Problem

Star Chevrolet Co. v. Green

Facts: Kevin Green paid $4,600 cash for a used Camaro from Star Chevrolet. When the car blew a gasket, the dealer refused to give Kevin his money back. Kevin repaired the car himself and drove it on the highway, where it was wrecked. Kevin sued Star, and the trial court awarded him the full price of the car, because he was a minor when he bought it. Star appealed.

Issue: Is Kevin Green entitled to disaffirm the contract even though the Camaro has been destroyed?

Holding: The appeals court affirmed judgment for Green but reduced the award to $3,100, based on the car's salvage value. A minor may disaffirm a contract. He is required to return the consideration only if it is still in his possession. If the minor has wasted, squandered, or otherwise destroyed the consideration, he need not return it and is still entitled to his money back.

1. Question: Star Chevrolet either did not know that Green was entitled to his money back, or knew but refused to honor it. Why was that a particularly costly mistake by Star?

2. Question: Kevin Green knew that he was a minor. Why should he be allowed to make an agreement, wreck a car, and then get his money back?