Case Summary

Hamilton v Lethbridge (1912) 14 CLR 236

Contract; formation; capacity; minors.

Facts: Lethbridge, who was a minor, bound himself to serve for five years as an articled clerk for the plaintiff, a lawyer practising in Toowoomba. As part of the agreement, Lethbridge agreed that, after qualifying, he would not practice as a solicitor within 50 kilometres of Toowoomba. However, a year after qualifying, Lethbridge started practising as a solicitor in Toowoomba, claiming that, as a minor, he lacked the capacity to be legally bound by the terms of the agreement with Hamilton.

Issue: Was the clause restraining Lethbridge from practising in Toowoomba legally enforceable?

Decision: The contract, including the restraint clause, was legally binding on Lethbridge, despite the fact that he was a minor at the time of the agreement.

Reason: Taken overall, the contract for articles (a form of apprenticeship) was substantially for the benefit of Lethbridge, even though it contained clauses, such as the restraint clause, that might be regarded as prejudicial to his interests. Barton J said (at 253):

"The rule is that stated by Lord Esher M.R. in Corn v. Matthews at p. 314: 'The mere fact of some conditions in the deed being against the apprentice does not enable the Court on that ground only to say that the agreement is void. It is impossible to frame a deed, as between a master and an apprentice, in which some of the stipulations are not in favour of the one and some in favour of the other. But if we find a stipulation in the deed which is of such a kind that it makes the whole contract an unfair one, then that makes the whole contract void. The stipulation which is objected to must be so unfair that it makes the whole contract between the apprentice, or the infant and the master, an unfair one to the infant.' "