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Jones Used Car Lot

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Analyze the following case--who should win and based on what legal reasons; who should lose and what are their legal arguments. Be sure to cite appropriate legal reasoning (contract law) in your analysis.

Jones Used Car Lot sold a five-year old sedan to a young man, age 17 at the time. He paid for the car with $250 cash and agreed to pay the balance in monthly payments of $250 for the next 36 months. When he bought the car, he represented that he was a full-time student with a part-time job. A credit check showed no credit history, but employment was verified, and the dealership extended credit without a co-signer. The young man, Chad, looked at cars with his girlfriend Melissa; they told the salesman they were going to be married in less than a year. Shortly after Chad turned 18, the dealership received notice that Chad was disaffirming the agreement and that the car could be picked up at a nearby car repair shop. The shop had not performed repairs on the car, but estimated that approximately $1,000 worth of engine repairs was needed. It was indicated that these repairs were not the result of accident or abuse of the vehicle. Jones Car Lot filed suit against Chad, who is now 18, for back payments and interest.

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When Jones Used Car Lot sold a five year old sedan to a young man age 17 there was no contract formed because the young man did not have the capacity to enter into a contract. A minor can be held responsible only for the supplies of necessities or services rendered to him. Jones Used Car Lot should have verified the age of the young man. Even though the young man had no credit report and even though there was no co-signer, Jones Used Car Lot entered into the agreement ...

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