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Minors' Contracts Act 1969

NIUE LAWS
LEGISLATION AS AT DECEMBER 2006

MINORS’ CONTRACTS ACT 1969

1969/41 (NZ) – 1 January 1970

1 Short title

2 Interpretation

3 Act to bind the Crown

Contractual Capacity of Minors

4 Married minors

5 Contracts of minors of or over the age of 18 years, certain contracts concerning life insurance, and contracts of service

6 Contracts of minors below the age of 18 years

7 Compensation or restitution

8 Applications under section 5 or section 6

9 Minor may enter into contract with approval of the Court

Miscellaneous Provisions

10 Guarantees and indemnities

11 Contracts to marry

12 Settlement of claims by minors

13 Variation of certain orders made under section 12

14 Jurisdiction of Court

15 Act to be a code

16 Trusts not affected

17-19 [Spent]

SCHEDULES

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To restate and reform the law relating to minors’ contracts

1 Short title

This is the Minors’ Contracts Act 1969.

2 Interpretation

(1) In this Act –

"property" means land, money, goods, things in action, goodwill, and every valuable thing, whether real or personal, and whether situated in Niue or elsewhere; and includes obligations, easements, and every description of estate, interest, and profit, present or future, vested or contingent, arising out of or incident to property.

(2) In sections 5, 6, 9, 10 and 12, "minor" does not include a minor who is or has been married.

3 Act to bind the Crown

This Act shall bind the Crown.

Contractual Capacity of Minors

4 Married minors

(1) Subject to section 16, a minor who is or has been married shall have the same contractual capacity as if he were of full age.

(2) Subject to section 16, any compromise or settlement of a claim agreed to, and any discharge or receipt given for any purpose, by any such minor shall have effect as if the minor were of full age.

5 Contracts of minors of or over the age of 18 years, certain contracts concerning life insurance, and contracts of service

(1) Subject to this section, every contract which is –

(a) Entered into by a minor who has attained the age of 18 years; or

(b) [Repealed by 2004/270]

(c) A contract of service entered into by a minor; shall have effect as if the minor were of full age.

(2) If the Court is satisfied in respect of any contract to which subsection (1) applies that, at the time the contract was entered into –

(a) The consideration for a minor’s promise or act was so inadequate as to be unconscionable; or

(b) Any provision of any such contract imposing an obligation on any party thereto who was a minor was harsh or oppressive,

it may, in the course of any proceedings or on application made for the purpose, cancel the contract, or decline to enforce the contract against the minor, or declare that the contract is unenforceable against the minor, whether in whole or in part, and in any case may make such order as to compensation or restitution of property under section 7 as it thinks just.

(3) For the purposes of subsection (2), the Court may receive evidence of commercial practice in contracts of the same kind.

(4) [Repealed by 2004/270]

(5) Nothing in this section shall apply to –

(a) Any contract approved under section 9, or

(b) The compromise or settlement of any claim for money or damages made by or on behalf of any minor (whether alone or in conjunction with any other person).

6 Contracts of minors below the age of 18 years

(1) Subject to this section, every contract other than a contract to which section 5(1)(b)or (c) applies entered into by a minor who has not attained the age of 18 years shall be unenforceable against the minor but otherwise shall have effect as if the minor were of full age.

(2) The Court may, in the course of any proceedings or on application made for the purpose, inquire into the fairness and reasonableness of any contract to which subsection (1) applies at the time the contract was entered into and –

(a) If it finds that any such contract was fair and reasonable at that time it shall not be obliged to make any order but it may –

(i) enforce the contract against the minor;

(ii) declare that the contract is binding on the minor, whether in whole or in part;

(iii) Make such order entitling the other parties to the contract, on such conditions as the Court thinks just, to cancel the contract;

(iv) Make such order as to compensation or restitution of property under section 7 as it thinks just, and

(b) If it finds that any such contract was not fair and reasonable at that time it shall not be obliged to make any order but it may –

(i) cancel the contract;

(ii) make such order entitling the minor, on such conditions as the Court thinks just, to cancel the contract;

(iii) make such order as to compensation or restitution of property under section 7 as it thinks just.

