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Why are minors contracts voidable? What type of protection do children need, and do you...

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van2013 | eNotes Newbie

Posted April 1, 2013 at 5:18 PM via web

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Why are minors contracts voidable? What type of protection do children need, and do you believe they still need this type of protection?

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crashs1824 | (Level 1) Adjunct Educator

Posted April 3, 2013 at 9:30 PM (Answer #1)

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At common law most, but not all, contracts made by minors are voidable. Generally, in states that follow the common law rule, a minor may enter into a contract but may later void that contract until shortly after reaching the age of majority. The contract is voidable at the minor's discretion, and may still be enforced against an adult party who made the contract with the minor.

Once a minor reaches majority, any contract made as a minor may be ratified by acts or words reasonably demonstrating the now adult person intends to be bound by the contract they made as a minor. A contract may also be ratified by a person failing to avoid a contract within some reasonable period after reaching the age of majority.

Be aware, not all contracts by minors may be voidable. Typically, contracts for necessities (such things as food, lodging, basic clothing and medical care) are not voidable. Furthermore, some contracts may not be voidable by minors by reason of state or federal statute--certain student loans are an example of this.

While at common law certain minor contracts are voidable by the minor, it does not mean that minors may simply "walk off" with someone else's goods. Typically, a minor must return any tangible goods received as a result of a voided contract. In addition, courts may require a minor to pay at least some restitution for any value retained or damages caused. The circumstances of when restitution must be paid, and the amount of said restitution, can vary from state to state.

In general, I would agree with this approach, especially in states that allow courts to equitably award damages or restitution for unfair conduct by minors. Minors, even ones who are nearly 18, typically do not fully understand the full ramifications of their decisions and often lack the market savvy of older people; this is the principal reasoning behind common law rule regarding the voidability of contracts by minors. Even in today's fast paced society, with easier access to information, minors often still lack the ability to fully appreciate long term financial decisions. Young people may have access to vastly more information than they used to, but they still are much less responsible and more impulsive than adults (at least as a group).

Having this voidability rule discourages predatory companies and individual sellers from targeting minors and locking them into long-term or damaging financial commitments that the minor may not fully appreciate. By allowing exceptions for necessities, minors will still be able to procure basic necessities when needed, but will not be "on the hook" for large, frivolous purchases. Also, allowing courts to award at least some damages for unsavory behavior by minors attempting to abuse the rule, there is some protection for merchants who unwittingly sell to a minor or are victims of fraudulent behavior by minors.

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