Author: Ishita Saxena, a student at Symbiosis Law School, NOIDA
Abstract
This research paper aims to analyse the position of a contract entered upon by a minor. This paper will start with obtaining a general understanding of the validity of contracts and the basic essentials of forming a valid contract. It will further help the reader in forming an accurate conclusion on the legal position of a minor’s contracts. The author of the research paper backs its findings with legal precedents set by the Hon’ble Courts in varied cases. It quotes some of the judgments and important verdicts provided by eminent judges to prove the authenticity of the conclusion formed by the author after going through extensive research. The research done by the author is doctrinal method. The author has relied on secondary sources like books, journals, newspapers, etc. No primary method of research had been used in the formation of this article.
Introduction
The Indian Contract Act, 1872 lays down the provisions relating to contracts. Section 10 of the Act provides the essentials of forming a valid contract. It mentions that to form a valid contract there must be free consent of the parties that are competent to contract, there should be a lawful consideration and a lawful object and the agreement should not be expressly declared void by the provisions of this Act. Section 11 of the Act provides the essentials for competency of a contract. It requires that to enter into a valid contract, the person must have attained the age of majority, should be of sound mind and should not have been debarred by law to enter into any contract.
PERSON OF AGE OF MAJORITY
The term age of majority means here, that the person should be of legal age of majority. In India, the Majority Act, 1875 provides the age of majority in legal terms. Section 3 of the Act lays down the age of majority to be the age of eighteen years and not before. Thus, any person under the age of eighteen, shall be termed as a minor.
However, in case of a guardian the age of majority is twenty-one years of age. This is also provided explicitly in Section 3 of the Act.
PERSON OF SOUND MIND
The Indian Contract Act requires that the person while entering into a contract should be of sound mind. This soundness of mind is not medically but legally. Any person who is mostly of unsound mind but sometimes of sound mind can enter into a contract when he is of sound mind but a person mostly of sound mind but sometimes of unsound mind shall not enter into a contract when he is of unsound mind. Section 12 of the Act explains of what is meant by the term sound mind and who can be said as a person of sound mind. It states that a person is said to be of sound mind if at the time of the contract e is able to make rational judgment and capable of understanding the contract.
NATURE OF SUCH A CONTRACT
As discussed above, Section 11 prohibits a minor to enter into a contract. Since, the contract entered into by a minor does not fulfil the essentials of a valid contract, it cannot be enforced by law and according to clause (h) of Section 2 of the Act, a contract enforceable by law is a valid contract. Thus, a contract with a minor is not a valid contract and not legally enforceable.
In the case of Mohiri Bibee v. Dhurmodas Ghose, the minor, Dhurmodas Ghose, mortgaged his property to the Respondent, who was a moneylender. He paid Rs. 8000 but refused to pay afterwards. When the case was brought to the court, the Privy Council adjudged on the matter. “It was observed by Sir Lord NORTH: “Looking at Section 11 their lordships are satisfied that the Act makes it essential that all contracting parties should be competent to contract and expressly provides that a person who by reason of infancy is incompetent to contract cannot make a contract within the meaning of the Act. The question whether a contract is void or voidable presupposes the existence of a contract within the meaning of the Act, and cannot arise in the case of an infant.””
CONTRACT ON BEHALF OF A MINOR
It is thus established successfully that a minor cannot enter into contract himself. This article will now explore the effect of a guardian of a minor entering into a contract on behalf of the minor.
Nothing in the Indian Contract Act prohibits a guardian of a minor to enter into a contract on behalf of him. Furthermore, it is required that the contract, entered upon, should be for the benefit of the minor. This finding is backed by the decision of Srikakulam Subrahmanyam v. Kurra Subba Rao. To pay off the debts of the father, the mother of the minor entered into a contract, on behalf of her minor son, to sell a piece of land to the appellants. Later, when the minor filed a suit to recover back the land, the Privy Council dismissed the claim and held that where the guardian is involved and the contract is for the benefit of the minor, the contract shall not be held to be void.
BENEFICIAL CONTRACTS
Contract of Marriage
A contract of marriage of a minor is considered as a contract for the benefit of the minor. However, it is a requirement that the contract should not be in the violation of a statute. The contract of marriage can be enforced by the minor against the other contracting party but it cannot be enforced against the minor.
