Brief Fact Summary.
Halbman, a minor, agreed to purchase a 1968 Oldsmobile from Lemke, the manager of a service station, for $1,250. After paying $1,100, Halbman disaffirmed the contract and sued for the return of his money.
Synopsis of Rule of Law.
A minor who disaffirms a contract is entitled to recover all consideration he has conferred incident to the transaction. In return, the minor must restore as much of the consideration as remains in the minor’s possession at the time of disaffirmance, and no more.
We expressed a similar uneasiness in a prior holding that a minor who disaffirms a contract for the purchase of an item which is not a necessary may recover the purchase price without liability for use, depreciation, damage or other diminution in value.View Full Point of Law
Halbman initially paid $1,000 in cash and took possession of the car, with a payment plan for the balance due. Halbman took the car to a garage and had $637.40 of repairs done, but did not pay for them. Lemke later transferred title of the car to Halbman in an attempt to avoid liability for the vehicle. Halbman then returned the title, disaffirmed the contract and sought recovery of his money. The car was later vandalized, making it unsalvageable.
The trial court granted summary judgment to Halbman, concluding that when a minor disaffirms a contract for the purchase of an item, he need only offer to return the property remaining in his hands without making any restitution for any use or depreciation. Halbman was also awarded interest from the date he disaffirmed the contract. The appellate court affirmed.
Must a minor who has disaffirmed a contract for an item that is not a necessity and tendered the item back to the vendor make restitution for damage to the property prior to the disaffirmance?
· Halbman could not be required to return more than was remaining in his possession at the time of disaffirmance. Lemke could not recover for the value of the depreciation by virtue of the damage to the car prior to disaffirmance.
To require Halbman to make restitution for the car’s diminished value would have bound him to a part of the obligation which by law he was privileged to avoid as a disaffirming minor.