UNIT 3

CONTRACTS MADE BY INFANTS

An infant, also known as a minor, is a person who has not yet reached the age of majority. In Nigeria, the age of majority is 18 years as stipulated in the Child’s Rights Act. Where the general rule states that contracts entered into by infants are generally voidable at their option and upon reaching the age of majority, a minor can ratify or disaffirm a contract made during infancy. Ratification can be explicit or implied, whereas disaffirmance must be clear and unequivocal.. This rule is designed to protect minors from exploitation due to their lack of experience and judgment. See the case of Peters v. Fleming (1840) which established that a minor is liable for necessaries supplied to him and the case of Labinjoh v. Abake (1924) 5 NLR 33 where the Nigerian court held that an infant could be held liable for necessaries supplied. There are certain exceptions where contracts made by minors are considered valid and binding and they include the following:

1. Necessaries: this is where contracts for the supply of necessaries are binding on minors. Necessaries include goods and services essential for the minor’s existence and reasonable lifestyle, such as food, clothing, shelter, education, and medical care.
2. Beneficial contracts of service: this is where contracts of apprenticeship, education, and employment that are deemed beneficial to the minor are enforceable.
3. Statutory exceptions: this is where certain statutes may provide exceptions where minors can enter into binding contracts.

CONTRACTS MADE BY ILLITERATE PERSONS

An illiterate person is someone who cannot read or write in any language or who cannot understand the language in which the contract is written. Where the general rule states that contracts made by illiterate persons are generally valid. However, special protections exist under Nigerian law to prevent exploitation and ensure that the illiterate person fully understands the terms of the contract. See the case of UAC Ltd v. Edems (1970) 1 All NLR 50 where the Supreme Court of Nigeria emphasized the need for strict compliance with the Illiterates Protection Act to protect illiterate persons. Under the Illiterates Protection Act, any person who writes a document for an illiterate must do the following:

1. Read the document to the illiterate in a language they understand.
2. Ensure the illiterate understands the contents of the document.
3. Attach a certificate stating that the document has been read and explained to the illiterate.

Where failure to comply with these requirements can render the contract voidable at the instance of the illiterate person.

CAPACITY OF CORPORATIONS

A corporation is a legal entity that is separate and distinct from its owners. It can enter into contracts, sue, and be sued in its own name. Where the general rule states that corporations have the capacity to enter into contracts in the same manner as natural persons. However, the capacity of a corporation is limited by its objects as stated in its Memorandum of Association. See the case of Ashbury Railway Carriage and Iron Co Ltd v. Riche (1875) LR 7 HL 653 which established the ultra vires doctrine, which is applicable in Nigerian corporate law and the case of Olaniyan v. University of Lagos (1985) 2 NWLR (Pt. 9) 599 where the Supreme Court of Nigeria applied the ultra vires doctrine, holding that the University could not enter into contracts beyond its statutory powers. Contracts that fall outside the scope of the objects clause are considered ultra vires (beyond the powers) and are void. The doctrine of ultra vires prevents corporations from engaging in activities not permitted by their constitutive documents.

CONTRACTS MADE BY MENTAL PERSONS

A mental person, or person of unsound mind, is someone who is incapable of understanding the nature and consequences of their actions due to a mental disorder. Where the general rule state that contracts made by persons of unsound mind are voidable if it can be shown that the person was incapable of understanding the contract and the other party was aware of this incapacity, the key test is whether the person was capable of understanding the nature and effect of the contract at the time it was made. If not, the contract can be declared void. See the case of Osefor v. Uwania (1971) 1 NCLR 313 where the Nigerian court held that a contract made by a person of unsound mind is voidable if the other party knew of the mental incapacity and the case of Foy v. United Insurance Co. Ltd (1950) 13 WACA 153 where the West African Court of Appeal held that a contract entered into by a person of unsound mind is voidable if the person was incapable of understanding the nature of the transaction.

CONTRACTS MADE BY DRUNKEN PERSONS

A drunken person is someone who is intoxicated to the extent that they cannot understand the nature and consequences of their actions. Where the general rule states that contracts made by drunken persons are voidable if it can be shown that the person was so intoxicated that they were incapable of understanding the contract and the other party was aware of this incapacity, the same test applied to mental persons is used here: whether the person was capable of understanding the nature and effect of the contract at the time it was made. If not, the contract can be declared void. See the case of Matthews v. Baxter (1873) LR 8 Ex 132 where the court held that a contract entered into by a drunken person is voidable if the other party knew of the drunkenness and the case of Onashile v. Idowu (1961) 1 All NLR 369 where the court held that contracts entered into by persons who are intoxicated to the extent that they cannot understand the nature of the contract are voidable.

CONCLUSION

These principles ensure that vulnerable individuals are protected in contractual dealings while maintaining the sanctity and enforceability of contracts in general.