6700 – 6753

6700 – 6753: Contracts

California’s Family Code recognizes that minors are sometimes in situations where they need to enter into contracts, for instance for personal needs, creative work, or professional commitments. Part 3 lays out the legal framework that governs these agreements, focusing on when minors can make contracts, the circumstances under which they can cancel them, and the protections in place to prevent exploitation.

The law makes clear distinctions between general contracts and those related to industries like entertainment and sports, where minors often work and earn significant income. It also addresses who has the authority to act on a minor’s behalf and outlines how earnings should be handled and protected. This part of the code is about balancing opportunity with oversight, giving young people the ability to engage in contractual relationships while safeguarding their rights and financial interests.

6700 – 6701: Capacity to Contract

In California, minors are generally allowed to enter into contracts just like adults. This means a person under the age of 18 can legally sign an agreement. However, there are important limitations and protections in place.

Section 6700 clarifies that minors can make contracts, but they retain the right to disaffirm, meaning cancel, the agreement under certain conditions. This right exists to protect young people from being bound by deals they might not fully understand or that are not in their best interest.

Section 6701 places further restrictions. It outlines three things a minor is NOT allowed to do:

• Delegate power
• Enter into real estate contracts
• Make agreements involving personal property that they do not physically control

These limitations exist because such transactions carry significant legal or financial consequences.

6710 – 6713: Disaffirmance of Contracts

Disaffirmance is a key protection for minors. It gives them the legal right to back out of a contract, even if they initially agreed to it. Section 6710 allows this to happen anytime before they turn 18 or within a reasonable time afterward. If the minor passes away before making that decision, their heirs can still disaffirm the contract.

However, not all agreements can be disaffirmed. Section 6711 makes it clear that if a contract was entered under the authority of a specific law, it cannot be canceled by the minor. Section 6712 adds another exception: if the contract involves necessities like food or shelter and was made when the minor was not in the care of a responsible adult, it cannot be disaffirmed either.

Section 6713 addresses what happens when a minor sells goods and those goods are later purchased by someone who did so in good faith and without knowledge of any issues. In such a case, the minor cannot reclaim the goods from that innocent buyer.

6750 – 6753: Contracts in Art, Entertainment, and Professional Sports

This chapter applies to minors working in the entertainment or sports industries, including actors, musicians, athletes, and even digital content creators. The law recognizes the unique nature of these careers and includes rules designed to protect young performers.

Section 6750 of the California Family Code addresses the types of contracts minors can enter into in specific professional industries. This provision is especially important because minors increasingly participate in entertainment, sports, and digital content creation which often involve complex contracts and significant earnings.

Scope of Covered Contracts

Subsection (a) defines the kinds of contracts that fall under this chapter. These include three main categories:

1. Artistic or Creative Services – Minors can enter contracts for creative work such as acting, music, directing, writing, or digital content creation. This includes influencers, streamers, and others working directly or through agents or service companies.
2. Intellectual Property Rights – Minors may contract to buy, sell, license, or manage rights to creative works or personal likeness for use in media like film, television, or stage productions.
3. Sports Participation – Contracts for minors to perform as athletes or participants in sports are also covered and subject to the same legal protections.

Who Is Considered the Employer?

Subsection (b) clarifies that responsibility does not depend on the form of the business arrangement. The person or company that receives the benefit of the minor’s services is legally recognized as the employer. This can include:

• A direct employer working one-on-one with the minor
• A company using a third party to provide the minor’s services
• A casting agency that places minors as extras or background performers

This definition ensures accountability by making clear who is legally responsible for following the rules laid out in this chapter, including financial protections and employment obligations.

Updated Definitions for Modern Professions

Subsection (c) expands the law to reflect current digital industries. The term content creator now has legal standing and includes individuals who work on online platforms such as YouTube, TikTok, Twitch, and podcasts. These creators often have direct contractual relationships with advertisers, production companies, or platforms, and those relationships are now formally recognized.

The term online platform is broadly defined to include websites, apps, social media services, and other digital systems that host or distribute content. By using an inclusive definition, the law accounts for future technological changes without needing constant updates.

