If your son or
daughter is an aspiring entertainer, computer code writer, app designer or video
game whiz kid, this article might be of interest. With media giants like Disney
and Viacom/Nickelodeon creating shows featuring younger and younger performers
for the adolescent and ‘tween demographic, and YouTube, Spotify and other
online companies hosting content by eager young creators, child stars and teenage
creators are in ever-increasing demand. Moreover, technology companies often
employ young teenage whiz kids to write code and develop video games and mobile
apps. All of this raises the predicament of dealing with a contract which
involves a contracting party under the age of eighteen.
The dilemma for
these companies is that a minor may disaffirm a contract at any time during
minority or upon reaching contractual majority (at the age of 18). The mere
exercise of having the parent of the minor co-sign, approve or “guarantee” the
contract does not resolve the problem. The minor may still repudiate the
contract on the ground of infancy, asserting that the parent or guardian lacked
authority to make the contract. Although many tech companies may rely on the
fact that they believe the minor is an employee creating intellectual property
for the company, this may not be sufficient to transfer rights to the company as
a “work made for hire” under U.S. Copyright law, or otherwise.
For this reason,
the people and companies that your children deal with may seek court approval
of the employment arrangement. States such as California ,
New York and Tennessee have laws which establish
procedures regarding the judicial approval of contracts with minors. Companies working
with minors will probably seek to employ this process at some point because once
the Court judicially approves the contract the minor will be held to a standard
of adult responsibility for its contractual obligations – and this procedure assures
the company that it will get what it bargained for.
The legal
procedure is nothing to be afraid of for parents although in most cases you
will want to retain a lawyer to guide you through the process – probably the
same lawyer that you use to negotiate the contract itself. A proceeding for
judicial approval of a minor's contract is usually commenced by the company or
employer filing a petition with the Court. Along with the petition there will
be affidavits or statements from the parents of the minor consenting to the arrangement.
An order granting
judicial approval of a contract for the services of a minor will not usually be
granted on the papers alone. A hearing will be commenced in which the minor,
the parents and the various other interested parties may appear before the
assigned Judge. In the course of the proceeding, the court will decide what
portion of the net earnings of the minor, if any, are to be set aside in a
trust. In fixing the amount to be set aside, the court will take into
consideration the financial circumstances of the parents entitled to the minor's
earnings, the needs of the parents' other children and the needs of the minor's
spouse, if married. Such amounts as are set aside are to be saved for the minor
under guardianship until the minor becomes 18 years old.
Once the court
does grant approval, an order will be issued which will, in effect, declare the
minor an adult for purposes of fulfilling his or her contractual obligations.
This will assure that the company gets what it bargained for and that your
child is adequately and fairly compensated for his work.
One final warning:
some companies try to avoid the cost of the court proceeding and, instead, seek
to have the parent or guardian of the child sign a guaranty. Parents are
well-advised to be very careful about what they sign. As mentioned earlier, the
parent cannot bind the child to the contract no matter what they sign. The
child, as a minor, can legally walk away from the contractual arrangement.
However, if the parent has signed some document that states that the parent is
liable for amounts due to the company from the child or for damages if they
child disavows the contract, that contract may be enforceable against the
parent and the parent could be on the hook for much more than they anticipated.
A parent can sign something that consents to the child working with the company
but should be wary of signing any document that goes any further.
WALLACE E.J.
COLLINS III , ESQ. is a leading
industry authority on contracts with minors practicing primarily in the areas
of entertainment, technology and intellectual property law. www.wallacecollins.com; Direct Tel:
212-661-3656