Behind child actors such as Iain Armitage, and child influencers such as Ryan’s World and Niana Guerrero, there are the contracts that made their success possible. California labor laws and the California Family Code require that contracts with minors include provisions to ensure that children are not exploited because of their youth. While not every employed minor is a model or entertainer, business owners and managers who wish to work with a minor may all be wondering the same thing: If I sign a contract with a minor, will it be enforceable?
All parties to a contract must have the legal ability to do so for the agreement to be valid. Minors (who, in California and many other jurisdictions, are under the age of 18) are deemed to lack the mental capacity required to enter into binding agreements under the law. Courts have determined that minors typically have insufficient understanding of legal terms and obligations. Minors may also often lack the judgment and experience to fully comprehend the consequences that contracts may impose upon them.
So, while a minor may be able to enter into a contract, this “lack of capacity” gives them the option to cancel (or disaffirm) it. A contract entered into by a parent or guardian on behalf of a minor can still be disaffirmed by the minor if the minor can prove that the parent or guardian lacked the authority to enter into the contract. However, if the contract is judicially affirmed, the minor cannot argue that the parent or guardian lacked authority to enter into the contract.
In California and as a general rule, many courts will enforce agreements made with minors if the agreement is about providing the minor or the minor’s family with “necessities.” Necessities may include things like food, clothing and shelter. Some states also have statutory exceptions, where minors’ rights to cancel agreements are limited, including those in connection with insurance, educational loans and healthcare.
Additionally, if the minor does not cancel a contract prior to turning 18 (or a reasonable time thereafter), generally, the contract can no longer be disaffirmed just because the individual was under 18 when the agreement was executed.
In California, entertainment contracts with minors are governed by the California Family Code and the California Labor Code. These laws were originally based on California’s child performer protection laws, commonly known as Coogan laws, named for Jackie Coogan. Coogan was one of the highest paid child actors in the 1920s. When he turned 21 and asked for a share of his earnings from his mother, he learned that all of his earnings were gone. He sued to regain the funds and won, but only ended up receiving the small amount of earnings that was left at the time.
The California legislature promptly drafted what are now known and referred to as the Coogan laws, in order to protect other child entertainer earnings. The statute has been amended several times in order to increase protections for minors.
California law provides for judicial approval of minor contracts regarding creative services (such as services of an actor, musician or model) or as a player in a sport; however, currently this definition does not extend to social media influencers. Once an agreement has been approved by the court, the child may no longer disaffirm on the basis that he or she lacked contractual capacity at the time of signing.
California courts take many factors into consideration before approving minor contracts. The court may refuse to approve agreements until parents (or minors) agree to set aside a portion of the child’s earnings for future use. However, even after court approval, a judge may modify the agreement or even revoke approval if the child’s obligations under the contract become damaging.
In the entertainment business, employers may be required to:
(i) obtain Entertainment Work Permits,
(ii) confirm that certain educational requirements are met,
(iii) limit the number of hours and timeframe the child works, or
(iv) ensure that the child has established a trust account for certain employment funds (commonly referred to as a Coogan Account).
All of the above are required to hire a minor for entertainment purposes in California. In other businesses, state or federal labor laws may limit the type of work minors are permitted to conduct, require additional employer permits or licenses or dictate special working conditions for minors. For example, California labor law generally prohibits employing children under the age of twelve.
For the reasons stated above, allowing minors to disaffirm contractual agreements is generally good public policy. However, a contract cancelled by a minor may have serious repercussions, both for the child’s family and for the other party. Before signing a contract with a minor, both parties should closely review the employment laws of their jurisdiction, consider the minor’s rights to cancel and think about the consequences of any such cancellation. Experienced entertainment and employment attorneys at Romano Law are ready to help. Contact us to speak with a member of our team.
Carlianna Dengel is admitted to practice law in New York and California.