Business Law

The issue involved in this case is whether Jacinta is legally obliged to pay the money which she had borrowed from her parents and friends back or not.

Running head: BUSINESS LAW
Business Law
Name of the Student
Name of the University
Author Note

1BUSINESS LAW
Issue:
The issue involved in this case is whether Jacinta is legally obliged to pay the money
which she had borrowed from her parents and friends back or not.
Rule:
According to Article 1 of the Convention of Rights of Child, 1990 the definition of a child
can be stated as any person who is below the age of eighteen. According to Australian
Contract Law a minor is strictly restricted from entering into contracts. Here Minor means a
person below the age of eighteen. Therefore a minor does not have the capacity to enter into
a contract. The fourth element of the Contract Law in Australia specifies the intention to
create legal relationships. But in case of domestic as well as the social relationships legal
intention is not created.
Application:
Jacinta is a seventeen years ten months old girl who is about to start her University.
Currently she is doing a casual job as “Hungary Wolves” with a salary of $ 20 per hour. Before
starting her accounting course she has decided to buy a number of expensive things. Therefore,
she takes a loan but she spends the entire loan amount on buying an IPhone 6 which was already
in her wish list. Jacinta also spends all the money she had on several other expensive things
according to her wish list. Earlier Jacinta had decided to repay her every debt with her salary.
But now “Hungary Wolves” terminates her job as she has taken too many sick leaves and also
had failed to perform her duties satisfactorily. Left with no other option Jacinta borrows money
from her parents and friends. As, Jacinta has already lost her job unfortunately she is unable to

2BUSINESS LAW
pay the borrowed money back to her parents and friends. Now Jacinta’s parents and friends
wants their money back. Here, being a minor Jacinta does not have the capacity to enter into
contract by Australian Contract Law. Here Jacinta is incapable to enter into a twenty four months
contract as stated in the case. In the same way being a minor an employment contract with
Jacinta is also not possible. Therefore the capacity to enter into a contract which is the third
element of a valid contract is not fulfilled. In Hamilton v Lethbridge (1912) 14 CLR 236; 18
ALR 222 case the minor restriction to enter into contract is stated. The fourth element which is
the intention to create legal relationships in the Australian Contract Law is also not fulfilled
because in case of domestic and social relationships legal intention is not created. (Stone and
Devenney 2017). Jacinta borrowed money from her parents and friends and therefore the legal
relationship is not created. Therefore, Jacinta is not liable to repay the borrowed money to her
parents and friends.
Conclusion:
Thus, it can be concluded that Jacinta being a minor does not have the capacity to enter into a
contract in the first place. She is also not liable to repay any debt to her parents and friends.

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REFERENCE LIST:
Article 1 of the Convention of Rights of Child, 1990
Australian Contract Law
Hamilton v Lethbridge (1912) 14 CLR 236; 18 ALR 222
Stone, R. and Devenney, J., 2017. The modern law of contract. Routledge