Minors and Contracts

BUS-225: Legal Environment of Business

I will provide the book link if needed.

Getting Started

Capacity is determined by the extent to which an individual can incur a legal obligation. As a matter of law, minors are considered to have limited capacity to contract because they do not have the same level of sophistication and bargaining power that adults do. The infancy doctrine makes a minor’s contract voidable. That is, it allows minors the option to disaffirm or cancel most contracts they have entered into. It is for this reason that most businesses are reluctant to enter into contracts with minors.

Upon successful completion of the course material, you will be able to:

  • Discuss the elements of contract law, including the law of capacity.


  • Textbook: Business Law and the Legal Environment
  • Webpage: 7 Essential Elements of a Contract: Everything You Need to Know
  • Webpage: Third Party Beneficiary: Everything You Need to Know
  • Webpage: Breach of Contract Remedies: Everything You Need to Know

Background Information

Courts recognize the fact that some minors must provide for their own maintenance and upkeep. For this reason, courts encourage businesses to contract with minors for necessaries of life, such as food, clothing, and shelter. A minor may still disaffirm a contract for a necessary but is liable for the value of the necessaries consumed under quasi-contract law theory. Businesses are thus allowed to recover the reasonable value of the necessaries provided to the minor.


  1. Review the rubric to make sure you understand the criteria for earning your grade.
  2. In the textbook Business Law and the Legal Environment, read section 10.4 “Capacity” from Chapter 10, “Real Assent,” and section 13.1 “The Statute of Frauds” from Chapter 13, “Form and Meaning”.
  3. In your textbook Business Law and the Legal Environment, also read section 20.2 “Warranties” from Chapter 20, “Products Liability”.
  4. Read the following:
    1. 7 Essential Elements Of A Contract: Everything You Need to Know
    2. Third Party Beneficiary: Everything You Need to Know
    3. Breach of Contract Remedies: Everything You Need to Know
  5. Navigate to the threaded discussion, and respond to the questions about the following scenarios:
    Carmen Ruiz is 17 years old and works in an office supply store. As part of her employment contract, Carmen agreed to mandatory arbitration to resolve employment disputes. Carmen was recently terminated from her job for refusing to work extra hours after her assigned shift ended. Her father, Jose, filed a lawsuit on Carmen’s behalf for wrongful termination. The office supply store asked the court to dismiss the lawsuit because Carmen had voluntarily signed the employment agreement to settle employment disputes through arbitration.
    1. Explain the implications of a minor entering into a contract.
    2. Assuming the arbitration agreement is legally enforceable and arose as part of her employment contract, could a court rule that arbitration was not legally required as a matter of contract law?
    3. Consider the alternative scenario in which Carmen is an emancipated minor who voluntarily signed the mandatory arbitration agreement. Explain what emancipation is and how it impacts a minor’s legal rights and obligations.
  6. In a separate case, Carmen purchased a car as part of a purchase contract with Joe’s AutoPlex. Joe’s AutoPlex sued Carmen after she failed to meet the requirements of the purchase contract. Carmen had every intention to make her payments under the contract, but she lost her job and had no money. She purchased the car because she needed reliable transportation to and from work. Her father and mother were unable to provide her with transportation which is why Carmen purchased the car. Carmen asked the court to dismiss the car dealer’s case because she is a minor.
    1. With respect to necessaries of life, do you think that Carmen should be liable for the purchase price of the car? Explain your response.
    2. How could Joe’s AutoPlex avoid situations like this in the future?
  7. Your initial post is due by the end of the fourth day of the workshop.
  8. Read and respond to at least two of your classmates’ postings, as well as all instructor follow-up questions directed to you, by the end of the workshop.
  9. Your postings also should:
    1. Be well developed by providing clear answers with evidence of critical thinking.
    2. Add greater depth to the discussion by introducing new ideas.
    3. Provide clarification to classmates’ questions and insight into the discussion.
    4. Be posted on three different days during the workshop.

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