Minor's Agreement
by Yukta Kumarkar
I. Introduction:
An agreement is enforceable by law when it is made in presence of the competent parties out of their free consent and for lawful consideration. Section 11 of the Contract Act deals with the competency of parties and lays down that, “Every person is competent to contract who is of the age of majority according to the law to which he is subject and who is of a sound mind and is not disqualified from contracting by any law to which he is subject”. Contract made with minors maybe either void or valid. Minor is someone who binds others but is never bound by others as no legal action can be taken for the misbehaviour or false promises gainst a minor.
II. Minor:
A minor is a person who has not yet attained the age of majority as stated in Section 2(e) of the Citizenship Act,1955. Section 3 of the Indian Majority Act,1875 defines minority as ‘Every person domiciled in India shall be deemed to have attained his majority when he shall have completed his age of eighteen years and not before’. The age of majority in India is 18 years so a person less than that age even by a day would be a minor for the purpose of contract.
III. Nature of Minor’s agreement:
A. Agreement by a minor is void-
As per Section 11 of the Indian Contract Act, a minor is not competent to contract so any contract made with a minor is void ab initio.
Case law – Mohori Bibee v. Dharmodas Ghose
In this case, Dharmodas Ghose while he was a minor mortgaged his property in favour of the defendant Bramho Dutt (money lender) to secure a loan. Before the execution of this contract, the plaintiff’s mother had sent a notice informing that his son is a minor. The mother later filed a suit on behalf of his son for cancellation of the mortgage deed and a declaration that the transaction was void. By the time of appeal to the Privy Council, the defendant had died and the appeal was prosecuted by his executor i.e. Mohori Bibee. The defendant had put forward various contentions before the council but they were rejected and it was held that the act makes it essential for all competing parties to attain the age of majority at the time of contract. As the defendant claimed the refund of the mortgaged money under Section 41 of the Specific Relief Act,1877 it was held by the court that money had been advanced to the minor with full knowledge of infancy of the plaintiff. Hence no decree could be passed either against the mortgagor or the mortgaged property.
An agreement with a minor is therefore void ab initio and cannot be sued upon.
B. No ratification of minor’s contract is possible –
Ratification means subsequent approval of an act already done. A contract by a minor is void hence he cannot ratify the contracts entered into by him during his minority even after attaining the age of majority. There can be no ratification of a contract.
In Bhola Ram v. Bhagat Ram (AIR 1927), it was observed that a contract by a minor is void and such contract which is a dead letter cannot be revived and constitute a valid consideration for a subsequent contract. Therefore a transaction entered into by a minor during minority cannot be ratified.
C. No estoppel against a minor –
If a minor enters into a contract by fraudulently representing himself to be a major then he cannot be prevented from pleading his minority in defence. Section 115 of the Evidence Act lays down, ‘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 nor his representative shall be allowed in any suit or proceeding between himself and such person or his representative to deny the truth of the thing’. According to this rule of estoppel, if a statement is made today which misleads another person, it is not allowed to deny the statement tomorrow. When the question of the liability arises, the rule of estoppel cannot be applied against a minor.
In Vaikuntarama Pillai v. Aathimoolam Chettiar , Madras High Court held that as there was a clean statutory provision that a minor being incompetent to contract is incapable of incurring any liability for any debt, the law of estoppel cannot over rule this provision to make him liable.
D. No restitution for minor’s fraud –
Restitution means return or restoration of the benefit. If a minor obtains property or goods by misrepresenting his age, he can be compelled to restore it. Minors are excluded from restoring the benefits to the other party of the contract.
Case law- Leslie Ltd v. Sheill
In this case it was observed that the money obtained by a minor cannot be recovered from the minor as the same cannot be traced. If a minor is asked to pay back the money then it may enforce a contractual obligation against a minor which the law does not permit.
IV. General exceptions:
a) Enforceability of sales, mortgages etc. in favour of minor-
A minor is capable of purchasing or mortgaging a property but cannot be held liable by any means. Although he may not be a promisor but he can be a promise to the contract. A minor binds others but is never bound by others.
b) Minor can be admitted to the benefit of partnership-
According to Section 30 of the Partnership Act,1930, a minor cannot be a partner but can be admitted into the benefits of a partnership. He cannot take part in the management affairs and his liability is limited to the extent of his share in the partnership.
c) Member of a company-
A minor cannot be a member of a company as he is incompetent to enter into contract. If shares are owned by a minor, the name of the guardian is written as member in the register and the minor’s name can be entered in the register if he receives shares by transmission.
d) Marriage by a minor-
The Hindu Marriage Act.1955 strictly prohibits the minor’s marriage and prescribes that bridegroom should complete 21 years and bride should complete 18 years at the time of marriage. A contract to marry in the future entered into by a minor is thus considered as void.
e) Minor in contract of agency-
A minor is incapable of entering into an contract as agreement by a minor is considered void. A minor cannot appoint an agent but he can be appointed as an agent (represent his principal).
f) Membership of societies-
A minor can become a member of a society, trade union, etc. provided the membership is for the benefit of the minor. As per section 21 of the Trade Unions Act 1926, a person who has attained the age of 15 years can be a member of a trade union.
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