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Under English common law the age of majority was twenty-one. Today, in most states the age of majority for contract purposes is eighteen. However, a minor can enter into any contract as long as its subject matter is legal for a minor. Minors cannot contract to buy alcohol but a minor can contract to rent an apartment. Generally, the difference between contracting with a minor and with an adult is a contract with a minor is voidable by the minor. In effect the minor can choose to keep or not keep the promises he or she makes. The adult who contracts with a minor does not have the same choice. This seems very one-sided but, for obvious reasons, the objective is to discourage adults from entering into contracts with minors.
Once a minor reaches the age of majority the rules change. Shortly after reaching the age of majority the minor must decide to affirm or disaffirm any previously existing contract. All that is required is the minor, by words or action, demonstrate intent to affirm or disaffirm the contract. For instance, continuing to make payments, or discontinuing payments, would demonstrate that intent.
There are some exceptions to the above. They are the duty of restoration and the duty of restitution. Also, what happens if the minor lies about his or her age and what are the effects of emancipation on the power to contract?
First, according to the duty of restoration, if a minor disaffirms a contract he or she must return any goods or other consideration they have received. That is, as long as the goods are still in their possession and even if they are damaged.
In a few states the duty of restitution applies. In such states any minor disaffirming a contract must return the adult with whom they have contracted to his or her former position. Not only must they return any goods still in their possession but also make compensation for damaged goods, goods no longer in their possession or for any other consideration received. This approach protects adults from minors who would try to take advantage of their favored position.
What if a minor lies about their age? It depends on the state. In the majority of states minors can still disaffirm the contract and cannot be sued for the tort of misrepresentation. In some states minors may disaffirm but they can be held liable for misrepresentation. In other states minors may disaffirm the contract if they can make restoration. But there are states, on the other hand, that will not allow disaffirmance at all.
Emancipation frees a minor from the control of his or her parents and gives them the right to their own earnings and to purchase property. Emancipation, though, does not always affect a minor's capacity to contract. Minors can contract for necessities, food, housing, clothing, and etc., and they can disaffirm these contracts, however, they are responsible for the reasonable value of these goods. The law makes minors responsible for the value of necessaries because it wants minors to be able to purchase these goods. The key is whether the goods are necessaries. If the contract is not for necessaries, the minor, emancipated or not, may not be liable.
That one is another long read, but go nuts.
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