MINORS’S

AGREEMENT
Law of Contacts I
AGENDA
INTRODUCTION
AGE OF MINORITY IN INDIA
MOHRI BIBII V. DHARMODAS GHOSE
EFFECTS OF MINORS’S AGREEMENT
EXCEPTIONS
CAN MINOR BE A PARTNER, AGENT OR PRINCIPAL, OR
SHAREHOLDER?
CONCLUSION
 INTRODUCTION

WHO ARE COMPETENT TO CONTRACT?

◦ S.11 of the Indian Contract Act, 1872 states that,

“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 from contracting to any
law to which he is subject.”
Thus, the section declares the following persons to be incompetent to contract—
1. Minors,
2. Persons of unsound mind
3. Persons disqualified by law to which they are subject
AGE OF MINORITY
◦ According to the Indian Majority Act, 1875, the age of majority in India is defined as 18 years.
For the purpose of entering into a contract, even a day less than this age disqualifies the person
from being a party to the contract. Any person, domiciled in India, who has not attained the
age of 18 years is termed as a minor.
◦ A minor is one who has not attained the age of 18, and for every contract, the majority is a
condition precedent. By looking at the Indian law, minor’s agreement is a void one, meaning
thereby that it has no value in the eye of the law, and it is null and void as it cannot be
enforced by either party to the contract.
 Nature of Minors’s Agreement
Mohri Bibee v. Dharmodas Ghose
Mohori Bibee v Dharmodas Ghose, [1903] UKPC 12, is a major Indian contract law case decided by
the Judicial committee of Privy Council. The case held that a contract entered into by a minor is totally void.
Brief Facts:
Dharmodas Ghose, a minor, mortgaged his property in favour of a moneylender, Brahmo
Dutt, against the loan of Rs 20,000. Dutt's attorney, acting on behalf of him, was aware of
Ghose's minority.{as throughout the transaction brahmo dutt was absent from calcutta}.
Ghose, through his mother and guardian, sued Dutt claiming that the mortgage was void
due to his minority. The Court of First Instance held in Ghose's favour, and on appeal,
the High Court of Judicature at Fort William upheld that decision. Before the appeal to
the Privy Council, Dutt died and the proceeding was continued by his heirs.
 Nature of Minors’s Agreement
Mohri Bibee v. Dharmodas Ghose
JUDGEMENT
◦ After carefully examining the facts of the case, the Privy CouncIil ruled that
the agreement made with a minor is void ab initio, which means it is void from
the very beginning. The court also addressed the defendant’s arguments.
◦ As a result, the court in Mohori Bibee vs Dharmodas Ghose established a
precedent that agreements with minors are void ab initio based on this case.
EFFECTS OF MINOR’S AGREEMENT
NO ESTOPPEL AGAINST MINOR
NO LIABILITY IN CONTRACT OR IN TORT ARISING OUT OF CONTRACT
DOCTRINE OF RESTITUTION
 ESTOPPEL AGAINST MINOR
◦ Estoppel is a legal principle that prevents a person from arguing something or asserting a right
that contradicts what they previously said or agreed to by law. 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.
◦ Thus, in a judgment by the Bombay High Court, it was said that even if a minor fraudulently
misrepresents his/her age and induces another person to enter into a contract with them, then
in defence the minor is not stopped from setting up a defence of minority
NO LIABILTY ARISING OUT OF
CONTRACTS OR TORTS
◦ A minor's agreement in principle is devoid of all legal effects. In this case, 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.

In 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 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

◦ Section 64 of the Indian Contract Act states that when a person at whose option a contract is voidable re it, the other
party need not perform it. This principle applies to contracts that are voidable. But a minor's contract is void.

According to this, if an infant obtains property or goods by misrepresenting his age, he can be asked to restore it but
only as long as it is traceable in his possession. This is known as equitable doctrine of restitution. Here, if the infant
has sold the goods or converted it, it cannot be made to repay the value of the goods because this would be equal to
entering into a void contract. The doctrine of restitution is not applicable if the minor 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.
EXCEPTIONS
• When minor has performed his obligation: In a contract, a minor can be a promisee but not
a promisor. So if the minor has performed his part of the promise, but the other party hasn’t
the minor being in the position of a promisee he can enforce the contract.
• A contract entered into by guardian of minor for his benefit: In that case, a minor can sue
the other party when it does not perform its promise. In the case of Great American Insurance
v. Madan Lal the guardian on the behalf of her son entered into an insurance contract in
respect of fire for the minor’s property. When the property was damaged and minor asked for
the compensation, the insurer denied it by saying that a contract with a minor is a void one.
But later the court held that this contract was enforceable, and he is liable to pay
compensation.
EXCEPTIONS
◦ NECCESSATIES SUPPLIED TO MINOR:
If a person is incapable of entering into a contract is supplied by another person with
necessities of life, the person who has supplied is entitled to get reimbursement from the
property of such incompetent person, including a child as well. But if the minor has no
property of his own, then he cannot be bound to reimburse the other person.
CAN MINOR BE A PARTNER?
◦ The way of a contract creates a partnership, and the essential of a contract is that the both the
parties should be of the age of majority. However, as an exception as per Section 30 of the
Partnership Act is that with the due consent of all the partners, the minor can be admitted to
the benefit of partnership for the time being. But he will not be liable for any of his acts.
CAN MINOR BE AN AGENT OR
PRINCIPAL?
◦ A minor can never be a principal because Section 183 of the Indian Contract Act for anybody
to become a principal he should be of the age of majority and be of sound mind and since a
minor is not competent to contract, he also cannot employ an agent. But, a minor can become
an agent as per the provisions of section 184 but the principal shall be bound by the acts of the
minor and he would not be personally liable in that case.
CAN MINOR BE A SHAREHOLDER?
◦ Minors cannot become a shareholder by purchasing shares under a share purchase
agreement. Though minors cannot contract to become shareholders of a company, minors can
acquire shares of a private limited company from an adult as a gift, thus making them the
shareholders of the company. Here the shares are transferred to the guardian of the minor
child, wherein the guardian will act as a Trustee until the minor child reaches the age to have
the capacity to contract. Therefore, it can be said that a minor can very much become a
shareholder of a company.
CONCLUSION
◦
The India Contract Act, of 1872 regulates the basic concepts of contracts and agreements and governs
whether contracts are valid and enforceable. The agreement’s pledges made by the parties are rendered
legally binding by the act. Agreements are a crucial feature of modern life since they establish the rights
and responsibilities of the parties, making the competence of the parties to the agreement a must. The
act’s provisions outline the parties’ legal capacity to sign a contract. The terms capacity to contract relate
to the parties’ capability under law to enter into a valid contract. Contracts have legal significance and
thus parties to a contract must be capable of upholding their end of the bargain. According to the law,
persons who are under the age of 18 or are of unsound mind or have been previously barred from
entering into contract lack the ability to sign contracts. The provisions of the legislation are lawfully
intended to protect the parties from abusers and any potential inconvenience caused by inexperience or
ignorance.
THANK YOU
Presented By,
Deepika Joshi
BA LLB I SEM
JKA23015