Legal Question in Business Law in California
Is it illegal or invalid if a minor signs a policy for a business or terms and conditions?
3 Answers from Attorneys
What is a "policy"'? If you mean a contract, contracts for the necessities are binding even for minors. For other things like cars, the contract would not be enforceable.
Contracts signed by a minor are voidable at the election of the minor. (This is called the power of disaffirmance.) A minor cannot delegate powers, make a contract relating to real propety or an interest in real property, or make a contract relating to personal property not in the immediate possession or control of the minor. (Fam. Code, sect. 6701.)
A minor cannot disaffirm a contract for necessities for the minor or the minor's family, that was actually furnished to the minor or the minor's family, and the contract was entered into by the minor when not under the care of a parent or guardian able to provide for the minor or the minor's family. (Fam. Code, sect. 6712.)
Note that there is a distinction between a void and a voidable contract. A void contract cannot be enforced. A voidable contract can be enforced by the minor, but disaffirmed at the minor's option.
For the reasons stated by Mr. Roach, no one should be making contracts with a minor, since the minor can enforce it, but the other party can't. Exceptions include contracts for necessaries and contracts made by an emancipated minor. The law is pretty strict in defining what is "necessary" - basically, food, shelter, basic clothing and education.
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