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What Is the Legal Age to Contract?

In most parts of the United States, 18 is the legal age to enter into a contract.
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  • Last Modified Date: 22 September 2014
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The legal age to contract refers to the chronological age a person must be to enter into a binding agreement. In most parts of the United States, Canada, and the United Kingdom, a person is a legal adult when he or she is 18 years of age. In some parts of the United States, a person must be 19 years old before he or she is a legal adult. In Scotland, a person can sign some types of contracts when he or she is 16 years old, but must be at least 18 to sign a contract to make a major purchase, such as buying a house or other property.

To form a legally-binding contract, each party who is signing it must be able to understand what is being signed. Not only does each party need to understand the terms of the contract, but everyone must also specifically consent to its terms. Children are not considered capable of fully understanding the terms of a contract and, in most areas, are not held legally responsible if they enter into one.

The law is written in this way to protect children from people who may attempt to take advantage of them. A young person may think that he or she has the capacity to understand the terms of the contract presented, but he or she must also be mature enough to appreciate the consequences of what is being signed. The principle was written for this purpose.

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The legal age to contract must exist in conjunction the mental capacity to understand a contract. An adult who is not considered competent is unable to make a binding contract with another party. The impediment may come from a lack of mental capacity, but courts are also reluctant to enforce contracts made when one of the parties was under the influence of alcohol. A person who is of legal age could argue that he or she was unable to fully appreciate either the terms of the contract or the consequences of signing it because he or she was drunk.

The exception to the legal age to contract rule falls in the area of employment law. A person who is younger than the age of majority will often be able to work legally. Most employer-employee relationships involve an unwritten contract where the employee agrees to perform work for a set number of hours at a certain rate, and the employer agrees to pay the employee for performing these duties.

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anon345368
Post 5

I have a query. Suppose you are a national of a country where the legal capacity to contract is 18 years old and by certain reasons you found yourself wanting to engage in a contract in another country where the legal capacity is 19 years old. Which law shall prevail? Your national law or the country where you wish to engage a contract?

stl156
Post 4

@jmc88 - Interesting. I always wondered how things like that worked. The other question I came up with from that is, what happens if you sign a contract when you are 17 and then turn 18 soon after? Are you then required to abide by the rules of the contract once you are 18?

My guess would be no matter what age you are, that is the age that the contract goes from, so you wouldn't be liable when you actually do turn 18. I understand the purpose that there has to be some magical age when things like this can happen, but it seems pretty arbitrary sometimes.

What is so much different about someone who is 17 years and 364 days compared to 18 years? Even at that point, I have known plenty of 18 year olds (and even some much older than that) who aren't responsible enough to be signing contracts. Meanwhile, I think there are some people who are 16 year olds that could fully understand a contract and abide by the rules and consequences.

jmc88
Post 3

@Izzy78 - I am pretty sure that real story probably went a little differently than that. There are basically two options that happen when a minor enters into a contract. Either the minor can void the contract (or have it voided by parents or the court or so on), or the minor can fulfill the obligations of the contract.

If it is like you said, and the person actually received the CDs, then they are on the second path or choosing the fulfill the contract. If they choose later to void the contract, that is their option, but then they would have to return the CDs or face legal action. The other question is where the original dollar came from. I would assume the person used his parents' credit card. In that case, they may be liable for the purchase if they can't prove the child made the order.

In any case, the minor may have been able to keep the CDs, but it probably wasn't through the means you described. I'd say the parents either payed for them or it just could have cost the CD company less not the take legal action.

Izzy78
Post 2

@titans62 - Very interesting question. I once heard a story about a similar case. I don't remember the specific details, but I know the general story. There was someone who was either 16 or 17 and entered into one of those deals where you get 10 CDs for a dollar or something. Part of the deal, though, is that you buy so many more CDs at regular price in the next year.

Once the CDs arrived, the parents realized what had happened. Because the child was underage, they called the company and explained the situation, but then argued that since the person was a minor, he was able to keep the CDs without fulfilling the rest of the contract. I guess the parents were right, because the company didn't argue about it, and the kid kept the CDs. It seems like that is a pretty big loophole, though, and the only thing stopping more parents from doing that is their own integrity.

titans62
Post 1

Where in the US are people not considered adults until they are 19? I have never heard of any states with that rule. I think it is good, though, that we have a legal age to sign a contract. There are a lot of people who I think would take advantage of younger people if they had the opportunity.

Something I got to thinking about is, what happens if someone who is under the legal age signs a contract anyway? Even though they don't technically have to abide by the stipulations of the contract, can they still enforce it? For example, say I signed a contract with a 16 year old saying that I would sell them a guitar for 500 dollars. Later on, I realize that the guitar is worth much more, and I no longer want to sell it for 500 dollars.

Obviously, if the person was over 18, I would be out of luck. I would have to sell the guitar for the agreed upon price (assuming it was in writing). If the person is 16, though, can I void the contract and not sell it to them?

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