Traditionally, a minor or an infant was a person who was under the age of 21. This has been changed by statutes in almost every state, and a minor is now anyone under the age of 18. The terms “infant” and “minor” are used interchangeably in most legal contexts.
What Is the Rule When Contracting With an Infant?
Generally speaking, anyone who contracts with a minor does so at their peril. That is because the law gives minors the ability to void, or exit, contracts as they see fit. In addition, guardians can void a contract on behalf of a minor. The other party to a contract with a minor, the one who is not a minor, does not have the same right to void the contract. The law in this area varies in the different states, so a person would want to consult an experienced contract lawyer in their state to learn about the provisions of contract law relating to minors in their state.
More importantly, courts do not enforce contracts in which one party is a minor. This means that if the minor breaches the contract and does not provide the performance promised in it, the other party cannot recover damages by suing the minor for breach of contract. The other party would have to absorb the loss. The technical legal term for the right of one party to renounce a contract is “disaffirmance. “
This law is most often justified as necessary to protect minors from assuming obligations which they are not capable of understanding. It also protects minors from economic exploitation, as they may not have the experience and understanding to recognize contractual relationships that may not really be in their best interests.
Of course, allowing minors the right to unilaterally void a contract might lead to harsh results, so some exceptions have been created. When a minor reaches the age of majority, i.e. 18, and they are still a party to a contract, in most states, the contract then becomes a valid, enforceable contract.
Or, in some states, the minor has a limited amount of time in which to either accept the contract or void it. If the minor does not void the contract within the required time period, the contract is considered to have been ratified.
Contracts made with minors who have been emancipated by a court are valid, because a court has granted adult status to the emancipated minor.
What Is a Voidable Contract?
A voidable contract is a contract that either party may exit at will. A valid contract is one that is binding on both parties. If one party fails to do what they promised in a valid contract, the other party may sue them for breach of contract.
If the party who does not receive the performance promised in a valid contract from the other party sues that other party for breach of contract, they can expect to succeed. A court should enforce the contract and award the non-breaching party damages to compensate for their economic losses.
One of the most important kinds of contracts with a minor that can be enforced deals with necessities. When a minor enters into a contract that is for health, e.g. medicines, comfort, or education, the minor cannot void the contract on the grounds that they did not have the capacity to enter into it.
Moreover, when a minor does void a contract that they are legally allowed to void, the law requires that certain steps be taken. If the minor still has the property or goods that they received from the other party to the contract, they must return it to the other party when they seek to void the contract.
If the minor does not return the property in such a situation, they cannot void the contract. However, if the minor cannot return the goods they have received per the contractual agreement, because it has been spent, damaged or destroyed, they can still void the contract. They can void the contract, and the law only requires that they return that part of the goods or property they received that they still have. If the minor has nothing left of what they received, or what they have is damaged property, they can still void the contract.
However, if a parent or any other adult co-signs a contract entered into by a minor, then the parent or other adult can be held liable for performance of the contract. So, for example, if a parent or guardian co-signs a car loan made to a minor, the parent is responsible for paying the loan if the minor defaults. If a parent or guardian has not co-signed the contract, they cannot be held liable for a minor’s contract.
What Are The Exceptions to a Minor’s Ability to Void a Contract?
If every contract with a minor were invalid, of course, no sane person would ever enter into a contract with a minor. To allow some minors to enter into contracts and/or prevent minors from abusing their minority, there are several exceptions including the following:
- Sports or Entertainment Contracts: Generally speaking, minors who enter into sports or entertainment industry contracts are held to them, and cannot void them at will. Many minors work in the entertainment industry. In New York and California, there are laws limiting a minor’s right to void contracts for the minor’s employment in the entertainment industry. In some states, courts are required to approve the contract before the minor starts working to safeguard the interests of both parties.
- One strategy for avoiding issues involved in contracting with a minor is to contract with the parent or legal guardian of a minor rather than directly with the minor, in order to ensure that the contract is legally binding on the minor.
- Minors may be allowed to work in many states, as long as they obtain a work permit. Some states may have other laws about the types of contracts that those under 18 cannot void.
- In New York State, a minor may purchase or be the recipient of a life insurance policy, and the insurance contract is not voidable;
- Necessities: Contracts for certain goods and services that are necessary to the health and safety of infants cannot be voided. Such goods and services include food, clothing, medicine and lodging or shelter. In some states, an automobile or motorcycle may be considered a necessity;
- Void the Entire Contract: A minor who chooses to void a contract because of their age must void the entire contract. The law does not allow them to continue to enforce part of the contract while voiding other parts;
- Ratification: A minor can only void a contract while they are still under the age of 18, or for a reasonable time after they have reached that age. If a person does nothing to disaffirm the contract after they stop being a minor, in most states, the law may find that they are no longer able to void the contract
Can an Attorney Help Me with Contracting with a Minor?
If contracting with a minor, it is likely that the contract would not be legally enforceable. The time to consult with an experienced contracts attorney is before entering into the contract. So, if you are in the process of negotiating or drafting a contract with a minor, you really should consult a contracts attorney.
If you already have a contract with a minor who is seeking to void it or defend against its enforcement, contacting an experienced contracts attorney is strongly recommended.