What You’ll Learn • How to explain the legal concept of minority • How to identify the rights of minors in relation to contracts • How to identify contracts that are voidable by a minor • How a person can ratify a contract made in minority • How to identify others, besides minors, who can rescind contracts
Why It’s Important Understanding the rights afforded to minors in contract law will enable you to exercise your rights and help others. Pre-Learning Question What is capacity?
capacity (p. 147) • rebuttable presumption (p. 147) • majority (p. 148) • minor/minority (p. 148) • emancipated (p. 148) • abandoned (p. 148) • ratify (p. 154) • necessaries (p. 156) • guardian (p. 157) • aliens (p. 157) Legal Terms
Section Outline The Requirement of Capacity Minor’s Rights and Obligations Definition of Minority Misrepresentation of Age Contracts of Minors Voidable Contracts Ratification of Minors’ Contracts Contracts for Necessaries Special Statutory Rules Other Contractual Capacity Rules Mentally Impaired Persons Intoxicated Persons Other Capacity Limitations
The Requirement of Capacity • Capacity, one of the six elements of a contract, is the legal ability to enter a contract. • Capacity relates directly to the involvement of minors in contracts.
Minor’s Rights and Obligations When people enter into contracts, they are permitted by law to presume that the other party or parties have the capacity to contract. This presumption, known as a rebuttable presumption, can be challenged in court.
Minor’s Rights and Obligations The presumption of capacity plays a key role in contracts made by minors because the law permits minors, within certain limits, to rescind or void their contracts. The court has established specific standards regarding who is considered a minor and what the term minority means.
Pre-Learning Question How would you define a minor? Why would the contracts of minors be different from the contracts of adults? What other classes of persons may be able to avoid contracts? Why?
Definition of Minority • The age of legal adulthood is known as the age of majority. • A person who has not yet reached majority is considered a minor and is still in his or her minority.
Legal Age 1972 - voting age was lowered from 21 to 18. - Many states lowered age of majority from 21 to 18. For years the age of majority was also the age at a person could begin to buy alcoholic beverages. Now - the age of majority is 18 nationwide - Most states have raised legal drinking age to 21. For legal purposes, people turn 18 at the beginning of the day before their 18th birthday.
Emancipation and Abandonment • Some states have declared that minors who are no longer under the control of their parents are emancipated. • This means they are responsible for their contracts. A minor who marries or leaves home, giving up all rights to parental support, is considered emancipated and is said to have abandoned the protection afforded him or her as a minor.
Misrepresentation of Age • If a minor claims to be over the age of majority, then he or she has committed fraud. • Fraud is a wrongful act, and minors are responsible for their wrongful acts.
Misrepresentation of Age Some states allow the other party to sue a minor who has misrepresented his or her age for fraud. Other states do not. However, it is illegal to lie about your age in order to buy age-restricted products, such as alcohol.
Contracts of Minors The law shields minors when they make contracts to protect them from unscrupulous adults. Minors may be vulnerable because of • Immaturity • Inexperience • Lack of education • Naïveté
Voidable Contracts Contracts made by minors are voidable by the minor. This means that minors may disaffirm, or avoid, their contracts if they so choose.
Voidable Contracts To disaffirm a contract means to show the intent not to live up to the contract by a statement or some other act. By permitting minors to have the privilege of disaffirming contracts, the law provides young people with a second chance when they use poor judgment.
Returning the Merchandise If a minor still has the merchandise he or she received upon entering a contract, that merchandise must be returned when the contract is disaffirmed.
Disaffirming the Whole Contract A minor may not affirm parts of a contract that are favorable and disaffirm the unfavorable parts. Disaffirming Contracts Made with Other Minors When two minors enter into a contract with each other, both parties have the right to disaffirm the contract.
Ratification of Minors’ Contracts After reaching the age of majority, a person can ratify, or approve, contracts made during minority.
7.1 Ratification Offer Acceptance A business advertisement in a newspaper can constitute an offer of sale, even if the advertisement is aimed toward minors. 1 If a minor agrees to the terms of an offer, then a voidable contract is created. 2 Reaching Majority Ratification When a minor reaches the age of majority, his or her contracts can be ratified. 3 Using or selling an item obtained by contract for a reasonable time after reaching the age of majority has the effect of ratifying the contract. Ratification can also be accomplished orally or in writing. 4
Contracts for Necessaries • A minor is held responsible for the fair value of necessaries. • Necessaries, or necessities, include food, clothing, shelter, and medical care.
Special Statutory Rules • There are many differences in state statutes regarding minors. • Minors should check the statutes of their own state to find out about special contractual capacities that they may be allowed.
Other Contractual Capacity Rules Other classes of persons are also able to avoid contracts. • Mentally impaired persons • Intoxicated persons
Mentally Impaired Persons Mentally impaired persons also have the right to disaffirm contracts because they are considered unable to make sound judgments. Before a guardian is appointed to look after the affairs of a mentally impaired person, his or her contracts are voidable.
Intoxicated Persons Persons who are intoxicated by alcohol or drugs at the time they enter a contract are sometimes able to disaffirm those contracts. To disaffirm a contract for this reason, a person must have been so intoxicated at the time of the contracting that he or she did not understand the purpose, nature, or effect of the transaction.
Other Capacity Limitations Other classes of persons lack the capacity to enter into certain types of contracts. • Convicts—people convicted of a crime. • Aliens—people who are living in this country but owe their allegiance to another country. • Enemy aliens—some foreign-born persons designated as such during time of war.
Section 7.1Assessment Reviewing What You Learned • What does it mean to be a minor? • What rights do minors have regarding contracts? • What contracts are voidable by a minor? • How can a person ratify a contract made in minority? • Name two other classes of persons who are able to avoid contracts.
Section 7.1Assessment Critical Thinking Activity Misrepresenting Your Age Should the act of misrepresenting your age if you are a minor be considered fraud? Why or why not?
Section 7.1Assessment Legal Skills in Action What Is a Good Age? Over the past 30 years, the voting age, the age of majority, and the age at which a person could buy alcoholic beverages has changed. In a paragraph no less than 10 sentences long debate your position on the ages for voting, majority, and buying alcoholic beverages.
ANSWER To protect the minor from an unscrupulous adult who might take advantage of him or her. Answer #1 A minor is a person who has not yet reached the age of legal adulthood.
Section 7.1Assessment Reviewing What You Learned Answer #2 Minors may disaffirm, or avoid, the contracts if they so choose. Answer #3 In essence all contracts are voidable by a minor; however, minors may still have some responsibilities when avoiding contracts and some states may have special statutory rules regarding minors and contracts.
Section 7.1Assessment Reviewing What You Learned Answer #4 Upon reaching majority, a person can ratify a contract by approving of the contract orally, in writing, or by some action. Answer #5 Mentally impaired persons and intoxicated persons.
Section 7.1Assessment Critical Thinking Activity Misrepresenting Your AgeAnswer Answers may vary, but should compare the elements of fraud with the misrepresentation of age if you are a minor. Legal Skills in Action Answer What Is a Good Age? Debates will vary, but should include information that supports their positions.