Signing contracts is an integral part of our daily lives. Whether it’s during the employment process or purchasing a new car, there’s always a contract. Once signed, contracts are usually binding on the parties that sign them. So, can a minor sign a contract in Ontario?
A Minor in Ontario is anyone below 18. They can sign contracts, but they lack the capacity, which makes the contract voidable if they back out. However, there are exceptions such as a contract for necessities, bank accounts, beneficial contracts, and contracts co-signed by adults such as parents.
Although the age of the majority in Ontario is 18, it’s not the same all over the country. Only Alberta, Manitoba, Prince Edward Island, Quebec, and Ontario, have 18 as the age of majority. It is 19 in all other provinces except Saskatchewan, where it’s 16. Here, we discuss whether a minor can sign a contract in Ontario.
Who is a Minor?
Law uses the term minor to refer to someone who has not yet reached the age of majority. That age differs from one location to another. In Ontario, the age of majority is 18 years which means anyone younger is a minor.
Capacity of Minor to Sign a Contract
Minors can enter a contract. The main issue is whether the court will enforce the contract. This is where legal capacity comes into play, and in most cases, the court will deem the minor to be legally incapable of entering the contract. This is premised on believing that a minor doesn’t understand the full implication of their contract. Thus, it shouldn’t be legally binding on them. That’s why Lord Justice Moulton compared an infant to a lunatic in Nash vs Inman stating either of them can’t make a purchase contract.
General Rule on Contracts Involving Minors
The general rule on any contract involving a minor is that it’s voidable at the option of the minor. The court will always give the option for the minor to back out of the contract. This is necessary due to the unequal bargaining power between the two parties. But the adult will not have the option to back out of the contract.
Any contract involving a minor has to be in writing whose signature is unavoidable. But if a minor cancels a contract, it has to be the whole contract and not just part of it. So, the idea of severance, where parties in a contract can agree to a severe part while fulfilling another part, won’t be available to a minor. If a minor should misrepresent their age, for example, lie that they’re older. The contract will still not be valid.
Exceptions to Voidable Contract
However, not all contracts involving minors will be voidable. If all contracts involving minors are voidable, most people will avoid entering contracts with minors as there’s a possibility that they won’t get compensation. Here are contracts that are not voidable:
A minor can enter into a contract for a necessity, which will be enforceable. The idea behind this view is that the law shouldn’t restrict the ability of the minor to get legitimate necessities. The Sales of Good Act also provides the capacity to buy and sell when it concerns the minor or anyone who will pay a reasonable price for the necessity due to their drunkenness or mental incapacity.
The definition of what amounts to a necessity is quite broad. Generally, the necessities are food, shelter, health, safety, and water. But there are also instances where items that aren’t generally necessary can be considered a necessity.
2. Bank Accounts
Courts will generally require a minor to follow the terms of the banking agreement. This means they have to pay the same fees as other account holders and are subject to the same penalties.
3. Contracts Co-signed by Parents
Generally, the parents of a minor won’t be bound by the contracts signed by a minor. But if the parents should co-sign the contract, they will be bound by it. So, the other party can sue the parents.
4. Beneficial Contracts
The court also allows the minor to enter an employment contract in which they’ll offer their services and get compensation. However, such a contract will only be valid if it’s beneficial to the minor as a whole,
Ratification of Contract by Minor After Reaching Age of Maturity
If a minor should enter a contract and incur debts, such debts won’t follow them into adulthood. The Statute of Fraud provides that if a person should make a promise when they’re of full age to pay a debt that they incurred as a minor or fulfil a promise or a simple contract they entered as a minor, the other party can’t bring an action over the promise.
However, the other party can bring an action if the ratification or promise is in writing and signed by the party. Of if the agent who has the authorization made such ratification or promise.
If a minor should enter a contract, they can get out of the contract within a reasonable period after coming of age. This was the decision in R v Rash, where the court decided that a person who supplied goods to an infant can’t enforce the claim against the infant during infancy and will if the infant should repudiate after coming of age, it may not become a debt.
The rationale is that since infants can’t enter a contract except for necessaries, anyone who supplies goods to the infant is deciding whether they’ll be paid.
Furthermore, a minor can ratify a contract after they reach the age of majority. This is usually the case with sports contracts. In such cases, it’s the parent or guardian of the minor that signs the contract. But when the minor becomes of age, they can decide to ratify the contract.
Minors can sign a contract, and they don’t require the permission of their parents to do this. But such contracts could be avoidable. This is why it’s important to take precautions when entering a contract with a minor. You can do this by checking the identification of the minor or even doing a background check. If it’s a contract that will have financial implications, you should request a co-signer.