If a minor will be 18 by the time funds are deposited, is a prearrangement contract legally binding?

• A. No
• B. Yes
• C. It depends on parental consent
• D. It depends on the deposit timing

Answer: (A)

The main idea here is capacity to contract. A contract entered into by a minor is generally voidable at the minor’s option, especially for non-necessaries. A prearrangement contract falls into that non-necessaries category, so if the agreement is signed while the person is under 18, it isn’t automatically binding. The fact that funds will be deposited after the minor turns 18 doesn’t cure the lack of capacity at the time the contract was formed. The minor could disaffirm the contract or later ratify it once they reach majority; without ratification, the obligation isn’t binding.