2.2 The present situation
The position was radically altered in 1991 with the passing of the Age of Legal Capacity (Scotland) Act 1991.
Box 1 Section 1 Age of Legal Capacity (Scotland) Act 1991
1 Age of legal capacity.
- (1) As from the commencement of this Act—
- (a) a person under the age of 16 years shall, subject to Section 2 below, have no legal capacity to enter into any transaction;
- (b) a person of or over the age of 16 years shall have legal capacity to enter into any transaction.
- (2) Subject to Section 8 below, any reference in any enactment to a pupil (other than in the context of education or training) or to a person under legal disability or incapacity by reason of nonage shall, insofar as it relates to any time after the commencement of this Act, be construed as a reference to a person under the age of 16 years.
The consequences of Section 1 are that anyone under the age of 16 has no legal capacity to enter into any transaction. Persons of or over the age of 16 years have legal capacity to enter into any transaction. The Act later defines a transaction as a transaction having legal effect and specifically includes certain examples, such as unilateral transactions (transactions where only one party benefits, for example the giving of a gift) and giving consent which has legal effect.
There are, however, some exceptions to this:
- the specific power of a person over the age of 12 to make a will
- the right for a person over the age of 12 to consent to the making of an adoption order
- perhaps most widely known, is the specific power of a person under the age of 16 to consent to medical or dental treatment (including surgery) if the doctor or dentist attending them is of the opinion that the patient can understand the nature of the treatment and the possible consequences.
In addition to the specific exceptions, there is a general exemption, the power of a person under the age of 16 to enter into any transaction of a kind commonly entered into by persons of their age and circumstances, provided the terms are not unreasonable. A transaction can, in certain circumstances, be a valid one.
This general exception is very important. Consider the extent to which legal transactions are part of everyday life in our society. Consider also how early in life we start functioning in this way. Children of a young age often have limited amounts of money to spend, for example on sweets. It could certainly be argued that children of six, for instance, may commonly transact to buy sweets. What is covered by this general exception will of course depend on the circumstances. It is probably not common for a child of six to transact the payment of a bus fare in return for a bus ride. However, the same cannot be said of a 12-year-old.
It is important to note that a transaction entered into by a person under the age of 16, which is not covered by one of the exceptions in the Act, is void. This means that in law there has been no transaction. Such a transaction is not voidable, i.e. capable of being reduced, in effect cancelled by the court. It has no legal effect at all.
As we have seen, the Age of Legal Capacity (Scotland) Act 1991 applies to individuals under the age of 16. So does that mean that any person over the age 16 has full capacity? The answer is yes, but there is an important point to remember. Any transaction entered into by a person aged between 16 and 18 may be reduced by the court before their twenty-first birthday if it is deemed to be prejudicial to them.
Box 2 Section 3(2) Age of Legal Capacity (Scotland) Act 1991 - definition of a prejudicial transaction
3 Setting aside of transactions.
- (1) A person under the age of 21 years (“the applicant”) may make application to the court to set aside a transaction which he entered into while he was of or over the age of 16 years but under the age of 18 years and which is a prejudicial transaction.
- (2) In this Section “prejudicial transaction” means a transaction which—
- (a) an adult, exercising reasonable prudence, would not have entered into in the circumstances of the applicant at the time of entering into the transaction, and
- (b) has caused or is likely to cause substantial prejudice to the applicant.
Activity 2 Legal transactions and children
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