Legally speaking, minors or people who are not of legal age can’t enter a contract. But if ever you were able to get them to sign a contract, that document wouldn’t be accepted as valid. Meaning, you can’t enforce all the conditions stated in the contract against the minor.

However, there’s always an exception to the rule. The Minors Act 1970 No. 60 states that you can enter a contract with a minor just for two reasons:

For employment
For necessities

Although you are entitled to sign a contract with an underaged individual, you must bear in mind that minors can opt out at any time. Once they decide to back out of the agreement, you cannot enforce the conditions written on the contract. You have no other choice but to let them opt-out.

Legal Capacity and Minors

Entering contracts involves two parties agreeing to specific terms. Minors, generally under 18, lack full legal capacity. This absence of capacity poses risks for both minors and adults. Understanding these risks is paramount.

Nature of Contracts:

Contracts are legally binding. They contain offers, acceptance, and consideration. But for them to be binding, involved parties must possess capacity.

Why Minors Lack Capacity:

Minors’ decisions often lack maturity. Their understanding of long-term consequences can be limited. The law seeks to protect them.

Protection for Minors:

Minors can usually void contracts. But exceptions do exist. For instance, for necessities like food, shelter, and medical services.

Void vs. Voidable:

A “void” contract lacks any legal effect. It’s non-existent. However, a “voidable” contract is valid until one party decides to void it. Contracts with minors are typically voidable by the minor.

Restitution:

If minors void contracts, they might need to return received goods. But they won’t always restore their exact value.

Entering Contracts with Minors: Best Practices

It’s not always avoidable – sometimes, you’ll transact with minors. In such cases, adhere to best practices.

Seek Guardian Consent:

Always try obtaining guardian or parental consent. It doesn’t make the contract fully enforceable, but it adds a layer of protection.

Confirm Age:

Never assume age based on appearance. Always verify with documentation if necessary, especially in significant agreements.

Document Everything:

Maintain meticulous records. Documentation will always be your safety net in disputes.

Open Communication:

Transparently discuss terms. Ensure the minor comprehends. This reduces misunderstandings.

Draft Clear Terms:

Ambiguity can be problematic. Always spell out the exact expectations from both sides.

Avoid Exploitative Terms:

Seeking to exploit a minor’s lack of experience is not just unethical, but it can also lead to legal repercussions.

Notable Exceptions and Special Cases

Certain situations defy the typical rules. Being aware of these helps in navigating the complex landscape.

Necessities:

Contracts for necessities bind minors. They can’t void them without consequences. Necessities include things vital for survival and daily functioning.

Ratification After Age of Majority:

Upon turning 18, if a minor doesn’t void an agreement and continues to benefit from it, it may be considered ratified.

Employment Contracts:

Minors can work, but employment contracts come with special considerations. Laws protect minors from exploitation in work settings.

Educational Loans:

Loans taken for education usually remain binding even after a minor turns 18. They can’t easily be voided.

Insurance Contracts:

Some states allow minors to enter insurance contracts, especially when they’re legally emancipated.

Emancipated Minors:

Emancipation means a minor is free from parental control. They’re responsible for their own decisions. Emancipated minors have a higher contractual capacity, but it’s still not absolute.

Always be aware. Contracts with minors are a delicate matter. Proceed with caution, knowledge, and fairness.

Employment Contract for Minors

There are reasons why minors aged 16 and older want to work at an early age. Their family might be underprivileged that they have to work to afford necessities, or their family is doing okay but there are luxuries that they want to buy themselves.

When hiring a minor, a contract must still protect their interests and rights. The agreement must not be unfair or oppressive in any way, shape, or form. Also, when the minor reaches legal age, he or she has all the right to renounce the agreement.

The contract will only remain binding if the minor does not renounce the agreement.

Necessities Contract for Minors

This agreement should include all the essentials that a minor needs.

Housing
Food
Clothing
Health Care
Education
Other activities like music lessons, sports, and art classes

If the minor is already receiving some of these needs through other means, a new contract for that necessity might not be needed anymore.

Can you enforce a contract against a minor?

Like we’ve said earlier, you can’t enforce the contract against them once they’ve decided to back out of the agreement. It doesn’t matter if it’s a contract for employment or necessities.

However, there are a few exceptions again to this rule.

First exception

If you’ve signed an agreement with both the child and the parent or legal guardians and the minor decides to back out, you might be able to claim something against the parents or whoever the other signatories are.

Second exception

The second circumstance is when you enter a land contract. The agreement will remain enforceable until the minor takes the right steps to opt out of the agreement.

You can only enforce a contract against a minor if…

The minor reaches legal age and opts into the contract

The legal age varies depending on what country you live in. So whatever the legal age in your country is, the minor can either affirm or back out of the agreement once he or she reaches that age.

If the minor decides to affirm or continue the contract, that’s when it becomes fully enforceable. Just make sure to provide proof that by the time of the signing, the minor has the legal capacity to enter into a contract.

The minor enters a new contract

In some countries, if the minor decides to sign a new agreement while he or she is still a minor, there’s a great chance that the second contract will be enforced against the minor.

However, this rule is not applicable everywhere. That’s why whenever you are entering a contract with a minor, make sure to consult legal experts like Gibbs Wright Lawyers first. An expert legal team will certainly help you understand the ins and outs of the rules regarding contracts.

This way, you’ll know what decisions to make and the steps to take.

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Entering a Contract with a Minor