Paypal- contracts with minors

Ughhh on 21/03/2017 - 22:29

So I came across a thread in another forum about a paypal dispute. To cut to the chase, here's a summary:

  • Buyer buys a makeup item from another user on a forum (Private sale) and paid via Paypal (possibly by Friends & family)
  • Item arrives, but is not as described. No reply from seller so a Paypal not as described dispute is opened.
  • For an unrelated reason to this topic, buyer lost the dispute

OP is apparently a minor (<18yo), because of this, another user recommended mentioning to Paypal that because the buyer is a minor, he/she can't legally enter a legally binding contract. Basically the transaction is "illegal", therefore the seller must refund all money and buyer must return product.

A couple of questions:
1. Afaik, DOB is required when signing up to use Paypal's services, and they require you to be 18yo or over and be legally capable of entering contracts. By putting false DOB on Paypal and now revealing to be a minor, is this basically admitting to fraud?
2. Voiding contracts with minors is understandable, but isn't this usually for contracts like purchasing a car or gym memberships? Buying an orange or hair dye from Woolies is entering a contract technically. Is the contract considered as a "contract for necessities"^(see below)?
3. Does the buyer have a leg to stand on in this scenario, if revealing to actually be a minor?

^Common law
The general rule at common law is that a contract made by a minor (a person under the age of 18) is voidable. There are, however, a number of exceptions (some of which now have statutory force).
Contracts for necessities
A contract by a minor for necessities is binding on both parties. Necessities are determined by reference to the minor’s ‘existing life style’ and must be necessary for maintaining that lifestyle. This is given statutory force in Victoria by the Goods Act s 7.
Also http://www.lawhandbook.sa.gov.au/ch10s02s03s01.php

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Comments

  • altomic on 21/03/2017 - 22:32

    <18 year olds can enter contracts. they do it every time they buy something at a store.

    • scrimshaw on 21/03/2017 - 22:48

      Yes, they can enter contracts but they are very restricted to certain types.

      From a quick read, there are two types of binding contracts they can enter:

      1. Contracts for necessities
      2. Contracts for employment

      However there are still certain contracts that can still be enforceable but not until they hit the age of maturity (that is, 18)
      for e.g the purchase or leasing of land, and "for a service which carries with it ongoing obligations (such as marriage settlements, or the purchase of shares), such a contract will be binding upon the minor upon reaching the age of majority, should they not choose to repudiate it within a reasonable amount of time" [Quoted from Wikipedia]

      The contract the user has with Paypal is one that does not really belong in #1 or #2, so Paypal to protect their own ass, does not allow underage users.

      • altomic on 21/03/2017 - 22:53

        I think paypals primary concerns is whether they made money from the transaction and ,secondly, whether they had to pay any tax in Australia.

        • trongy on 21/03/2017 - 23:19

          I think Paypal's primary concern is to make money from millions of transactions, which sometimes leads it take action to protect its reputation for relatively safe transactions.

  • scrimshaw on 21/03/2017 - 22:35

    I think this is operating inside Paypal's vacuum and what the seller/buyer is agreeing to is Paypal's terms and conditions of use.

    Here is the screenshot of the agreement as of Mar 2017
    https://i.imgur.com/gr3ZcgL.png

    If TC's are not met, then Paypal has the say in who does what. According to their TC's a person under 18 y/o cannot use Paypal's services. The only way they can is to have a normal account create a 'student account' and have the two accounts tied together. minors cannot create the account for their own right. Note that the Aussie version of Paypal doesn't have student accounts.

    • Ughhh on 21/03/2017 - 23:05

      I forgot to mention that the buyer is most likely residing in the US. Though the laws may differ a little, the "contracts with minors" shouldn't be too far off? Otherwise, no minor is allowed to buy candy or a bottle of coke. In addition, Paypal requirement of being >18yo still applies in the US.

      So basically, the excuse of "it's illegal for minor to enter a binding contract" in this Paypal scenario to get a refund from seller is basically inadmissible?

      • scrimshaw on 21/03/2017 - 23:08

        It doesn't matter who the buyer is, because the exchange of goods and services could happen without Paypal's merchant services, and it would still be legal and admissable.

        However, the moment you involve Paypal as a 3rd party in your transaction, you are now dealing with Paypal Australia as an Australian business or corporation. They stand between you and your buyer and are responsible for taking the money out of the buyer's bank account and depositing it in yours. They can freeze and deactivate the buyer's account, if they so wished, and not return you a single cent.

        In other words, the buyer is shit outta luck. Paypal is pretty much a law unto themselves and have screwed many people and businesses over with their policies.

        IMPORTANT TO KNOW:
        "Paypal is not a bank." They're not regulated like a bank and don't have to behave like one.

        • altomic on 21/03/2017 - 23:21

          IMPORTANT TO KNOW:
          "Paypal is not a bank." They're not regulated like a bank and don't have to behave like one.

          they are an escrow service/middle man between two parties.

  • KaTst3R on 21/03/2017 - 23:21
    +1

    This is getting into the deep end of the pool…

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