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Legal contract age refers to how old a person must be to enter into a binding agreement. This is commonly linked to a term known as the age of majority, which is the age when a person becomes an adult. In most developed countries, children cannot be bound by contracts that they may sign or to which they may have verbally agreed. There are instances, however, when the legal contract age for certain agreements may include minors.
The laws and exceptions regarding legal contract age can vary from one jurisdiction to the next. Many countries, such as the Germany, Brazil, and Norway, have set 18 as the age of majority. Likewise, this is the legal contract age in those countries. In Scotland, a minor, who is defined as a person under the age of 16, can enter into contracts that are reasonable and commonly entered into by people of similar age and circumstances.
Generally, minors cannot be bound to contracts because they are not old enough to enter them. In many cases, if someone does enter a contract with a minor, the minor has the ability to have the contract deemed void. On the other hand, if an adult breaches a contract with a minor, the minor can hold him liable.
The inability to enforce contracts with minors is the reason why they are usually denied privileges such as commercial credit. With commercial credit, comes the promise to repay. Companies generally have no legal grounds to recover amounts that they have lent or to take action against borrowers who are not of the legal contract age.
There are some instances when minors are considered within the legal contract age and may be held liable for breaching the terms. In the United Kingdom, for example, children can be bound by contracts for necessaries. This covers things such as housing or food. They may also be held liable for certain service contracts.
If a legal dispute arises regarding a contract to which a minor may be held liable, the minor's mental capacity is likely to be assessed. Mental capacity refers to the minor's ability to understand what he was agreeing to and the terms of the agreement. In many instances, a great deal of leniency is given to the minor. This is especially true when the contract regards a subject on which the adult party has intimate knowledge. An example would be a contract between a minor and a professional who is to serve as a talent agent.
The legal contract age may not serve as protection against breach of contract when a person who would otherwise be considered a minor has been emancipated. Emancipation generally involves being treated as an adult in all aspects of life. This includes emancipation that is achieved through court proceedings as well as emancipation that results from marriage.