Comprehensive Guide to Contract Laws for Minors

Capacity to Contract
Chapter 4
Who is competent to enter into a
contract?
Sec. 11 defines the persons who are competent to
contract, ‘Every person is competent to contract who
is:
 Of the age of majority according to law to which he is
subject
 Of sound mind
 Not disqualified from contracting by any law to which he
is subject.
Who is competent to enter into a
contract?
Sec. 11 defines the persons who are competent to
contract, ‘Every person is competent to contract who
is:
 Of the age of majority according to law to which he is
subject
 Of sound mind
 Not disqualified from contracting by any law to which he
is subject.
 Minor: According to Sec. 3 of the Majority Act,1875 as
amended by the Majority (Amendment) Act, 1999, a
person, domiciled in India, who is under 18 years of
age is ‘minor’.
Laws regarding Minor’s Agreement
 An agreement with or by a minor is void and
inoperative as against him ab-initio.
 An agreement with or by a minor is void and
inoperative as against him ab-initio.
 Mohiribibee Vs Dharmodas Ghose (Appeal Case)
The plaintiff, a minor, mortgaged his houses in favor

of the defendant, a moneylender, to secure a loan of
INR 20000. A part of this amount, INR 8000, was
actually advanced to him. While considering the
proposed advance, the money-lender received
information that the plaintiff was still a minor.
Subsequently, the infant commenced the action stating
that he was under age when he executed the mortgage
and the same, should therefore, be cancelled.
 No restitution except in certain cases: A minor can’t be
ordered to make compensation for a benefit obtained
under a void agreement because Sec. 64 and Sec. 65
of the Contract Act, which deals with restitution, apply
only to contracts between competent parties and are
not applicable to a case where the parties are
incompetent to contract.
 No restitution except in certain cases: A minor can’t be ordered
to make compensation for a benefit obtained under a void
agreement because Sec. 64 and Sec. 65 of the Contract Act,
which deals with restitution, apply only to contracts between
competent parties and are not applicable to a case where the
parties are incompetent to contract.
 But, according to Sec.33 of Specific Relief Act, 1963, on
adjudging the cancellation of an instrument, the court may
require the party to whom such relief is granted, to restore, so
far as may be, any benefit which he may have received from
the other party and to make any compensation to him, which
justice may require.
 Court may compel restitution by a minor when he is a plaintiff
and seeks the assistance of court and the section is
inapplicable if he happens to be merely a defendant in a suit.
 The court will not grant restitution in the following
circumstances even if he is a plaintiff:
 Where the other party was aware or suspicious of
minority
 Where the other party was unscrupulous (unfair) in his
dealings with the minor.
 Where, though the minor has misrepresented his age,
the other party was so zealous to enter into the
transaction that the false representation exerted no
influence on him.
 Where the other party fails to satisfy the court that the
justice requires the principle of restitution in his favour.
 Jagar Nath Vs Lalta Prasad (Appeal Case)
Lalta Prasad (LP), a minor, induced Jagar Nath (JN)
to purchase a property from him. Jagar Nath didn’t
know about his minority. He agreed and made an
agreement. Later, LP filed a case for the recovery of
the property sold and JP wanted the advance given to
him to LP.
Decide the case.
 Beneficial agreements are valid contracts: An
agreement which is of some benefit to the minor and
under which he is required to bear no obligation, is a
valid contract. Such contracts can be enforced at his
option but not at the option of the other party.
 Beneficial agreements are valid contracts
 Raghava Chariar Vs Srinivasa
A duly executed transfer by way of sale or mortgage
in favour of a minor, who has paid the whole of
consideration money was challenged in the court. Is the
transfer enforceable by the minor?
 Sharafat Ali Vs Noor Mohd.
Is a promissory note executed in favor of a minor
valid and can it be enforced in a court?
 Raghava Chariar Vs Srinivasa
A duly executed transfer by way of sale or mortgage

