Contemporary Canadian Business Law Essay

A minor named Alice entered into a contract with Silver Flatware Ltd. for purchasing silverware on a long-term credit contract. The goods was delivered but the payment was not yet been fully made by Alice. Before she attain the age of majority, Alice repudiated the contract and refused to return the silverware. The company demanded a return of the silverware and refused to refund. The company sued Alice for the balance of purchase price. The legal issues in this case are whether Alice has the legal capacity to the contract and whether Alice has the right to repudiate the contract. If the second question is answered affirmative, what the effect of repudiation will occur in this case? Should Alice return the silverware and should she be liable to the lost of teaspoons? Finally, should the Silver Flatware Ltd. Refund the money had been paid by Alice? The plaintiff’s argument would be that the defendant must return the goods if she wants to repudiate the contract. The lost of teaspoons should be counted as damage to the goods and the plaintiff is entitled to recover the loss by charging compensation from the defendant. The defendant’s argument would be that she has the right to repudiate the contract since she was a minor while entering into the contract and she repudiated the contract before her attaining of the age of majority. The defendant has the option to repudiate the contract because the contract has not been fully performed and it was signed for purchasing non-necessary goods. The defendant was entitled to a return of the payment as she was a minor at the time she entered into the contract. The defendant was not liable to the lost of teaspoons since it was not a direct result of the minor’s deliberate act and it was not recoverable by the merchant. In my opinion, the probable decision of the court would be that the defendant must return the goods and the plaintiff must refund all the monies paid by the defendant. The defendant must return the goods before the plaintiff is obliged to return the monies paid. The defendant is not liable to the lost parts of the goods. The reasons for the probable decisions are as follows. Firstly, public policy dictates that minors should not be bound by their promises. The defendant did not have the legal capacity to a contract since she entered into the contract and repudiated the contract before her attaining of the age of majority. Secondly, the contract has not been fully performed as the defendant has not made full payment of the goods, so the contract is voidable at the defendant’s option. Thirdly, the goods purchased was a non-necessary goods since the silverwork is commonly considered as luxury but not necessary. Therefore, the plaintiff is not liable on such contract. According to the reasons stated above, the defendant who is a minor has the right to repudiate the contract at any time and at her option, for the reason of the contract has not been fully performed and it was for purchasing non-necessary goods. Additionally, once the contract has been repudiated, the minor is entitled to a return of any deposit paid to the adult contractor. Since the minor has purchased the goods on credit and taken delivery, the minor must return the goods before the merchant is obliged to return any monies paid. Finally, the loss of loosing teaspoons is not recoverable by the merchant because there is no evidence provided to proof that the loss is a direct result of the minor’s deliberate act.