KES’ Shri. Jayantilal H.

Patel Law College, Mumbai

Minor’s Capacity to Contract with Leading Case Laws

CONTRACT

A project submitted in partial fulfilment of the requirements for

The Fifth Semester of B.A.LL.B Course

BY- DIPANSHI BAJAJ

Third Year B.A.LL.B

Division-A

Roll No.- 9

Under the Supervision of- Asst. Prof. Pooja Maniar

Date: 25th September, 2023

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 Declaration

The work presented in this assignment/project has been conducted by me under the guidance
of Asst. Prof. Pooja Maniar. The observations, analyses, and interpretations made in this study
as well as the conclusions arrived at and included in the assignment/project are entirely my
own. The work reported in this is original, and to the best of my knowledge, has not been
submitted in part/full for any other diploma or degree of KES’ Shri. Jayantilal H. Patel Law
College, or any other University or Institute.

Signature of the Student Signature of Asst. Prof.

(Name): DIPANSHI BAJAJ (Name): Ms. Pooja Maniar

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 TABLE OF CONTENTS

1. Introduction………………………………………………………………………………………………….4
2. Competency of contract……………………………………………………………………….………4
3. Nature of Minor’s Agreement………………………………………………………………..…....5
4. Case: Mohori Bibee v/s Dharmodas Ghose………………………………………………….6
5. Effects of Minor’s Agreement………………………………………………………………………7-8
a) No estoppel against a minor
b) No Liability in Contract or in Tort arising out of Contract
c) Doctrine of restitution
d) Minor seeking relief, compellable to restore

6. Beneficial contract…………………………………………………………………………..…….………9
7. Contract of marriage…………………………………………………………………………….………..9
8. Contract of Apprenticeship……………………………………………………………………………10
9. Rectification……………………………………………………………………………………..………….11
10.Necessaries……………………………………………………………………………………………….…12
11.Nature of liability…………………………………………………………………………………………12
12.Case: Khan gul vs Lakha Singh……………………………………………………………………13-14

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 INTRODUCTION

As per the Indian Contract Act, 1872, under its section 2 (h), a contract can be defined as an
agreement made between two or more individuals that are enforceable by law. A contract is
an agreement enforceable by law. The Contracts or agreements among various individuals are
formed and validated as per the provisions of the Indian Contract Act.

1. The essentials of a valid Contract are:

a) Intention to create a legal relationship
b) Lawful Consideration
c) Competent parties
d) Free consent
e) Lawful Object
f) Offer and Acceptance
g) Not being expressly declared void

Section 10 of the Indian Contract Act states that the parties must be competent to contract.
Competence is defined in Section 11 of the Indian Contract Act. It says that:

Who are Competent to Contract: 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 sound mind, and is not
disqualified from contracting by any law to which he is subject.

• Thus, this section declared the following persons to be incapable of forming a contract
a) Minors
b) Persons of unsound mind, and
c) Persons disqualified from law to which they are the subject.

AGE OF MAJORITY

• The age of majority is generally eighteen years except for the cases where a guardian
of person, property, or both have been appointed by the court, in which case the age
of majority is twenty-one years.

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 • The age of majority of a person is to be determined according to the law to which he
is subject. Formally, the age of attaining majority was 21 years in England. Now, as per
the Family Law Reform Act, 1969, a minor is a person under the age of eighteen years
• Earlier, a minor was referred to as an infant but this act has changed this term to
“minor”.

NATURE OF MINOR’S AGREEMENT

Section 10 requires that the parties to a contract must be competent and Section 11 declares
that a minor is not competent. But neither section makes it clear whether, if a minor enters
into an agreement, it would be voidable at his option or altogether void. These provisions had,
therefore, quite naturally given rise to a controversy about the nature of a minor's
agreement." The controversy was only resolved in 1903 by the Judicial Committee of the Privy
Council in their well-known pronouncement in Mohori Bibee v Dhurniodas Ghose.

Name Of The Case: Mohori Bibee v/s Dharmodas Ghose

Citation: (1903) ILR30Cal539(PC)

Date Of Judgement: 04 March 1903

Brief Facts And Disputes Of The Case:

The respondent was Dharmodas Ghose, who was a minor, received a loan from Brahmodutt,
a lender in Calcutta, by saying that he was an adult and had written a mortgage deed in his
favour to get a loan. At the time when the mortgage was being considered for advance money,
At the time of standing, Kedarnath, the agent of Brahmodutt, had received information that
the respondent was a minor; So, he cannot execute the deed. But still he executed a mortgage
deed from Dharamdos Ghose.

