4.1 Minors and Contracts

Minors generally can't enter legally binding contracts due to their age and vulnerability. The law aims to protect them from exploitation and poor judgment. However, there are exceptions for necessities and beneficial agreements.

Minors can usually disaffirm contracts by communicating their intention and returning any consideration. Adults remain bound until disaffirmance but can recover remaining consideration if the minor backs out. These rules balance protecting minors with fairness to adults.

Minors and Contracts

Minors' capacity to contract

• General rule: Minors lack capacity to enter legally binding contracts due to age (typically under 18 years old)
• Law seeks to protect minors from inexperience and immaturity
  • Considered more vulnerable to exploitation and unfair dealings (high-pressure sales tactics, complex legal language)
  • Aims to shield minors from consequences of poor judgment (impulsive purchases, long-term financial obligations)

Binding contracts for minors

• Contracts for necessaries bind minors for goods or services essential for health and well-being
  • Includes food, clothing, shelter, medical care, and education
  • Goods or services must be actually necessary, not just desired by minor (designer clothing vs. basic attire)
  • Price must be reasonable and minor must not have legal guardian to provide necessaries
• Beneficial contracts may bind minors if they provide net benefit without imposing obligations or detriments
  • Contracts for gifts or those securing advantages for minor (trust fund, scholarship)

Process of contract disaffirmance

• Disaffirmance allows minors to cancel or void most contracts, except binding ones (necessaries and beneficial contracts)
• Steps for minors to disaffirm:
  1. Communicate intention to disaffirm to other party through written notice or actions inconsistent with contract (refusing to make payments, returning goods)
  2. Return any remaining consideration (goods or money) received under contract, if possible
     • Consideration consumed or destroyed may not need to be returned (used clothing, perishable goods)
  3. Disaffirm within reasonable time after reaching age of majority or after contract made (if still minor)

Adults' rights in minor contracts

• Adults bound by contracts with minors, even if minor later disaffirms
• Must perform obligations under contract unless and until minor disaffirms (deliver goods, provide services)
• If minor disaffirms, adult has right to recover any remaining consideration provided (returned goods, refunded money)
• May seek restitution for reasonable value of necessaries provided, even if minor disaffirms (medical bills, educational expenses)
• Cannot enforce specific performance of contract against minor who has disaffirmed (requiring minor to complete payments, continue services)