Freedom of Contract in UK: Analysis of Restrictions on Capacity to Contract for Minors, Mentally Incapable and Drunk People

This essay analyzes the principle of freedom of contract in UK and examines the restrictions set by contract law on the capacity to contract for minors, the mentally incapable and people who are drunk at the time of the contract. It also discusses the different categories of people getting protection under this policy and relevant cases.

Running Head: CONTRACT LAW 0
FREEDOM OF CONTRACT
UNITED KINGDOM

CONTRACT LAW 1
Introduction
In this essay the following principle i.e. “Everyone should be able to enter into a contract. The
restrictions set by contract law on the capacity to contract for minors, the mentally incapable and
people who are drunk at the time of the contract should be scrapped" will be analyzed, explained
and examined in detail considering cases. Freedom of contract is a concept of the judiciary which
determines that the formation of a contract is based on the agreement made mutually and with
free choice. So the contracts are not hampered by external contracts such as the interference of
the government. The main raised question i.e. whether all the people must be allowed to enter
into a contract? And in this, all means the vulnerable people like the minors, drunks and the ones
who are of unsound mind.
Different categories of people getting protection under
this policy
A contract can be well-defined as that ability of an adult through which it make a legally binding
agreement with two or more parties having a common interest and with no interference of the
government and the obligations which can be imposed on him or her1. When the question arises
regarding the people who are legally binding or have the capacity to enter into a contract, then
the answer attained is that the people who are minors in the eyes of laws or are placed in the
special categories are the ones who lack entry into the contract. Contracts entered by incapable
people are called voidable contracts which can be either permitted or be ended2.
1 Mr. John Adriaanse Construction contract law (Macmillan International Higher Education 2016).
2Ewan McKendrick Contract law: text, cases, and materials (Oxford University Press 2014).

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Printing and Numerical Registering Co. v Sampson (1875) 19 Eq 462 it is a case related to the
English contract law and patent. The most distinguished and robust encouragement of freedom of
bond policy was brought before by Sir George Jessel MR. In this case it was remarked that the
contract which was made for the betterment of the public policy and in good faith cannot be
considered to be void or voidable unless they are not done by the express interest of both the
parties without any forcing or threatening conditions3.
This situation thus protects the lacking party form being forced to continue up with the deal.
Some categories of people who get protection of contract upon limitation or their ability to enter
into contract or the people who do not have the capacity to enter into a legally binding
agreements are as follows, First one in the minors, who are under the age of 18 years lacks the
capacity to make contracts or gets its protection. A contract signed by the minor either gets
honored or becomes void. However, there are a few exceptions to these provisions, for example,
there are some nations in which the contract made by a minor is not considered as a void in case
of its necessities like food, clothing, and lodging, etc. A contract may also be considered as void
if done by a child even after attaining majority if he/she lacks capacity4.
For example, a boy of 17 years of age who was a paraglide who signed an extended time period
contract or an authorized contract for sportswear. He did that work for several years but at the
age of 19 for taking up with the better endorsement deal, he wanted to give up or void the deal.
For this, he claims that he was lacking capacity at the time he made the contract as he was just 17
years of age.
3 Oren Bar-Gill and Omri Ben-Shahar, ‘Regulatory techniques in consumer protection: a critique of European
consumer contract law’ (2013) 50(1) Common Market Law Review 109-125.
4 Mariana Pargendler, ‘The role of the state in contract law: The common-civil law divide’ (2018) 43 Yale J. Int'l L.
143.

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In the leading case of X (Minors) v Bedfordshire Country Council (1995) 2 AC 633 it was
determined that the issues related to the welfare and education of the child mentioned under the
provisions of Children’s Act 1989 and Education Act 1944 and 1981 will not be connected with
any remedy of the private laws done in negligence or breaching of any statutory duties5.
Guardians of the minor children can make a contract on the behalf of their kids but it must be
done for their betterment and benefit6. Minors cannot enter into any contract except that of
necessity but the legal guardians can make it on their behalf and in good faith7.
The second one is mentally incapable people. So the contract made by such people will be
considered as void, except done in the time of necessity. The term mental capacity means the
state of mind or the ability of an individual to understand the conditions of the contracts or the
held up transactions8. Few nations conduct cognitive tests or the tests which are effective to see
whether the parties can understand the reasons or the conditions or the manners behind the
conducted transaction or the contract. The inability to understand the conditions will lead to
make the contract void. Whereas some nations used the motivational test for judging the capacity
of the individuals making contract9.
For example, Mr. X contracted with Mr. Y to sell its computer and later it was claimed that the
contract will be considered as void as the Mr. x could not understand, he was detected with
manic depression and had been realized approaching within and outside of the psychologists
chambers. His psychologist also stated that he was unable to understand or evaluate any
transactions of business, in the state of manic. A court of appeal in California rejected this case
5 Margaret Brazier and Emma Medicine, patients and the law. (Oxford University Press, 2016).
6s X (minors) v Bedforshire Country Council [1995] 2 AC 633 1.
7 Legislation, ‘UK Public General Act’ (Children Act 1989’) <
https://www.legislation.gov.uk/ukpga/1989/41/schedule/12/crossheading/the-education-act-1944-c-31>accessed 17
August 2019.
8 Calvi, James V., and Susan American law and legal systems (Routledge 2016).
9 Stacy Clifford Simplican, The capacity contract: Intellectual disability and the question of citizenship (U of
Minnesota Press, 2015).

