(ii) The Effect of Minority on the Validity of Contracts

Where a minor has transferred benefits to the defendant pursuant to a contract between them and the minor wishes to recover these benefits, the first question which needs to be considered is whether the contract continues to be operative. This is because of the fundamental principle that restitutionary relief is only available where the contract has ceased to operate.^[1] Between 1874 and 1987 contracts made with minors were void, so there was nothing to bar the minor’s restitutionary claim. Today, the effect of the contract on the minor depends on the nature of the contract. The contract may fall into one of two categories.³⁸

• (1) Contracts in which the minor acquired an interest of a permanent or continuous nature, such as contracts for the acquisition of interests in land or shares in a company.³⁹ These contracts are valid and binding until the minor disclaims the contract whilst still a minor or within a reasonable time of having attained the age of majority.
• (2) Other contracts which are not continuous do not bind the minor unless they are ratified within a reasonable time after he or she has attained the age of majority.

The distinction between these types of contracts makes legal analysis of the effect of the claimant’s minority on the contract somewhat difficult. Where the contract can be characterized as continuous in its operation, it is acceptable to conclude that the contract operates until it is rescinded. Where the contract is not continuous it is not strictly true to say that the contract needs to be rescinded, since it does not bind the minor during his or her minority and will only bind once the age of majority has been attained and the contract is ratified. Since these contracts cannot affect the claimant whilst he or she is a minor there is no need to rescind them. These types of contract cannot therefore constitute an obstacle to the minor’s restitutionary claim if he or she transferred benefits to the defendant under the contract.

• [1] 40 Lovell and Christmas v Beauchamp [1894] AC 607.