Legal Contract Age: Everything You Need To Know
In some cases, a legal contract age is the same as the state's age of majority and indicates whether an individual is deemed by the law to enter into contracts.3 min read
In some cases, a legal contract age is the same as the state's age of majority and indicates whether an individual is deemed mentally competent by the law to enter into contracts.
By law, individuals are able to enter into contracts when they become mentally competent adults. In most cases, this means that the individual must reach the age of majority before they can enter into contracts. However, all states have laws that set the age at which individuals reach legal capacity and the age at which they may undertake certain legal actions.
Age of Majority
In most states, the age of majority is 18 years. Individuals who reach this age are considered adults. Other states, like Alabama, stipulate 19 years as the age of majority.
Even if a contracting party has reached the age of majority, it doesn't automatically make the contract legally binding. The legal contract age may be stipulated by the type of contract—for instance, car rentals require renters to be at least 21 years old. In cases where the individual is not deemed competent to contract—due to impairment or mental illness—it no longer matters whether said individual has reached the age of majority or not.
Sufficient Mental Capacity
Generally, minors are presumed not to have sufficient mental capacity to understand contractual rights. Therefore, they are not competent to contract. The terms “infant” and “minor” are used in legal circles to describe persons who have not reached their age of majority.
Void and Voidable
A contract entered into with a minor is generally voidable. However, there are contractual obligations that remain binding, even if the contracting party is an infant. Contracts for necessities such as housing, food, or medical care are not voidable, and the infant is liable for any and all contractual obligations.
The minor's economic status or that of his/her parents may be considered when determining whether the item is necessary or not. As such, automobiles could be considered as necessary.
Once a guardian or parent consents to a contract involving a minor, it becomes legally binding. If such consent is not obtained, guardians or parents can contact the other contracting party and request that the contract is destroyed.
Enforcement of Contractual Obligations
Depending on extenuating circumstances, the court may enforce contractual obligations as is or require that the minor pay fair market prices for the goods/services contracted for.
For instance, when a minor leaves the interstate during a downpour and books a hotel room for $150 a night. If the fair market price for the room is $100, some courts may require the minor to pay $100 while others would impose the original contracting price of $150.
Contracts with minors are not automatically void. In states like Illinois, however, they are considered voidable. This means that minors can force the other contracting party to provide the benefits to be received under the contract. However, if the other party wants to enforce such a contract, the minor could declare the contract void—except if the benefits are for necessary items indicated above.
If a minor wishes to void a contract, he/she must still pay restitution for benefits received when the contract was in effect.
Although 18 years is the legal contract age in most states, there are several exceptions—such as the case of emancipation. If the minor hasn't reached the legal contract age but is granted legal status by a court of law, he/she may enter into contracts. Such a grant is made after careful review and analysis of relevant laws as well as the specific circumstances and facts.
To determine if an individual is legally competent to contract, it's best to seek expert legal advice. Courts usually require a minor to comply with terms of banking agreements. They are subject to the same penalties and fees as other consumers. Some states allow minors to work as long as they can obtain work permits.
Case and state laws could list other kinds of contracts that a minor cannot void. For instance, most states hold a minor to entertainment or sports contracts. In New York, minors can be recipients or purchasers of life insurance policies. Such policies are not considered voidable.
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