Nature and Effect of a Minor’s Agreement

A minor, in legal terms, is an individual who has not yet attained the age of majority. In India, a person who is below the age of 18 years is considered to be a minor. A minor is deemed to lack the legal capacity to understand the nature and implications of a contract fully. 

Therefore, they are not capable of entering into a valid contract. The Indian Contract Act, 1872, contains provisions that govern the legality and enforceability of contracts. 

Nature of a Minor’s Agreement

Section 11 of the Indian Contract Act, 1872, defines a contract as an agreement that is enforceable by law. Since a minor does not have the legal capacity to enter into a valid contract, any agreement entered into by a minor is not legally binding. This means that a minor cannot be held liable for any breach of contract.

A minor’s agreement is considered to be void ab intio.

Mohri Bibi v. Dharmodas Ghose

The case of Mohri Bibi v. Dharmodas Ghose, decided in 1903, revolves around a mortgage agreement between a minor and a moneylender. The plaintiff, A, mortgaged his property to the defendant, B, to secure a loan of Rs. 20,000 while he was still a minor. It was later revealed that the actual amount of the loan given was less than Rs. 20,000. The attorney who acted on behalf of the moneylender was aware that the plaintiff was a minor at the time of the transaction.

The plaintiff filed a case against the defendant, stating that the mortgage was void and inoperative since he was a minor when he executed it. The plaintiff requested that the mortgage be cancelled. However, during the appeal to the Privy Council, the defendant passed away and the appeal was pursued by his executors. Among other defences, the defendant argued that the plaintiff had fraudulently misrepresented his age and therefore, no relief should be granted to him.

The court ruled that an agreement cannot be considered a contract unless the parties have the legal capacity to enter into a contract under Section 10 of the Indian Contract Act. As per the Act, parties who are competent to enter into a contract must be of legal age and of sound mind.

Effect of a Minor’s Agreement

The effect of a minor’s agreement is void ab into. This means that a minor’s agreement is considered void; thus it does not impose any obligations upon the parties to fulfil their promise. 

Additionally, any property transferred to the minor under the contract must be returned to the party who transferred it. However, if the minor has already received a benefit under the contract, they may be required to compensate the other party for the benefit received.

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. 

However, the question arises as to whether the law of estoppel can be invoked against minors. In the case of Jagar Nath Singh v. Lalta Prasad, the court held that the law of estoppel cannot be used to validate a void agreement.

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.

Doctrine of Restitution

The principle of restitution holds that if a minor obtains property or goods by misrepresenting their age, then the property or goods can be returned if they are still in the minor’s possession. However, if the minor has already sold or converted the property or goods into cash, they cannot be asked to refund the same. This principle was established in the case of Leslie (R) Ltd v. Sheill. 

If a minor seeks to cancel a contract, the court may grant relief and order the minor to restore any benefits they received, as per Section 41 of the Specific Relief Act, 1877. However, this section only applies if the minor has approached the court. 

In Khan Gul v. Lakha Singh, Sir Shadilal CJ reiterated that this jurisdiction is only to be exercised when the minor seeks the aid of the court. After the amendment of 1963, the principle of restitution is included in Section 33 of the Specific Relief Act.

No liability in contract or in tort arising out of the contract

When a minor enters into an agreement, it is void from the beginning and does not create any legal obligations for the parties involved. As a result, a minor cannot be held responsible for breaching their promises or for any tortuous acts arising from the agreement.

It has been established in Harimohan v. Dulu Miya that a minor cannot be held liable in tort for money lent on a bond. The Calcutta High Court further explained that if the tort is directly connected to the contract and is a part of the same transaction, the minor cannot be held liable in tort. 

However, if the tort is unrelated to the contract, the minor can be held liable for it, as observed in Burnard v. Haggis. In this case, a minor had hired a horse for a ride and had agreed not to use it for jumping. But later, the minor lent the horse to a friend who used it for jumping and the horse got injured. The minor was held liable for the injury caused to the horse, as the tort committed was not part of the contract.

Necessaries and Minor’s Agreement

Contracts for necessaries are an exception to the voidability of a minor’s agreement. Necessaries refer to goods or services that are essential for the minor’s survival and well-being. These include food, clothing and shelter. Contracts for necessaries are considered valid and the minor can be held liable for breach of contract.

The reason for this exception is that necessaries are essential for the minor’s survival and well-being. Therefore, it is in the minor’s best interests to ensure that they receive these goods or services. Additionally, necessaries are generally not expensive or beyond the minor’s means. Therefore, it is unlikely that the minor will be taken advantage of by unscrupulous parties.

Liability for contracts for necessities extends to the value of the goods or services received by the minor. The minor cannot be held liable for any other damages that may arise due to the breach of contract. Additionally, the contract must be reasonable and of fair value. 

This is to prevent any exploitation of minors by unscrupulous parties who may try to take advantage of their vulnerability. It is essential to ensure that the contract is in the best interests of the minor, even in cases where the contract is necessary.

Parents’ or Guardians’ Liability

Parents or guardians are legally responsible for the contracts entered into by minors. Therefore, if a minor enters into a contract that is valid and enforceable, the parent or guardian can be held liable for any breach of contract. This is because parents or guardians are responsible for the actions of their minors.

However, the liability of parents or guardians is limited to contracts that are beneficial to the minor and are not contrary to their interests. This means that parents or guardians cannot be held liable for contracts that are not for the minor’s benefit or that are contrary to their interests.

Conclusion

A minor’s agreement is considered to be void ab intio. Contracts for necessaries are an exception to the voidability of a minor’s agreement. 

Necessaries refer to goods or services that are essential for the minor’s survival and well-being. Parents or guardians are legally responsible for the contracts entered into by minors, but their liability is limited to contracts that are beneficial to minors and are not contrary to their interests.