Capacity in contract law becomes an issue when one party is deemed not able to act for themselves because of mental incapacity, or because they are underage (a minor) – and in these cases, an agent or litigation friend may act for them and enter into contracts.
Challenging and voiding such agreements and making a claim requires specialist legal advice, as both those with a mental disability or children under the age of 18 may still have some liability in contract law – for example, under the Sale of Goods Act (1979) where services might have been supplied to the individual.
Capacity is a complex area of breach of contract law, because not only must one party prove that they were not mentally sound when they signed a contract, it must also be proved that the other party to the contract and/or the agent acting for the individual was aware of the fact.
Under current legislation, individuals with a mental health condition are protected by the Mental Incapacity Act 2005 – and minors are protected by the Minors’ Contracts Act 1987.
Disputes can arise if the party deemed not able to act for himself or herself challenges the contract that was made – or there is a dispute over legal fees incurred, as might be the case in a personal injury claim.
In some cases, adults who entered into a contract on behalf of a minor may become liable if the minor is in breach of contract – and Section 7 of the Mental Incapacity Act 2005 states that if goods or services are supplied to an individual who was not able to act for themselves (ie lacked capacity) and enter into a contract, a reasonable price must still be paid for them.
Disputes over contracts where capacity is an issue are extremely complex and require specialist legal advice on whether a contract can be voided.
Duncan Lewis is the UK’s largest provider of Legal Aid mental health services and has one to the UK’s most successful family law departments able to advise on capacity in contract law – including contract disputes where an individual may have ratified a contract after appearing to recover from a period of incapacity, or where an individual disputes a contract made on their behalf when they were a minor or unable to act for themselves,
It is advisable to seek legal advice as soon as possible in contract disputes involving capacity and/or ratification.
In contract disputes involving minors, time may be of the essence, as in some cases a minor may be able to void a contract before they reach the age of 18.
Duncan Lewis litigation solicitors can advise at any stage of a contract dispute involving capacity – and will take swift action to protect a client’s interests.
For expert legal advice on contract law and Capacity, call Duncan Lewis Litigation Solicitors 0n 0333 772 0409.