CHAPTER 14 " THE CAPACITY TO CONTRACT" ->

restitution to the adult for the loss? The traditional rule is that the minor who cannot fully return the consideration that was given to her isnotobligated to pay the adult for the benefits she has received or to compensate the adult for loss or depreciation of the consideration. Some states still follow this traditional rule.(As you will read in the next section, however, a minor's misrepresentation of age can, even in some of these states, make her responsible for reimbursing the other party upon disaffirmance.) The rule that restitution is not required is designed to protect minors by discouraging adults from dealing with them. After all, if an adult knew that he might be able to demand the return of anything that he transferred to a minor, he would have little incentive to refrain from entering into contracts with minors.

The traditional rule, however, can work harsh results for innocent adults who have dealt fairly with minors. It strikes many people as unprincipled that a doctrine intended to protect against unfair exploitation of one type of people can be used to unfairly exploit another class of people. As courts sometimes say, the minor's right to disaffirm was designed to be used as a "shield rather than as a sword." For these reasons, a growing number of states have rejected the traditional rule. The courts and legislatures of these states have adopted rules that require minors who disaffirm their contracts and seek refunds of purchase price to reimburse adults for the use or depreciation of their property.

undesirable for the law to discourage adults from selling minors the items that they need for basic survival. For this reason, disaffirming minors are required to pay the reasonable value of items that have been furnished to them that are classified asnecessaries. A necessary is something that is essential for the minor's continued existence and general welfare that has not been provided by the minor's parents or guardian. Examples of necessaries include food, clothing, shelter, medical care, tools of the minor's trade, and basic educational or vocational training.

A minor's liability for necessaries supplied to him isquasi-contractual. That is, the minor is liable for thereasonable valueof the necessaries that she actually receives.She is not liable for the entire price agreed on if that price exceeds the actual value of the necessaries, and she is not liable for necessaries that she contracted for but did not receive. For example, Joy Jones, a minor, signs a one-year lease for an apartment in Mountain Park at a rent of $300per month. After living in the apartment for three months, Joybreaks her lease and moves out. Because she is a minor, Joy has the right to disaffirm the lease. If shelter is a necessary in this case, however, she must pay the reasonable value of what she has actually receivedthree months' rent. If she can establish that the actual value of what she has received is less than $300 per month, she will be bound to pay only that lesser amount. Furthermore, she will not be obligated to pay for the remaining nine months' rent because she has not received any benefits from the remainder of the lease.

Whether a given item is considered a necessary depends on the facts of a particular case. The minor's age,

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station in life, and personal circumstances are all relevant to this issue. An item sold to a minor is not considered a necessary if the minor's parent or guardian has already supplied him with similar items. For this reason, the range of items that will be considered necessaries is broader for married minors and other emancipated minors than it is for unemancipated minors.

Effect of Misrepresentation of Age

It is not unheard of for a minor to occasionally pretend to be older than he is. The normal rules dealing with the minor's right to disaffirm and his duties upon disaffirmance can be affected by a minor's misrepresentation of his age.3Suppose, for example, that Jones, age 17, wants to lease a car from Acme Auto Rentals, but knows that Acme rents only to people who are at least 18. Jones induces Acme to lease a car to him by showing a false identification that represents his age to be 18. Acme relies on the misrepresentation. Jones wrecks the car, attempts to disaffirm the contract, and asks for the return of his money. What is the effect of Jones's misrepresentation? State law is not uniform on this point.

The traditional rule was that a minor's misrepresentation about his age did not affect his right to disaffirm and did not any obligation to reimburse the adult for damages or pay for benefits received.The theory behind this rule is that one who lacks capacity cannot acquire it merely by claiming to be of legal age. As you can imagine, this traditional approach does not "sit well" with modern courtsat least in those cases in which the adult has dealt with the minor fairly and in good faithbecause it creates severe hardship for innocent adults who have relied on minors' misrepresentations of age.

State law today is fairly evenly divided among those states that take the position that the minor who misrepresents his age will beestopped(prevented) from asserting his infancy as a defense and those states that will allow a minor to disaffirm regardless of his misrepresentation of age. Among the states that allow disaffirmance despite the minor's misrepresentation, most hold the disaffirming minor responsible for the losses suffered by the adult, either by allowing the adult to counterclaim against the minor for the tort of deceit or by requiring the minor to reimburse the adult for use or depreciation of his property.

Joseph Dodson, age 16, bought a 1984 Chevrolet truck from Burns and Mary Shrader, owners of Shrader's Auto Sales, for $4,900 cash. At the time, Burns Shrader, believing Dodson to be 18 or 19, did not ask Dodson's age and Dodson did not volunteer it. Dodson drove the truck for about eight months, when he learned from an auto mechanic that there was a burned valve in the engine. Dodson did not have the money for the repairs, so he continued to drive the truck without repair for another month until the engine "blew up" and stopped operating. He parked the car in the front yard of his parents' house. He then contacted the Shraders, rescinding the purchase of the truck and requesting a full refund. The Shraders refused to accept the truck or to give Dodson a refund. Dodson then filed an action seeking to rescind the contract and recover the amount paid for the truck. Before the court could hear the case, a hit-and-run driver struck Dodson's parked truck, damaging its left front fender. At the time of the circuit court trial, the truck was worth only $500. The Shraders argued that Dodson should be responsible for paying the difference between the present value of the truck and the $4,900 purchase price. The trial court found in Dodson's favor, ordering the Shraders to refund the $4,900 purchase price upon delivery of the truck.

• What is the reason behind the reimbursement (newer) rule?
• What is the downside of the reimbursement rule?

In yourremaining post(s):

• Which rule do you prefer?Why?
• Optional:If you can think of a better rule the courts should apply in these situations, tell us about it