The minor then filed a suit against Brahmodutt by his mother and guardian in which he appeal
to the court to cancel the mortgage deed, as he was a minor at the time of the mortgage deed
being executed. Justice Jenkins (Jenkins J.) who was a judge of the trial court, Accepting the
appeal of the respondent, he cancelled the mortgage deed.

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The appeal against the order was also quashed by the High Court; Therefore, the appellant
appealed to the Privy Council. Brahmodutt had died at the time of making this appeal. So, he
was replaced by his successor, Mohiri.

Arguments presented by Mohori Bibee:

While cancelling the mortgage deed, the court should have forced the minor to pay the money
(Rs. 10,500) under the deed Return it. In favour of this argument, he referred to the Specific
Relief Act, 1963 under which the Court has the power to pass such an order.

Under Sections 64 and 65 of the Indian Contract Act 1872, the return of the money received
under the deed cancelled may be compelled.

According to the principle of 'Estoppel', the minor, who called himself a minor, cannot now be
allowed to argue that he was a minor while contracting.

The Contract made by the minor is null and voidable.

Verdict: The court dismissed the appeal.

Rule propounded:

a) The contract made by the minor is not null and void from the beginning
b) Section 64 of the Contract Act against the minor does not apply as these sections
require that the parties to the contract should be able to make contracts.
c) The principle of restriction cannot apply in this case because both the parties were
aware that the contract was being done with a minor.
d) Under the Specific Relief Act, 1963, the minor may be compelled to return the benefits
availed under zero contract. But in this case, the court does not think it appropriate,
because when Dharmodas Ghose was given a mortgage loan, the appellant knew that
he was a minor.

Conclusion:

Based on the above principles, the Privy Council rejected the appeal of the appellant.

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EFFECTS OF MINOR’S AGREEMENT

A minor's agreement being void, ordinarily it should be wholly devoid of all effects." If there
is no contract, there should, indeed, be no contractual obligation on either side. Consequently,
all the effects of a minor's agreement must be worked out independently of any contract.

No Estoppel Against a Minor

The principle of estoppel doesn’t apply to minors. As per this principle, when one person
intentionally causes or permits another person to believe a thing to be true and to act upon
such belief, neither he nor his representatives can deny the truth of that thing in any suit or
proceeding between himself and such person or representative.

An infant or minor is not estopped for setting up the defence of incompetence due to minority.
This is because of the reason that the policy of the law of contract is to protect minors from
any contractual liability and hence the defence of estoppel cannot be used against them.

The Madras High Court, in (Vaikuntarama Pillai v. Authimoolam Chettiar), reaffirmed that the
principle of estoppel cannot override the provision that minors are incapable of contracting
and therefore not responsible for any liabilities. Similarly, in (Gaganand Singh v. Rameshwar)
Singh, the Patna High Court agreed with this principle.

No Liability in Contract or in Tort arising out of Contract

A minor agreement is devoid of all effects. "A minor is in law incapable of giving consent, and,
there being no consent, there could be no change in the character" or status of the parties.

(Johnson V Pye in 1965), it was said that if by falsely representing a minor obtained load from
someone, he cannot be made to repay the loans in the form of damages for deceit. Hence, a
minor cannot be held liable for anything which would directly or indirectly enforce any
agreement. The Calcutta High court upheld the principle that a contract cannot be converted
into a tort to sue a minor.

(Burnard V Haggis), the defendant, a Cambridge undergraduate and a minor, hired a horse for
the purpose of going for a ride. The defendant then gave the horse to a friend who used it for

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jumping. As a result, it fell and was injured. The minor was thus held liable for the injuries to
the horse as in according to the contract, the horse was to be used only for the purpose of
riding and jumping. The injuries caused to the horse had happened outside the contract and
could nit said to be the abuse of the contract.

Doctrine of Restitution

If an infant obtains property or goods by misrepresenting his age, he can be compelled to

restore it, but only so long as the same is traceable in his possession. This is known as the
equitable doctrine of restitution. Where the infant has sold the goods or converted them, he
cannot be made to repay the value of the goods, because that would amount to enforcing a
void con- tract.29 Again, the doctrine of restitution is not applied where the infant has
obtained cash instead of goods.

