New Zealand contract law is distinctive from other jurisdictions. This came as a result of the enactment of a series of Acts of Parliament. This process began with the Minors Contracts Act 1969. Then came the Illegal Contracts Act 1970, followed by the Contractual Mistakes Act 1979 and the Contracts Act 1982. One of the main points of these Acts was the wide discretionary powers given to the courts when granting relief.
‘This wide discretion is evident in the type of order that can be made under these statutes. This gives courts more flexibility; they are no longer bound by previous technical and artificial rules’ (Chetwin, Graw. 2001). Initial fears arose when it was thought that ...view middle of the document...
This means that if a valid contract is made between an adult and a minor; a minor can enforce the contract against the adult but the minor cannot be sued. This rule is qualified in s6(2). The court may enquire into the reasonableness and fairness of a contract at the time it was entered into. This type of action would have to be bought by the adult. If it is fair and reasonable, the court has discretion. Under S6 (3), in exercising its discretion, the court may take into account a list of criteria:
• The subject matter and nature of the contract
• The circumstances surrounding the making of the contract
• Age of the minor
• Nature and value of the property
• Means of the minor
• All other relevant circumstances
The case example is Morrow & Benjamin Ltd v Whittington (1989). A brief summary of facts begins with a 15 year old male buying and selling shares through a stock broking firm (Morrow and Benjamin Ltd). The firm was aware of his age and allowed him to buy shares on credit. The balance outstanding was $30,250.55. Held: Judgement was entered for Whittington. The word reasonable should be given the ordinary meaning, being reasonable between consenting and informed adults. There was nothing unfair in the way the contracts were entered into, but they were not reasonable when failing to...