Question

In: Accounting

Suppose a minor wants to cancel a contract after the minor has paid money to the...

Suppose a minor wants to cancel a contract after the minor has paid money to the adult for the purchase of a truck. Can the minor return the truck, even if it sustained damage after the purchase, and receive the full purchase price?  Under the traditional rule, if a minor cannot return the consideration fully, such as in the case where the property is damaged, the minor is not responsible for compensating the adult for the depreciation of the property. Please refer to theDodson case.

Solutions

Expert Solution

"Dodson v Shrader :

In this case Dadson is minor, bought truck from Shrader for $4900. Dadson drove truck for 9 months until engine was ruined.Dadson parked his car in front of his parent's house , Where it was hit by another vehicle as a result engine was damaged and truck was only worth of $500.Dadson contacted Shrader to rescind the contract and requested a full amount as refund($4900). Shrader refused the same. Shrader argued that Dadson should be responsible for the truck loss of value.

Ruling :

Purpose of "infancy doctrine" is to protect minors from their own lack of judgement an should not cause an unfair hardship on innocent adults. Benifit rule holds that ,upon rescission, recovery of the full purchase price is subject to a deduction for the minor's use ,depreciation ,or damage of the goods.order passed in favour of Shrader."

So refering to the above case study minor has to be responsible for the loss or damage of truck.


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