Question

Describe the capacity for children or infants to enter into contract binding without exception. Back answers with relevant facts.

Answer 1

Definition of Minor or Infant

In the past, an infant or a minor was a person under age 21. However, most states have revised statutes that identify minors as those under age 18. The words “minor” and “infant” are often used interchangeably in legal situations.

What Is the Rule When Contracting With an Infant?

When someone chooses to enter into a contract with a minor or an infant, they are doing so at their own risk. Contract laws provide minors the option to exit a contract as they desire, which is called "voiding a contract." These laws exist to protect minors from entering into contracts with responsibilities and obligations that they may not understand.

The rule that allows minors to void contracts can lead to severe consequences, so the laws do have some basic exceptions. One exception allows a minor to either void or accept the contract within a reasonable amount of time upon reaching the age of majority.

Voidable Contract

When a contract is valid but contains the option to be voided by any of the involved parties, this is called a "voidable contract." Before entering into a contract, a minor must have the capacity to understand it fully. If an adult enters into a contract with an infant who doesn't have the capacity, the infant retains the right to void that contract.

Other exceptions to the contract laws around minors include contracts that cannot be voided. These include:

• Military contracts
• Taxes
• Necessities
• Penalties
• Bank regulations

Many enforceable contracts among minors relate to necessities. If a minor chooses to enter into a contract for something concerning education, comfort, or health, it cannot be voided based on the capacity rule. When voiding a contract, a minor must follow certain rules of the law.

The first rule is returning any items that have been granted under the contract terms. If the minor has any of the items received, they must be returned before the contract can be voided. Failure to return the property limits the ability to void a contract. In general, a contract with an infant or minor can be voided. This rule protects younger people who don't necessarily understand the responsibilities or consequences of entering into contracts. Minors don't have the capacity to enter into contracts.

Statutes and court rulings offer the option to exit contracts to minors, at their own discretion. The other party entering into a contract with a minor does not have the right to void a contract. Only the minor has the discretion to void a contract on this basis. Although the contract is valid, the minor can exit if they wish to do so. Since this rule can lead to severe consequences or be abused, several exceptions exist to the general voidability rule for contracts with minors.

Exceptions to Creating a Binding Contract with a Minor

The first rule concerns contracts relating to entertainment or sports. If a minor enters into an entertainment or sports contract, this would not be voidable at will. Any contracts for necessities, such as services and goods that are necessary to the safety and health of minors, can't be voided at will. Examples of necessities include shelter or lodging, clothing, and food. In some cases, a motorcycle or automobile could be classified as a necessity.

Although the rule that allows minors to void contracts at will exists to protect them, the exceptions exist to protect the other parties in contracts. If any minor or infant could simply opt out of a contract as they wish, very few people would want to take the risk of entering into a contract. Certain contracts for specific services and goods cannot be voided at will. The economic status of the minor and their parents could be a factor when determining if a good or service is a necessity.

A court may enforce an original contract, although another course of action could be requiring the minor to pay for the services or goods at fair market value. For example, a minor exits the highway during a major rainstorm and finds a hotel nearby. The price of a room at this hotel for one night was $150, but the fair market value of that same room was $100 for the night. A court could require the minor to pay the full $150 price or adjust the contract to the fair market value of $100.