A contract is an agreement which is enforceable by the law.
(a) What are the prerequisites of a valid contract?
(b) Explain the validity of the following contracts entered into by Rita, aged 16 years:
(i) A contract of apprenticeship as a hairdresser with Esther.
(ii) A contract of purchase share in Medium Mayenne Company Ltd.
(iii) A contract with Mrs. Bwisa Nyutu, a taxi driver to visit her mother in hospital.
(iv) A guarantee by Mrs. Kimani and Miss Tomno for an overdraft with a bank.
ANSWER
(a) A contract is simple legal parlance is a legally binding agreement made between two or more parties. For an agreement to be enforceable at law it must be characterized by certain elements.
- Consensus – Comprises offer and acceptance. Is the foundation of any contract.
- Capacity – This is the ability to enter into a contract.
- Intention – The parties must have intended to bind themselves in law
- Consideration – The act or promise offered by one party as the price for the other’s promise.
- Legality – The contract must not be illegal or unlawful
- Formalities if any – e.g. writing, signature consent, written evidence.
(b) The validity of the following contracts entered into by Rita, aged 16 years:
(i) A contract of apprenticeship as a hairdresser with Esther
This contract binds Rita and Esther. Both are obliged to honour their obligations failing which either party may sue and other in damages for breach thereof.
(ii) A contract to purchase shares in Medium Moyenne Ltd.
This contract is voidable by Rita at any time during infancy or within a reasonable time after attaining the age of maturity. During infancy, Rita is not liable on the contract and cannot be sued on it.
(iii) A contract with Mr. Bwisa Nyutu, a taxi driver to drive her mother in hospital.
This contract is void and unenforceable by Rita or Bwisa as it is not recognized by the law of contract as binding.
(iv) A guarantee by Mrs. Kimani and Mrs. Tomno for an overdraft with a bank.
This guarantee is void and unenforceable by or against Rita. Since money borrowing by infants is void by virtue of the Infants Relief Act, 1874, any guarantee or security given is also void. (Valentini V. Canali)