Valencia v. White
654 P.2d 287 (1982)
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Rule of Law:
When a minor disaffirms a contract for non-necessaries that was entered into fairly and without disadvantage, the minor is liable for the reasonable value of the benefits received from the transaction, even if those benefits cannot be returned in kind.
Facts:
- Valencia, a 17-year-old, owned and operated his own profitable trucking business, which his father had established for him.
- While a minor, Valencia lived at home and was fully supported by his parents, who provided his food, clothing, and housing.
- Valencia entered into a contract with White, a garage owner, for ongoing service and repair of his business vehicles.
- As part of their business dealings, White agreed to replace an engine in one of Valencia's trucks for approximately $10,700.
- After the new engine was installed, the truck experienced problems, which the trial court determined were caused by Valencia's own acts.
- Valencia made payments to White totaling $7,100 toward the repair services before the dispute arose.
Procedural Posture:
- Valencia's guardian ad litem filed a complaint in the trial court against White seeking an injunction and return of his truck-tractor.
- White filed a counterclaim against Valencia seeking payment of $13,783 owed on an open account for vehicle repairs.
- In his reply to the counterclaim, Valencia asserted his minority as a defense, arguing he lacked the capacity to contract.
- The trial court, sitting without a jury, found for Valencia, ruling that he could repudiate the contract because the repair services were not 'necessities.'
- The trial court ordered White to return the $7,100 Valencia had paid and permitted White to retain the disassembled engine, while dismissing White's counterclaim.
- White, as appellant, appealed the trial court's judgment to the Arizona Court of Appeals; Valencia is the appellee.
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Issue:
When a minor disaffirms a contract for goods and services that are not necessaries, is the minor required to compensate the other party for the value of the benefits received under the contract?
Opinions:
Majority - Birdsall, Judge
Yes, when a minor disaffirms a contract for non-necessaries, the minor is required to compensate the other party for the value of the benefits received. The court adopted the 'benefit rule,' a minority position, which holds that a minor must account for the benefit received from a disaffirmed contract, especially when the contract was fair and the adult party did not take advantage of the minor. Citing Worman Motor Co. v. Hill, the court aligned Arizona with states like Minnesota and New Hampshire, rejecting the traditional majority rule that only requires a minor to return property they still possess. The court reasoned this rule is more equitable in modern times, preventing a minor engaged in business from using the infancy doctrine to unfairly impose upon others. Because there was no evidence White took advantage of Valencia or that the contract was disadvantageous, Valencia must pay for the reasonable value of the services that enabled him to operate his business successfully.
Analysis:
This decision solidifies Arizona's adoption of the minority 'benefit rule' regarding the disaffirmance of contracts by minors for non-necessaries. It signals a shift from the traditional, highly protective infancy doctrine toward a more equitable approach that balances the protection of minors with fairness to adults who contract with them in good faith. This precedent makes it more difficult for a minor, particularly one engaged in business, to void a contract without compensating the adult for the value received. The ruling requires future courts in Arizona to calculate the actual benefit a minor derived from a transaction and hold them accountable for that value upon disaffirmance.
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