Professional Documents
Culture Documents
Capacity To Contract
Capacity To Contract
1. The defendants contention that the minor had falsely misstated his age, the law of estoppel should apply against him
and he should not be allowed to contend that he was a minor,
was considered. The Privy Council found that the fact that the
plaintiff was a minor at the time making of the agreement was
known to the defendants agent. It was held that the law of
estoppel as stated in Section 115, Indian Evidence Act, was not
applicable to the present case, where the statement (about age)
is made to a person who knows the real facts and is not misled
by the untrue statement. It was observed :
There can be no estoppel where the truth of the matter is
known to both the parties, And their Lordships hold, that a false
representation, made to a person who knows it to be false, is not
such a fraud as to take away the privilege of infancy
2.
under another provision also, i.e. Section 41, Specific Relief Act,
1877. The section reads as follows :
On adjudging the cancellation of an instrument, the Court may
require the party to whom such relief is granted to make any
compensation to the other which justice may require.
As regards this section, it was held that this section gives discretion
to the court to order compensation, but under the circumstances of
this case justice did not require the return of money advanced to
the minor, as the money had been advanced with the full
knowledge of the infancy of the plaintiff.
commits a tort he is liable for that In the same way and to the same
extent as an adult person. commits a tort. For example, a minor
misrepresents his age and fraudulently stating that he is of the age
of majority takes a loan from another person. Under the law of
contract the minor cannot be asked to repay .the loan as a minors
agreement is void, but he has also committed fraud for which the
liability for the tort of deceit can be possibly be there. The question
which in such case arises is: Should we make him liable for fraud ?
If we do so, it may also mean enforcement of an agreement which
is void.
On this point the Courts have held that where permitting an action
in tort will result in an indirect enforcement of an agreement the law
will not permit such an action, because one cannot make an infant
liable for breach of a contract by challenging the form of action to
one ex delicto. In Johnson Vs. Pye (1665), a minor falsely
stated that he was of the age of majority and obtained a loan of
300 pounds. It was held that the minor cannot be asked to repay
the loan by bringing an action for deceit against him. Similar was
the decision in Jennings Vs. Rundall (1799). There a minor,
who hired a mare for riding, injured her by over-riding. It was held
that he could not be made liable for the tort of negligence because
that would mean making him liable for the breach of contract of
bailment.
under the contract, the action for the same can lie. This may be
illustrated by reference to Burnard Vs. Haggis (1863) There a
minor hired a mare. It was expressly agreed that the mare will be
used only for riding and not for jumping and larking. The mare
was made to jump over a fence, she was impaled on it and killed.
It was held that the minor was liable for negligently killing the mare
as his act was totally independent of the contract made by him.
Burnard Vs. Haggis was followed in the case of Ballett Vs.
Mingay (1943)
Chapter
recognises
Contract,
Certain
i.e.
Relations
Quasi-contractual relations.
Section 68 in that
2.
3.
4.
Illustrations
(a)
supplies
condition in life.
property.
(b)
B, a lunatic, with
A is entitled to be
Section 30, Indian Partnership Act declares that a minor 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 the benefits of partnership.
If a minor is admitted to the benefits of partnership, he has a right
to such share of the property and of the profits of the firm as may
be agreed upon and may also have access to and inspect and
copy any of the accounts of the firm.
personally liable towards the third parties for any act of the firm, but
only his share is liable for such acts.
him, so as to
prevent him from alleging that he was a minor when the contract
was made ?
In Mohori
According to Leslie
Vs.
Sheill
the money
sections 64 & 65, Indian Contract Act for the benefit obtained by
him under a void contract ?
2.
the provisions contained in sections 38, 39, and 41, Specific Relief
Act, 1877 ?
Both the above questions have been answered in the negative
by the Courts in the case of Mohori Bibee Vs. Dharmodas
Ghose.
Beneficial Contracts of Service and Apprenticeship
Position in England
Contracts of
she
would
not
accept
any
professional
the infant apprentice ranged between 6d. and 9d. per show during
the first three years and between 6d. and 1 sh. Thereafter. Nothing
was to be paid to her when she was not employed and the plaintiff
could terminate the contract, if she was not found suitable for the
stage dancing. It was held that considering the contract as a whole
its terms were unreasonably prejudicial to the interests of the infant
apprentice and were, therefore, not enforceable against her.
