The Infancy Defense in the Modern Contract Age: a Useful Vestige

• Publication year: 2010
• Citation: Vol. 34 No. 02

UNIVERSITY OF PUGET SOUND LAW REVIEWVolume 34, No. 2WINTER 2011

NOTE

The Infancy Defense in the Modern Contract Age: A Useful Vestige

Victoria Slade(fn*)

Most parents admit that teens can be baffling creatures. Whether slumped in front of the TV or locked away in a bedroom, teenagers can be a formidable group-communication with them is no easy task, even for those who live within the same household. For companies looking to develop and market products to the younger generation, the challenge takes on added significance: teens are a complex group who can be a highly lucrative market.(fn1)

Although children have long participated in the consumer marketplace, until recently they were bit players, purchasers of cheap goods. They attracted little of the [marketing] industry's talent and resources . . . . That has changed. Kids and teens are now the epicenter of American consumer culture. They command the attention, creativity, and dollars of advertisers . . . . Yet few adults recognize the magnitude of this shift and its consequences for the futures of our children and our culture.(fn2)

I. Introduction

Today's children are subjected to a constant stream of advertise-ments.(fn3) By age three or three-and-a-half, children start to believe that brands communicate their personal qualities, and by the time they start school, typical first graders can name 200 brands.(fn4) Because of the increase in their disposable income, children and teen consumers have been recognized as a huge market, and accordingly, advertisers have ruthlessly targeted them.(fn5) What has emerged is the most brand-loyal, consumerist generation this nation has ever seen.(fn6) At the same time, the process of entering into contracts is less formalistic, parties' bargaining power is less equal, and consumers are far more likely to enter into an agreement without full knowledge of the terms.(fn7) A contract that formerly took weeks of negotiation and hours of reading fine print may now be sealed merely through a click.(fn8) Obligations can even arise when a user simply browses a website, without clicking anything.(fn9)

Because of these concomitant trends, it is important to reexamine an antiquated legal principle designed to protect children: the infancy defense. The infancy defense has existed for ages as a common law defense to liability under a contract to protect those who are legally incompetent from entering into unwise bargains. The doctrine essentially allows children to avoid liability under unfavorable contracts. This doctrine represents society's concern that children are not capable of properly evaluating the risks and benefits of a contract and are, therefore, susceptible to manipulation by adults and businesses with more knowledge and bargaining power.(fn10)

For almost as long as the infancy defense has been employed in the common law, commentators have speculated about its efficacy.(fn11) Among other things, critics have argued that children are often as, if not more, competent with technology than adults, making them too sophisticated to merit such protection.(fn12) Critics have also accused the defense of functioning more as a sword than a shield, empowering children to bilk adults relying on their business legitimacy.(fn13) Children become mature much earlier in these modern times, not just physically,(fn14) but economi-cally.(fn15) They are provided many more opportunities to be economically productive members of society.(fn16) For these reasons, many contend that the infancy defense is an anachronistic doctrine that stifles commerce and is unsuitable in modern society.

Arguments against the infancy defense are prevalent, and their reasoning is reflected in myriad exceptions to the defense's application;(fn17) however, these arguments are also flawed. Their infirmity is that they do not address the fundamental problem of the balance of power between children and adults. Additionally, these arguments do not consider the nature of the modern marketplace and contractual practices, or how abrogation of the infancy defense might affect the behavior of the companies that deal with children. Modern society, in which children purportedly no longer need protection, is fraught with consumerism,(fn18) work-and-spend economic cycles,(fn19) enormous consumer debt,(fn20) and vigorously targeted and aggressive marketing towards minors.(fn21) With the increased control large corporations exert over everything we read, watch, and buy, minors are still a vulnerable group in need of protection. An examination of modern contract practices, business marketing strategies, and typical consumer financial circumstances reveals that the infancy defense is not a vestige of a bygone era but, in fact, remains as important now as ever.

Additionally, the infancy defense has grown and adapted to changing times. Courts no longer rigidly apply a rule allowing minors to disaffirm; instead, they balance equities and employ a number of exceptions to the infancy defense.(fn22) As long as the defense is applied judiciously, these exceptions answer concerns about the doctrine's application in modern times. And unlike a proposal to eliminate the defense, these exceptions address concerns regarding the infancy defense without dramatically increasing the risk to youth who enter improvident deals.

This Note argues that the state of a modern consumer society, when evaluated against the culture of marketing and consumerism surrounding America's youth, calls for persisting protection of children in contract formation through retention of the infancy defense. Part II of this Note introduces the infancy defense, the philosophy behind it, the various exceptions to the defense, and how these exceptions have adapted to the modern marketplace to assure equitable results for adults. This Part also discusses other arenas of the law in which children are afforded special protection. Part III addresses the current state of the infancy doctrine as demonstrated in the 2008 Virginia case A.V. v. iParadigms,(fn23) in which the United States District Court for the Eastern District of Virginia dismissed high school students' attempts to disaffirm an online contract under the infancy defense, holding that the plaintiffs could not disaffirm because they had retained the benefits of the contract.(fn24) Part IV replies to the predominant arguments against the infancy doctrine and explains why equitable concerns about the infancy defense's impact on adults are unwarranted. Part V examines the ongoing relevancy of the infancy defense in light of technological advancements, suggesting ways in which minors continue to be vulnerable to more sophisticated adults and businesses. This includes a discussion of the commercialization of childhood and the ways in which marketing companies target children in order to further the prevalence of materialism, consumer debt, and the earn-and-spend lifestyle. This Part also discusses the types of agreements that are prevalent online, such as adhesion contracts and clickwrap agreements, and argues that young people are particularly incompetent to consent to these forms of contracts. Finally, Part VI concludes with the contention that the infancy defense is still important and should be retained with its current exceptions.

II. The Law's Protection of Youth

A. An Overview of the Infancy Defense

The infancy law doctrine is one of the most venerable traditions in the common law.(fn25) It represents society's determination that minors lack the mental capacity for a meeting of the minds-a requirement for contract formation.(fn26) The doctrine exists to protect minors from "foolishly squandering their wealth through improvident contracts with crafty adults who would take advantage of them in the market place."(fn27) Under the traditional common law infancy doctrine,(fn28) still largely in effect to-day,(fn29) contracts entered into by minors fell into one of three categories: "void, when clearly prejudicial to the child; voidable, when possibly in the child's best interest; and valid, when clearly in the child's best inter-ests."(fn30) Today, the doctrine is simplified with a general rule that all contracts entered into by minors can be disaffirmed by the minor before reaching the age of majority.(fn31)

The common law has grown to include several exceptions to the infancy defense. The two most significant and generally accepted exceptions are contracts for necessaries and contracts in which the minor has retained a benefit. The first precludes invocation of the infancy defense in minors' contracts for necessaries.(fn32) What constitutes a necessary is not fixed, but depends upon factors such as the child's standard of living and individual circumstances, and the child's ability to obtain necessaries from his or her parent or guardian.(fn33) The adaptability of this definition of necessaries serves to protect those adults who, in good faith, enter into contracts with minors and provide them what they need to survive.

The other most common exception to the infancy doctrine is the benefits exception, which states that a minor will be liable on a contract if she has retained a benefit.(fn34) The infancy defense allows minors to disaffirm contracts on the condition that they make restitution of benefits received.(fn35) This doctrine is criticized because it can allow minors to return goods in far worse shape than they received them.(fn36) One might argue...