Nature and Effect of a Minor’s Agreement

Under Section 10 certain conditions have been stated to make an agreement a contract; one of which is that parties should be ‘competent’ to contract. As per Section 11 of the Indian Contract Act, the parties who fulfil the following conditions are capable of entering into a contract:

  1. The parties are of the age of majority,
  2. of sound mind, and
  3. are not disqualified from contracting by any law.

Thus, from the above points it can be briefed that a person who is a minor, or of unsound mind, or is disqualified from contracting by law (he is subject to) is not ‘competent’ to enter into a contract.

Minor: Minor is a person who has not attained the age of majority as specified under Section 3 of the Indian Majority Act, 1875. A person to be a major must have completed the age of 18 years; in the case when a guardian has been appointed for a minor’s person or property by a court, then the age of 21 years will be considered as the age of majority. [1]

Nature of a Minor’s Agreement: The nature of an agreement by a minor has not been specifically laid down in the provisions of the Contract Act. However, minor is not considered a competent party to enter into a contract by Section 11. The absolute positioning of a minor’s agreement was enunciated in the case of Mohori Bibee v. Dharmodas Ghose [2]

Facts: Dharmodas Ghose while he was a minor mortgaged his property in favour of the defendant in order to take a loan from him. The attorney of the defendant at the time of the aforementioned stance knew that plaintiff was a minor. The plaintiff did not repay the whole amount and brought an action against the defendant stating that the mortgage would be void as he entered into the transaction during the time when he was a minor.

Held: It was held by the Privy Council that an agreement with a minor would be considered void ab initio, i.e., void from the very beginning. Thus in the Mohiri Bibee case the plaintiff was exempted from repaying the remaining amount of loan.

This decision of the Privy Council in the instant case has been followed in various cases. In Suraj Narain v. Sukhu Aheer [3], the Allahabad High Court held that a fresh promise cannot be based on the consideration received by a person during his minority. 

Effect of a minor’s agreement: A minor’s agreement is considered void; thus it does not impose any obligations upon the parties to fulfil their promise. Though, there are some effects that arise out of an agreement of a minor:

  1. No estoppel against a minor: Where one person has by his declaration, act or omission intentionally caused or permitted another person to believe a thing to be true and to act upon such belief, neither he or his representatives shall be allowed in any suit or proceeding between himself and such person or representative to deny the truth of that thing [4]. Thus, a person who misled another party and disguised as something he isn’t then such person has no right to take the actual truth as a defence. However, question arises regarding the law of estoppel against minor. In Jagar Nath Singh v. Lalta Prasad [5], the court said

      “the law of estoppel cannot be invoked in aid to validate that which is void under the law”.

In Vaikuntarama Pillai v. Authimoolam Chettiar [6] the Madras High Court, reiterated that the law of estoppel cannot overrule the provision of minor being incompetent to contract and thereby not liable for any liability. The same was agreed by Patna High Court in Gaganand Singh v. Rameshwar Singh [7].

  1. Doctrine of Restitution: According to the doctrine of restitution, when a minor obtains property or goods by misrepresenting his age then the same is subject to be returned if traceable in the minor’s possession. In case the minor has already sold such property or goods or converted them into cash, then he cannot be asked to refund the same. This doctrine evolved from the judgment of Leslie (R) Ltd v. Sheill [8]. Anyways, if the minor moves the court for the cancellation of a contract, then the court may grant relief and ask minor to restore the benefits he gained as given under Section 41 of the Specific Relief Act, 1877. The section will be applicable only when a minor has come to the court. The same was reiterated by Sir Shadilal CJ in Khan Gul v. Lakha Singh [9]:

  “the language of the section no doubt shows that the jurisdiction conferred thereby is to be exercised when the minor himself invokes the aid of the court.”

  After the amendment of 1963, the principle of restitution is contained in Section 33 of the Specific Relief Act.

  1. No liability in contract or in tort arising out of the contract: An agreement entered with a minor is void ab initio and therefore it does not instigate any legal obligations upon the parties. A minor cannot be held liable for not performing his promise or for being liable for a tort as a consequence of the agreement. “You cannot convert a contract into a tort to enable you to sue an infant.” [10] In Harimohan v Dulu Miya [11] Calcutta High court held that a minor cannot be held liable in tort for money lent on bond. The court further explained:

“If the tort is directly connected with the contract and is the means of effecting it and is a parcel of the same transaction, the minor is not liable in tort.”

However, when the tort committed by the minor has no relation to the contract concerned then such minor can be held liable. The same can be observed in Burnard v. Haggis [12]. A minor hired a horse to go for a ride and further enunciated that he won’t use the horse for jumping. However, later the defendant (minor) lent the horse to his friend who used the horse for jumping. During this, the horse fell and got injured. The defendant was held liable for the injury caused to the horse since the tort committed was outside the contract entered between the parties.

Conclusion: A minor’s agreement is regarded as void in India by Section 10 and 11 of the Indian Contract Act. A minor is not held liable for not fulfilling the obligations promised in the agreement. Further, the law of estoppel is not applicable to minors. Since a minor’s contract is void from the very beginning the question of ratifying it does not arise at all; however, in some cases, the doctrine of restitution may apply. Thus it can be concluded that the nature of a minor’s agreement is quite clear as void due to which no certain legal effects are generated out of it.

References:

  1. Section 3 of the Indian Majority Act, 1875.
  2. (1930) 30 IA 114 (PC).
  3. AIR 1928 All. 440.
  4. Section 115, Indian Evidence Act.
  5. ILR (1908-10) 21 All. 21.
  6. ILR (1915) 38 Mad. 1071.
  7. AIR 1927 Pat. 271.
  8. (1914) 3 KB 607 (CA), 618.
  9. ILR (1928) 9 Lah 701.
  10. Jennings v Rundall, (1799) 101 ER 1419.
  11. ILR (1934) 61 Cal 1075.
  12. (1863) 4 CBNS 45: 8 LT 328.

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