Halbman v. Lemke
Supreme Court of Wisconsin, 1980.
99 Wis.2d 241, 298 N.W.2d 562.

Facts:

Halbman was a minor who bought a car from Lemke for $1,250. He paid $1,000 up front, and was going to pay $25/week until the balance was paid. About five weeks later, a connecting rod on the engine broke.

  • Halbman had it repaired but never picked it up. The garage then removed the transmission and engine and towed it to his house.
  • Lemke never picked it up.
  • As a result of vandalism, the car was unsalvageable.
  • Halbman sued for his money back, and Lemke countered, asking for the $150 still owed on the contract.

History:

The trial court ruled in favor of Halbman:

  • When a minor disaffirms a contract for the purchase price of an item, all he needs to do is offer to return the property remaining in his hands without making restitution for any use or depreciation.

The appellate court affirmed.

Issue:

Whether a minor, having disaffirmed a contract for the purchase price of an item which is not a necessity and having tendered the property back to the vendor, must make restitution to the vendor for damage to the property prior to the disaffirmance.

Holding:

No. Affirmed.

Reasoning:

The infancy doctrine:

  • “A contract of a minor for items which are not necessities is void or voidable at the minor’s discretion.”
  •  Its purpose is to protect minors from foolishly squandering their wealth through improvident contracts with crafty adults who would take advantage of them.
  • Restitution is limited to the return of the property – to hold otherwise would be to bind the minor to part of the obligation which by law he is privileged to avoid.

Infancy doctrine: A person younger than 18 years of age (a “minor” or “infant”) who enters into a contract has the power to void the contract (i.e, a minor only has the capacity to enter into a voidable contract) – and then all the minor needs to do is return the property remaining in his hands.

  • Note: A minor has the power to disaffirm a contract for necessaries too, but the minor WILL be liable in quasi-contract (a claim for unjust enrichment seeking restitution) for the reasonable value of the necessaries.
  • So, for example: If the car in Halbman was a necessity, he would have had to return what was left of the car, AND make up the difference of the depreciation.

Majority rule: A minor who intentionally misrepresents his or her age STILL has the power to disaffirm the contract. The other party, however, also has the power to disaffirm based on misrepresentation (provided the elements of the contract doctrine of misrepresentation are established).

  • Minority rule: A minor who intentionally misrepresents his or her age does not have the power to disaffirm the contract.