Question

Week 3 What are the common law rules regarding contracts entered into by infants, and when are such contracts valid, voidable or void? (10 marks, maximum 300 words)

Answer 1

Week 3

Contracts entered by Infants

A person who is under the legal age of an adult is considered as an adult.In some countries the age for adult is 18 years and in some countries it is 21. If an infant is entered into a contract in which he is in capable of understanding the terms and legal consequences of the contract is void. This is to protect the infants against their own weakness. The statute provides the infants to exit the contract at their own discretion and it is voidable only by the infant and not by the other party. However, there are certain exceptions to avoid the misuse of the statute.

The contract entered by the infants for the necessities are not voidable. It includes goods and services that are necessary for the minors health and safety such as food, clothing, shelter, lodging. In certain cases mobile is also considered as necessity. For determining whether the goods or service is a necessary, the economic status of the minor and his parents is considered.some other contracts which are not voidable are Contracts with banks, employment contracts, sports and entertainment contracts.

The infant can void the contract within the age he is infant. When he enters into the legal age of adult he is having the choice of whether to accept the contract or not. Within the period of six months after attaining the legal age of adult he has to disaffirm the contract. If he does not do so within that specified period, the court does not allow the contract to be void and hence the contract is binding between the parties.If the Infant want to rescind the contract he can do it in 2 ways: one is to file a suit in the court asking to void the contract. Other way is to raise the affirmative defense of lack of capacity if the infant has been sued.

Week 4

Contra Profentem Rule

Contra Proferentem Rule states that if there is any clause in the contract that is ambiguous should be interpreted against the interests of the party that had crested and requested to include it in the contract. It is the legal interpretation of the contract when challenged in the court. It is placing a fault on the party who has created and requested an ambiguous clause. It is a doctrine of law which penalize and punishes for including such clause. It applies to the contract entered by the parties one with a superior power who drafted the agreement and the other has no bargaining power. The court first determines whether there is an ambiguity in the clause and whether it is made intentionally. Based on that Contra proferentem is applied.
In this today's business environment the giant businesses drafts their agreements in such a way that the other party has no choice except to sign the contract. So, in such situations, Contra Proferentem is very useful to protect the rights of the consumers. it is mostly found in the case of insurance. The agreement is drafted by the insurer while the other party has no choice but accept to it. So, in order to protect the rights of the consumers, the contra proferentem is used and interpreted the contract in both ways and the valid interpretation is taken in favor of the one who has not inserted any clauses in the agreement. Contra proferentem places the cost of losses on the party who has in the best position to avoid the harm. Some contracts includes the exclusion clauses to pay the liabilities or rights to claim against the parties. Then the court uses the contra proferentem rule and construct the term against the party which is getting the benefit from such exclusion.