The following paper explains why contracts are legally enforceable agreements between two or more competent parties, unless a (commonly a person under the age of 18) is involved. The contract promise, written or otherwise, made between the parties defines the obligations. However, lawmakers have determined that minors do not have the legal capacity to enter into a legally binding contract.
Minors are treated differently because the law acknowledges that they are unable to make rational decisions for themselves and on average make mistakes. These rules are applicable regardless of whether or not the contract is verbal or written. It could be a simple bill of sale or a legal document signed by the minor, but under the law, both instances would result in a voidable contract. This observation may not seem fair, but the adoption of laws, like the infancy doctrine, and other statutes have helped to shield our young people from being taken advantage of.
In general, it is estimated that if two or more people come to an agreement (offer and acceptance); make a consideration (monetary, commitment, or terms of an exchange); are considered competent (legally and mentally); and the agreement is of a legal nature (not against the law) they have entered into a legally binding contract. If all four elements previously mentioned are present, we can assume that both parties will fulfill their side of the agreement. With that being said, what if one party decided that they did not want to fulfill the contract, and just withdrew from it? Does that seem appropriate or fair? Is there any validation to do so? When minors are involved in contracts, these questions become more significant than one might realize.
In the United States, the majority of the courts consider a person under the age of 18 to be a minor, mainly due to their limited decision making ability. This protects minorsfrom fraudulent practices, agreements, or assuming the responsibility of those agreements. The minor (being considered a non-competent party) can void the contract by means of disaffirming it. Disaffirmance is "the act by which a person who has entered into a voidable contract disagrees and declares they will not abide to it" (Disaffirmance, The Letric Law Library). While disaffirmance is clearly meant to protect minors, it is not without its complications or disadvantages.
Minors and the Right to Return Goods
Minors have the right to return items that they have purchased and get their money back, regardless of a store’s stated or printed return policy for many reasons. The first reason is that a minor cannot enter into an enforceable contract until the legal age of eighteen. In addition, a minor cannot be held responsible for reading and understanding the fine print of the return policy. Lastly, minors have the right to change their minds on a purchase. For example, if a thirteen year old girl buys herself a doll, she has the right to change her mind about the doll and return it back to the store to get a full refund.
Minors and a Written Contract
As mentioned earlier, the United State’s legal system has a somewhat different set of rules for minors compared to that of adults. For example, competent adults are held to contracts in which they agree to; however, minors are allowed to cancel or disaffirm most contracts they entered into with adults (e.g. purchasing a stereo from an electronics store). Having the ability to rescind these types of contracts is possible as a result of the infancy doctrine adopted by the United States to protect minors from the unscrupulous behavior of adults (Contract Basics, 2009). Although minors may be able to disaffirm most contracts they enter into, there are contracts (e.g. purchases) that may not be rescinded. These types of purchases usually fall into the category of necessaries for life, which includes food, clothing, shelter, etc.
When a minor rescinds a contract that is eligible to be voided, the other party must return what they originally received from the minor (e.g. money in exchange for the stereo), and the minor must return the item they received from the adult (e.g. stereo). In the case of a minor entering into an agreement with an adult, it is irrelevant be it a simple bill of sale or a legal document signed by the minor. According to the law, minors are presumed immature and therefore lack the judgment and experience to enter into a legally enforceable contract with an adult (Goldman & Sigismond, 2007).
Minors and Returning Purchases
Although all retailers have return policies, the policies do not typically apply to purchases done by minors. However, some return policies do have special terms regarding purchases and returns done by minors. For example, Game Stop specifically states that they have the right to refuse returns and some returns must be made directly to the manufacturer. Also, they state that they reserve the right to refuse trades and that minors must have written parental consent or be accompanied by a parent or guardian to do any type of trading (Return Policy, 2009).
