Case Law Study

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Dawn Montgomery
BUSI Law 2301 NT
February 15, 2013

Case Study #1

I. FACTS: Helen, age 17, falsely presented an identification card showing her age as 22 to a motorcycle dealer. She persuaded him to sell her a motorcycle on credit because she did not have the money to pay cash. Helen drove the motorcycle away and a few days later, returned it to the dealer stating that she voided the contract. The dealer states that she cannot void the contract because (a) she had misrepresented her age and (b) the motorcycle was damaged.

II. ISSUE: Can she legally void the contract?

III. HOLDING: Yes, the minor may void the contract but, depending on the state, may be held responsible for damage, ordinary wear and tear, and depreciation of the goods prior to disaffirmance.

IV. REASONING: The legal avoidance, or setting aside, of a contractual obligation is referred to as disaffirmance. To disaffirm, a minor must express through words or conduct, his or her intent not to be bound to the contract. They must disaffirm the entire contract, not just a portion of it. Courts in most states hold that the minor need only return the goods subject to the contract. Even if the minor returns damaged goods, the minor is often entitled to disaffirm the contract and obtain a refund of the purchase price. However, a growing number of states are beginning to put an additional duty on the minor to restore the adult party to the position she or he held before the contract was made. These courts may also hold a minor responsible for the damage.
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