Restitution
We saw that in Nash v Inman the tailor was left in an unfortunate position
of receiving no payment for the eleven waistcoats which the student had
been wearing. In order to address this position, section 3 of the Minors’
Contracts Act 1987 gives the court a discretionary power to insist on the
handing back of goods under an unenforceable contract with a minor (note
that the statute says that the court ‘may’ order restitution, not that they
always will). This means that if the minor has been exploited by an adult,
the court may well feel that it is just not to order restitution. However, in
the event that a minor has taken advantage of an adult, using the law to
escape from obligations, then restitution will go some way to providing a
remedy for the other party. The courts have the final decision to make on
this, but they are the ones who will be in knowledge of the facts of the case.
In addition, where the minor has exchanged goods acquired in this way
for other goods, these may be the subject of the restitution order. For
example if a minor has bought a car on credit, and has sold it, using the
money to buy a motor-cycle, the court may order the minor to hand over
the motor-cycle to the seller of the car.
The provisions on restitution do raise some problems. Restitution of goods
which hold their value, such as antique jewellery, is satisfactory for the seller,
as he receives back what he has lost. However, restitution of clothing which is
now second-hand, and of very low monetary value, is less satisfactory. It could
be argued that where the court feels that restitution is necessary in such cases,
because on the facts it is evident that a minor has manipulated the law to his
own ends, then some payment could be ordered. However, there is no provision
for such an order at present. Furthermore, in some contracts restitution is not
possible, such as in a contract for services or consumable items, such as a meal.
A further problem arises where the original goods acquired by the minor are
now represented by money. If they have been sold and the money is kept intact,
for example in a labelled envelope, there should not be a problem. However, if
the money is used with other money to buy a more expensive item, or is paid
into a bank account which contains other money, and from which withdrawals
have been made, difficulties exist. No detailed ruling exists at present, so it will
no doubt be up to the courts to use their discretion in such cases.
On the whole, despite the problems raised, the power of restitution does
give the courts the possibility of providing a just outcome in more situations
than before the Minors’ Contracts Act was passed.
88 Contract law
How can the protection of minors be balanced against fairness towards
adults who deal with them?