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
Consider the following scenarios. Which do you think describe valid legal transactions which have legal effect and which do not?
1 Andrew is six years old and has been given £1 by his grandfather. On his way to school the next day he goes into the local shop and spends half of the money on crisps and the other half on a bar of chocolate. That evening he gives the chocolate to his mother for her birthday.
2 Ben is nine years old and has inherited £1000 pounds. He spends £850 of it on a new television and DVD player for his bedroom.
3 Claire is 13. She goes with her friends to a burger restaurant where she buys a meal and a drink. Her share of the bill is £30. Claire thinks this is very expensive and a lot more than she was expecting; despite this, she pays it.
4 Ali is 12. He has toothache and goes to the dentist. He asks the dentist to extract the painful tooth. The dentist extracts his painful tooth.
5 Elizabeth is 15. She has inherited £1000 from her grandmother. Now she has some money, she makes a will leaving half of it to her favourite charity.
6 Freddie is also 15. He has inherited a flat from his great-uncle in Glasgow. He grants a lease of the flat to his elder brother who is a student at Glasgow University. The lease states that there shall be no rent payable by his brother to Freddie.
1 There are two possible transactions here, the purchase of the crisps and chocolate and the gift Andrew has made to his mother. Although he is only six, the nature of the goods he has bought and the amount they cost mean these are both probably transactions a 6-year-old child in Andrew’s circumstances would enter into. The terms are not unreasonable and as such these are valid transactions.
2 By the time a child is the age of nine, the value of goods involved in a purchase will often be more than that involved in a purchase by a 6-year-old. However, 9-year-olds do not usually make large purchases such as televisions. We do not know whether the price paid was reasonable or not, but even so it is unlikely this could be a transaction commonly entered into by persons of Ben’s age. As such, there is no valid transaction here.
3 Buying a burger whilst with friends is certainly a transaction commonly entered into by 13-year-old girls. However, we are told that Claire’s share of the bill is £30. Assuming Claire is correct in her view that this is not reasonable, the terms of the transaction will not be reasonable; as such, it would be void.
4 The Act specifically includes the giving of consent as a transaction and states that it is valid if in the opinion of the dentist the person understands the nature of the treatment and any possible consequences. Therefore the consent is valid provided that Ali’s dentist has formed the view that Ali has this understanding.
5 The Act specifically states that testating (making a will) is a transaction. It also provides that a person over the age of 12 has the power to do so. Therefore this is a valid transaction.
6 There are two important points here. First of all, is this transaction commonly entered into by persons of Freddie’s age and in his circumstances? It is clear that most 15-year-olds do not lease property – even those who own some – and as such there will be no transaction. Second, even if there were a transaction, we would have to consider whether the terms were reasonable. We are told Freddie’s brother is not to pay rent under the lease. That being the case it is very unlikely that the terms of the lease would be reasonable. There is therefore no valid transaction.