As per Section 11 of the Indian Contract Act, 1872, every person is competent to negotiate a contract who is of the age of majority according to the law to which he is subject and who is of reasonable intelligence and is not excluded by the law to which he is subject.
Thus, people who are of unsound mind or people who are disqualified by the laws of the country are not allowed to enter into a contract.
Who is a minor?
A minor is a citizen of the country who has not yet attained the age of maturity under the law of the country he is subjected to.
According to the Indian Majority Act, 1875, a citizen is considered to be a major after completing 18years but if a guardian was allotted to the person by the court then the citizen will be considered a major after attaining 21 years.
It can be said that a contract involving a minor as a party is ab initio i.e. invalid right from the start.
In Mohri Bibi v. Dharmodas Ghosh, a minor entered into a contract with a money lender. He borrowed money by mortgaging his house. On default of the payment, the moneylender went to take possession of the house as stated in the contract. The Privy Council in 1903 stated that any contract with a minor is invalid from the outset and thus, no contract can be enforced.
The Indian Judiciary has time and again used this precedent to release minors from their contractual obligation since they are not mature enough to comprehend the percussions of the contract they are entering into.
The minor party does not have any capacity to ratify a contract after attaining the age of majority unless any law specifically allows them to do so. No specific relief or performance can be asked from courts in contracts engaging minors as a party since it is void from the starting.
Minors can receive the benefits of partnership and ratify the same upon attaining majority, but the Partnership Act prohibits them from becoming partners in affirm before attaining the age of majority.
Parents or guardians of the minor can name them in a contract only if it is beneficial to them still the minors are not legally bound to fulfill any contractual obligation.
No estoppel against Minor
Estoppel can be defined as comments made by one person to another to mislead them. The person making a misleading comment cannot refuse the same statement in the future. The theory of estoppel forbids a group from stating things that go against statements made in their prior claims.
Various precedents of different High Courts of India allow the minor to plead mitigation even if at the time of the arrangement, even if he wrongly declared that he was not a minor.
In Sadik Ali Khan vs Jai Kishore, the Privy Council decided that an act committed by a minor is void and no plea can be raised against him.
Minority in India is a fact and cannot be avoided by choice.
Restitution of benefit
Section 25 of the Indian Contract Act, 1872 covers the doctrine of restitution. Section 65 provisions apply if the subsequently reached agreement is found void or one of the parties makes it void.
In Colleries limited vs Jharkhand mines ltd, the Supreme Court of India declared that a later-stage agreement that is invalid would fall under Section 65.
If a minor has gained property or any goods by falsely representing his age, he can be compelled to restitute it, but only if the same is traceable. In Leslie (R) Ltd v. Sheill where a minor tricked money lenders by misrepresenting his age. The plaintiff tried to recover the principal amount along with interest as damages for fraud but failed to do so as there is no estoppel against the minor. Lord Sumner rejected the contention held that the money paid to the minor was used personally and thus was not traceable or restorable as it will be the same as a void contract getting enforced. But if the minor moves to the court for cancellation of his contract, the court may grant relief through the help of Section 30 and Section 33 of the Specific Relief Act, 1963 with the condition that gained obtained by him should be restored or compensated.
Minor has no liability in tort arising by a contract
A minor’s contract is invalid as he/she is not capable enough to comprehend a contract or is an adult to provide their free consent. The Calcutta High Court set a precedent where it was held that “ 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 “
Minor has liability for necessaries
A minor is accountable for necessary services rendered to him.
Section 68 states “ If a person incapable of entering into a contract, or anyone whom he is legally bound to support, is supplied by another person with the necessaries suited to his condition in life, the person who has furnished such supplies is entitled to be reimbursed from the property of such incapable person “
(1) The contract must be for goods necessary for his support or his standard of living.
(2) He must not already have an adequate supply of these necessaries.
If a minor is provided with the necessaries and if he already has an ample amount of supply of that necessary item, then the minor is not liable to reimburse the supplier and the price is irrecoverable. In India, the liability of the minor does not depend upon the minor’s consent. It arises out of quasi-contractual nature, which means the liability is only that of the minor’s estate.
It can be concluded by saying that under Section 11 of the Indian Contract Act, 1872, a minor cannot enter into a contract by rendering himself a party to a contract and thus cannot be held liable for the same.
R .K . Bangia Contract I book
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