Question

The minor and contract law/infancy doctrine.

Answer 1

Hawai`s has long recognized the common law rule—referred to as “the infancy doctrine” or “the infancy law doctrine”— that contracts entered into by minors are voidable. See, e.g., Jellings v. Pioneer Mill Co., 30 Haw. 184 (1927); Zen v. Koon Chan, 27 Haw. 369 (1923); McCandless v. Lansing, 19 Haw. 474 (1909). Under this doctrine, a minor may, upon reaching the age of majority, choose either to ratify or avoid contractual obligations entered into during his or her minority.

See 4 Richard A. Lord, Williston on Contracts § 8:14 (4th ed. 1992); see also Restatement (Second) of Contracts, §§ 7, 12, and 14 (1979); 7 Joseph M. Perillo, Corbin on Contracts § 27.4 (2002 ed.). Traditionally, the reasoning behind the infancy doctrine was based on the well-established common law principles that the law should protect children from the detrimental consequences of their youthful and improvident acts. As the California Court of Appeals explained in Michaelis v. Schori, 20 Cal.App.4th 133, 24 Cal.Rptr.2d 380 (1993):

“The rule has traditionally been that the law shields minors from their lack of judgment and experience and under certain conditions vests in them the right to disaffirm their contracts. Although in many instances such disaffirmance may be a hardship upon those who deal with an infant, the right to avoid his contracts is conferred by law upon a minor for his protection against his own improvidence and the designs of others. It is the policy of the law to protect a minor against himself and his indiscretions and immaturity as well as against the machinations of other people and to discourage adults from contracting with an infant. Any loss occasioned by the disaffirmance of a minor’s contract might have been avoided by declining to enter into the contract.

Id. at 381; see also Dodson v. Shrader, 824 S.W.2d 545,547 (Tenn. 1992) (“[T]he underlying purpose of the infancy doctrine . . . is to protect minors from their lack of judgment and from squandering their wealth through improvident contracts with crafty adults who would take advantage of them in the marketplace.””

The rule that a minor’s contracts are voidable, however, is not absolute. An exception to the rule is that a minor may not avoid a contract for goods or services necessary for his health and sustenance. See 5 Richard A. Lord, Williston on Contracts § 9:18 (4th ed. 1993); see also Creech v. Melnik, 147 N.C.App. 471, 556 S.E.2d. 587, 590-91 (2001); Garay v. Overholtzer, 332 Md. 339, 631 A.2d 429, 443-45 (1993).

Such contracts are binding, even if entered into during minority, and a minor, upon reaching majority, may not, as a matter of law, disaffirm them. See Muller v. CES Credit Union, 161 Ohio App.3d 771, 832 N.E.2d 80,85 n. 4 (2005) (stating that contracts for the purchase of necessities, which “are food, medicine, clothes, shelter or personal services usually considered reasonably essential for the preservation and enjoyment of life[,]” are valid exceptions to the general rule) (citation and internal quotation marks omitted); see also Yale Diagnostic Radiology v. Estate of Harun Found., 267 Conn. 351, 838 A.2d 179, 182 (2004). As the Maryland Court of Appeals summarized in Schmidt v. Prince George’s Hospital, 366 Md. 535, 784 A.2d 1112 (Ct.App. 2001):

“By the common law, persons, under the age of twentyone years, are not bound by their contracts, except for necessaries, nor can they do any act, to the injury of their property, which they may not avoid, when arrived at full age. . . .

They are allowed to contract for their benefit with power in most cases, to recede from their contract when it may prove prejudicial to them, but in their contract for necessaries, such as board, apparel, medical aid, teaching and instruction, and other necessaries, they are absolutely bound, and may be sued and charged in execution; but it must appear that the things were absolutely necessary, and suitable to their circumstances, and whoever trusts them does so at his peril, or as it is said, deals with them at arms’ length.

Their power, thus[,] to contract for necessaries, is for their benefit, because the procurement of these things is essential to their existence, and if they were not permitted so to bind themselves they might suffer.”

It is apparent that the Hawai`s Legislature has, through the enactment of several statutory provisions codified the principle that contracts relating to medical care, hospital care, and drug or alcohol abuse treatment are contracts for “necessaries” (i.e., medical aid). These statutes explicitly provide that minors who enter into contracts for the medical services described therein cannot later disaffirm them by reason of their minority status.

