The esports industry is filled with fantastic, talented young people who are continuing to push the boundaries of competition and entertainment. Younger and younger professionals are finding their foothold in the space and this trajectory looks set to continue. Ignoring degrees of passion and enthusiasm, young video game enthusiasts have several advantages which set them up as excellent candidates for the competitive scene. Biologically, younger people are able to learn faster and react quicker, while culturally they have achieved a greater level of digital literacy than older generations and have fewer responsibilities which might hinder their commitment.
BUT… the prevalence of young people in the space means the esports industry has a responsibility to protect their health, wellbeing, and education. This article will be an introduction to the capacity of minors under contract law and the role that parents can and cannot play. Links to other articles specifically addressing young people in the industry can be found below:
Contracts – The General Rule
Since 1969 the ‘age of majority’, also known as the ‘age of capacity’, is achieved on reaching 18 years of age (s1 Family Law Reform Act 1969). Anyone under the age of 18 (“minors”), therefore, do not have the capacity to enter into contracts. Where a contract is created with a minor that contract will be ‘voidable’ by the minor. This means that the minor will not be bound by the contract but the other party will be bound unless and until the minor decides to determine the contract ‘void’. The minor won’t be penalised for voiding a contract but the parties may need to return to the position they were in beforehand if, for example, the minor gained something at the other party’s expense which now needs to be returned.
When a minor reaches the age of 18 and achieves the capacity to enter into binding relations they can then ratify contracts they entered into while minors, making them fully binding and enforceable even without new consideration (Southerton v Whitlock 93 (1725); Williams v Moor (1843)). This ratification could be expressly stated, either in writing or orally, or impliedly through conduct which indicates they intend to be bound by the contract (Brown v Harper (1893)).
Contracts – Exception 1, Necessaries
There are two exceptions to this general rule of contracts being voidable by minors. The first is where the contract is for “necessaries” which will be binding even on minors (Walter v Everard [1891]). “Necessaries” are defined in s3(3) of the Sale of Goods Act 1979 and will include essential goods such as food, drink, clothing, medicine, and essential services. Where the supplier can prove their consideration is ‘necessary’ the minor must pay a reasonable price for them, though this may differ from the contractual price (section 3(2), SGA 1979).
In the esports industry it is unlikely that many contracts will be considered “necessary”, though perhaps one exception may be access to the internet. Arguments could be made that equipment and services which are essential to the pursuit of a professional esports career could be ‘necessary’ for minors where competitive play is part of their livelihood. This rationale would rely on a subjective analysis of the necessity of the goods/services from the perspective of a minor making the purchases for “real use”.
Contracts – Exception 2, Apprenticeships, Education, and Service
It is considered inherently beneficial to help a minor build their skills and prepare for their future. Contracts for apprenticeships, education, and service are, therefore, considered to be inherently beneficial and will bind a minor where they adhere to this principle (Clements v London & North Western Railway Co 2 [1894]). This doctrine is what allows contracts between professional players under the age of 18, and the esports organisations they play for, to exist.
Case law from sports law provides some useful guidance on how these esports player contract can operate. The contract will have to be beneficial to the minor on the whole. This is judged from a ‘big picture’ analysis so not every clause will need to be beneficial. Contractual terms such as restrictive covenants which prevent the minor from competing against the business after their service has expired can, therefore, be enforceable (Gadd v Thompson [1911]). Incorporating a degree of ‘training’ or ‘education’ within the contract will go a long way to demonstrating its benefit. Young professional players could be offered coaching to improve their competitive play as well as assistance in developing related business and tech skills. Teams should also ensure that traditional education is not neglected as a result of the player’s time obligations.
Proform Sports Management Ltd v Proactive Sports Management Ltd [2006]
One interesting and useful case on this topic revolves around a young footballer who was destined for greatness… 15-year-old Wayne Rooney. As a minor of 15yrs, Proform acted as Mr Rooney’s agents until he was snatched up by a rival, Proactive. When judgement was passed down on the matter it was found that Mr Rooney’s contract with Proform was not “necessary to earn a living”. His contract with the football club itself would be enforceable as it provided employment and training, however, his contracts with other parties, such as his agents, were voidable.
Mr Rooney was entitled to void the contract with Proform at any time and as such Proactive could not be liable for ‘inducing a breach’. This case acts as a warning to professionals, such as esports agents, who may need to regularly contract with minors. Each contract should be considered in isolation to ensure it is enforceable and legal advice should be sought if there are any doubts.
Parents
It is useful at this point to explore the powers and liabilities of parents because some readers may already be devising cunning ways to use a minor’s parents to recover losses or create binding contractual relationships.
The general rule on liability is that a parent will not be liable for their child’s contracts or their debts (Fluck v Tollemache; Shelton v Springett; Mortimore v Wright). Where a parent entered into a separate contract, such as a personal guarantee against their child’s agreement, they would be bound and liable for that contract even if the contract with the minor turns out to be unenforceable (s2 Minors' Contracts Act 1987).
The general rule on a parent’s power is that they cannot execute contracts on their child’s behalf. It is academically debated whether a minor may grant a power of attorney to their parent, allowing them to execute contracts on their behalf, though the prevailing approach from the Law Commission is that this is possible (The Incapacitated Principal, Law Com No 122, 1983). This does not, however, circumvent the issue of capacity as the contract would only be binding, under these circumstances, if it would have been binding on the minor in any event. Where the contract is not for necessaries or for beneficial apprenticeship, education, or service the contract would, therefore, still not be binding. The parent could, in fact, find themselves liable for breach of warranty if signing a voidable contract as an attorney because, on entering the contract, they would be taken to warrant their authority to do so.
Parents do have rights and obligations in relation to the upbringing of their children which derive from the concept of ‘parental responsibility’, defined within (section 3(1), Children Act 1989. This would be highly unlikely to extend to a minor’s professional esports career, however, a debate could be had if esports was intrinsically linked to the minor’s education. Though we are not quite there yet the author can certainly imagine a gamified education system on the horizon.
Adam McGlynn
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