This above-mentioned principle was observed in (Leslie (R) Ltd V Sheil). According to the facts
of this case, a minor succeeded in deceiving some money lenders by misrepresenting their
age and were successful in obtaining a sum of 4000 euros from them. Their attempt to recover
the amount and subsequent damages failed due to the principle explained above.

However, when a minor asks the aid of the court for the cancellation of a contract, the court
may grant relief with the condition that he shall restore all the benefits obtained by him under
the contract and also make suitable compensation to the other party.

Minor seeking relief, compellable to restore

where an infant invokes the aid of the court for the cancellation of his contract, the court may
grant the relief subject to the condition that he shall restore all benefits obtained by him under
the contract, or make suitable compensation to the other party.

The section authorised the courts to order any compensation that justice required to be paid
by the party at whose instance a contract was cancelled. The first well-known case decided
under the section is that of (Mohori Bibee v Dhurmodas Ghose).

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BENEFICIAL CONTRACTS

The contracts beneficial to a minor in the following instances:

• If a minor has advanced mortgage money and there is a mortgage in his favour, he can
sue for enforcement of the contract
• a minor can sue on a Promissory Note executed in his favour.
• A contract for the marriage of a minor is also prima facie for his or her benefit. The
contract of marriage cannot be enforced against the minor.
• A minor can also be supplied with necessaries suited to his condition in life (e.g., food,
lodging, education) and the supplier of such necessaries is entitled to be reimbursed
from the property of the minor.
• A lease to a minor is void.

A minor cannot be a partner in a partnership firm. However, he can be admitted to the benefits
of partnership as per Section 30 of the Indian Partnership Act. The minor shall not share losses
except when liability to third parties has arisen. But then too, he is liable only up to his share
in the partnership assets. He cannot be made personally liable.

CONTRACTS OF MARRIAGE

A contract for the marriage of a minor is also prima facie for his or her benefit. "It is customary
amongst most of the communities in India for parents to arrange marriages between their
minor children and the law has to adapt itself to the habits and customs of the people." It has,
therefore, become well-established, almost without any controversy, "that while the contract
of marriage could be enforced against the other contracting party at the instance of the minor
it cannot be enforced against the minor".

Where the agreement for marriage of a minor involves statutory violation, e.g. the Hindu
Marriage Act, 1955, the age of the girl has to be 18 years, the agreement is likely to be avoided.
In this case, on the date of engagement the girl was not of 18 years but on the date fixed for
marriage she would have completed 18 years. The agreement was held to be valid. The other
party ran away from the agreement. The court allowed her compensation of Rs27,000 for
mental pain and suffering.

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Marriage of Muslim minor girl (Kumari shahnoor v state of UP AIR 2007NOC 437)

Parties were governed by Shariat law. The medical report showed that the girl had not attained
the age of majority. She had, therefore, no right to enter into the contract of marriage on her
own free will. She could have been given in marriage only by her father or guardian. The Kazi
who performed the ceremony of marriage was in know of things. The marriage was not valid.
She could not have been forced to live with her husband against the mandate of Quran Sharif.
The father was entitled to her custody.

CONTRACTS OF APPRENTICESHIP

Contracts of apprenticeship is another species of contracts which are for the benefit of minors.
The Indian Apprentices Act, 1850 provides for con- tracts in the nature of contracts of service
which are binding on minors. The Act was passed, as the preamble of the Act shows: "For
better enabling children, and specially orphans and poor children brought up by public charity,
to learn trades, crafts and employments, by which, when they come to full age, they may gain
a livelihood.

Case: (Raj Rani V Prem Adib,1947)-.

The facts of the case were as follows, Raj Rani's father entered into a contract on her behalf
(as she was a minor) with a film producer, Prem Adib. According to the terms of the contract,
the minor was to act in a film on payment of a certain amount. Later, she was not given any
work. As a result, she sued the producer of the movie for breach of contract. The Bombay High
Court held that neither she nor her father could sue on the promise. If it was a contract with
the plaintiff, she being a minor, it was void. The contract with the father was also void because
there as no consideration.

TRADE CONTRACTS NOT INCLUDED IN BENEFICIARY CONTRACT

This category of beneficial contracts does not include ordinary trade contract.