Defining Gross Earnings

Subsection (d) explains how a minor’s gross earnings are calculated. This is important because certain laws, such as the required setting aside of a portion of earnings for the minor’s benefit, depend on this figure.

In general, gross earnings include the full amount paid to the minor or to a third party acting on their behalf. However, for minors working specifically as musicians, singers, or songwriters, the gross earnings include advances but not deductions for expenses or those same advances. This distinction reflects common industry practices, where creative professionals are often given advances that are later recouped by the employer.

Section 6750 is a foundational part of California’s efforts to regulate contracts involving minors in professional environments. It recognizes the realities of modern work, particularly in entertainment and digital media, while creating legal safeguards. By clearly defining the scope of covered contracts, who is responsible, and how earnings are calculated, the law provides a framework that balances opportunity with protection.

Court Approval and Protections

Section 6751 introduces a powerful protection: if a contract is approved by a court, the minor cannot later disaffirm it simply because they were underage at the time. The court’s approval applies to every part of the contract, including clauses about how long it lasts or how it can be ended. A parent or legal guardian usually acts on the minor’s behalf during this process unless the court decides otherwise.

Earnings and the 15 Percent Set-Aside Rule

Section 6752 establishes strict financial protections for unemancipated minors who enter into entertainment or sports contracts. It requires that 15 percent of the minor’s gross earnings be set aside in a trust account to ensure those funds are preserved until the minor reaches adulthood.

To begin, the parent or legal guardian must provide certified proof of the minor’s age and legal authority to act on their behalf. Once a contract is approved by the court, the employer must withhold and deposit 15 percent of the minor’s earnings into a trust. This does not apply to work as an extra or background performer. The parent or guardian typically serves as trustee unless the court appoints someone else.

Trustee Responsibilities

The trustee must provide the employer with the necessary account information within ten business days of the start of employment. The employer then has fifteen business days to deposit the funds, after which their responsibility ends. From that point on, the trustee is responsible for managing the funds and submitting annual reports.

The court maintains oversight and can modify or end the trust if needed. Parents or guardians must notify the employer of any updates that affect fund deposits, such as a change in account details or trustee information.

If the trustee fails to act within 180 days, the employer must forward the funds to The Actors’ Fund of America. This organization then assumes responsibility and manages the money until the minor claims it upon turning 18 or becoming emancipated. The fund must maintain records, pay interest, and is allowed to deduct administrative fees after the first year.

Even if the contract is not court approved, the earnings set-aside requirement still applies. All funds under this section are exempt from California’s Unclaimed Property Law, ensuring they remain protected for the benefit of the minor.

Establishing and Managing the Trust

Section 6753 defines the requirements for creating what’s often called a “Coogan Trust Account.” This account must be opened in California at a federally insured institution. Once established, no one can withdraw from it without a court order until the minor turns 18 or is emancipated.

The trust must also be documented and reported to the employer, including all relevant account details. It can be managed through approved investments, but only those that align with specific criteria set by law to minimize risk.

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This set of laws is designed to strike a balance. On one hand, it recognizes that minors can engage in serious and lucrative work, especially in entertainment and digital media. On the other, it builds in multiple safeguards—legal, financial, and procedural—to protect their interests, preserve their earnings, and ensure accountability from adults involved in the process.

Key Takeaways

1. Minors can make contracts but can usually cancel them before or shortly after turning 18.
2. Some contracts are restricted, such as those involving real estate or power of attorney.
3. Certain contracts cannot be canceled, especially those involving necessities or backed by statute.
4. Entertainment and sports contracts have special rules, including court approval and income protection.
5. Court-approved contracts are binding, even after the minor turns 18.
6. Fifteen percent of earnings must be saved in a trust for the minor’s future.
7. Parents or guardians manage the trust unless the court appoints someone else.
8. If they fail to act, The Actors’ Fund takes over and holds the money until the minor claims it.
9. Trust funds are protected from being claimed by the state as unclaimed property.

If you’re a parent, guardian, or employer involved with a minor entering into a contract in California, it’s important to understand these rules and follow them closely. They’re not just guidelines—they are legal obligations meant to safeguard a young person’s rights and future.