Minor As A Contracting PartyMinor As A Contracting Party..

Presented by

Poonam Sarang Deore.

LIM.(I), Sem.(I).

SYNOPSISI. INTRODUCTIONI. INTRODUCTION

II.COMPETENCY TO CONTRACT.II.COMPETENCY TO CONTRACT.

III. AGE OF MAJORITYIII. AGE OF MAJORITY

IV. NATURE OF MINOR’S AGREEMENT IV. NATURE OF MINOR’S AGREEMENT V.EFFECT OF MINOR’S AGREEMENTV.EFFECT OF MINOR’S AGREEMENTVI. CONCLUSIONVI. CONCLUSION

Every man from dawn to dusk has to enter into one or other from of contracts. Man contract making activities increase with increasing trade, commerce and industry. In this way, living in modern society will be impossible if the law does not recognize contract making power of the person. Indian contract Act,1872. Forms 1 to 75 lays down the minimum requirements of contract.

I. INTRODUCTIONI. INTRODUCTION

S.10 of the Act (Indian Contract Act 1872), declares that parties must be competent to contract who is of-

1.the age of majority (according to the law to which he is subject)2.Who is of sound mind, and3.is not disqualified from contracting by any low to which he is subject.

II.COMPETENCY TO CONTRACT.II.COMPETENCY TO CONTRACT.

To enter into a valid contract, a person should have attained the age of majority. In other words, an agreement entered into by a minor person is not valid. Under S. 3 of Indian majority Act, 1875, A minor is a person who has not attained the age of 18 years. However, if a person for whose person or property guardian is appointed by the court the age of majority for him is 21 years. S. 11 of the contract Act declares minor not competent to contract.

III. AGE OF MAJORITYIII. AGE OF MAJORITY

S.11 of the Act, declares that a minor is incapable to enter into contract.There was no unanimity of opinions among High Courts in India. Some declared as void and some as voidable.Privy Council in Mohorbibi V. Dharmadas Ghosh set this controversy at rest in 1903.It was held in that case that minor’s agreement is void ab-initio.

IV. NATURE OF MINOR’S AGREEMENT IV. NATURE OF MINOR’S AGREEMENT

FACT: Moharbibi was a money lending firm. Dharmadas Ghosh a minor owned landed property who was in need of money of Rs.20000.He borrowed a loan of Rs.12000.,It was agreed that he would mortgage his immovable property with the firm while taking remaining Rs.8000.But Dharmadas Ghosh neither mortgaged the property by taking the remaining balance of loan of Rs.8000 nor returned the loan already taken Rs.12000.Therefore the firm filed suit against him for recovery of loan; or to complete the transaction by executing mortgaged deed in their favour.

ISSUE: What is the nature of minor’s agreement.

HELD: S.10 requires that the parties to the contract must be competent and S.11 declares that minor is not competent to contract.therefore minor’s agreement is void -ab- initio.

MOHARBIBI V.DHARMDAS GHOSHMOHARBIBI V.DHARMDAS GHOSH

I. No ratification against minor.

II. No estoppels against minor.

III. Liability for necessaries(S.68).

IV. Minor as an Agent

V. Minor as a ‘partner of the firm’ and a ‘member of the company’.

VI. No liability in contract as well as in tort arising out of contract

VII. No specific performance against minor

VIII. Minor as a donee.

V.EFFECT OF MINOR’S AGREEMENTV.EFFECT OF MINOR’S AGREEMENT

No ratification against minor.

Ratification means confirmation . Ratification relates back to the date of the making of the contract and, therefore a contract ,which was then void, cannot be made valid by subsequent ratification. Minor’s agreement being void ab-initio, cannot be validated by marriage after becoming major. The consideration furnished in respect of a transaction during minority cannot be considered to be consideration for a subsequent promise after attaining majority

No estoppels against minor.

Estoppel means a person is not allowed to speak contrary what he has said earlier.

Minor cannot be held liable for estoppel.

Liability for necessaries(S.68

Minor’s agreement is void –ab-initio.

He has to reimburse for the necessaries supplied to him by other person.

The obligation of minor to pay for the necessaries supplied is not based on liability under contract but on quasi contract.

The person who has furnished such supplies is entitled to be reimbursed from the property of such incapable person.

Minor as an Agent

A minor can be appointed as an agent.

He himself does not bind in contract.

However, for any wrong of minor agent his principal will be held liable to 3rd party.

Even Principal cannot recover from minor any loss caused to him by negligent or wrongful act of his minor agent.

Minor as a ‘partner of the firm’ and a ‘member of the company’.

Since minor is disqualified from contract, he cannot be a partner.

He can be admitted as partner for the benefit of partnership firm.

Liability is limited to his interest.

A minor cannot be member of company.

If he inherits any share, the name of guardian will come in record.

No Liability In Contract As Well As In Tort Arising Out Of Contract

He cannot be sued under tort for his contract

An infant who obtains a loan by false representating his age cannot be made to repay the amount of loan in the form of damages for deceit under tort

No Specific Performance Against Minor An agreement by minor being void, the court cannot direct the

specific performance of such agreement, against minor

IILUSTRATION

‘A’ a minor contracts to paint picture for B , but after getting paid refuses to paint , cannot be forced by court to paint a picture.

Minor As A Donee

It is one of the essential requirement of transfer of property by way

Of ‘gift’ that the donee should accept the gift.

But in case of donee his acceptance is treated as valid even though in law he is supposed to give consent.

A minor suffers disability for entering into a contract but he is thereby not incapable of receiving property.

Gift to the minor is valid gift.

According to sec.11 of the Indian Contract Act,1872,minor is incapable to enter into contract. It is void-ab-initio . But , necessaries supplied to minor are exception to this rule. Minor has to reimburse for the necessaries supplied to him by other person.

ConclusionConclusion