Contract of Apprenticeship
It is held in the case of Raj Rani v. Prem Adib, that a contract of apprenticeship signed on behalf of the minor, if in the benefit of the minor, is a valid contract. The minor is bound to such a contract. Section 30 of the Indian Partnership Act also holds that a minor can be a partner, he is entitled to profits but cannot be liable to losses.
WHEN A MINOR CAN BE MADE LIABLE
Although a contract cannot be enforced against the minor, yet there are instances where a minor was held liable and damages were provided to the claimant. Section 68 of the Indian Contract Act, states that if a minor was provided with necessaries, the provider is entitled to compensation which can be given to him only by the property of the minor.
The term ‘necessaries’ has been explained by the Courts in various cases. One such case was of Chapple v. Cooper. It explained that “Things necessary are those without which an individual cannot reasonably exist. In the first place, food, raiment, lodging and the like.” It also held: “articles of mere luxury are always excluded, though luxurious articles of utility are in some cases.”
Thus, it is safely concluded that only when a minor is provided with necessaries, then the person who provided him with such necessaries is entitled to compensation that can be recovered only by his property.
IMPACT OF AGREEMENTS ENTERED BY MINOR
The Principle of Estoppel
The principle of estoppel is the legal doctrine that prohibits a person from asserting a right in contrary to his prior actions. When a minor misrepresents his age and enters into a contract with the other party, the minor can still avoid liability by using the defence that he was a minor. He is not estopped from using the fact, that he was a minor, as a defence. The reason behind this exemption is that estoppel cannot be used against a statute.
Liability arising out of contract
In the law of torts, infancy is no defence. Furthermore, if a liability of tort arises out of a contract, then the minor cannot be held liable for the tortuous act. In an early case of Johnson v. Pye, it was held that if an infant obtained a loan by misrepresenting his age cannot be compelled to repay the loan in form of damages for deceit. It is however, necessary in such an exemption that the tort should be directly connected to the contract. If it is not related to the contract then no exemption of this kind will be granted to the minor.
Doctrine of Restitution
The doctrine of restitution asserts that at the breach of the contract, the parties should restore the benefits obtained during the period when contract was surviving. This doctrine, however, partly applies to the contract entered by a minor. It has been established that when a minor by, misrepresenting his age, obtains some benefits, it is only the traceable goods which can be restored. When the minor has obtained cash instead of goods, this doctrine does not apply. The same idea was also established in the case of Leslie (R) Ltd. v. Sheill, where a minor had fraudulently misrepresented his age and obtained a sum of £400. When a suit was filed for the repayment of the money, the company was denied payment on the reason that the money could not be restored since it was now impossible to trace the money of the plaintiff because the defendant had spent it and it would amount to enforcing a void contract. Thus, the doctrine of restitution is not a good remedy in the fraudulent acts of minor.
RATIFICATION
The contract by a minor is a void contract by its essence. Ratification is a process by which the parties give assent to a contract. It is a step required at the formation of the contract; however, a void contract cannot be ratified. Thus, a minor’s contract cannot be ratified. Furthermore, if a minor upon attaining majority, enters into a new promise then the new promise so formed will be binding on the contracting parties.
CONCLUSION
After having a thorough reading of the article, one would be able to form a general idea on the legal validity of the minor’ contracts. Overall, a contract entered upon by a minor is a void contract. This article has provided the instances where the legal precedents had partly deviated to the basic law. These deviations have been for the benefit of the minor. Thus, the judicial precedents show that if a contract is for the benefit of the minor, it may be in certain cases, enforced for the sole benefit of the minor. This article has also explored the effects of the contract by minor and how legal doctrines are affected due to these contracts. It is evident from the cases cited, that since early time, the main basis of the judgments has been to protect the best interests of the minor.
The article has also explained the sections of the Indian Contract Act, 1872 to provide a legal backing by the arguments made by the author. The author is of the view that a minor should not be allowed to enter into contracts. This provision has been made in the Contract Act to safeguard the rights of the minor. The lawmakers had made this provision to protect the minor, as he is deemed to be an innocent person, from the witty minds of the adults. The judicial precedents had also been of the view that the rights of the minor should be protected in the first place.
