A contract is when two people exchange promises to do something, such as when you buy a car or rent an apartment. The law assumes that both people understand what they are doing, so in a lawsuit, one of the things the judge looks at is the age of the parties to see if the contract is enforceable. Laws vary by state, but across the board, no one under the age of 15 may enter into a contract for goods or services.
Who Can Enter Into a Contract?
Having the "capacity to contract" means the person who signs a contract has the ability to understand what they are getting into. Typically, a person must be of the legal age of majority in the state the contract is entered into as well as mentally and physically able to read and understand the terms of the agreement. If an adult or business signs a contract with someone who is too young, the minor may be able to disaffirm, or walk away from, the contract with little to no legal consequences.
Read More: How Does a Contract Work?
What is the Legal Age of Majority?
In all states, a person has reached the age of majority and is a legal adult at the age of 18. A minor can also be emancipated, or declared a legal adult, by the court. In some states, people as young as 15 may be able to contract for necessities like food and shelter as well as education and car expenses. For example, in Alabama, a minor over the age of 15 may purchase health, life and auto insurance. In New Jersey, a married 17-year-old may sign property contracts. In the end, it is the responsibility of the adult or business to verify the age of the person contracting for goods or services to avoid the contract being voided by the court.