What is the position of minor under Indian Contract Act, 1872?

What is the position of minor under Indian Contract Act, 1872? written by Prachi Mehta Student of MKES College of Law

ABSTRACT-

In today’s society, minors are appearing in public life at a greater speed than ever before. A minor has to travel, to visit cinema halls or deal with educational organizations and buy so many products by himself. Thus, any party can manipulate the minor or brush him aside on the ground that the agreement is null and void. Therefore, legal protection for or against the minor and signifying his position under the Indian Contract Act, 1872 is essential. This article talks about the capacity of a minor to contract, the nature of a minor’s agreement, and its consequences along with highlighting the important case laws.

INTRODUCTION-

According to the Indian Contract Act, 1872, competency is a requisite condition for any party before entering into any agreement. Section 11 of the Contract Act says- “Every person is competent to contract who is of the age of majority according to law to which he is subject, and who is of sound mind, and is not disqualified by law to which he is subject.”
Thus, the section asserts the following persons who are unable to enter into a contract-
1) Minors
2) Persons of unsound mind
3) Persons disqualified by law
A minor and contract law does not go hand in hand and the majority is a requisite condition for a valid contract.

WHO IS A MINOR?

A minor is a person who has not yet completed the age of majority by law to which he is subject. The age fixed by the law can be different for various legal jurisdictions. In India, according to the Indian Majority Act, 1875- the age of majority is attained after the completion of 18 years except in the case of a person where a guardian has been appointed by the Court, the age fixed is 21 years. However, it is to be noted that the Indian Majority Act, 1875 has been amended and the age of the majority is considered to be 18 years, irrespective of the fact that a guardian has been appointed of that minor. The bill in this regard has been passed by both the Houses of Parliament but the President’s assent is yet to be attained.

WHETHER MINOR’S AGREEMENT IS VOIDABLE OR VOID ALTOGETHER?

Section 10 of the Contract Act talks about the competency of the parties and Section 11 talks about persons who are not allowed to enter into a contract. But neither section makes it certain, what will be the consequences of a minor entering into an agreement, whether it would be voidable at his option or altogether void. Thus, these provisions had created a legal conundrum about the nature of a minor’s agreement. The Privy Council finally resolved this controversy in the year 1903 through the landmark case of Mohori bibi vs Dharmodas Ghose where Dharmodas Ghose, a minor, mortgaged his house for Rs. 20,000 to a money lender. At the time of the contract the legal representative, who acted on behalf of the moneylender was aware that the party was a minor. The minor brought a suit against the moneylender stating that he was a minor at the time of the contract and, therefore, the contract was void and incompetent. But at the time of Appeal to the Privy Council, the defendant died and the Appeal was filed by his wife, Mohori Bibi.
The Privy Council by clearing the air in the above case said that the minor’s agreement is void ab initio i.e. void from the beginning. The general belief that “every man is the best judge of his own interest” is excluded in the case of a minor.

WHAT WILL BE EFFECTS OF MINOR’S AGREEMENT?

A minor’s agreement is considered void thus, there should be no duty to perform any part of the contract from either party and the effects of the same are also void. But suppose that a minor by misrepresenting his age to mislead another to contract with him, will there be any estoppel against him?

No Estoppel against a minor-

The question of estoppel against the minor raised a legal difficulty among the authorities. But was settled by the pertinent authority that there is no such estoppel against a minor. Estoppel means, if a person makes a statement that misleads another person, he cannot deny the same statement in the future when his obligation in respect of his statement arises. The doctrine of estoppel prevents a party to state something which contradicts his previous statements. Thus, the minor is not estopped from presenting the defense of infancy. The reason is, there can be no estoppel against a statutory provision given by law. But in the Mohori bibi case, the defendant misrepresented his age in order to mortgage his house but the moneylender was already aware of the fact that the defendant was a minor. Therefore, the Privy Council did not consider the doctrine of estoppel as the plaintiff was not misrepresented or mislead by the statement of the minor.
Considering the various decisions of different High Courts of India, it is to be noted that the minor can plead minority as a defense even though at the time of making the agreement, he falsely stated that he is not a minor.

