Facts
- Larry Swalberg (plaintiff), an adult, agreed to sell Todd Hannegan (defendant), a minor, a 1974 Ford truck for $2,500.
- Hannegan paid $640 at the time of sale and agreed to pay the remaining $1,860 three months later.
- The parties apparently did not discuss Hannegan’s age when contracting, and there was no allegation that Hannegan misrepresented his age.
- Instead of paying the remaining balance, Hannegan disaffirmed the contract on the basis of his minority.
- Swalberg sued seeking to enforce the contract or, alternatively, to undo it and obtain the truck plus compensation for its use or loss in value.
- Hannegan returned the truck to Swalberg while Hannegan was still a minor.
- In its returned condition, the truck was worth about $700.
- On cross-motions for summary judgment, the trial court ruled for Swalberg and entered judgment against Hannegan for $1,160 (the $1,860 balance minus the $700 value of the returned truck).
- Hannegan appealed the summary judgment.
Issues
- Under Utah Code Ann. § 15-2-2, when a minor disaffirms a contract, must the minor restore the adult to the adult’s precontract position by paying the full value (including depreciation), or is the minor required only to return money or property that remains within the minor’s control?
Decision
- The Utah Court of Appeals reversed the summary judgment entered for Swalberg and remanded.
- The court held that § 15-2-2 does not require a disaffirming minor to restore the full value of the consideration received or to pay for depreciation.
- Because Hannegan returned the truck (the property received and then within his control), the trial court erred by awarding Swalberg a money judgment that effectively shifted the truck’s loss in value to the minor.
Legal Principles
- Utah Code Ann. § 15-2-2 permits a minor to avoid contractual liability by disaffirming before (or within a reasonable time after) reaching majority and restoring to the other party “all money or property received … and remaining within his control.”
- The statute’s “remaining within his control” language limits a minor’s restoration duty to what the minor still has and can return; it does not impose an added requirement to make the adult whole for diminished value.
- Utah law treats the infancy doctrine as protective of minors in ordinary transactions; absent an applicable exception, an adult who contracts with a minor bears the risk that the minor may disaffirm and that the property’s value may change while in the minor’s possession.
- Where there is no claim that the minor lied about age or engaged in similar misconduct, courts generally apply the statutory restoration requirement as written rather than adding a depreciation measure.
- Summary judgment is reviewed on appeal by viewing the facts and reasonable inferences in favor of the party against whom judgment was entered.
Conclusion
Because § 15-2-2 requires a disaffirming minor to return only the money or property received that remains within the minor’s control, Hannegan’s return of the truck satisfied his restoration obligation, and the trial court’s award of $1,160 to cover the truck’s loss in value was reversed and the case remanded.