Reference no: EM131658719

Question: Should Retailers Enter into Contracts with Minors and Intoxicated Persons?

Sales personnel, particularly those who are paid on a commission basis, are often eager to make contracts. Sometimes, however, these salespersons must deal with minors and intoxicated persons, both of whom have limited contractual capacity. Therefore, if you are a retailer, you should make sure that your employees are acquainted with the law governing contracts with minors and intoxicated persons. Contracts with Minors If your business involves selling consumer durables, such as large-screen televisions, entertainment centers, appliances, furniture, or automobiles, your sales personnel must be careful in forming contracts with minors and should heed the adage, "When in doubt, check." Remember that a contract signed by a minor (unless it is for necessaries) normally is voidable, and the minor may exercise the option to disaffirm the contract. Employees should demand proof of legal age when they have any doubt about whether a customer is a minor.

If the customer is a minor, the employees should insist that an adult (such as a parent) be the purchaser or at least cosign any sales contract. In addition, because the law governing minors' rights varies substantially from state to state, you should check with your attorney concerning the laws governing disaffirmance in your state. You and those you hire to sell your products should know, for example, what the consequences will be if a minor disaffirms the sale or has misrepresented his or her age when forming a sales contract. Similarly, you need to find out whether and in what circumstances a minor, on disaffirming a contract, can be required to pay for damage to goods sold under the contract. Dealing with Intoxicated Persons Little need be said about a salesperson's dealings with obviously intoxicated persons. If the customer, despite intoxication, understands the legal consequences of the contract being signed, the contract is enforceable. Nonetheless, it may be extremely difficult to establish that the intoxicated customer understood the consequences of entering into the contract if the customer claims that she or he did not understand. Therefore, the best advice is, "When in doubt, don't." In other words, if you suspect a customer may be intoxicated, do not sign a contract with that customer.

CHECKLIST FOR THE RETAILER

1 When in doubt about the age of a customer to whom you are about to sell major consumer durable goods or anything other than necessaries, require proof of legal age.

2 If such proof is not forthcoming, require that a parent or guardian sign the contract.

3 Check with an attorney about the laws governing minors' contracts in your state.

4 Do not sign contracts with intoxicated customers.