When a party avoids a contract under a defense to enforceability, the party who seeks to avoid the contract is entitled to restitution.  Under this theory of recovery, the party seeking to avoid the contract returns whatever he or she received and, in return, receives back whatever he or she gave up.

For example, if a minor contracted to purchase a new dog from a breeder for $100, the minor must return the dog to the breeder, and the breeder must return $100 to the minor.  When the contract is for a good (such as a dog), it's easier to "undo" the transaction.

When a minor purchases a service (such as dance lessons) rather than a good (such as a dog), it may be more difficult for the minor to return the benefit he or she received under the contract.  For example, if the minor purchases a dance lesson for $100 and completes the lesson, the dance studio can return $100 to the minor, but how can the minor return the "value" of the dance lesson? 

In these cases, a court may allow for an offset - it can allow the dance studio to keep some amount of the $100 so that the dance studio receives the fair market value of the dance lesson.  For example, the court could allow the dance studio to keep $50 as the fair market value of the dance lesson and could require the dance studio to return $50 to the minor.  

QUESTIONS: In this hypothetical:

• Is either the dance studio or the minor fairly or unfairly harmed?
• If the court allows the dance studio to keep $50, did the court enforce a $50 contract for dance services between a minor and the dance studio?
• Would allowing the dance studio to keep some or all of the $100 be consistent with the protection that the incapacity defense seeks to provide?

Answer rating: 100% (QA)

In this hypothetical scenario 1 Fairness of Harm The minor is likely not unfairly harmed since they ... View the full answer