Under Long-Established Law, Minors Generally Have the Power to Avoid

question 10

Essay

Under long-established law, minors generally have the power to avoid liability for their contracts. They seldom exercise this power, even though they make annual purchases measured in the billions  of dollars. What are some possible explanations for this seemingly strange state of affairs?​

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Definitions:

Oversubscription Privilege

is a right or privilege granted to existing shareholders to purchase additional shares in a new issue before it is offered to the public, especially in cases where the demand exceeds the supply.

Rights Offering

A method by which a company raises capital by giving existing shareholders the right to buy additional shares at a discount to the market price before offering them to the public.

General Cash Offer

A public offering of securities to all investors by a company, which involves selling securities directly to the general public to raise capital.

Underpriced

Refers to a situation where an asset is selling for less than its perceived or actual value.