CONTRACT LAW 4
by stating that Mr. X was able to understand the condition of the case even in his normal state10.
This was because the manic phase of illness cannot be considered as a weakness of mind which
can affect or render a person incompetent to contract. In other word, it can be said that manic
depression is considered as a cognitive condition which may reduce the judging capacity but not
the level of understanding.
In the leading case of F v West Berkshire Health Authority (1989) 2 AC 1, it was held that there
was a woman who was 36 years of age but had a mental conditio9n of the minor age. She was to
undergo an operation which was consented by her mother on her behalf as she was incapable of
making a contract. The major issues here were that was it lawful for the doctors to operating on
such a patient who was not capable mentally of giving consent and can the court can give any
such declaration before the performance of such operation. Finally, the operation was held lawful
by the court as it was done for the betterment and with the best interest. The consent given by the
mother was also held justified as all these were done in good faith11.
The third one is adductors of alcohol and drugs. The intoxicated people or drinkers cannot be
well-thought-out as lacking the ability to enter into contract. Generally, the benches state that the
individuals who are intoxicating willfully must not be allowed to avoid the obligation of the
contract, rather they must be held responsible for their self-made or altered state of mind12. But it
also has an exception that if a party is not baling to comprehend the flora and the penalties of the
act or the that if a party is unable to understand the nature and the consequences of the act or the
contract and the alternate party takes the misuse of his condition then the contract may be
considered as voidable by the intoxicated party13.
10 Charles Kopel, ‘Suffrage for people with intellectual disabilities and mental illness: Observations on a civic
controversy’ (2017) Yale J. Health Pol'y L. & Ethics. 17 209
11 F v West Berkshire Health Authority [1989] 2 AC1.
12 Richard Stone and James Devenney, The modern law of contract (Routledge 2014).
13 Jill Poole, Casebook on Contract law (Oxford University Press 2014).

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In the case of Sandwell & West Birmingham Hospitals NHS Trust v Westwood14, it was held that
Westwood who was the staff nurse at the Birmingham City Hospital in the AAE department
helped another nurse in the nightshift to remove an intoxicated patient who refused to leave even
after getting discharged. Both the nurses let the patient lying on a trolley outside AAE15. This
action of the nurses had thus breached the discipline policy of the hospital and for that, the nurses
were dismissed for the gross misconduct committed by them. Though the patient was highly
intoxicated the act of the nurses was also not according to the code of conduct of their
employment16.
The freedom of contract given to the drunk, minor and the mentally incapable people help them
or protect them or their rights to get infringed from the other party who can misuse they're the
other rights due to the incapacities of their understanding the condition and nature of the
transactions17. Guardians of the minors and a mentally incapable person can enter the contract on
their behalf only upon the prior permission of the court or for the benefit or the betterment of
their minor kid or any other18.
This policy may also be proved as a disadvantage to the other party of the contract, they may feel
cheated morally or it may also be proved as unfair to the alternate party, they may also have to
face highly generated losses or damages sometimes, etc. 19
14 [2009] UKEAT/0032/09/1712
15 Jonathan Herring, Medical law and ethics (Oxford University Press 2014).
16 Janet O'Sullivan, O'Sullivan and Hilliard's the Law of Contract. (Oxford University Press 2018).
17 Thomas H. Green, Liberal legislation and freedom of contract (Routledge 2014).
18 Bernadette McSherry Managing Fear: The Law and Ethics of Preventive Detention and Risk Assessment
(Routledge 2013) 266.
19 Neil Andrews Contract law (Cambridge University Press 2015).

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Conclusions
Hence it can be concluded that the minors, mentally incapable persons and the intoxicated
persons must be either not allowed to enter into contracts or if allowed then they must be
provided with certain limitations but all these things must be done in such a way that the
morality of the other party to the contract does not get hampered, neither they have to face any
kind of injustice by any such act.

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https://www.legislation.gov.uk/ukpga/1989/41/schedule/12/crossheading/the-education-act-
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CONTRACT LAW 8
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