void

as far as the minor is concerned and valid as far as the other
party is concerned.
MINOR
OTHER
PARTY- YES!
EDELSTEIN VS EDELSTEIN
Principle from case: The ante-nuptial contract was
entered into by an unassisted minor and was therefore
not enforceable.
Although her mother had assisted her, she was not
assisted by her guardian (father). Her marriage was
therefore in community of property.
UNLESS!!!...
Exception to the general rule for unassisted
minors!
i.
Unduly enriched
ii.
Fraudulent Misrepresentation
iii.
Emancipation
iv.
Ratification
Undue Enrichment
RULE:
If a minor is unduly enriched as a result of a
contract entered into unassisted, the minor must
restore to the other party the extent of undue
enrichment.
Case in point: Tanne v Foggit at p.98 (Contract
Law made simple)
FRAUDUENT MISREPRESENATTION
RULE:
If a minor fraudulently misrepresents his age in order to
get into a contract, the minor incurs an obligation. The
obligation is not based on the contract because
remember the contract is void but is based on the fraud.
Case in point: Louw v MJ & H Trust at p. 99 (Contract Law
made simple)
EMANCIPATION
RULE:
When a minor is emancipated (expressly or
tacitly) he incurs a binding contractual obligation
as far as the emancipation.
Case in point: Dickens v Daley at p. 100 (Contract
Law made simple)
RATIFICATION
RULE:
Where a minor contracts without his guardians consent
the contract may be subsequently ratified by the minor on
attaining majority either expressly or by conduct.
Case in point: Stuttaford & Co v Oberholzer at p. 101
(Contract Law made simple)
Contracts with minors assisted by

guardian
GENERAL RULE: A minor is bound by contract made on his behalf
by his guardian or made by himself with the guardians
assistance given at the time, beforehand or afterwards.
Therefore, assistance may be given at the time, beforehand or

afterwards.
See Van Dyk v South African Railways and Habour & Skead v
Colonial Banking and Trust at p. 102 (Contract Law made simple)
THREE IMPORTANT CONSIDERATIONS

i.
The minor only becomes prima facie liable. If the

contract is to the minors prejudice then he may obtain
an order setting it aside. Case in point: Wood v Davies
p. 103
ii.
Guardians consent may be express or tacit Ex Parte

Blignaut p. 103
iii.
Guardian need not consent to the contract before it is

made, he may ratify it. Fouche v Battenhausen & Co.
p. 103
MENTALLY UNFIT PERSONS

1)
May also be classified as insanity or mentally ill persons.
2)
RULE: A contract made by a mentally unfit person is void at the

time of the agreement because he could not understand and
appreciate the transaction into which he/she is entering or if his
consent was motivated by an insane delusion caused by the
mental illness. Lange v Lange p. 110
3)
Whether or not the mentally unfit person understood the

transaction is a matter of fact to be examined in the case. Uys v
Uys at p. 111 (Lucid interval)
INTOXICATION (DRUNK PERSONS)

i.
RULE: Where a person enters into a contract so drunk

that he/she does not know what they are doing then
they lack contractual capacity.
ii.
HOWEVER, if the person is merely easily persuadable or

more willing to conclude the contract then they will be
bound.
iii.
A drunk person may incur liability for undue enrichment.
OLD PERSONS, BLINDNESS ETC.

An old person or a blind person could lack contractual
capacity.
Erste Nationale Bank van Sudelike Afrika v Saayman p. 112

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CONTRACTUAL CAPACITY

MINORITY, INSANITY, INTOXICATION, & OLD

In accordance with certain formalities

Within the limits of contractual capacity

With intention to be bound or create a legally binding

TWO categories to examine

with unassisted minors

Contracts with unassisted minors

General Rule: Contracts made by an unassisted minor are void

Contracts with minors assisted by

Therefore, assistance may be given at the time, beforehand or

THREE IMPORTANT CONSIDERATIONS

The minor only becomes prima facie liable. If the

Guardians consent may be express or tacit Ex Parte

Guardian need not consent to the contract before it is

MENTALLY UNFIT PERSONS

May also be classified as insanity or mentally ill persons.

RULE: A contract made by a mentally unfit person is void at the

Whether or not the mentally unfit person understood the

INTOXICATION (DRUNK PERSONS)

RULE: Where a person enters into a contract so drunk

HOWEVER, if the person is merely easily persuadable or

A drunk person may incur liability for undue enrichment.

OLD PERSONS, BLINDNESS ETC.

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