Topic: Capacity and Legality: Bill is selling his 2002 Toyota for $3,000. Bill\'
ID: 363906 • Letter: T
Question
Topic: Capacity and Legality: Bill is selling his 2002 Toyota for $3,000. Bill's car is parked in his driveway with a 4-sale sign on it opposite LA City College. John approaches Bill and tells him he would like to take it for a ride and then, if he likes it, John will buy it. Bill asks John if he has a driver's license? John shows him his license and then takes the car for a test drive. John buys the car from Bill.
About six (6) months later John comes to Bill's house and requests that Bill give him his money back. The car now has a few dents in it and about 10,000 additional miles on the odometer. As it turns out, John is only 17 years old. Had Bill looked closely at John's driver's license perhaps he would have realized that John was only 17 yrs old! Question: Does Bill have to return John the $3,000? What does the Majority Rule (Most states in U,S,A.) have to say about this?
Questions:
(A) Does Bill have to return John the $3,000? -
(B) What does the Majority Rule (Most states in U,S,A.) have to say about this? -
(C) Are there Exceptions to the Rule regarding minors making purchases - carefully list any and all exceptions?
Explanation / Answer
(A)
Yes - Bill has to return John the entire amount because as a minor, John has the right to disaffirm his legal capacity of entering into a contract. He needs only to return the car (which he is doing as per the case facts) to Bill in order for getting the refund considering that the care is in his possession. It is also not necessary to return the car in the same condition as in the time of purchase i.e. the court will ignore the fact that the car has been driven and there are some dents on the body.
(B)
Regarding the disaffirmation of contract right of a minor, most of the states in the USA take a unique stand that regulates that minors can disaffirm any contract signed by them. The difference between different states lies with respect to the extent of minor's obligation on disaffirmance. Most of these states courts rule that minors need to return back the goods (or any other consideration) provided they are in possession of the minor. Even if they return damaged goods, they are often entitled to disaffirm the contract and get the full refund of the purchase price. However, in some states (which are growing in numbers), the court will impose an additional duty on the minor to restore the adult party at its original position in order to earn the rights to disaffirm.
(C)
Following are some of the exceptions to the above rule regarding minors disaffirmation rights -