|What is a contract?||
A contract is an agreement between two or more people or a business which creates an obligation to do or not to do something. In order for a promise to be legally enforceable, there must be an offer, an acceptance, consideration, and mutual agreement.
|Can I make a contract before turning 18?||
Yes, you can contract as a minor but it might be very difficult to find someone willing to do so. Because as a minor (under 18) you have the ability to terminate a contract. Once you reach 18, you can reaffirm a contract made as a minor either expressly or by failure to disaffirm it. Adults cannot usually enforce contracts against minors. That is why your parents or some adults probably had to co-sign any contracts you made as a minor. You may be liable for the fair market value of necessary items purchased as a minor. In New Mexico, if married and under the age of 18, you are considered an adult for the purpose of a contract.
|What are some likely contracts I may soon be part of?|
|Do all contracts have to be in writing?||
No. Many contracts, such as employment, are rarely in writing. However, some contracts must be in writing to be enforceable:
Having a contract in writing helps to avoid any confusion over what the parties had agreed upon.
|What are some of the advantages of written contracts?||
|What are some of the disadvantages of written contracts?||
Consumers are often forced to sign printed form contracts that are written in favor of the seller; for example, attempting to limit warranties and saying that the consumer must pay the business’s legal fees if there is a lawsuit to enforce the contract. Some words contained in written contracts have technical legal meanings which are unknown to most people.
|What are some general rules to follow when I am asked to sign a contract?||
|What can happen if I don’t honor a contract or miss payments or other obligations?||
You can be sued. You, as a “defendant,” can be required to appear in court. The judge or jury decides what the facts are and the judge/jury decides who wins. If you do not put up a defense, you will lose the case by default. If you lose, a “judgment” will exist against you. Interest is added to the amount of the judgment until it is paid. Your wages may be taken to pay the judgment by a procedure called “garnishment” or your property may be taken and sold to pay off the judgment by a procedure called “attachment.” If you don’t pay a car loan, the car can be repossessed and sold.
|What can I do if I owe more money than I can pay?||
Some options include working out agreements to pay your debts back over a period of time, taking out a new loan to pay back existing debts, and bankruptcy, which is a formal court proceeding and quite complicated. Failure to pay debts on time and/or filing a bankruptcy can have a bad effect on your credit rating, making it harder for you to obtain a loan or credit in the future. Bankruptcy can also make you ineligible to rent an apartment at certain complexes or make you ineligible for some jobs.