Dodson vs. Shrader

Presented by Group 2: Scott, Gregor, Mishala, Michael, and Olga

FactsDefendant is ShraderPlaintiff is DodsonDodson borrowed $4900 from his girlfriends

grandmotherOn April 7, 1987, Dodson, who was 16 at the time,

purchased a truck from Shrader for $4900In December, 1987 Dodson was told by a mechanic

that there was a burned valve in the engineDodson continued to drive truck with the burned

valve until January, when the engine blew up, and stopped operating

Facts On may, 10, 1988 Dodson sued Shrader in general

sessions courtDodson has agreed to return the truck to Shrader

but the Shraders refused to return the purchase price of $4900

The Shraders wanted the truck plus the difference in value from when Dodson purchased it.

After the Sharders refused to return the original $4900 purchased price for the truck. The truck was still in possession of Dodson when it was damaged in a hit and run while it was parked on the street

TimelineApril 7th, 1987Dodson bought truck for $4900 from ShardersDecember

1987Dodson discovered truck had burned valve

January 1988Truck engine “blew up”

May 10th 1988Dodson sued Sharders in General Sessions Court

Later dateTruck was damage by hit and run

Dodson borrowed money from girlfriends grandma

Questions at IssueIs the contract voidable to Dodson, and is

Dodson entitled to get his money back.

POV: Economic Should minors be allowed to rip companies off?

If minors bought vehicles only to ruin them and demand their money back, not only would companies go out of business, but they just might stop selling them to minors.

In a 2002 study the national estimated annual cost of automobile crashes involving young drivers each year is $32,000,000,000. 

Are minors not responsible enough to purchase and take care of vehicles?

POV: PlaintiffDodson believes that because he is a minor

and in no way misrepresented his age, he has the right to disaffirmance--(The exercised power of avoidance which releases the minor from any liability on the contract) and the right to get his money back

POV: Defendant Shrader sold the truck assuming Dodson was

at least 20 years of age. Shrader believes it is Dodsons negligible actions toward the car that resulted in the vehicles failure to continue it's mobility. Shrader knows he is in no way responsible for this minors actions.

He did not want to rescind the contract because the car had depreciated in value due to Dodson’s actions.

Precedent Case #1Wheaton v. East, 13 Tenn. 40, 61

Cited Keane v. Boycott, 2 H. Black, 511 If the contract is not in the best interest of the

minor, it is void. If the contract is to the minor’s benefit in regard to

necessities, it is good. If the benefit or prejudice (negative impact) of the

contract is unknown, it is voidable only at the election of the minor.

Precedent Case #2Grace v. Hale, 21 Tenn. 26, 29-30

Necessities for which a minor can bind himself or herself by contract include the following: Diet Apparel Washing Lodging Schooling Medicine

Some specific contracts falling into these categories may in fact not be “necessities”, depending on the fortune and circumstances of the minor.

Precedent Case #31926, Giddens v. Etheridge Co., Inc., 2 Tenn.

App. 324Cited Grace v. HaleAn automobile is not a necessaryThe fact that the subject automobile was useful

and even perhaps a necessary for the plaintiff’s circumstances does not make it a necessary in regard to the law

Precedent Case #4Bentley v. Haimans Ready to Wear, 1 Tenn.

App. 280In this case, Bentley purchased a dress and

wore it for nine monthsBentley lost, because the dress was clearly

apparel, for which, according to Grace v Hale, the minor could be required to pay for

Precedent Case #5Rose v. Sheeham Buick, Inc., Fla.1967, 204

So.2d 903In this case, the minor could not disaffirm the

purchase of an automobile because he had used the vehicle to carry on his school business and social activities, resulting in the determination that the automobile was a “necessary”.

This decision held that the mere fact that the minor appeared to be of age did not constitute a misrepresentation sufficient to prevent disaffirmance.

Precedent Case #6Matherson v. Davis

The plaintiff executed a deed three months before her majority.

For three years after majority, she expressed satisfaction with the deal and never disaffirmed the deed. She then died.

The Supreme Court held that the deceased, a married woman, could not informally affirm her deed made while a minor, so long as she continued under the then existing disabilities of coverture.

In this case, the court held that ‘the privilege of infancy is to be used as a shield and not a sword.” Generally, in order for an adult to disaffirm a contract entered

into while a minor, they must restore the consideration received.

