The Office of General Counsel issued the following informal opinion on October 1, 2003, representing the position of the New York State Insurance Department.
Re: Service Contracts with Minors
Question Presented:
May a minor enter into a service contract in New York State?
Conclusion:
If the service contract provider is registered and approved by the superintendent of insurance, a minor may enter into a service contract with the service contract provider that is voidable by the minor.
Facts:
Your inquiry generally requests whether a minor can enter into a service contract and does not relate to any specific circumstances or set of facts.
Analysis:
The contracts of minors or infants are not void, but voidable at the infants election. 66 N.Y. Jur. 2d § 7 (2000). While contracts made by an infant are ordinarily voidable at his or her election, contracts for necessities are excepted from this rule. In an action against an infant upon a contract made by the infant allegedly for necessities, the burden is upon the plaintiff to show that what he or she agreed to provide to the infant was a necessity. 66 N.Y. Jur. 2d § 20 (2000).
N.Y. Ins. Law § 7907 (McKinney 2003) provides that, no person shall act as a provider of service contracts under article 79 without first having obtained an approval of a registration to do so from the superintendent. Article 79 contains all of the requirements and conditions for doing business as a service contract provider.
Therefore, a minor/infant may enter into a service contract with a service contract provider whose registration has been approved by the superintendent of insurance. The minor/infant may avoid or disaffirm the contract if the services contracted for are not necessities.
For further information you may contact Special Counsel Athan Shinas at the Albany Office.