Position of a Minor in Contract | Civil Law for Judiciary Exams PDF Download

Introduction

• A minor, in legal terms, refers to an individual who has not yet reached the age of majority. In India, a person below 18 years of age is considered a minor. Minors are deemed to lack the legal capacity to fully understand the nature and consequences of a contract.
• Due to their status as minors, they are incapable of entering into a legally binding contract. The Indian Contract Act of 1872 outlines rules regarding the validity and enforceability of contracts.

Nature of a Minor's Agreement

• Section 11 of the Indian Contract Act defines a contract as a legally enforceable agreement.
• Since minors lack the capacity to enter into a valid contract, any agreement they make is not binding in the eyes of the law.
• As a result, a minor cannot be held responsible for breaching a contract.
• A minor's agreement is considered void ab initio, meaning it is invalid from the outset.
• Illustrative Example: For instance, if a 16-year-old enters into a contract to purchase a car, they can later disaffirm the contract and return the car without legal repercussions.

Mohri Bibi v. Dharmodas Ghose

• The case of Mohri Bibi v. Dharmodas Ghose, which was decided in 1903, centers around a mortgage agreement between a minor and a moneylender.
• Plaintiff A mortgaged his property to defendant B to secure a loan of Rs. 20,000 while he was still a minor, although it was later discovered that the actual loan amount was less than Rs. 20,000.
• The attorney representing the moneylender was aware of the plaintiff's minor status during the transaction.
• The plaintiff contended that the mortgage was void and unenforceable due to his minority at the time of signing and sought its cancellation.
• Following the defendant's death during the appeal to the Privy Council, the appeal was continued by his executors.
• One of the defendant's arguments was that the plaintiff had deceitfully misrepresented his age, thus disqualifying him from receiving any relief.
• The court's ruling emphasized that for an agreement to qualify as a contract, the involved parties must possess the legal capacity to enter into such an agreement as outlined in Section 10 of the Indian Contract Act.
• According to the Act, parties must be of legal age and sound mind to be considered competent to enter into a contract.

Effect of a Minor's Agreement

• A minor's agreement is considered void ab initio, meaning it is void from the beginning and does not impose any legal obligations on the parties involved.
• Any property transferred to a minor under a contract must be returned to the transferring party. However, if the minor has already received a benefit, they may need to compensate the other party.

No Estoppel Against a Minor

• The principle of estoppel, which prevents a person from denying the truth of a thing they previously asserted, does not apply to minors.
• Estoppel cannot be used to validate a void agreement involving a minor, as established in legal cases like Jagar Nath Singh v. Lalta Prasad.

Doctrine of Restitution

• Restitution dictates that if a minor acquires property through misrepresentation of their age, the property can be returned if still in the minor's possession.
• In cases like Leslie (R) Ltd v. Sheill, if a minor sells or converts the property into cash, they are not obligated to refund the amount.
• Section 41 of the Specific Relief Act, 1877 allows courts to order a minor seeking to cancel a contract to restore any benefits received.

No Liability in Contract or in Tort Arising out of the Contract

• When a minor enters into an agreement, it is void and does not create legal obligations, preventing the minor from being held responsible for breaching promises or tortuous acts related to the agreement.
• In cases like Harimohan v. Dulu Miya, a minor cannot be held liable in tort for money lent on a bond.
• If a tort is directly connected to the contract, the minor cannot be held liable; however, if it is unrelated, the minor may be held accountable, as seen in Burnard v. Haggis.

Necessaries and Minor's Agreement

• Contracts for necessaries are exceptions to a minor's voidable agreements.
• Necessaries are goods or services vital for a minor's survival and well-being, such as food, clothing, and shelter.
• These contracts are considered valid, and minors can be held accountable for breaching them.
• Necessaries are crucial for a minor's well-being, ensuring they have access to essential goods and services.
• Typically, necessaries are not overly expensive or beyond a minor's financial means, reducing the risk of exploitation.
• A minor is only liable for the value of the goods or services they receive under such contracts.
• Minors cannot be held responsible for any additional damages resulting from a contract breach.
• Contracts for necessaries must be reasonable and of fair value to protect minors from exploitation.
• It is crucial to safeguard minors from potential exploitation by ensuring that contracts are in their best interests.

Parents’ or Guardians’ Liability

• Parents or guardians bear legal responsibility for contracts made by minors. This implies that if a minor engages in a valid and enforceable contract, the parent or guardian can be held accountable for any contract breaches. This responsibility stems from the fact that parents or guardians are answerable for the actions of their minors.
• However, the liability of parents or guardians is confined to contracts that benefit the minor and align with their best interests. In other words, parents or guardians cannot be held responsible for contracts that do not serve the minor's benefit or go against their interests.

Conclusion

• A minor's agreement is considered void ab initio, except for contracts for necessaries that are essential for the minor's well-being.
• Parents or guardians are responsible for contracts made by minors, but their liability is limited to contracts that benefit the minor and are not against their interests.