Legal Capacity in Contract Law Australia: What You Need to Know
In contract law, legal capacity refers to a person`s ability to enter into a binding agreement. As such, it is a crucial element in any contract. In Australia, the rules governing legal capacity are not straightforward, and there are several factors to consider. This article will provide an overview of legal capacity in contract law Australia.
Who has legal capacity?
In general, anyone who is of legal age and mentally capable has legal capacity to enter into a contract. In Australia, the legal age is 18 years old. However, there are some exceptions to this rule, such as when a person is emancipated or has a court-appointed guardian.
What about minors?
Minors, or persons under the age of 18, are generally not legally capable of entering into contracts. However, there are some exceptions. For example, a minor can enter into a contract for necessities such as food, shelter, and medical treatment. They can also enter into contracts for education and employment, provided that the contract is not detrimental to their interests.
In some cases, minors may also be able to enter into contracts with the consent of a parent or guardian. This is known as a contract of guarantee. In such cases, the parent or guardian is liable for any obligations under the contract.
What about people with disabilities?
People with disabilities may also have limitations on their legal capacity. This can include physical disabilities as well as mental illness. In general, a person with a disability is considered legally capable if they can understand the nature and consequences of the contract they are entering into.
In some cases, a court may need to appoint a guardian or decision-maker to assist a person with a disability in making decisions about contracts. This is known as a guardianship order.
What happens if someone lacks legal capacity?
If someone lacks legal capacity and enters into a contract, the contract may be voidable. This means that the person may be able to cancel or terminate the contract. However, this will depend on the specific circumstances of the case.
If someone wants to cancel a contract on the grounds of lack of legal capacity, they will need to provide evidence to support their claim. A court may then need to make a decision about the validity of the contract.
Conclusion
Legal capacity is an essential element in contract law Australia. It is important to understand the rules governing legal capacity, particularly when entering into a contract with a minor or someone with a disability. If you are unsure about legal capacity in a particular situation, it is always recommended to seek legal advice.