Last updated 9 August 2016
There is no law prohibiting children from entering into contracts. Children enter into contracts every day when they purchase goods. Generally, however, a contract entered into by a child cannot be enforced against that child. It is for this reason that some businesses (e.g. banks, finance companies and mobile phone companies) have policies not to enter into contracts with children. Although such a policy might appear to discriminate against children on the basis of their age, the Anti-Discrimination Act 1991 (Qld) allows such discrimination.
Exceptions to this rule that contracts cannot be enforced against children include:
- contracts for necessities. A child is obliged to pay for necessities that are supplied under a contract. Necessities are not confined to articles necessary for basic existence, but include goods and services needed to maintain the lifestyle of the child. To receive payment, a supplier must also prove that the goods were consistent with the child’s needs at the time of delivery
- beneficial contracts of service. These contracts (e.g. contracts for apprenticeships) will only be enforceable if a court considers that the terms of the contract are more beneficial than onerous
- contracts for food, clothing, lodging, medical attention and legal advice. These have been held by courts to be necessary.
Expensive clothing has been held not to be necessary when the child already had an adequate wardrobe (see Nash v Inman  2 KB 1). A contract for necessaries will not be enforced against a child if it contains harsh or particularly onerous terms. When substantial sums of money are involved, suppliers will usually require an adult to guarantee the child’s performance of the contract for necessaries. The adult (guarantor) then becomes personally liable if the child fails to perform the contract (see the chapter on Consumers and Contracts).