in favour of a minor, who has paid the whole of
consideration money was challenged in the court. Is the
transfer enforceable by the minor?
 Valentini Vs Canali
The plaintiff, a minor, agreed with the defendant to
become a tenant of his house and to pay Pound 100
for the furniture therein. He paid Pound 68 in cash
and gave a promissory note for the balance. The
plaintiff occupied the premises and used the furniture
for some months and then, brought an action for the
refund of the consideration paid by him and the
cancellation of the promissory note.
Decide the case.
 Contracts of apprenticeship and service by a minor: An
agreement of service by a minor is void. But, contracts
of apprenticeship are special types of contracts which
are made for the benefit of the minor. A contract of
apprenticeship is valid and binding upon a minor
because such a contract is protected by the
‘Apprentice Act, 1961’ which was passed to better
enable children to learn trade, craft & help them in
employment so that they may gain a livelihood. But,
this act will apply only if
 A minor must not be less than 14 years of age.
 The contract must be entered into, on behalf of
minor, by his guardian

 Contracts of apprenticeship and service by a minor
 Raj Rani Vs Prem Adib
The plaintiff, a minor, was allotted by the
defendant, a film producer, the role of an actress in a
particular film. The agreement was made with her
father. The defendant, subsequently, allotted that role
to another artist and terminated the agreement with
the plaintiff’s father. Plaintiff sued him.
Decide the case.
 Contracts of apprenticeship and service by a minor
 Roberts Vs Gray
The defendant, a minor, but was more than 14
years old, agreed with the plaintiff, a noted billiards
player, to join him in a billiards-playing tour of the
world. The contract was entered into, on behalf of
minor, by his guardian. The plaintiff spent time and
money in making arrangement for billiards matches,
but the defendant repudiated the contract. The case
was filed.
Decide the case.
 No ratification on attaining the age of majority:
‘Ratification’ means ‘subsequent adoption and
acceptance of an act or agreement’.
 A minor’s agreement, being a nullity and void ab-
initio has no existence in the eyes of law.

 Consideration which passed under an earlier
contract can’t be implied into the contract which

the minor enters on attaining majority.
 Thus, consideration given during minority is no
consideration.
 No ratification on attaining the age of majority
 Suraj Narain Vs Sukhu Ahir
A minor, borrowed a sum of money by executing a
promissory note and after attaining majority executed a
second bond in respect of the original loan. The case
was filed for the enforceability of the second bond.
 No ratification on attaining the age of majority
 Suraj Narain Vs Sukhu Ahir
A minor, borrowed a sum of money by executing a
promissory note and after attaining majority executed a
second bond in respect of the original loan. The case
was filed for the enforceability of the second bond.
 Sindha Shri Ganpatsinghji Vs Abraham
Services were rendered to a minor voluntarily during
minority. These services were continued even after
attaining majority at his request. Defendant (minor)
promised to compensate for the services received.
Subsequently, he failed to pay the promised
compensation.
 No estoppel against minor: Sec. 115 of Indian Evidence Act
explains ‘estoppel’ as ‘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 representatives shall be allowed, in any suit or
proceeding between himself and such person or his
representative, to deny the truth of that thing.
 But, this rule of ‘estoppel’ doesn’t apply to a minor. It means
that if a minor has, by misrepresenting his age, induced the

other party to contract with him even then he will not be held
liable and he CAN AVOID the contract by saying he is a minor.
 However, in this case, ‘doctrine of equitable restitution’ will
apply which means that if an infant obtains property or goods

