Contracts with Minors

Companies may run into issues when they are faced with the prospect of signing a contract with a minor. Some may believe that minors cannot sign contracts or that it is illegal to do so. It is true that contract law requires all parties to the contract to have the legal capacity to enter the contract — that is, that they understand that they are entering into a contract, as well as understanding terms of the contracts and the consequences of those terms. While minors may lack legal capacity, the general rule in most jurisdictions is that a contract with a minor is voidable at the option of the minor. This is distinct from a contract being void, such as with a person who is mentally incapacitated — a void contract is not enforceable at all from the moment it is signed. Conversely, a voidable contract is enforceable as long as the party with the option to void it wishes to continue enforcing it. States that have the voidable rule differ on how to treat the contract when the minor turns 18. Most states require minors, when they 18 or within a reasonable time after turning 18, to void any contracts they wish to void, otherwise the contract becomes enforceable. However, other states may permit a minor to void a contract signed during their minority well after they turn 18. States also have exceptions to the voidable rule. If a child is emancipated from their parents, some states hold that their contracts are no longer voidable. Some states also have a policy of holding minors to contracts for necessities (e.g. food, housing, etc.). Other states may allow for enforceable contracts with minors in certain categories, such as, for example, if the child is providing a musical or acting performance.

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