CAPACITY TO

CONTRACT

Minor

By- Amit Bhandari

 Introduction
• The enforceability of an agreement (sec.2(b)) carries a pre condition that the parties to a
contract must be competent to contract.
• The competency/capability or capacity, has been defined in Sec 11 -:
‘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’
 Persons not competent to contract

• 1. Minors
• 2. Persons of unsound mind
• 3. Persons disqualified by law
 Minor
'A minor is a person who has not completed eighteen years of age'

The person becomes major on completing the age of 21 years

Position of Minor before Mohri Bibi Case
(1903)
• (1) a minor is absolutely incompetent to contract; the agreement with minor
void ab initio,

• (2) an agreement with the minor voidable, the minor is not liable but the
other party is liable.
The law dealing with minors is based upon two
principles –

- The law must protect the minor against his own inexperience,

- That the law should not cause unnecessary hardship to adults who deal fairly
with minors
 No ratification
• An agreement with the minor is completely void. A minor cannot ratify the
agreement even on attaining majority, because a void agreement cannot be
ratified.

• But If on becoming major, minor makes a new promise for fresh

consideration, then this new promise will be binding.
 Rule of Estoppel and Minor
• The Indian Evidence Act, 1872 Sec.115 - Estoppel.- When 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 representative shall be allowed, in any suit or proceeding between himself
and such person or his representative, to deny the truth of that thing
 No estoppel against a minor
• Where a minor by misrepresenting his age has induced the other party to enter into a contract
with him, he cannot be made liable for the contract. There can be no estoppel against a minor.
It means he is not estopped from pleading his infancy in order to avoid a contract.

• But a contract entered into by guardian or manager on minor's behalf can be specifically
enforced if
• (a) The contract is within the authority of the guardian or manager.
• (b) It is for the benefit of the minor
 Doctrine of Restitution
• The term restitution may be defined as the act of restoring back to the
rightful owner that which has been taken away or lost

• The doctrine implies that when a person obtains property or goods by false
misrepresentation, he can be compelled to restore it to the person from whom
he has received it.
Minor’s Liability for Necessities
• Sec.68 of Indian Contract Act says
‘If a person, incapable of entering into contract or anyone whom he is legally
bound to support, is supplied by another person with necessities suited to his
condition in life, the person who has furnished such supplies is entitled to the
reimbursed from the property of such incapable person.
Contract for the benefit of the Minor
• Srikakulam Subrahmanyam v. Kurra Shubha Rao (ILR 1949 Mad 141 PC),
Persons of unsound mind
• As per sec.12, ‘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 understanding it and of forming a rational
judgment as to its effects upon his interest’ The section requires two conditions
1. He should be capable of understanding the nature and contents of the contract.
2. He should be capable of forming a rational judgment about the effects of the contract on his
interest.
 Persons disqualified by law
The following persons are disqualified by law
• Alien Enemies
• Foreign Sovereigns, diplomatic staff and accredited representatives of foreign states
• Insolvents
• Convicts
Thank you