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MINOR’S CONTRACT

Updated: Feb 20, 2022

Written by: Medha Reddy



INTRODUCTION


‘Agreements entered into with Minors are void ab-initio’. A contract formed with a minor is considered void. Any contract with a minor is void from the start; anyone under the age of 18 is not capable of entering into a contract, so anyagreement that has been formed by a minor is void ab-initio (from the beginning).


All agreements are not contracts, according to Section 10 of the Indian Contract Act.[1]Only such contracts are agreements by parties who are legally capable of entering into a contract. In addition, Section 11[2] of the Indian Contract Act defines the term "competent," which includes three elements-

  1. The person must be of legal age, which is 18 years old,

  2. The person should be of sound mind and

  3. is not disqualified from contracting by any law to which he is subject.[3]

A minor is someone under the age of eighteen, and the majority is a requirement for every contract. The Indian Majority Act of 1875[4] specifies that the age of the majority in India is 18 years. A minor is a person living in India who has not reached the age of eighteen. According to Indian law, a minor's agreement is void, which means that it has no legal validity and that it is void and invalid because neither party to the contract can enforce it. Even when he reaches the majority, he will be unable to sign the same deal.


The case of Mohori Bibee vs. Dharmodas Ghose[5], covers the entire scope of minors’ agreements. This case primarily concerns a contract involving a minor or a contract with a minor. In India, an agreement or contract with a minor (a person under the age of 18 or who has not legally reached the age of 18) is void ab-initio (void from the beginning). These rules and regulations are in place because, according to the law, such people cannot contract or agree to do so.


Facts of the case- The plaintiff, Dharmodas Ghosh, mortgaged his property to the defendant, a moneylender when he was a minor. The defendant's attorney was aware of the plaintiff's age at the time. The plaintiff eventually paid just Rs 8000 but refused to pay the remaining amount. The plaintiff's mother was his next friend (legal guardian) at the time; therefore, he filed a lawsuit against the defendant, claiming that because he was a minor at the time of the contract's formation, he was not obligated by it.


In the judgment of the courts, anyone under the age of 18 or who has not reached the age of 18 (i.e., a minor) cannot intend to enter a contract or make major choices. This case has essentially taught us that, because minors are legally incapable of giving their consent, they must be entitled to or given protection in their relations with other adults. Following this instance, every attempt to contact or agree with the minor was invalid and void from the beginning. Such contracts are "void ab-initio”.


In this case, the Privy Council announced the law that any minor's contact or agreement is "completely void," and it has been carefully enforced and is still developing. Section 10[3] of the Indian Contract Act of 1872 defines what forms a contract, while Section 11[4] specifies who is competent to contract.


The following are the legal principles that were established in this case:


1. Any contract with a minor or an infant is neither valid nor voidable but is void from the beginning.


2.Section 64[7] of the Indian Contract Act, 1872 applies where the parties entering a contract are competent to do so, and therefore does not apply in circumstances where no contract is created at all.[6]

3. A representative's legal acts or any knowledge of an agent's principle imply that such acts or knowledge are of his principle.[7]


THE LEGAL IMPLICATIONS OF MINOR AGREEMENTS ARE-


  • No Liability in Contract or Tort arising out of Contract.


There is no liability resulting from either tort or contract: A minor is incapable of consenting, and the nature of a minor's agreement is void and unenforceable.


  • No Estoppel Against the Minor


Estoppel is a legal rule of evidence that prohibits a party from alleging that contradicts what he previously asserted. The court found that the doctrine of estoppel does not apply in cases when the individual knows the facts ahead of time, such as in this instance when the defendant's attorney knew the plaintiff was a minor. As a result, this regulation is not applicable.


  • Ratification of a Contract


The ratification of a minor's contract does not exist. If a person is a minor at the time of contracting, the contract is invalid and void. After becoming a major, the minor is no longer able to remedy the contract (the contract, if corrected, will no longer be valid). Furthermore, if the parties to the contract express interest, they may engage in a new contract with the restriction that the consideration in the new contract be new, as the prior consideration cannot be utilized again.


  • Doctrine of Restitution


If a minor falsely claims to be an adult and enters a contract, he may be required to restore the commodities in his possession that were part of the contract, if they are still in his custody (not sold/given to someone else or converted) and there is no consideration (money). Otherwise, it would imply enforcing a void contract, such as a minor's agreement.[8]


Other implications are, the parents of a minor will not be held accountable if the child lies about his age, but they will be held liable if the minor entered the contract with the consent of his parents. A minor will be unable to file for bankruptcy. A minor cannot own, acquire, or sell a business stock, but a major who is the minor's guardian can do so on his behalf.


CONCLUSION


Finally, a minor cannot engage in a contract, according to section 11 of the Indian Contract Act. In the case of Mohori Bibee v. Dharmodas Ghose, it was determined that any contract involving a minor is void from the beginning and has no implications. This was a key decision that clarified the nature of the minor's agreement. As a result, if a minor enters a contract, he will not be held at fault, will not be forced to repay, if there is a breach of contract, and will not be entitled to recover a contract when he becomes major.

[1]The Indian Contract Act, 1872. S.10[3] [2]The Indian Contract Act, 1872. S.11[4] [3]https://www.academia.edu/20625545/LAW_OF_CONTRACT(Visited on June 18, 2021) [4]The Indian Majority Act, 1875. S.3.available at:https://indiankanoon.org/doc/153138729/ [5](1903) ILR 30 Cal 539 (PC) [6] The Indian Contract Act, 1872. S.64[7] [7]http://lawtimesjournal.in/mohori-bibee-anr-vs-dharmodas-ghose/ (visited on June 18, 2021) [8]The Indian Contract Act, 1872, S.65.

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