About Contracts with Minors

About Contracts with Minors
Coming up next: Mental Incapacity & Contracts: Definition & Examples

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  • 0:06 What Constitutes Maturity?
  • 0:50 Kids and Contracts
  • 1:45 Voidable Contracts
  • 3:55 Entertainment Contracts
  • 5:21 Lesson Summary
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Lesson Transcript
Instructor: Kat Kadian-Baumeyer

Kat has a Master of Science in Organizational Leadership and Management and teaches Business courses.

It seems counterintuitive that a minor can enter a contract and be liable for its conditions, but there are instances when a minor is permitted to enter into a contract and is bound by its terms.

What Constitutes Maturity?

Think about the months leading up to your 18th birthday. Do you remember being excited to finally be an adult? What were you most excited for: getting to vote? Not having a curfew? How about the ability to enter into a legal contract? It's likely that contracts aren't on the minds of most soon-to-be 18-year-olds, but the age of 18 actually makes a difference.

In legal terms, at 18, one has reached the age of maturity, or the end of obligatory parental support.

While you typically need to be an adult to enter into a contract, there are instances when a minor is actually permitted to enter into a contract and is legally obligated to the terms and conditions of the contract.

Kids and Contracts

According to law, a minor is obligated to satisfy the obligations of a contract when the contract involves:

  • Tax obligations like filing a tax return
  • Penalties and fines like parking tickets
  • Bank regulations like overdraft charges
  • Military service like joining the Army
  • Necessities like payment for housing, food or education
  • Sports or entertainment contract terms (in New York and California)
  • Misrepresenting a minor's age like using false identification or a false statement

In other words, as long as the minor has capacity, or the mental competency to understand the agreement, as it relates to the types of contracts above, the minor can willfully jump right in.

This is not to say that a minor can enter into any and all contracts, like buying a car or a new stereo system. These purchases do not represent necessities and can be voided.

Voidable Contracts

In Bowling v. Sperry (1962), Bowling, a minor, decided to purchase a car. He headed directly to Sperry Ford Sales, a nearby car dealership, to hammer out a deal on a 1947 Plymouth.

After kicking the tires and checking under the hood, Bowling, accompanied by his aunt and his grandmother, sealed the deal. With a $140 sale price, a down payment of $50 and a bit of financial assistance from the ladies, Bowling was cruising in style.

After driving the car for a while, things went sour. The car turned out to be a clunker, and Bowling was no longer satisfied with his purchase.

Steamed about the confounded car situation, he drove the automobile to Sperry's place and returned it. Bowling then drafted a strongly-worded letter disaffirming, or denying, that the contract was valid because he lacked capacity.

Sperry was not going to have the wreck returned and immediately initiated litigation. Sperry contended that Bowling had capacity to enter into the contract and was obligated to its terms.

In the court of original jurisdiction or the state court in which the case was heard, it was decided that Sperry could uphold the terms of the contract, and Bowling was obligated to pay for the malignant motor vehicle.

Dissatisfied with the lower court's decision to uphold the contractual agreement, Bowling appealed the case on the grounds that the vehicle was not a necessity and therefore did not fall under the instances in which a contract with a minor can be upheld.

Unfortunately, Sperry was unable to convince the court that the car was something that Bowling could not sustain life without. Had Sperry been able to prove that the car was a purchase that was essential to Bowling's life, the outcome may have been different.

The appellate court reversed the decision of the lower court and remanded the case back down for a new trial.

Bowling's case helps us to understand the terms in which a minor can ratify a contract. Had Bowling misrepresented his age by showing false identification or expressly stating his age as 18 or above, he would have been liable for all conditions of the contract.

So what happens when a minor enters into a contract and is obligated to the terms and conditions?

Entertainment Contracts

Most parents believe their baby is cute enough to make it to Hollywood - and some do!

Child actors enter into contracts as any actor would. Of course, the contract is negotiated between an acting agent and the parent or guardian of the child.

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