Can an Underage Person Sign a Voidable Binding Contract?

Question from johny3377, Can an Underage Person Sign a Voidable Binding Contract?

Answer from AI:

In the United States, the general rule is that contracts signed by minors (individuals under the age of 18) are considered voidable. This means that while the contract is valid and binding, the minor has the option to either honor the contract or void it. Here’s a detailed explanation of how this works:

Understanding Voidable Contracts

A voidable contract is one that is valid and enforceable on its face but may be rejected by one of the parties. In the case of minors, they have the right to disaffirm or cancel the contract at any time before reaching the age of majority (18 years old) and for a reasonable time afterward.

Key Points About Minors and Contracts

• Capacity to Contract: Minors generally lack the legal capacity to enter into binding contracts. This is to protect them from exploitation and to recognize their lack of experience and maturity.
• Disaffirmance: A minor can disaffirm a contract, meaning they can declare the contract void and refuse to be bound by it. This must be done before they turn 18 or within a reasonable time afterward.
• Ratification: If a minor does not disaffirm the contract within a reasonable time after reaching the age of majority, the contract can be considered ratified and thus fully binding.
• Necessaries: Contracts for essential items (food, clothing, shelter, medical care) are typically exceptions. Minors are usually held liable for the reasonable value of these necessaries.

Legal Precedents and Statutes

Several court cases and statutes provide guidance on this issue:

1. Dodson v. Shrader (1992): This case established that a minor could disaffirm a contract but might be required to return the goods or compensate for their use.
2. Restatement (Second) of Contracts, Section 14: This legal document outlines the general principles regarding minors and their capacity to contract.

Steps to Take if a Minor Wants to Void a Contract

If a minor or their guardian wishes to void a contract, they should:

1. Notify the Other Party: Clearly communicate the intention to disaffirm the contract in writing.
2. Return Any Goods or Consideration: If possible, return any goods received under the contract to avoid unjust enrichment.
3. Seek Legal Advice: Consult with a legal professional to ensure that the disaffirmance is handled correctly and to understand any potential liabilities.

When to Consult a Legal Professional

While this information provides a general overview, the specifics of each case can vary. It is crucial to consult with a legal professional to get personalized advice, especially if:

• The contract involves significant amounts of money or valuable goods.
• There are disputes about the terms or the disaffirmance process.
• The contract involves complex legal issues or multiple jurisdictions.

For more detailed information, you can refer to the [Restatement (Second) of Contracts](https://www.law.cornell.edu/wex/restatement_of_the_law) and other legal resources available online.

Remember, while minors have the right to void contracts, the process and implications can be complex, and professional legal advice is often necessary to navigate these situations effectively.