Agreements with Minor under Indian Contract Act,1872
EFFECTS OF MINOR’S AGREEMENT
| Agreement is void ab initio, i.e., it is without any legal effect. | A minor is incompetent to enter into any contract. Therefore, any agreement initio, Le without made by a minor is void ab any legal effect. Mohori Bibi Dharmodas Ghose (IMP) • A minor entered into an agreement for mortgage of his property • He was paid a certain amount for mortgaging the property • Afterwards, the mortgagee filed a suit against the minor for recovery of money paid to the minor. • It was held that the money was paid to the minor under a void agreement. and therefore the mortgage was not valid. | ||
| An agreement for the benefit of minor is enforceable by minor | • The principle laid down in Mohori Bibi v Dharamodas Ghose applies only if the agreement creates an obligation of a minor • Where, an agreement is for the benefit of a minor, the agreement is not void and therefore the minor can enforce such agreement. • If the other party to the agreement fails to perform his part of obligation, the minor can claim restitution. | ||
| Restitution | Khan Gul v Lakha Singh Following principles were laid down in the above case • The Court may grant relief to the other party if the other party had entered into a contract with the minor on the basis of a misrepresentation made by the minor • If the minor had received some consideration under the agreement, the Court may grant restitution to the other party • However, the minor shall not be personally liable. In other words restitution shall be made only to such an extent as the estate of minor has been benefited • The power of the Court to grant relief is discretionary in nature. • The Court shall not grant relief if the other party had the knowledge of the fact that it was entering into an agreement with a minor | ||
| No estoppel against a minor | • If the rule of estoppel is applied against a minor, it would amount to an indirect way of enforcing a void agreement • Therefore, the rule of estoppel does not apply against a minor | ||
| No specific performance | • The other party cannot demand that minor should perform the obligation which he had agreed to perform under the agreement. | ||
| No ratification by a minor | • Ratification means acceptance of a transaction already done, • An agreement entered into by a minor cannot be ratified by him after he has attained majority. • Where on attaining majority, a minor agrees to pay for the goods supplied by a third party, such agreement is void for want of consideration. | ||
| No liability of guardian | The guardian of a minor shall not be liable for acts of a minor. | ||
| Contracts by a guardian-Valid | The contract by a guardian on behalf of a minor shall be valid if- (a) The contract is for the benefit of minor, and (b) The guardian has the authority to enter into such a contract | ||
| Minor’s liability for necessities | Nature of liability | As per Sec. 68, a minor is liable for necessities supplied to- (a) him, or (b) Any other person who is dependent on the minor | |
| Conditions | (a) The liability is only for necessities of life The term necessity means necessities of life as per the social status and conditions of life of the minor. (b) The minor is not already in possession of such necessities (c) The minor shall not be personally liable | ||
| Position of minor | (a) Minor cannot be a guarantor (b) Minor may be admitted as a member where the shares are fully paid up (c) Minor can be an apprentice provided he is of at least 14 years of age (d) Minor cannot be a partner in a firm. However, he may be admitted to the benefits of partnership, | ||
