(iii) The Effect of Minority on Other Transactions
Where a minor makes a gift to a person of full capacity, the disposition should be regarded as valid until the minor wishes to set it aside.[1]
(iv) The Role of Minority in Restitutionary Claims
(1) There Must Be a Total Failure of Basis
Where a minor is not bound by a transaction by reason of his or incapacity, it follows that the minor will be able to obtain restitution of benefits transferred under the transaction as long as one of the recognized grounds of restitution is applicable. Whether the fact that the claimant was a minor can operate as a ground of restitution in its own right is a matter of some controversy. The general approach in English law is that restitution will not lie simply on the ground of minority, since it must also be shown that the basis for the transfer of the benefit has totally failed.[2] This is illustrated by Steinberg v Scala (Leeds) Ltd,[3] where the claimant had repudiated a contract for the purchase of shares whilst she was still a minor and then sought to recover the purchase price from the company. Her restitutionary action failed on the ground that there had not been a total failure of basis, because she had obtained the very thing for which she had bargained, namely a shareholding in the company. This was a valuable benefit, which entitled her to receive a dividend and to attend general meetings of the shareholders. Similarly, in Pearce v Brain[4] the claimant, who was a minor, exchanged his motorbike for the defendant’s car. After the claimant had driven the car for 70 miles it broke down. The claimant then sought to recover the bike or its value, but his action failed on the ground that there had not been a total failure of basis since he had obtained some benefit from the transaction, namely the use of the car for a few days.
(2) The Relevance of Minority
Where the conditions for establishing total failure of basis have been satisfied this will constitute the ground of restitution on which the claimant bases his or her restitutionary claim. It would seem, therefore, that the fact that the claimant was a minor would be irrelevant. This is not, however, the case, since pleading minority in conjunction with total failure ofbasis does have one important advantage to the claimant. This is because, where the claimant is an adult who entered into a contract of a continuous nature and who wishes to obtain restitution on the ground of total failure of basis, it is first necessary for the claimant to repudiate the contract, for example by showing that the defendant had breached it. This is likely only to be possible where the defendant’s breach was repudi- atory, which it might not be possible to establish.45 Where, however, the claimant is a minor who entered into a contract of a continuous nature, he or she can rescind the contract simply by virtue of the fact that he or she was a minor and without needing to establish a repudiatory breach. It is then only necessary to show that there has been a total failure of basis before the claimant can obtain restitution.
(3) Should it Be Necessary to Establish that the Basis Has Totally Failed?
Is it really appropriate to ground restitution on total failure of basis in those cases where the claimant was a minor at the time of contracting with the defendant? Careful analysis of the cases which recognize the requirement that there must have been a total failure ofbasis suggests that they are concerned with the distinct, but apparently similar, principle that restitution should be denied to the claimant if he or she is unable to make full counterrestitution to the defendant. If this is correct, it follows that the appropriate ground of restitution in these cases should be that the claimant lacked capacity to enter into the contract with the defendant, but restitution should be denied to the claimant if he or she is unable to restore all the benefits which were received from the defendant.[5] This is a much more satisfactory position.
That the claimant’s minority should operate as a ground of restitution in its own right is perfectly acceptable. The reason why contracts made with minors are usually unenforceable against them presumably derives from a desire to protect minors from the consequences of entering into foolish transactions and such protection will only be partial if restitution is denied.[6] There is no reason why the policy which makes the contract unenforceable against the minor should not be followed through to its logical conclusion to ensure that the benefits which were transferred under the contract should be restored to the minor, subject to the minor paying for any benefits which he or she had obtained under the contract. But, despite this, the law considers that the position of the defendant should not be ignored and, if the claimant is unable to restore benefits which had been received from the defendant, it is only just that restitution should be denied. Support for this approach can be found in the decision of the Divisional Court in Valentini v Canali,[7] where the claimant, who was a minor, leased a house from the defendant. The claimant agreed to pay ?102 for the use of the defendant’s furniture and paid ?68 on account. After using the house and the furniture for a few months the claimant sought to recover the ?68. His action failed because, as Lord Coleridge CJ said:49
When an infant has paid for something and has consumed or used it, it is contrary to natural justice that he should recover back the money which he has paid. Here the infant plaintiff who claimed to recover back the money which he had paid to the defendant had the use of a quantity of furniture for some months. He could not give back his benefit or replace the defendant in the position in which he was before the contract.
Lord Coleridge did not suggest that restitution should be denied because there had been no total failure of basis. Rather, restitution was denied because, as he thought, the claimant could not make counter-restitution to the defendant.
It is much more consistent with the fundamental principles of the law of restitution that the restitutionary claim should be defeated because the claimant cannot make counterrestitution to the defendant, than it is to say that the claim should fail because the claimant cannot rely on the ground of total failure of basis. Similarly, where the claimant needs to rescind a contract it has long been accepted that rescission will be barred if the claimant cannot make counter-restitution to the defendant. The importance of this analysis is that the more liberal interpretation of the bar that counter-restitution is impossible should be applicable to restitutionary claims founded on the claimant’s minority. 0 It follows that the restitutionary claim should not be barred simply because the claimant cannot make exact counter-restitution to the defendant. It should be sufficient that the claimant can restore the value of any benefit received to the defendant without necessarily having to restore the actual benefit received. This means that in a case such as Valentini v Canali, the claimant would have been able to rescind the contract and recover the money paid to the defendant, if he had made counter-restitution by paying the defendant the reasonable price for hiring the furniture.
(4) Exploitation
Where a minor has transferred a benefit to the defendant he or she may be able to obtain restitution of the benefit without relying on incapacity, but instead by establishing that one of the grounds of restitution which are founded on the principle of exploitation can be established.[8] [9] For example, the minor might be able to show that the defendant had unduly influenced him or her or that the defendant had acted unconscionably in entering into the transaction with him or her.
- [1] Zouch de Abbott v Parsons (1765) 3 Burr 1794, 1806; 97 ER 1103, 1110.
- [2] See Chapter 13 for analysis of total failure of basis as a ground of restitution.
- [3] [1923] 2 Ch 452. See also Corpe v Overton (1833) 10 Bing 252, 131 ER 901.
- [4] [1929] 2 KB 310. 45 See p 314, above.
- [5] C Mitchell, P Mitchell, and S Watterson (eds), Goff and Jones:The Law of Unjust Enrichment (8th edn,London: Sweet and Maxwell, 2010), 645. See also AS Burrows, The Law of Restitution (3rd edn, Oxford: OxfordUniversity Press, 2011), 313 and GH Treitel, ‘The Infants’ Relief Act 1874’ (1957) 73 LQR 194.
- [6] As Lord Denning MR said in Chaplin v Leslie Frewin (Publishers) Ltd [1966] Ch 71: ‘If the infant is to beprotected, the law must be able to intervene as well after as before the disposition is made.’
- [7] (1889) 24 QBD 166. 49 Ibid, 167.
- [8] See p 26, above. 51 See Chapter 11.
- [9] 52 The question of whether restitutionary relief is available against a public authority which lacked the
