Law protects teenage banking

Posted Aug. 29, 2010, at 9:05 p.m.

Q. My 16-year-old son opened a bank account and was given a debit card with “bounce protection” by a local bank without our knowledge or permission. Naturally, he spent a lot more than he put in, and is now being dunned for the money they forwarded him, and all the fees. Is this legal? Can we, as his parents, be made responsible? We have an account at the same bank.

A. Since at least 1832 minors have been making poor decisions and there have been adults willing to exploit their youthful indiscretions. That year is when the common law of the state of Maine recognized the “infancy doctrine.” This law recognizes the need to protect minors from their own improvident actions during their youthful years. It also serves as a protection from those who seek to unfairly “take candy from a baby” and exploit the gullibility of minors.

The general law in Maine regarding the validity of a minor’s contract is that, except in limited circumstances, where there is none.

“No action shall be maintained on any contract made by a minor unless he or some person lawfully authorized, ratifies it in writing after he arrived at the age of 18 years, except for necessaries or real estate of which he has received title and retains a benefit.”

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In lay terms, that means the bank cannot sue to enforce a contract it made with a minor. The only way anyone can bring a lawsuit for a breach of a contract made with a minor is if the minor ratifies the contract in writing after he or she reaches the age of majority, 18 years of age, — in other words, when no longer a minor. Since the bank did not make you a co-signer or obtain your written consent to open the account, they cannot now look to you for fulfillment of the contractual obligations.

As parents we strive to teach our children the importance of financial responsibility and maintaining good credit. The infancy doctrine affords us this opportunity. It would be nice to be able to say this action by the bank is unusual and shocking, but unfortunately, in recent years, it is not. But the law is clear that those who conduct dealings with minors must do so at their own peril.

When it comes to bad choices, in this instance, the law is more concerned with protecting the minor than the bank. The contract your son had with the bank is not enforceable. As a matter of fact, your son could demand that any profits the bank made as a result of the contract be disgorged to him. This probably is not worth the cost of pursuing.

The bank will most likely be extremely motivated to “save face” and use every tactic available to it to stonewall and make your son’s effort unsuccessful. It may be more practical to use the experience as one of those teachable moments in parenting to impress upon your teen what could happen if, as an adult, he takes on a line of credit he knows he can’t afford, and falls behind.

This column is a service of the Lawyer Referral and Information Service of the Maine State Bar Association. Its contents are a general response to the question and do not constitute legal advice. Questions are welcome. E-mail, describe your question and note you are a BDN reader. Written questions mailed to “Ask a Lawyer,” Bangor Daily News, P.O. Box 1329, Bangor 04402-1329 will be forwarded to the LRIS.

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