According to an article in Chicago Family Law Blog, “some contracts may or may not be binding, depending on circumstances.” Shockingly, other information found stated that minors had very little resistance to the purchases of alcohol, knives, spray paint and fireworks on websites with prepaid credit cards. The article stated that 9 out of 12 retailers tested allowed the purchase of the restricted items and delivered them to preselected addresses. It was also found that while some of the websites confirmed legal age, many others did not. These websites assumed that when the consumer checked the box indicating that they were of legal age, they were telling the truth. While some companies are comfortable with this, Bill Bilon, Director of Trading Standards made a comment, "that not to ask and verify age is unacceptable and should be investigated and held to tort law" (Pearlman, 2007).
Many articles available did not spell out why retail stores continue to sell to minors or incompetent parties with regard to returns of purchases and contract law. It is possible that this is because companies are simply seeking revenue, without concern as to who they are selling to. In today’s market, many retailers target minors because they know that they are a driving force in the purchase decisions because of their ability to coerce their parent or legal guardian to purchase the “unnecessary” item(s).
Another reason for companies targeting minors is the fact that they are impulse buyers - using cash over credit - and the fact that they tend to overspend. Since minors are inexperienced and easily made to believe in products that follow mainstream fads or have cool names and appearances, they are the ideal target for retailers. This of course highlights the revenue focus of retailers without consideration for who is doing the purchasing. This however, is not true for all retailers, but many retail sites fall into this category in some way, shape, or form. The belief is that it should be mandatory for all retailers to utilize verification systems to ensure that the consumer is of legal age. Also adults, parents, or guardians should make a concentrated effort to ensure their "minor" is making informed decisions on purchases.
If minors can return purchases more freely than adults, is it fair to retailers who honestly enter into contracts with them? The answer to this question is no. It is not fair to retailers who honestly enter into contracts with minors who then dis affirm the agreement by returning purchases unethically simply because the law says they can. However, it is not the same as common law. The state adopts the role of protector to the fragile and more susceptible persons, without allowing individuals to use the law as a “sword” against the retailer.
According to an article on capacity law this is called “Parens Patriae" (in public policy terms). Basically, a minor can dis affirm a contract without good reason. However, the entire contract must be voided and all goods must be returned. This is considered an Aspect of Restoration. Even if a question of misrepresentation of age is involved, the minor is still allowed to dis affirm and not face tort violation (Capacity Law, 2009).
However, it seems as though the courts give too much forgiveness to minors that make bad decisions. In many cases, minors are very capable to make decisions and knowingly purchase things with the intent of using their infancy as an excuse to void the contract. This is known as unethical behavior and a breach of ethics (R.A. II, 2007, p. 2). That being said, most children learn from examples and we as parents are the role models they follow.
Adults, parents, and legal guardians need to take the time to set expectations and pass down proper ethics and morals to younger generations. With this thought in mind, a minor who knowingly makes a wrong decision based on their wants and desires should be held accountable. In fact, this type of action brought about the formation of The Hague Conference on Private International Law, who created guidelines for the treatment of minors who enter into contracts. The guidelines state that jurisdiction is given to the state of habitual residency of the minor. However, the contracting states can request jurisdiction if the state believes the minors’ interests would be better served there (Hague Conference, 2010).
Although there are specific laws created to protect minors from agreements made with adults, there are no specific laws to protect consumers who buy defective products or who are led to make purchases based on convincing misleading advertising. Basically, there is generally no specific rule or law that absolutely requires merchants to offer refunds, exchanges or credits on the items they sell. Merchants set their own individual policies on refunds and do not have to give a refund or exchange once an item is purchased. However, if a store does not have a return or exchange policy, it can have a negative effect on business.
For the reason mentioned above, most merchants allow items to be returned, as long as it is within their company’s stated guidelines. A copy of said guidelines (e.g. return policy) should be posted near cash registers and printed on sales receipts. However, whether or not a minor makes a purchase or an adult makes a purchase, it does not affect the return policy. If a merchant was worried about minors making purchases, then they would put a clause in their return policy to reflect such. There is not much evidence showing a store catering specifically to minors in their return policy. If a minor is capable of making a purchase with the right amount of money, then they should be responsible for the item they purchased. However, this does not apply if the minor purchased an illegal or an adult item.