Inasmuch as none of the parties to this appeal contend that Douglass’ employment was “a necessary,” it would appear that under the well-recognized infancy doctrine, Douglass would be entitled to disaffirm his employment contract, including the purported arbitration agreement.

However, a review of Hawaii’s child labor law—specifically HRS § 390-2 (1993 Supp. 2005)—evinces the legislature’s intent to incorporate the rationale underlying the common law infancy doctrine—that is, to protect children from the detrimental consequences of their youthful and improvident acts—into the statutory scheme and impose upon the Department of Labor and Industrial Relations (DLIR) the responsibility of promulgating rules and regulations to effectuate such intent.

Prior to 1969, all minors seeking employment were required to obtain a certificate of employment, which, as previously noted, requires the signature of a parent or guardian of the minor, as well as information from the employer as to, inter alia, the hours of work and the nature of the employment.

[But] . . . since 1969, sixteen- and seventeen-year-olds are no longer required to secure parental consent, and the DLIR does not require any information from the employer; sixteen- and seventeen-year-olds are merely required to present his or her certificate of age to a prospective employer, which the minor obtains from the DLIR after producing an acceptable proof of age document.

With respect to contracts of employment, it is apparent that, by relaxing the requirements for sixteen- and seventeen-year-olds to obtain employment, the legislature clearly viewed minors in this particular age group—being only one to two years from adulthood—as capable and competent to contract for gainful employment and, therefore, should be bound by the terms of such contracts. Similarly, inasmuch as the parent or guardian of a minor under sixteen is required to sign the application for a certificate of employment, which contains specific information regarding the nature and conditions of that employment, before entering into an employment contract, any such contract is equally binding on said minor.

However, consistent with the policy of protecting minors until they attain the age of majority, the legislature provided an additional safeguard by authorizing the DLIR to “suspend, revoke or invalidate” any certificate of employment or age previously issued if the minor’s employment is later found to be detrimental to the minor. See HRS § 390-4. Thus, based on the foregoing reasoning, we conclude that, inasmuch as the protections of the infancy doctrine have been incorporated into the statutory scheme of Hawaii’s child labor law, the general rule that contracts entered into by minors are voidable is not applicable in the employment context.

In applying the foregoing discussion to the circumstances of the instant case, we recognize that the record does not indicate whether Douglass had, in fact, obtained an age certificate prior to his employment with Pflueger.

However, even if he did not, Douglass should, nevertheless, be bound by the terms of his employment contract with Pflueger. First, there is nothing in the statutory scheme of the child labor law that renders Douglass’ employment invalid or illegal based on his failure to obtain an age certificate. Second, it is undisputed that Douglass was, at the time he was hired, a seventeen-year-old high school graduate, who was only four months away from majority. And, third, there is nothing in the record to suggest that “the nature or condition of [Douglass’] employment [as a lot technician was] such as to injuriously affect [his] health, safety or well-being . . . or contribute towards [his] delinquency” so as to trigger the suspension, revocation, or invalidation authority bestowed upon the DLIR director pursuant to HRS § 390-4. In other words, whether Douglass did or did not obtain an age certificate is irrelevant; it does not change the fact that Hawaii’s child labor law provides for the protections of the infancy doctrine and renders inapplicable the general rule that contracts entered into by minors are voidable in
the employment context. To conclude otherwise would be inconsistent with the clear legislative policy that sixteenand seventeen-year-old minors do not, in accordance with the common law infancy doctrine, have an absolute right to disaffirm their employment contracts.

Accordingly, we hold that the circuit court properly rejected Douglass’ argument that he is entitled to disaffirm his employment contract, including the arbitration provision, by reason of his minority status. Mossman v. Hawaiian Trust Co., Ltd., 45 Haw. 1, 15-16, 361 P.2d 374, 382 (1961) (agreeing with determination of the trial court, but for different reason); see also Ko`olau Agric. Co., Ltd. v. Comm’n on Water Res. Mgmt.,83 Hawai`i 484, 493, 927 P.2d 1367, 1376 (1996) (same).”