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In (Cowen V Nield), a minor was carrying a trade contract for the supply of clover and hay.
The plaintiff paid him part of the payment. On this, the defendant delivered him clover but
failed to deliver hay. The plaintiff's action for recovering the amount of the cheque failed.
The court held that only the contracts which are for the benefit of the minor can be
supported. The trade contract was dine done for the benefit of the minor hence the minor
cannot be held liable.

• A minor will have the option of retiring from the contract made for the benefit of the
minor on attaining majority provided that he exercises the option within a
reasonable amount of time.

RACTIFICATION

A person cannot ratify an agreement made by him during minority once he attains majority.
Ratification deals back to the date of making of the contract. Once a contract which was
then void cannot be made valid due to subsequent ratification. It would hence be a
contradiction of terms to say that a once void contract can be made valid by subsequent
ratification. When a minor attains majority.

In a case decided by the Allahabad High Court, the court stated A minor borrowed a sum of
money, placed a simple bond on it and, after reaching the majority, placed a second bond on
the original loan plus interest. He argued that the claim to the second bond was not
sustainable. As the bond was without consideration and did not come under Section 25(2) of
the Indian Contract Act.

NECESSARIES

The liability is only for necessaries, but there is no definition of necessaries in the act.

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.

Thus, "what is necessary" is a relative fact to be determined with reference to the fortune
and circumstances of the particular minor; articles, therefore, that to one person might be

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mere conveniences or matters of taste may, in the case of another, be considered
necessaries, where the usage of society renders them proper for a person in the rank of
life in which the infant moves.

LIABILITY FOR NECESSARIES

Sec 68- Claim for necessaries supplied to person incapable of contacting.-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.

Illustrations

(a) A supplies B, a lunatic, with necessaries suitable to his life. A is entitled to be reimbursed
from B's property.

(b) A supplies the wife and children of B, a lunatic, with necessaries suitable to their condi-
tion in life. A is entitled to be reimbursed from B's property.

NATURE OF LIABILITY

There are two theories relating to liability of a minor's estate for necessaries.

In one of the theories, it is suggested that the liability does not depend upon minor's
consent. It arises due to the necessities supplied to him, and hence is quasi-contractual in
nature

The other view of liability in England is that it is contractual. A minor is not absolutely free of
contractual capacity. A contract for necessaries is just one of those categories which a minor
is allowed to make.

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 KHAN GUL vs LAKHA SINGH CASE

FACTS

The defendant (minor) intentionally misrepresented himself as an adult and agreed with the
plaintiff for the sale of his property. The plaintiff paid him a certain sum of money and was
ready to pay the balance amount, but the defendant refused to furnish the possession of the
property to the plaintiff, which led to this case.

ISSUE

• Whether the doctrine of estoppel applies to minors?

• Whether the defendant can refuse to perform his part of the contract and
additionally keep the benefit (consideration) received by him?

RATIO DECIDENDI

• The courts analyzed the interpretation of the term “Person” stated in section 115 of
the evidence act which deals with the doctrine of estoppel. It is a rule in interpreting
a statute that when a general principle is incompatible with a special principle then,
that special principle must be considered as an exception to the general principle
consequently after intense analysis, the courts considered the law of estoppel as a
general principle and as the section 11 of contract act which was created by
legislation particularly to protect minors as a special principle.
• And while application of general principle “doctrine of estoppel” the minors would
be exempted from the general rule.
• Courts also examined the case of Mohori Bibi vs Dharmodas case, which also stated
that the law of estoppel cannot apply to minors but the case did not deal with the
subject, as it was not that case.
• Regarding the second issue, the court observed that under English law, if a
minor/infant misrepresenting himself as an adult persuades another party to enter
the contract, the minor will be liable neither for breach nor for damages in tort law.
But the same would activate the equitable jurisdiction of the court. As per the rule of
equity, no person could take advantage of his own fraud.

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DECISION

The courts concluded that the doctrine of estoppel cannot apply to minors as it would cause
absurdity and injustice.

“it would be sheer injustice if an infant keeps not only property but also the money received
under the contract. As the transaction is wiped out is only fair that both parties should
revert and in this case, restitution is not provided because there is a contract instead it is
provided there is none and both parties should revert to original status”.

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