Disafirrming of Contracts by Minors

Business Law Group Project"Disaffirming of Contracts By Minors"

Generally it is expected that if two people agree to the terms of a contract, that the parties involved must fulfill their end of it. But what if one party of the agreement decided they didn't want to fulfill the contract, and just dropped out of it? Would that seem right? Fair? Is there justification to do so? When dealing with minors and contracts, these questions can arise. Most states consider individuals under the age of 18 (most states) to be minors. In an attempt to protect minors from un-fair contracts, the child can choose void the contract through disaffirming it. While Disaffirmance is meant to protect minors, it is not without its drawbacks. Often the Adult side of the contract gets the short end of the stick. The following is such an instance.

Lindsay, a 17-year-old girl joined a club through which she purchased 7 DVDs, for $25, as a promotional offer. Lindsay agreed to purchase another 5 DVDs at the cost of about $14.99 over the next two years. Upon learning of the time in which the DVDs would arrive, she decided she did not want to stay in the agreement. She composed a letter to the club informing them that she; a minor (in this case 17 years old) was disaffirming her contract with the club to purchase the 7 DVDs. Also on top of her disaffirming she is demanding that her initial $25 be reimbursed. Her aunt feared that Lindsay's actions carried both legal and ethical problems.

To understand if this case presents ethical, legal or business-related dilemmas, one must first understand what disaffirming is in relation to contracts with minors. Disaffirming a contract is "When the minor decides not to perform the legal obligations contemplated in the agreement and thus disaffirms the contract, this action results in a voidable contract. The minor has the option to either performing the contract or avoiding it." (Davidson 276). Just because the minor decided to not continue with the contract, this does not mean that they are not responsible for the return of goods. Another aspect of disaffirming a contract is that the minor must return the adult's property (if possible). This is referred to as the Aspect of Restoration. Whether it is a car, DVDs, or anything to that effect, the minor is responsible for the return of the items or pay for any fees for damaged goods.

Cases very similar to Lindsay's happen on a daily basis. Many companies comparable to the one that Lindsay was involved with make themselves attractive to the younger generations. These clubs do this by sending these offers directly to minors while promoting music that would be attractive to their age group. These offers should not even be presented to minors and should defiantly not be accepted without legitimate verification of age. "Practically free CDs and DVDs. $14.99, five times over the next two year! What's there to lose, right?" From a teenage perspective, this sounds like a great idea. And that is exactly why it is illegal for a minor to contribute to any type of contract. At that age the more significant thought is the current moment. Not what this could potentially turn into or the responsibility that may come with it.

With the contract in writing, Lindsay engaged in an informal contract with the club. Because of the misrepresentation of Lindsay's age this contract is void able, meaning it remains valid and fully enforceable until she disaffirms the agreement. Disaffirmance may be made formally with a lawsuit otherwise informally with a verbal agreement or in writing. Upon this action, Lindsay must return any products she has received from the club and they must return her funds, this is called duty of restoration.

Thankfully our court system allows forgiveness to minors who make bad decisions like Lindsay, in this case. Had this occurred not even a year later, this would be a situation Lindsay could not get herself out of. She would be trapped into paying for something she would rather not.

When reviewing this case, ethics certainly play a major role. If we are to assume that Lindsay is seventeen years old, a minor, and she entered into a contract, then that right there is a breach of ethics. She misrepresented herself as an adult to be able to get the benefits, seven DVDs for twenty-five dollars, of signing a contract with the DVD Company. If the DVD Company would have known that she was a minor more than likely they would not have signed a contract with her. "The practical effect is businesses won't contract with

Individuals should be responsible for the consequences of their actions; including the violation of a contract. Since the person violating a contract in this case study is a minor it is a little more complicated. Lindsay should have known that by misrepresenting herself as an adult to sign the contract she was being unethical. She was also being unethical when she decided to break the contract by using her age as an excuse to get out of the contract without penalty. She clearly has a skewed view of what is and what is not ethical. I believe that a child inherits most of his or her ethics and morals from their parents. The parents are the one who play the role model for the child and set the standards of what is and is not ethical. In this case I would have to say that either the parents were not ethical people and their poor ethical values were passed onto their child, or that Lindsay did not follow her parents' ethical guidelines and she knew that what she was doing was wrong. The job of a parent as a role model can only go on for so long before it is going to be up to the individual to start making his or her own decisions using what they were taught as a child. Lindsay being seventeen years old should know the difference between what is ethical and what is not.

The international considerations pertaining to minors have been greatly unified over the years. The Hague Conference on Private International law with its 65 member nations has created guidelines regarding the treatment of minors who enter into contracts. The jurisdiction over said contract is given to the state where the minor is a habitual resident. The contracting state may also request that jurisdiction go to another contracting state if it decides that it would be in the best interest of the minor. Also if another contracting state believes the minors' interests would be better served in their jurisdiction they may submit a request to the contracting state in which the minor has habitual residence.

The way in which other countries view the defense of infancy can vary depending on each individual country. In British Columbia all contracts including necessary and beneficial contracts are considered unenforceable against a minor. The law in British Columbia pertaining to minors is called the Infants Act. It was written specifically for the protection of minors and to outline their responsibilities. The United States laws are a little different in that only necessary and beneficial contracts are enforceable against a minor all other contracts are not. Although the laws regarding minors may vary by country the main point to consider is where the minor is a habitual resident because the laws of that country will most likely be the basis for any decision made.

Assuming to Lindsay that this case has been filed in my court room I would like to explain how my court would rule and why. Court is now in session. Judge Anderson presides. You may now be seated. This case is in reference to Lindsay making a decision in committing herself to a contract for this DVD Company for seven DVD's for $25 and also committing herself to another five DVD's for $14.99 each. May I please see the contract that Lindsay filled out for this DVD program? I have some questions for you Lindsay, and I would like you to answer these questions honestly. Lindsay is this your signature? Yes your honor. Lindsay where you aware when filling this form out that you must be at least 18 years of age to be eligible for the DVD's? Yes sir. Well then why did you complete this form checking the box saying you are 18 years of age when you are only 17? Well judge I wasn't thinking clearly or ethically I guess. I just wanted to get the DVD's not realizing that I didn't really have the money to do so. Well that is a mistake on your part then, and not thinking about your actions. You are lucky that you are only 17 because this company could sue you for the money you owe them and some more. Furthermore, do you know what the penalty is, for signing a contract and lying on the contract? No your honor I do not know the penalty. The penalty can be jail time and court fees. I think I have heard enough about this case. Lindsay how do you plead? Your honor I plead guilty. Well at least you are admitting responsibility in this case. Ok Lindsay here is my ruling. First of all you will not be getting back your $25 for the seven DVD's. Also instead of paying court fines I want you to pay the DVD Company $74.95 for the contract of five additional DVD's for $14.99 each which you will not be receiving. Also in addition to that you need to complete 15 days of community service and I am putting you on probation for 6 months. I am giving you this penalty to make you understand that when you make unethical decisions their will be a price to pay. Lindsay I hope this is a lesson learned. You can get your community service details at the front desk. Court is out of session. Gabel strikes.