Doctrine of Restitution-

If a minor has gained a property or any goods by falsely representing his age, he can be compelled to restitute it, but only if the same is traceable. The Courts may, on the ground of equity, ask the minor to return his ill-gotten gains as he cannot have under the guard of infancy liberty to cheat. Where the minor has sold the property or goods, he cannot be made to repay or restore the value of goods, because that would amount to enforcing a void contract. The doctrine of restitution cannot be applied in cases where it becomes difficult to trace the goods or the minor has acquired cash instead of goods.
A well-known case of Leslie (R) Ltd v. Sheill where a minor tricked some money-lenders by misrepresenting his age and got them to lend him the amount of £ 400 thinking of him being an adult. The plaintiff attempted to recover the principal amount and interest as damages for fraud but failed as there is no estoppel against the minor. Further, the money-lenders relied upon the doctrine of restitution, contending that the minor should be liable under the equitable grounds to restore the money. Lord Sumner rejecting this contention held that the money paid to the defendant (minor) was used for his own use. There is no way of tracing the money and no option of restoring it as this would lead to enforcing a void contract.
However, where a minor moves the court for cancellation of his contract, the court may grant relief with a condition that he shall restore all the gains obtained by him under the contract, or make suitable compensation to the opposite party under Section 30 and Section 33 of the Specific Relief Act, 1963.

No liability in tort arising out of contract-

A minor’s agreement is invalid of all its effects. A minor is not capable of giving consent and thus there being no good consent, it could be laid down no change in the position or status of the parties. It is to be noted that a minor cannot be held liable for anything which would indirectly enforce his agreement. Therefore, one cannot convert a contract into a tort to enable the suit against a minor. The Calcutta High Court in a case said- “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”. Thus, under this principle, the minor is not held liable in tort.
However, when the tort committed is free from the contract and which is not directly connected with the contract, the fact that a contract is also involved will not release the minor from his liabilities. This can be explained through the case of Burnard v. Haggis. The facts of the are as follows- The defendant who was an undergraduate and a minor lent a horse for the purpose of going for a ride. He clearly stated that he did not want a horse for jumping. The defendant then gave the horse to his friend who used the horse for jumping, with the result that it fell and was injured. The defendant was held responsible under tort as the act resulting in injury to the horse was outside the purview of the contract, and in indirect relation with the contract.

WHAT ARE BENEFICIAL CONTRACTS?

A minor’s agreement as laid down in the Mohori Bibi case is absolutely void. However, a contract for the benefit of a minor is enforceable. Under Section 30 of Indian Partnership Act, 1932- “a person who is a minor according to the law of which he is a subject may not be a partner in a firm, but with the consent of all the partners, for the time being, he may be admitted to share the benefits of the partnership.” This can be done through an agreement with his guardian and other partners. Thus, the minor is only liable for the benefits and not for liabilities or debts of the partnership firm. A minor will have the option of retiring from the contract of this nature on completion of 18 years of age within a reasonable time. Apart from a beneficial contract under the Indian Partnership Act, contracts of marriage or marriage of Muslim minor girl, contracts of apprenticeship are all considered under beneficial contracts.

WHAT WILL BE THE LIABILITY OF A MINOR FOR NECSSARIES?

A minor will have liability for necessaries. The word “necessaries” is not defined in the Act but an illustrative explanation of the meaning of the term is given by Alderson B in his judgment in Chapple v Cooper “Things necessary are those without which an individual cannot reasonably exist. In the first place, food, raiment, lodging, and the like. Articles of mere luxury are always excluded, though luxurious articles of utility are in some cases allowed.” A minor is also accountable for the necessary services rendered to him like- provision to education, medical facilities or legal advice. Thus, “necessaries” is a relative factor and may be determined according to the circumstances and facts of the case.
According to Section 68 of the Contract Act, “If a person incapable of entering into a contract, or anyone whom he is legally bound to support, is supplied by another person with 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” Therefore, two conditions are required to prove the liability of a minor-
(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.

CONCLUSION-

The position of minor under the Indian Contract Act, 1872 is to be concluded as that a minor cannot enter into a contract and the same would be void ab initio. The minor cannot on attaining majority rely on ratification of the contract made by him during his minority. The reason is that ratification relates back to the past when the person was still a minor thus, a contract that was void cannot be made legitimate subsequently. If it is necessary, a new contract can be made after attainment of the age of majority with a fresh consideration. Further, a minor’s agreement cannot be called for specific performance as it would result in performing a void agreement. However, a minor will be held liable only for the claim of necessaries.