What Is Disaffirmance?

Disaffirmance is a legal term that refers to the right for one party to renounce a contract. In order to render the contract void, the person must indicate that he or she will not be bound by the terms outlined in the agreement. This can be explicitly expressed by the person in a declaration or implied when the person chooses not to abide by the terms of the contract.

Key Takeaways

  • Disaffirmance is the right for one party to renounce a contract.
  • The person must indicate that he or she will not be bound by the terms outlined in the agreement expressly or implicitly.
  • People who can prove they lacked the capacity to enter a legally binding contract and minors can disaffirm a contract.
  • A minor may rightfully disaffirm any contract into which he or she enters, whether or not it has already been performed.

Understanding Disaffirmance

Disaffirmance occurs when one party renounces or disagrees with his or her part of a voidable contract. As noted above, disaffirmance can be either implied or explicit. In cases of implied disaffirmance, the party may simply not act by the terms of the contract. But in explicit terms, the party expresses that he or she will not live up to the agreement.

People who can prove they lacked the capacity to enter a legally binding contract—intoxication, mental incompetence, etc.—can disaffirm a contract and therefore avoid any and all legal obligations set forth in the contract. In many cases, this can apply to minors. A minor or any other person who has not yet reached the legal age of majority is generally not legally required to carry out the terms of a contract.

In most cases, a minor only needs to give the intention that he or she intends to disaffirm a contract. The other party, however, remains bound by the contract.

Even though one party may disaffirm the contract, the other party is still bound by the agreement.

A minor retains the right of disaffirmance of any contract into which he or she enters, whether or not it has already been executed. Once that minor reaches the age of majority, any contract that he or she has entered into prior to the age of majority must be either disaffirmed within a reasonable but predetermined period of time. If this doesn't occur, the contract is ratified.

In order to disaffirm a contract made before he or she reached the legal age of majority, the minor must state—either in writing or orally—his or her intention not to honor the contract. If the minor acts in such a way as to indicate to a reasonable person that he or she has no intention to honor the contract, that can also count as disaffirmance. However, once the minor reaches the legal age, if he or she does not disaffirm the contract within the time limit, the contract becomes ratified, and the entire contract becomes binding to both parties.

Special Considerations

The person who disaffirms the contract must do so in its entirety. This means the party cannot pick and choose which parts of the contract he or she will disaffirm. Any property that has been transferred as a result of the contract can be recovered by the minor if they void the contract during a reasonable period of time.

There are special instances in which minors cannot disaffirm a contract. In most states, they cannot disaffirm a contract for necessities such as food, shelter, clothing, healthcare, or employment. Minors may also not disaffirm a contract for the purchase or sale of real estate.