Children cannot form legal contracts. The Constitution gives contracts high regard generally, and prohibits Congress from interfering with them. There are, however, several exceptions as to who can enter into a contract, and one of those exceptions is minors. Minor children are not of legal contract age, that is to say, with few exceptions, they cannot consent to or enter into a binding contract until they reach the age of majority.
In the United States, the age of majority is determined individually by each state. In 47 of the states, the age of majority is 18. In Nebraska and Alabama it is 19, and in Mississippi it is 21. In American Samoa, a U.S. territory, the age of majority is only 14.
The legal theory that prevents minors from entering into contracts is based on the idea of consent and capacity. To be legally binding, a contract must represent a meeting of the minds, which means it should be understood and consented to by all parties. For the same reasons that minors are not able to vote, purchase alcohol or consent to sexual intercourse, the law does not deem them capable of understanding and weighing the consequences of a contract. They are said to lack the capacity to enter contracts. Instead of discriminating against minors, this framework generally exists for their protection.
Because minors cannot enter into a lawfully binding contract, any contract in which they're supposed to have entered can be invalidated or disaffirmed. This means that even if a minor signs a contract, they probably cannot be held to its terms. In court, a judge will try to return all affected parties to the conditions prior to the contract since, in the eyes of the law, no contract ever existed and therefore no transactions pursuant to the contract should have occurred.
There are a few exceptions to the legal contract age. The most important is that minors have the right to work and, therefore, to be paid for their work according to the terms of an employment agreement. The parent of a minor cannot demand payment or benefits on behalf of their minor child according to a contract if the payment or benefits have already been given to the minor. The other major exception relates to necessities. A minor cannot be held liable for contracts involving items necessary to existence at their accustomed standard of living if there is no legal guardian to provide the items. Minors, however, can be liable for the purchase of luxury items and cannot reverse a cash transaction on a theory of contractual incapacity.
Ratification and Disaffirmance
Upon reaching the age of majority, an ongoing contract to which a minor might be subject does not instantly become legally binding. Instead, there is a period of roughly two years during which the minor (now of majority age) can disaffirm the contract entirely on the grounds of having been a minor at the time it was entered. After having ample opportunity to disaffirm the contract, but failing to do so, a judge can hold the contract to be ratified and thereby legally binding on the now adult person.
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