Contracts signed by minors - are they valid?

Jaimee Best: Candidate Legal Practitioner - Dispute Resolution Practice Group at PH Attorneys

As stipulated in the Children’s Act 38 of 2005, a child, whether male or female, becomes a major upon reaching the age of 18 years. Similar to persons of unsound mind, minor children under the age of 7 do not have contractual capacity. No agreement entered into by these individuals will be valid and either a parent, guardian or curator must enter the contract on the minor’s behalf.

Minors between the ages of 7 and 18 years of age have a ‘limited’ capacity to act. This lack of capacity may, however, be cured by the assistance or consent of a legal guardian. Exceptions to the limitation on these minors’ contractual capacity include:

1. Statutory exceptions: This is where legislative provisions contradict the limitation on the contractual capacity of minors. For example, the Wills Act 7 of 1953 stipulates that a minor who is 16 years or older may conclude a valid Will.

2. A valid contract which does not impose an obligation on a minor but merely confers a right upon them, may be concluded without consent or assistance. This exception would be applicable, for example, when a minor accepts a donation.

3. When a minor has obtained majority status and may independently participate in commercial dealings. A minor who has concluded a valid marriage obtains majority status, as well as a minor who has been emancipated.
   

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Limping contract

It is important to take note that if a minor child above the age of 7 has entered into a contract without the required assistance or consent, the contract will be classified as a “limping contract”.

If a limping contract imposes an obligation on a minor, this obligation will only be recognised if the minor chooses to perform. Therefore, the minor’s parent or guardian may elect to either repudiate or enforce the contract.

If the contract is enforced and thus ratified, this ratification operates retrospectively, and the contract will become valid and enforceable. On the other hand, any obligation imposed by a limping contract on the other contracting party is legally binding and enforceable.