The contract entered by the 17-year-old son, who is a minor with Don is voidable. The contract can be invalidated on the ground that the contract of sale that was entered between him and Don can be annulled since the son is only a minor and he was not the designated representative of the company. Hence, once the contract is nullified, the effect is that it is as if there is no agreement at all. This is due to the fact that the minor cannot represent the company since there is no board resolution to empower him to enter the contract.
Therefore, the minor cannot be considered as a competent party to enter to a contract (Miller and Jentz, 2011).
In this case, the son can void or disaffirm the contract within a reasonable time after he reaches the age of majority, or when he turns 18 years. This was the ruling decided by the Supreme Court in the case of Spencer v. Lyman Falls Power Co., where the minor may disaffirm the contract at any time after reaching the age of majority (Aalberts, 2011, p. 245). Under the existing the laws, only the former minor has the right to disaffirm the contract and not the person with whom the minor has contracted. In effect, neither the company nor Don can annul the contract of sale involving the anti-oxidant supplements sold by Scuppernongs Company. Since the son entered the contract with Don without the express instructions of his father, or the owner of the company, there is not valid contract to speak of. Don can nullify the contract entered by his son and use the minority of his son as a defense. Therefore, the contract entered by the son and Don will be rendered voidable and the son can disaffirm the contract after he reaches the age of majority or one year thereafter since Don is only 17 years old when he signed the contract. The contracts entered to by minors are generally voidable by nature.
In the case of owner of Scuppernongs v. Don, the issue to be resolved is whether the owner can file a case for damages against Don when he employed fraud when he asked the minor son to sign a contract which contained the provision of a guaranteed price schedule consistent with what he had been paying for several years. Don was in bad faith when he made the son believe that signing of the contract is “just a formality” to guarantee a continuing business relationship.
Here, the owner of Scuppernongs can file a case for damages against Don before the courts for the fraud committed against the minor to the detriment of the company. This is a manifestation that Don failed to comply with his obligation of good faith as implied by the common law of most states. Under this concept, the parties to a contract shall have the obligation to observe good faith and fair dealing despite of the absence to express provisions in the written contracts. This was the same ruling held in the case of Eastern Shore Markets v. J.D. Assoc. Ltd., where the covenant of good faith and fair dealing was defined as the “duty of the parties to abstain from detrimental competition”. Such ruling was affirmed in the case of Interim Health Care of Northern Illinois, Inc. v. Interim Health Care, Inc., where there is an implied covenant of good faith and fair dealing to demand from the parties to the contract who is given the contractual discretion to use such discretion in a reasonable manner and in accordance with the reasonable expectations from each of the parties.
Don is estopped from bringing case for damages against Scuppernongs company under the doctrine of promissory estoppel. Since Don acted in bad faith when he asked the minor to sign the contract, he is not allowed to recover damages against the company in the event that it will no longer continue to supply it with the antioxidant products. Miller (2013, p. 173) stated that the doctrine of promissory estoppel also known as “detrimental reliance”, shall give any person who has reasonably and substantially relied on the promise of another to acquire some measure of recovery. At present time, the doctrine of promissory estoppel has been used in different contexts by the court that allowed the recovery of a promise despite lack consideration on the promissor. The doctrine enabled the court to enforce an unenforceable promise that will prevent the miscarriage of justice to those who suffered losses and damages. In order for the doctrine to exist, there are requisites that should be met:
1.) There must be a clear promise that is certain;
2.) The promisor expected the promisee will depend on such promise;
3.) The promise has reasonable relied on the promise by acting or refraining to do an act;
4.) The promisee suffered from a substantial detriment resulting from a definite reliance; and Fifth, the enforcement was done to avoid injustice to the promisee. However, in the case of Don, he employed fraud to induce the minor son to sign the contract by making him believe that the same was just a formality for the continuity of the business.
Applying the Bible verse in Jeremiah 32:10 to 15, it can be considered as the same scenario when the deed of purchase was given to son of Baruch, despite the presence of witnesses and not to Baruch. Here, the deed should have been entered by the father, who is the original party to the deed of purchase. Hence, the contract should not bind Baruch, despite the presence of witnesses because he did not give his consent to the contract nor did he allow his son to be his representative. Absence of Baruch’s consent renders the contract void and no obligation is expected on the part of Baruch to comply with the deed.
References
Aalberts, R. J. (2011). Real Estate Law, 8th ed. Mason, OH: South Western Cengage.
Alaska Democratic Party v. Rice, 934 P.2d 1313 (Alaska 1997).
Devecmon v. Shaw, 14 A. 464 (Md. 1888).
Eastern Shore Markets v. J.D. Assoc. Ltd., 213 F.3d 175 (4th Cir. 2000)
Hoffman v. Red Owl Stores, Inc., 26 Wis.2d 683, 133 N.W.2d 267 (1965).
Interim Health Care of Northern Illinois, Inc. v. Interim Health Care, Inc., 225 F.3d 876 (7th Cir. 2000)
Jenkins, S. H. (2006). Symposium: Contracting out of the Uniform Commercial Code:
Contracting out of Article 2: Minimizing the obligation of performance & liability for
breach, 40 Loy. L.A. L. Rev. 401.
Jeremiah 32:10-15 ESV
Miller, R.M. (2013). Fundamentals of business law: excerpted cases. Mason, OH: South
Western Cengage.
Spencer v. Lyman Falls Power Co. 109 Vt. 294, 196 A. 276 (1938)
Sons of Thunder, Inc. v. Borden, Inc., 148 N.J. 396 (1997).
Walsh, D. J. (2012). Employment Law for Human Resource Practice, 4th ed. Mason, OH:
Thomson.
