For a contract to be valid, the parties must have legal capacity to contract. Capacity is the legal ability to enter into a contract. Society does not want to hold vulnerable parties to obligations they were not actually able to make. When one of the parties has a lack of capacity, the contract can be void or voidable.

$1.$ Minors

A person under the age of $18$ years is a minor, and minors lack legal capacity to contract. Still, a minor can enter into a contract, unless the particular activity or subject matter of the contract is prohibited by law. Contracts with minors are voidable by the minor, but not by the non$-$minor party. This means the minor has the option to choose to cancel the contract or to continue with it$.$ If the other party is not a minor, that other party is bound by the minor$$s decision.

Emancipation

Emancipation is the termination of minority status when a parent or legal guardian relinquishes the legal right to exercise control over a minor child, or when a court terminates that right. Once a minor becomes emancipated, he or she is able to enter into legally binding contracts.

Disaffirmance

To void the contract, the minor must show his or her intent to not be bound by disaffirmance. To disaffirm, the minor must accomplish certain acts:

The minor must express his or her intent by words or actions.

The minor must give notice to the other party.

The minor must disaffirm while a minor or within a reasonable period of time during minority or after reaching majority age.

The minor must disaffirm the entire contract.

In some jurisdictions, a minor could be liable to the other party for damages from disaffirmance.

Note that only the minor can disaffirm the contract. If the other party is not a minor, that non$-$minor party is bound to the contract and cannot disaffirm.

Public policy will not allow minors to disaffirm all contracts; it is important that minors be bound by some contracts. Exceptions to the rule that contracts with minors are voidable include:

Contracts for Necessities $$ Minors must pay for the value they receive for necessities, such as housing, food, and medical care.

Misrepresentation of Age $$ Some jurisdictions hold minors accountable for contracts when they lie about their age.

Marriage contracts

Military enlistment contracts

Ratification

Ratification is the act of agreeing to being bound by a legal obligation that was not enforceable until the party ratifies or agrees to that obligation. Once minors reach the age of majority, they can ratify a contract by acting expressly or impliedly.

Express Ratification $$ The minor affirmatively states either verbally or in writing that he or she intends to be bound by the contract.

Implied Ratification $$ The minor$$s actions indicate his or her intent to be bound by the contract.

A minor may disaffirm before turning $18$ years old, and may ratify or disaffirm within a reasonable time after turning $18.$ If the minor does not disaffirm the contract within a reasonable time after reaching the age of $18,$ the court will decide whether the contract was ratified or disaffirmed. In general, if the contract has been fully performed, the courts will assume the contract is ratified.

Question at position $1$

$1$

$2$ points

Question at position $1$

In what situation is a minor most likely to be able to terminate a contract?

In what situation is a minor most likely to be able to terminate a contract?

A minor entering into a marriage contract

When a minor lied about his or her age when making the contract

When the minor purchases food

When a minor orders books for school

Question at position $2$

$2$

$2$ points

Question at position $2$

Isabel is $17$ years old and wants to stop paying for the use of the local gym, but wishes to continue teaching classes. Her contract with the company includes terms regarding her employment and use of the facility. What must she do to properly disaffirm the contract? Choose $2$ answer choices.

Isabel is $17$ years old and wants to stop paying for the use of the local gym, but wishes to continue teaching classes. Her contract with the company includes terms regarding her employment and use of the facility. What must she do to properly disaffirm the contract? Choose $2$ answer choices.

Isabel can choose to disaffirm the gym membership portion of the contract and retain the employment terms.

Isabel must let gym staff know she is terminating the contract.

Isabel must disaffirm both the gym membership obligations and the employment terms in the contract.

Isabel must wait until she turns $18$ to disaffirm the contract.