Additional Precedent CasesMagnolia Courts, Inc. v. Webb 470 S.W.2d 16, 18

(1970)Gardner v. Flowers, 529 S.W.2d 708 (1975)Western Union Telegraph Co. v. Ausbrooks, 418

Tenn. 615, 257 S.W. 858, 33 A.L.R. 330 (1924)Foster v. Adcock, 161 Tenn. 217, 30 S.W.2d 239

(1930)Tuck v. Payne, 17 S.W.2d p. 9Harwell Motor Company v. Cunningham, 337

S.W.2d 765 (1959)Wheaton v. East

Identification of a Necessary529 S.W.2d 709-710A precise definition is not desirable or necessary,

and could not cover all possible cases.A minor must be in actual need of the goods or

services in question. The be in need of the goods or services depends on these factors:The nature of the goods or servicesThe minor’s need for the goods or services at the

timeWhether the minor has sources, other than his or

her own credit, for supplying the needed goods or services

The Law43 C.J.S., Infants, Section 166, pp. 448, et seq.

As a general rule, an infant has not the capacity to bind himself absolutely by a contract, or is not bound by his contract. Such was the rule at common law, and under some statutes, infants are not to free to contract for themselves, except in cases provided for . . .

It is the policy of the law to protect infants against their own mistakes or improvidence, and from designs of others, and to discourage adults from contracting with an infant. A person who deals with an infant does so at his peril, whether or not he has actual or constructive notice of the infant’s disability.

The Law43 C.J.S., Infants, Section 172, pp. 448, et seq.

The right of an infant to avoid or disaffirm a contract is absolute and unconditional. It may be exercised regardless of the reasonableness of the contract, or of the motive in doing so, and is not affected by the presence of good faith on the part of the other party to the transaction. The contract may be avoided as against an assignee thereof, as the avowed purpose of the rule permitting disaffirmance by a minor is to protect and safeguard the minor’s property or funds.

The rule relating to the avoidance of infants’ contract should be liberally applied. However, infancy is said to act as a shield and not as a sword, and the privilege of disaffirmance should serve as a shield and not as an instrument of oppression.

The Law 43 C.J.S., Infants, Section 175, pp. 448, et seq.

As a general rule, in order to give effect to an infant’s disaffirmance of his contract, it is not necessary to place the other party in status quo. Hence, except as may be provided otherwise by statute, a restoration or tender of what the adult party to the contract has parted with, or its value, generally is not regarded as a condition precedent to avoidance, unless at the time of disaffirmance the infant has the fruits of the contract in his possession or within his control; but there is also authority to the contrary.

Nevertheless, where he has exercised his right to repudiate the contract, the infant may be required to return the consideration, if he can, or such part thereof as still remains in his hands or under his control, for the law will not allow him to repudiate his contract and at the same time retain its fruits or benefits as his own, especially where the benefits are tangible. It has been said that, as long as the infant retains and does not restore the consideration received by him, he may be treated as a trustee of the other party, and the infant would be liable for any tortious use or disposition of the property after avoidance and before its surrender to those from whom it was obtained.

Where the infant disposed of, lost, or wasted the consideration or a part thereof during his infancy, he cannot be required to make good to the other party the consideration, or such part, and the other party must take it in the condition in which he finds it. It has been said that on disaffirming a contract for purchase of equipment or machinery, on the ground of infancy, the infant is obligated to account for reasonable use or depreciation of the value of such equipment or the machine in his possession, such as a motor vehicle, although there is authority to the effect that an infant is not required to account for use or depreciation of the property while in his possession.

Consequences

The main consequences are that Dodson walked away costing the Shraders more money when he drove the truck to the point the engine blew.

Minors should learn to taking responsibility of their possessions and not ruin it for the everyone by suing companies for their mistake.

Businesses aught to be extremely careful upon going into contracts with minors without a parental signature guaranteeing payment.

Group OpinionWe believed this case turned out how it

should have, Dodson got to return the truck but it had to be in the same condition as received or had to pay for damages out of the 4900.

Video #1http://www.youtube.com/watch?v=OfAcTq_fuo

E

ConclusionMr. Dodson may rescind his contract with the

Sharders but that, in order to do so, he must return or offer to return the Sharders to their pre-contract status quo. Therefore, the Sharders are entitled to be reimbursed for the value of Mr. Dodson’s use of the truck. They are also entitled it insist that the truck be returned in substantially the same condition it was sold or that they be reimbursed for the damage to the truck while it was in Mr. Dodson’s possession.