Case Study Analysis

Running head: CASE STUDY ANALYSIS
CASE STUDY ANALYSIS
Name of the Student:
Name of the University:
Author Note:

1CASE STUDY ANALYSIS
Part A:
a) Issue:
The issue involved in this case is whether John is bound by the contract to buy the tools.
Rules:
For a valid contract, one of the essential conditions to be satisfied is that all the parties to
the contract must have the capacity to contract as given in Minors (Property and Contracts) Act
1970 (NSW). Under common law, a contract entered by the minor is usually voidable. A minor
is a person below 18 years of age as per section 8 of Minors (Property and Contracts) Act 1970
(NSW).
Under both common law and statute, the minors are restricted to contract. As per
common law, a contract entered by a minor is voidable. A minor is not bound by a contract as
given in section 17 of Minors (Property and Contracts) Act 1970 (NSW). But there are few
exceptions to this rule. A contract for necessities by a minor is binding on parties as found in the
case of Nash v Inman [1908] 2 KB1. This is provided in section 7 of the Goods Act (Vic.).
Again, a contract entered into by a minor for employment is binding except in the cases
of oppression or unfair means inflicted on the minor. A minor can terminate or approve such
contract on reaching adult hood as given in section 30 of Minors (Property and Contracts) Act
1970 (NSW).
The contracts not covered by either of the above mentioned exceptions are voidable.
When the contract results into permanent acquisition of the property or includes any continuous

2CASE STUDY ANALYSIS
duty like in partnerships, then such contract is binding until and unless it has been avoided by the
minor. However until then the minors remain bound by the obligations of the contract.
All other contracts are not binding on minors unless the contract is being ratified by the
minors after they become adult by taking some positive steps to approve it.
Application:
As per the rules enumerated above, John is 16 years of age. Hence he is a minor. He buys
a set of tools for his plumbing apprenticeship which is about to start after he finishes his school
in six months. Thus it is seen that he buys the tools for plumbing apprenticeship. Apprenticeship
is different from employment. Moreover, he did not purchase the tools for incurring the
necessities.
Conclusion:
Thus from the above discussion, it can be said that John cannot be bound by the contract
to purchase the tools neither by applying the common law or statutory laws of Australia.
b) Issues:
The issue involved here is whether John can enforce the contract to get profit from the sale of his
AppTools shares.
Rules:
Under both common law and statute, the minors are restricted to contract. As per
common law, a contract entered by a minor is voidable. But there are few exceptions to this rule.
A contract for necessities by a minor is binding on parties as found in the case of Nash v Inman