(3) In exercising its discretion under subsection (2) the Court shall have regard to –

(a) The circumstances surrounding the making of the contract;

(b) The subject-matter and nature of the contract;

(c) In the case of a contract relating to property, the nature and the value of the property;

(d) The age and the means (if any) of the minor;

(e) All other relevant circumstances.

(4) Nothing in this section shall apply to –

(a) Any contract approved by the Court under section 9; or

(b) The compromise or settlement of any claim for money or damages made by or on behalf of any minor (whether alone or in conjunction with any other person).

(5) Nothing in this section shall limit or affect section 20 of the Trustee Act 1956.

7 Compensation or restitution

(1) Where the Court exercises any of the powers conferred on it by section 5(2) or where it may exercise any of the powers conferred on it by section 6(2) (whether or not it exercises any of those powers), the Court may grant to –

(a) Any party to the contract; or

(b) A guarantor or indemnifier under a contract of guarantee or indemnity relating to a contract to which section 5(1) or section 6(1) applies; or

(c) Any person claiming through or under or on behalf of any such party, guarantor, or indemnifier,

such relief by way of compensation or restitution of property as the Court thinks just.

(2) The Court may by any order made under section (1) vest the whole or any part of any property that was the subject of, or the whole or any part of the consideration for, the contract in any party to the proceedings or may direct any such party to transfer or assign any such property to any other party to the proceedings.

8 Applications under section 5 or section 6

(1) An application under section 5(2) or section 6(2) may be made by –

(a) Any person to whom the Court may grant relief under section 7; or

(b) Any other person where it is material for that person to know whether the Court will exercise the powers granted to it by the subsection.

(2) Any order made under section 5(2) or section 6(2) or under section 7 or any provision of any such order, may be made upon and subject to such terms and conditions as the Court thinks fit.

9 Minor may enter into contract with approval of the Court

(1) Every contract entered into by a minor shall have effect as if the minor were of full age if, before the contract is entered into by the minor, it is approved under this section by the Court.

(2) An application to the Court under this section may be made –

(a) By the minor or any other person who will be a party to the proposed contract; or

(b) By a guardian of the minor.

(3) The Court may refer any such application to a guardian of the minor, or, where the Court deems it necessary for the purposes of the application, to a solicitor nominated by the Court, or to any other person, and may make such order for the payment of the reasonable costs and expenses of any person to whom the application is so referred.

(4) Any person to whom any such application is referred under subsection (3) may file a report in the Court setting out the results of his consideration and examination of the application and making in respect of it such recommendations as he thinks proper, and may appear and be heard at the hearing of the application; but no such person shall be under any obligation to consider or examine any such application until his reasonable costs and expenses have been paid or secured to his satisfaction.

(5) The Court shall not approve a contract under this section where the contract relates to property held on trust and the Court is of the opinion that it is a case in which it would be more appropriate for an application to be made under section 64 or section 64A of the Trustee Act 1956.

Miscellaneous Provisions

10 Guarantees and indemnities

Every contract of guarantee or indemnity where any person (other than a minor) undertakes to accept liability in the event of the failure of a minor to carry out his obligations under a contract shall be enforceable against that person (in this section referred to as "the surety") to the extent that it would be if the minor had been at all material times a person of full age, and that liability shall not be affected by any other provision of this Act or by any order made under any other provision of this Act; but the liability of the minor to the surety and the surety’s right of subrogation against the minor may be affected by the other provisions of this Act or by any order made under section 5(2) or section 6(2) or section 7.

11 Contracts to marry

No contract to marry any person entered into by a minor (other than a minor who has been married) shall be binding on either party, and nothing in section 5 or section 6 shall apply to any such contract.

12 Settlement of claims by minors

(1) Where any money or damages are claimed by or on behalf of a minor (whether alone or in conjunction with any other person) then –

(a) If the claim is not the subject of proceedings before any Court in Niue, any agreement for the compromise or settlement of the claim entered into by the minor, or on his behalf by a person who in the opinion of a Court of competent jurisdiction is a fit and proper person to do so, shall be binding on the minor if it or a release of the claim is in writing and is approved by a Court of competent jurisdiction; and

(b) If the claim has not been compromised or settled in accordance with paragraph (a) and has become the subject of proceedings before any court in Niue, no settlement, compromise, or payment and no acceptance of money paid into Court, whenever entered into or made, shall so far as it relates to that minor’s claim be valid without the approval of the Court.