As can be seen from the information provided, we have examined the necessary elements of a legal contract, one being that both parties are competent. Due to their immaturity, minors are not considered legally competent to enter into a contract. As a result, most contracts entered into by minors are not legally binding and can be voided by dis affirming them. The infancy doctrine allows minors to cancel a contract they dispute. This protects them from being taken advantage of by adults. Necessity of life purchases (food, clothing, etc.) however, usually cannot be dis affirmed. Despite this fact, merchants continue to sell to minors in spite of the infancy doctrine. Although refund policies are not required by law, the store’s refund and exchange policies are sufficient to cover minors who want to reverse a purchase.
(2009, March 12). Return Policy. Retrieved December 23, 2009, from Game Stop Web site: http://www.gamestop.8_5x11-countercard-returnpolicy.indd
Capacity Law. (2009, April 25). Retrieved December 29, 2009, from The Free Encyclopedia: http://en.wikipedia.org/wiki/Capacity_(law)
Contract Basics. (2009). Martindale-Hubbell Lawyers.com. Retrieved December 31, 2009 from: http://consumer-law.lawyers.com/Contract-Basics.html.
Disaffirmance. (n.d.). In The Lectric Law Library's. Retrieved December 22, 2009, from The Lectric Law Library's Lexicon On Disaffirmance: http://www.lectlaw.com/def/d166.htm.
Goldman, A. J., & Sigismond, W. D. (2007). Business law: Principles and practices (7th ed.). Boston: Houghton Mifflin.
Hague Conference on Private International Law. (2010). In Encyclopedia Britannica Online. Retrieved January 4, 2010, from: http://www.britannica.com/EBchecked/topic/1445464/Hague-Conference-on-Private-International-Law
Pearlman, A. (2007, December 30). Contract with Minors are Voidable [Print]. Retrieved December 29, 2009, from Chicago Family Law Blog: http://chicagofamilylawblog.com/113448-print.html
R.A. II. (2007, April 3). Disaffirming of Contracts by Minors. Associated Content, 2. Retrieved January 4, 2010, from Associated Content Web site: http://www.associatedcontent.com/article.190866/disafirrming_of_contracts_by_minors_pg
Rights of Minors
College list for your deciding teen.
Shannon Pierce on September 27, 2016:
How do I cite you?
Jim Benefer on July 14, 2014:
What is the law regarding the 'return' of virtual goods purchased by a minor on a gaming site? eg Gaia, Clubcooee, etc
Amy Goldstein (author) from Chesterfield on November 18, 2013:
This article was written in 2011.. Thank u
Chandra on November 15, 2013:
Great Article, can you tell me when you wrote this? I need it for my reference list. thanks.
Amy Goldstein (author) from Chesterfield on May 21, 2012:
The guardian can sign for a minor- but the contract must also have the minors signature as well.
Danny on May 15, 2012:
What is the California Code for retail store return policy for minors?
My Daughter (17) purchased a Promo dress (Special Ordered) without my permission and when I tried to ask for a refund (Keep in mind we have not received the dress yet due to it being on order) they refused to refund or give store credit. So I want to know if there is a California Law pertaining to minors making purchases and trying to return the item. I mainly am trying to look for the code number.
(Above is what I have posted online, to search for an answer)
I was interested in you article you have wrote, being how it is similar to what I am going thru. However, I wanted to ask if what you have written applies in all USA States (I.E. California, where I live) and I wanted to ask if you know what the California code # is for that law?
Mubashir Tanveer on May 12, 2012:
i read your article but i could not find the answer of my question: my question is as follows
Can the guardian of minor can make contract for minor?
kindly answer it as soon as possible as i have to submit the project. Thanks
Amy Goldstein (author) from Chesterfield on March 27, 2012:
I was the author of this article. The references are listed if needed- besides myself :)
references needed on January 05, 2012:
Guys, I and my classmates used this article for our group project. When was this article written and who is the author? Thanks