by misrepresenting his age, he can be compelled to restore it
but only as long as the same is traceable in his possession.
 No estoppel against minor
 Leslie Vs Sheill
A minor succeeded in deceiving some
moneylender by lying about the age and got Pound
400 on the faith of him being adult. Later, the minor
refused to pay back saying that he was a minor at the
time when the loan was taken. A case was filed.
 Minor’s liability for necessaries supplied to him: Sec. 68
states that ‘if a person, incapable of entering into a
contract, or any one 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’.
 Minor being incompetent to contract can’t be a partner in a
partnership firm but under Sec. 30 of Indian Partnership
Act, 1932, he can be admitted to the ‘benefits of
partnership’ with the consent of all the partners.
 Minor being incompetent to contract can’t be a partner in a
partnership firm but under Sec. 30 of Indian Partnership
Act, 1932, he can be admitted to the ‘benefits of
partnership’ with the consent of all the partners.
 A minor can’t be adjudged insolvent, for he is incapable of
contracting debts.
 No ‘specific performance’ of the agreement entered into
by him as they are void ab-initio.
But, a contract entered into, on behalf of a minor,
 By his guardian or the manager of the estate is binding on
the minor and can be specifically enforced by or against
the minor provided:
 The contract is within the authority of guardian or
manager
 It is for the benefit of the minor
However, a guardian has no power to bind the minor by a

contract
 For the purchase of immovable property
 Of service on his behalf

 Minor can become an agent (Sec. 184) – He shall bind
the principal by his acts done in the past course of agency
but he can’t be held liable personally for negligence or
breach of duty.
breach of duty.
 Where a minor or an adult jointly enter into an agreement
with another person, the minor has no liability but the
contract as a whole can be enforced against the adult.
breach of duty.
 Position of minor’s parents - they are not liable for
agreements made by minor even though, the contract is
for the supply of necessaries to the minor. But, if the
minor acts as an agent of them, they will be held liable.
breach of duty.
 Position of minor’s parents - they are not liable for
agreements made by minor even though, the contract is
for the supply of necessaries to the minor. But, if the
minor acts as an agent of them, they will be held liable.
 A minor can’t be a shareholder of a company, being
incompetent to contract, unless the shares are fully paid.
 Minor’s liability in a tort: ‘Tort’ is a civil wrong. A minor
is liable for his tort, unless the tort is in reality a
breach of contract.
 Minor’s liability in a tort: ‘Tort’ is a civil wrong. A minor
is liable for his tort, unless the tort is in reality a
breach of contract.
 Jennings Vs Rundall
The defendant, a minor, had hired a horse to be
ridden for a short journey but he took it on a much
longer journey, with the result that it was injured. The
case was filed to recover damages.
 Burnard Vs Haggis
A minor borrowed a mare for riding only. He lent
her to one of his friends who jumped it, whereby it
was injured and ultimately, died. The case was filed.
Persons of unsound mind
 Sec. 12, ‘a person who 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 understanding it and of
forming a rational judgement as to its effect upon his
interests.’
 A person who is usually of unsound mind but
occasionally of sound mind, may make a contract when
he is of sound mind.
 A person who is usually of sound mind but occasionally
of unsound mind, may not make a contract when he is
of unsound mind.
 Example: Lunatics, Idiots, Drunkards
Persons of unsound mind
 In cases, where the contract is sought to be avoided on
any of the above grounds, the burden of proof lies on a
party who sets up such a disability, but, if
unsoundeness of mind is established, the burden of
proving a lucid interval is on him, who sets it up.
 Inder Singh Vs Parmeshwardhari Singh
A property worth INR 25000 was agreed to be sold
by a person for INR 7000 only. His mother proved that
he was an idiot, incapable of understanding the
transaction. A case was filed.
Disqualified Persons
 As per Sec. 11, these are those who are disqualified
from contracting by any law to which they are
subject. These are:
 Alien Enemy
 Foreign Sovereigns and Ambassadors
 Convict
 Insolvent
 Joint Stock Companies and Corporations

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Comprehensive Guide to Contract Laws for Minors

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Capacity to Contract

The plaintiff, a minor, mortgaged his houses in favor

A duly executed transfer by way of sale or mortgage

 The contract must be entered into, on behalf of

minor, by his guardian

initio has no existence in the eyes of law.

contract can’t be implied into the contract which

that if a minor has, by misrepresenting his age, induced the

apply which means that if an infant obtains property or goods

However, a guardian has no power to bind the minor by a

 Of service on his behalf

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