Key Takeaways:

  • Contracts with minors are voidable at the minor's discretion but exceptions exist, such as contracts for necessities (e.g., food, health, and transportation).
  • A minor who does not void a contract after reaching the age of majority may lose the ability to do so.
  • Certain contracts—like those for entertainment, military enlistment, and necessities—are enforceable even against minors.
  • Disaffirming a contract requires returning the goods or services provided.
  • Courts assess contractual capacity for minors based on necessity and fairness.

Minors and contracts is a very complicated legal issue. While it can sometimes be possible to enter into a contract with a minor, very strict requirements must be met.

Minors vs. Infants

In the past, minors and infants were anyone younger than 21 years of age. Most states, however, have introduced statutes lowering this age to 18. In the majority of legal situations, the terms minors and infants have the same meaning.

Why Minors Lack Legal Capacity

Minors are presumed to lack the legal capacity to fully understand the consequences of entering into contracts. This is grounded in the belief that minors do not possess the maturity, judgment, or experience necessary to make informed decisions about legally binding agreements. Laws exist to protect minors from being exploited or unfairly bound by contracts they cannot comprehend.

Entering Into a Contract With Infants

If you are seeking to enter into a contract with a minor or infant, you should be aware that you will be doing so at your own risk. Minors and infants usually retain the legal right to void a contract whenever they wish, which means you would have no guarantee that the contract would actually be completed. The reason that minors are allowed to void contracts is so they will be protected from being forced to fulfill contractual obligations they do not have the ability to understand.

Because this can result in very serious consequences to the non-minor party, there are some exceptions to this rule. For instance, if a minor passes the majority age and the contract is still in place, they will retain their ability to void the contract for a limited period of time, after which the contract would be binding.

Disaffirmance and Restitution in Contracts With Minors

Disaffirmance refers to a minor's right to void a contract. To exercise this right:

  1. Timing: The minor must void the contract before reaching the age of majority or within a reasonable period after reaching adulthood.
  2. Restitution: If a minor received goods or services, they must return what remains in their possession. Failing to do so may impact their ability to void the contract.

Example: If a 17-year-old buys a car and later decides to void the contract, they must return the car in its current condition to the seller.

What Are Voidable Contracts?

A voidable contract is a valid contract that can be voided, or ended, at the discretion of one or both parties. Minors who enter into a contract will be given the right to void the agreement. If an adult and a minor enter into a contract and the minor is found not to have legal capacity, the contract can be voided by the minor.

Certain types of contracts, however, cannot be voided, even if a minor is involved, including:

  • Bank regulations
  • Taxes
  • Contracts with the military
  • Penalties

Contracts that are based on necessities are a very common type of enforceable contract that involves minors. For instance, if a minor enters a contract that is related to their comfort, education, or health, these contracts cannot be voided by the minor because they are for necessities. Certain rules must be followed when a minor plans to void a contract.

For example, if the minor is still in possession of what they were provided by the other party in the contract, they must return whatever they received before the contract can be voided. Failing to give back the property to the other party will prevent the contract from being voided.

In general, minors are considered not to have the legal capacity to enter into the contract, which is why contracts involving minors can be voided. Only the minor, however, has the right to void the contract. The other party does not have this ability. The exceptions to this rule have been put in place so that minors will be deterred from abusing their ability to void contracts.

Types of Contracts That Minors Cannot Void

While most contracts involving minors are voidable, exceptions exist to prevent abuse and protect businesses. Contracts that cannot be voided include:

  • Necessities: Contracts for essentials like food, housing, medical care, and education.
  • Entertainment Contracts: Agreements for participation in sports, acting, or music industries often remain enforceable.
  • Military Service: Contracts for enlistment are binding.
  • Banking and Insurance: In some cases, financial contracts such as loans or insurance agreements may not be voided.

Courts may assess whether a contract involves necessities by evaluating the minor’s personal and financial situation.

Exceptions When Contracting With a Minor

Minors cannot unilaterally void several types of contracts. When a minor signs an entertainment or sports contract, for example, they will usually not be able to void the contract, meaning they will be held to the contract's terms. Contracts for services or goods that are necessary to the minor's safety and health also cannot be voided by the minor.

Transportation, such as an automobile, can be a necessity in certain circumstances. Vehicle leases signed by a minor may be upheld if the transportation is deemed necessary. The reason for these exceptions is that most parties would refuse to contract with a minor if all of these contracts could be voided whenever the minor wishes.

Several factors can be used to determine whether a good or service is necessary, including the economic status of the minor and the minor's parents. If the court decides that an item is necessary and that the contract involving the item cannot be voided, they can either enforce the terms the contract has written or rule that the minor has to pay for the services or goods that they have been provided. If a minor decides to void a contract, the entire contract must end. The minor will not be able to pick and choose which parts of the contract to void.

Remedies for Breach of Contract Involving Minors

When a minor voids a contract, the other party may seek limited remedies:

  • Partial Recovery: Courts may allow recovery of reasonable expenses or losses incurred.
  • Enforcement for Necessities: The minor may be required to pay a fair value for essential goods or services they retained.
  • Equitable Adjustments: In rare cases, courts can modify contract terms to balance fairness for both parties.

These measures aim to protect minors while ensuring fairness for businesses or individuals that contract with them.

Frequently Asked Questions:

  1. Can minors enter into legally binding contracts? Minors can enter contracts, but they have the right to void most agreements at their discretion.
  2. What contracts are enforceable against minors? Contracts for necessities like housing, food, medical care, and certain entertainment or military contracts are enforceable.
  3. What happens if a minor voids a contract? If a minor voids a contract, they must return any goods or services still in their possession.
  4. Can a minor ratify a contract after turning 18? Yes, if a minor continues to honor a contract after reaching adulthood, it may become binding.
  5. What are necessities in a contract with a minor? Necessities typically include essentials such as food, shelter, medical care, education, and transportation.

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