Can a Minor Enter a Partnership?

Friday, May 12, 2006

Under ordinary contract law, a minor may enter into a contract with another minor or an adult. However, a minor may disaffirm their contracts during minority. This means that while the individual is still a minor, they can leave the partnership without being liable for breach of contract. This makes the partnership agreement basically useless, as it will not hold the minor liable for damages to the partnership, particularly debt that is incurred.

Once a minor reaches the age of majority, and they have not dissociated from the partnership contract, they will be personally bound for all liabilities incurred by the partnership for the entire time they were part of the firm.

Depending on the state, there are different ways that liabilities and contributions to the partnership must be handled. In some states, the entirety of the financial contributions must be returned to the minor when they disassociate. However, in other states, the financial contributions are left with the partnership in order to pay off any liabilities incurred during the time of the partnership.