(2) An application for the approval of the Court under subsection (1) may be made by or on behalf of the minor or any other party to the agreement or proceedings.

(3) The Court may refuse any application for its approval under subsection (1) or may grant its approval either unconditionally or upon or subject to such conditions and directions as it thinks fit, whether as to the terms of the agreement or of the compromise or settlement, or as to the amount, payment, securing, application, or protection of the money paid, or to be paid or otherwise.

(4) Without limiting subsection (3), where the Court directs that the whole or any part of any money or damages awarded to a minor in any cause or matter or of any money to which a minor is entitled under an agreement, compromise, or settlement approved under subsection (1) shall be held on trust for the minor under this subsection by a person then, except so far as the Court directs any immediate payment therefrom or otherwise orders, and subject to any directions or conditions given or imposed by the Court –

(a) The amount shall be invested and held by the trustee upon trust –

(i) to make such payment (if any) to the minor out of the income and capital of the amount as the Court may specify; and

(ii) to apply the income and capital of the amount or so much thereof as the trustee thinks fit for or towards the maintenance or education (including past maintenance or education) or the advancement or benefit of the minor;

(b) The minor shall have no power, either by himself or in conjunction with any other person or persons, to terminate the trusts upon which the amount is held or to modify or extinguish those trusts;

(c) The interest of the minor in the income and capital of the amount shall not, while it remains in the hands of the trustee, be alienated, or pass by bankruptcy, or be liable to be seized, sold, attached, or taken in execution by process of law.

(5) (a) Upon any minor attaining the age of 20 years or marrying under that age while any amount is held on trust for his benefit under subsection (4), the balance of that amount and of the income therefrom remaining in the hands of the trustee shall be paid to the minor except in so far as the Court may have ordered before the payment is made that the whole or any part of that amount shall continue to be held on trust under that subsection.

(b) Where the trustee has made an application or received notice that an application has been made to the Court for such an order he shall not make any payment under this subsection until the application has been disposed of.

(6) [Repealed by 2004/270]

(7) For the purposes of this section "court of competent jurisdiction" means a court in which proceedings could be taken to enforce the claim or, in the case of a claim that could not be the subject of proceedings in Niue, a court in which proceedings could be taken to enforce a similar claim in Niue.

(8) Nothing in this section shall limit or affect the Deaths by Accidents Compensation Act 1952.

13 Variation of certain orders made under section 12

(1) The Court may vary any order made under section 12 insofar as the order relates to the payment, investment, or application of money held on trust or the income from such trust.

(2) Any order under this section may be made by the Court of its own motion or on an application made by –

(a) The minor; or

(b) The trustee; or

(c) Any other person who adduces proof of circumstances which in the opinion of the Court make it proper that he should make the application.

14 Jurisdiction of Court

The Court may exercise any of the powers conferred by sections 5 to 7 where –

(a) The occasion for the exercise of the power arises in civil proceedings (other than an application for the purposes of section 5(2) or section 6(2)) before the Court; or

(b) The value of the consideration for the promise or act of any minor under the contract is no more than 2,000 dollars.

15 Act to be a code

(1) The provisions of this Act shall have effect in place of the rules of the common law and of equity relating to the contractual capacity of minors and to the effect, validity, avoidance, repudiation and ratification of contracts entered into by minors and to any contract of guarantee or indemnity in respect of any such contract.

(2) –

(3) Nothing in this Act shall limit or affect any provision of any other enactment whereby a contract is made binding on a minor and nothing in section 5 or section 6 shall apply to any such contract.

(4) Nothing in this Act shall limit or affect the rule of law whereby a minor is not liable in tort for procuring a contract by means of fraudulent representations as to his own age or any other matter, but the Court shall take any such representations into account in deciding whether to exercise any of its powers under section 5(2) or section 6(2) or section 7.

16 Trusts not affected

Nothing in this Act shall entitle –

(a) A trustee to pay money or deliver property to a minor otherwise than under the terms of the trust;

(b) A minor to enter into an agreement whereby a trust is extinguished or the terms of a trust are varied but nothing in this section shall prevent any contract approved under section 9 from having effect according to its tenor.

17-19 [Spent]

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SCHEDULES

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