Contracts Signed by Minors: Everything You Need to Know
Contracts signed by minors do not have the same legal status as contracts signed by adults because minors are seen as not having the same legal understanding.3 min read
Contracts signed by minors, those under the age of 18, do not have the same legal status as contracts signed by adults because minors are seen as not having the same legal understanding as adults. Because of that, when minors sign contracts, the contract is not valid, and minors are under no obligation to honor that contract. There are exceptions, which include contracts for food, lodging, medicine, and other necessities. Otherwise, minors are required to have a parent or guardian to give consent in order for the contract to be legally binding.
Outside of contracts for necessities, minors may enter into a legal agreement, but the contract is considered "voidable" only by them. This is due to the presumption that minors lack the legal capacity to initially agree to the contract terms. A minor may choose to either terminate the agreement or allow it to continue as agreed upon. The law surrounding minors' ability to enter contracts is meant to prevent them from agreeing to a contract that takes advantage of their lack of understanding.
Minors can only void a contract due to their age while they are still considered a minor. Once a person reaches the age of 18 and hasn't taken action to void the contract, they can no longer void it for that reason.
How a Minor Can Void a Contract
A contract can be voided by a minor in one of two ways:
- File a lawsuit requesting the court to void the agreement.
- If sued, increase the affirmative defense of lack of capacity.
The entire contract must be voided if a minor chooses to void any part of it. It is not possible to void only one provision of the agreement. The minor cannot simply pick and choose the terms of the agreement that sound favorable. In addition, the minor might be obliged to pay restitution for the goods received or return the subject matter of the agreement. The courts are undecided as to the whether a minor typically needs to pay for any repairs or decrease in value of an item that benefited him or her.
If a minor does not reveal his or her true age and then later states that he or she is a minor, the contract is still invalid due to lack of capacity. If a minor agrees to a contract without a legal guardian being party to the contract, the guardian may not be held liable if the minor does not keep up his or her end of the agreement. However, if a parent or legal guardian co-signs the contract with the minor, the contract is considered valid and legally binding.
Work Contracts by Minors
It's quite common for those under the age of 18 to be employed. In addition, many minors work in the entertainment industry. New York and California have both passed laws that limit a minor's right to void the contract. In some jurisdictions, courts are required to approve the contract before the minor starts working so that they cannot later try to void it. Contracting with the legal guardian of a minor rather than directly with the minor may, in some cases, legally bind the minor.
Minors may be allowed to work in many states as long as they obtain a work permit. States may have additional stipulations about the types of contracts that those under 18 cannot void. As an example, some states hold minors to sports or entertainment contracts. Minors in New York State may purchase or be the recipient of a life insurance policy, the contract of which is not voidable.
Ratification of Contracts by Minors
In most states, individuals may only void the contract while they are still legally considered a minor. There are also laws regarding ratification, typically with a set amount of time in which the individual can void the contract. For example, some states allow up to six months after the person's 18th birthday to void any contracts made while they were a minor. If the person does nothing to revoke the contract by then, a court may not allow the voiding of a contract, as the person is considered to have ratified the contract. Ratification may also occur when the person signs a legally binding document, or by default when the person continues to abide by the contract terms (such as making payments).
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