PSI Oklahoma Real Estate Practice Test

What is the status of a contract signed by a minor?

1. Enforceable by both parties

2. Voidable by the minor

3. Binding only after reaching adulthood

4. Automatically cancelled by law

The correct answer is: Voidable by the minor

A contract signed by a minor is characterized as voidable by the minor. This means that the minor has the legal right to affirm or rescind the contract at any time before reaching the age of majority, which is typically 18 years old in most jurisdictions. The rationale behind this principle is to protect minors from being bound by legal obligations that they may not fully understand or appreciate due to their age and maturity level. If a minor chooses to void the contract, they can do so without facing legal repercussions. This protection exists because the law recognizes that minors may lack the experience and judgment to enter into contracts that could have long-term financial implications or responsibilities. Other options suggest different statuses that don't accurately reflect the legal understanding of contracts with minors. For example, stating that a contract is enforceable by both parties would imply that the minor has the same legal capacity as an adult, which is not the case. Similarly, suggesting that a contract is binding only after reaching adulthood misrepresents the nature of such agreements since the minor has the ability to void them anytime before adulthood. Finally, the assertion that a contract is automatically canceled by law would inaccurately represent the minor's ability to affirm the contract if they choose to do so before reaching adulthood.