Can I Enforce an Agreement With a Child?

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Table of Contents

• Supply of Necessaries (Excluding NSW and SA)
• Beneficial Contract of Service (Excluding NSW and SA)
• Other Agreements (Excluding NSW and SA)
• Child Agreements in NSW
• Key Takeaways
• Frequently Asked Questions

A child (or minor) is anyone below the age of 18 years of age. Before entering an agreement with a child, you should be aware of whether or not you can enforce that agreement. In Australia, excluding NSW and SA, there are two clearly defined categories of agreements valid and enforceable against a child. These are an agreement for the supply of necessaries and a beneficial contract of service. This article will explore when an agreement with a child is enforceable.

Supply of Necessaries (Excluding NSW and SA)

This is an agreement where you agree to supply the child with goods or services. This kind of agreement will be enforceable against the child if those goods or services are necessary. That is, they are suitable to maintain the child in question at the standard of living and in the position in life which that child currently enjoys. In deciding whether or not the goods or services are necessary, a court will consider what the child’s actual requirements are at the time of sale and delivery. It is important to note that the goods or services must be necessary during sale and delivery.

If the agreement is not one for the supply of necessaries, then the child does not have to pay for the goods or services or return them. Unless they obtained the goods or services by fraud. 

Beneficial Contract of Service (Excluding NSW and SA)

A beneficial contract may include a contract of employment or apprenticeship which is beneficial to the child. 

The main question when deciding whether an agreement is a beneficial contract of service and enforceable is whether the agreement as a whole, including any restrictions placed on the child now and in the future, is beneficial to the child. If the contract is more beneficial than detrimental to the child, it will probably be enforceable. There are exceptions to this rule and you should consider each case individually.

Other Agreements (Excluding NSW and SA)

Certain agreements are enforceable against a child unless the child indicates they do not intend for the agreement to be binding. These agreements involve a continuing obligation, for example, a lease or a shareholder agreement.

Note: In Victoria, unenforceable agreements with a child include:

• the repayment of money lent or to be lent to a child;
• payment of goods supplied or to be supplied (other than necessaries); 
• repayment of a contractual debt incurred when the child was under the age of 18; and
• all accounts agreed to be correct between the child and the other party.

An agreement will not be enforceable against a child if they provide security under the agreement for an advance. This includes an agreement for necessaries.

Child Agreements in NSW

The enforceability of an agreement will depend on whether the child engaged in a civil act. For example, this may include:

• a contract;
• an election to rescind or determine a contract for fraud, mistake or breach;
• an assent to or waiver of any matter affecting the child’s rights and obligations under a contract or relating to property; and
• any other act relating to contractual/proprietary rights or obligations.

If a child participates in a civil act and that participation is for the child’s benefit, the act will be binding as though the child were an adult. Certain acts are binding even though they may not benefit the child. For example, where a child disposes of property for consideration which is not manifestly inadequate, and the child receives at least part of the consideration.

Key Takeaways

In summary, whether or not an agreement with a child will be enforceable depends on a variety of factors. This includes the nature of the agreement and where the child is. Even if the agreement is enforceable, the child may not have to pay the full contract price, only a reasonable price. Furthermore, a child may repudiate an agreement, even if it is valid. This means the child may choose not to be bound by the agreement meaning it is no longer enforceable. 

If you need help enforcing an agreement with a child, our experienced contract lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.

Frequently Asked Questions