LAW RELATING TO MINORS AGREEMENT:
All
the rules related to minor's agreement are based on the fundamental that ‘Law
always protects the minors’.
The
rules regarding minor’s agreement are as under-
1) A minor's agreement is void ab initio:
In India, an agreement with or by a minor is void ab initio and inoperative as a
minor has no capacity to enter into a contract. A minor is neither liable to
perform what he has promised to do under a contract nor is he liable to repay
money which he might have received under a contract.
Mohori
Bibee V. Dhurmodas Ghose. In this case, a minor
executed a mortgage for Rs.20,000, out of which he received Rs.8,000 from the
mortgagee. Subsequently, the minor sued for setting aside the mortgage. The
mortgagee claimed a refund of Rs.8,000 paid by him. The Privy Council held that a
minor's agreement was absolutely void and the minor was not liable to return
the money.
2) A Minor can be a Promisee or a Beneficiary:
A minor cannot be bound by contract but he can be a lawful beneficiary.
3) A minor's property is liable for necessaries:
Under Section 68 of the Indian Contract Act, if a person incapable of entering
into a contract or anyone whom he is bound to support, is supplied by another
person, with necessaries suited to his condition in life, the person, who has
furnished such supplies are entitled to be reimbursed from the property of such
person. It is to be noted that only the minor's property is liable, the minor is not
personally liable for necessaries (food, cloth, shelter, education, and expenses
for funeral) supplied to him.
4) No estoppel against a minor: A minor is always allowed to plead minority, and is not estopped to do so even where he had procured a loan or entered into some other contract by falsely representing that he was of full age. The rule of estoppel is only a rule of evidence i.e. a rule of formal law. This rule is not applicable to minors.
5) No ratification of a minor's agreement:
Since a minor's agreement is void ab initio, a minor who has entered into an
agreement during his minority cannot subsequently ratify (approve) the contract
on attaining majority.
6) No Restitution: The doctrine of restituion implies that when a person obtains property or goods by false representation, he can be compelled to restore it to the person from whom he has received it. But, in the case of Minor, it is applicable only as long as the same is traceable in his possession.
7) No insolvency for a minor:
A Minor is incapable of contracting debts and hence he cannot be adjudged
insolvent.
8) A minor can be admitted to the benefits of
partnership: A minor cannot enter into an
agreement of partnership, however with the consent of all the partners he can be
admitted to the benefits of a partnership.
9)
A Minor can act as an agent: A minor can become an agent, and by his
acts, he binds his principal; however a minor is not personally liable for his
principal. A minor’s parents/guardians are not liable to a minor’s creditor for
the breach of contract by the minor, whether the contract is for necessaries or
otherwise. However, the parents are liable where the minor is acting as their
agent.
10) A minor cannot be member of a registered company:
This is because a minor is not competent to apply for membership.
11) No specific performance of the agreements:
There
can be no specific performance of the agreements, entered into by minors as
they are void ab initio. A contract entered into on his behalf by his parent
/guardian or the manager of his estate, can be specifically enforced by or
against minor provided that the contract is:-
(a) Within the scope of the authority of the parent /guardian or manager, and
(b) For the benefit of the
minor.
12)The liability of minor’s parents or guardians:
As a matter of fact, the minor’s contracts do not impose any liability on his parents or guardians even if the contracts are for ‘necessaries’. The parents or guardians of the minor may pay money borrowed by him just out of moral obligations.
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