What actions can the finance company take to recoup their money if the purchaser was a minor?
Full Question:
A 16 year old minor responding to an advertisement enters into a contract with Auto Dealer, for the purchase of an auto. The contract calls for the minor to pay $1,000.00 up front and to finance the rest of the purchase price in monthly installments over a three year period to ABC Finance Company. Minor makes the scheduled payments for the first year and then stops paying and informs the finance company that he is returning the auto and will no longer make the payments. What actions can the finance company take to recoup their money?
01/08/2007 |
Category: Minors ยป Age of Major... |
State: Alabama |
#215
Answer:
In most states, the age of majority is 18. It is generally held that a minor does not have the capacity to enter into a binding contract except for "necessites". In this situation, the minor has disaffirmed the contract by returning the car and refusing to make the payments. Because the minor is under 18 and has also disaffirmed the contract, he is discharged from any liability and the finance company will not recoup their money.