An infant is not liable for every beneficial contract. The liability is
only for contracts of service or apprenticeship. There is no liability
for a trading contract. In Cowern Vs. Nield the defendant, an
infant, who was a trader in hay and straw, agreed to supply some
clover and hay to the plaintiff. He received the payment from the
plaintiff in advance but failed to supply the material. In an action
against the infant defendant to recover back the price paid it was
held that even though the contract was beneficial to the defendant,
he being an infant could not be made liable for the same.
Contracts analogous to those of service and apprenticeship
A minor is bound for a beneficial contract of service or
apprenticeship, or any contract analogous thereto. This may be
illustrated by referring to the decision in
Stadium Ltd. T5he plaintiff, who was an infant, applied for licence
as a boxer, stating as under :
I hereby apply for a licence as a boxer and, if the licence is
granted to me, I declare to adhere strictly to the rules of the British
Boxing Board (1929) as printed and abide by any further rules or
alterations to existing rules as may be passed
A licence was duly granted to him and renewed thereafter.
In
accordance with the rules the plaintiff was disqualified in one of the
contests for hitting below the belt and a sum of 3000 pounds due to
him was withheld. The infant sued to recover that amount. It was
held that the infants contract with the Board of Control was so
closely connected with the contract of service that the same was
binding against him and, therefore, he could not recover the
amount.
Position in India
Contracts of service
Unlike English Law contracts of service entered into by a minor are
void. Neither a minor can enter into such a contract himself, nor
can the minors guardian or other representative make a contract
on his behalf. The following observations of Desai J. in Raj Rani
Vs. Prem Adib explains the position :
Now though according to English law the minor would be liable in
the case of a contract of service where the contract was for his
benefit, it is clear that under Section 11, Contract Act the minors
contract being void, the minor would not be held liable .. If the
minors contract is a void contract, he is not entitled to sue for
damage for breach of such contract including the contract of
service where contract is entered into by the minor himself .. If
then a minor cannot sue on a contract of service entered into by
him personally, is entitled to sue for obtaining practically the same
relief, simply because the contract has been entered into for and
on his behalf and for his benefit by his guardian ? I have already
referred to the fact that a minor cannot employ an agent, and,
therefore, it cannot be said that the contract was entered into for
and on his behalf in that sense
The facts of Raj Rani Vs. Prem Adib are as follows : The father
of Raj Rani, who was a minor, entered into a contract on her behalf
with Prem Adib, a film producer. According to the contract Raj Rani
was to act as a film actress in the defendants studio, on payment
of a certain amount. Raj Rani was not given any work. She sued
the producer, Prem Adib for the breach of contract. It was held that
the plaintiff, being a minor, the contract was void.
It was also
Vs.
Lalji Karamsi
(1941)
In khimji
the contract was made on behalf of the minor by his guardian and if
the court found that it was for his benefit the Court enforced it.
In Abdul Razak Vs. Mahomed Husein (1917) The Bombay
High Court allowed an action against a muslim father, who
promised to give his minor daughter in marriage to the plaintiff, but
subsequently there was a breach of the contract. In this case after
the defendant agreed to give his minor daughter in marriage to the
plaintiff, the plaintiff spent some amount by presenting ornaments
and clothes to the defendants daughter and incurred certain other
expenses in connection with the agreement for the marriage. On
the breach of the contract of marriage, it was held that the plaintiff
was entitled to recover the amount from the defendant under
sections 65 & 73 of the Contract Act.
Contracts beneficial to a minor
While no liability can be incurred by a minor he is not debarred from
accepting a benefit. If a minor has advanced mortgage money and
there is a mortgage in his favour, he can sue for enforcement of a
contract. (Raghava Chariar Vs. Srinivasa ) 1916
Similarly, a minor can sue on a promissory Note executed in his
favour. (Ranganazu Vs. Madura Basappa) (1913)
Position of a person of Unsound Mind
We have already noted that according to section 11 a person of sound
mind is competent to contract. It means that if a person is of unsound
mind he is as much incompetent to contract as a minor. What is sound
mind for the purpose of making a valid contract has been defined by
section 12 as under :
A person is said to be of sound mind for the purpose of making a
contract if, at the time when he makes it, he is capable of
about here and there and therefore, the transaction made by him is
void. It was held that defendant No. 1 was incapable of understanding
business and forming a rational judgement as to its effect upon his
interest at the relevant time and, therefore, the sale deed executed by
him in favour of the plaintiffs did not confer any title on them.