Minor’s Contract under Indian Contract Act

Author: VS Warrier

Section 10 of the Indian contract act requires that the parties must be competent to contract. Competence to contract is defined in section 11. Who are competent to contract-every person is competent to contract who is of age of majority according to the law he is subject, and who is of sound mind, and who is not disqualified from contracting by any law he is subject to.

AGE OF MAJORITY

The age of majority is generally eighteen, except when a guardian of minor’s person or property has been appointed by the court, in which case it is 21 years.

NATURE OF MINORS AGREEMENT

Section 10 requires that the parties to a contract must be competent and section 11 say that a minor is not competent. But neither section makes it clear whether if a minor enters into an agreement, the contract would be voidable at minor’s instance or void as such, Thus causing a lot of confusion. This controversy was resolved after the Mohoribibee v. Dharmodas Ghose case.

LORD NORTH observed –“The question whether a contract is is void or voidable presupposes the existence of a contract within the meaning of the act, which cannot arise in case of a minor.”

After this judgment the principle that minor’s contract is absolutely void was laid down. This law is not merely to protect the child from fraudulent manipulations by others but also to provide him protection against his own ignorance and immaturity for a child may shoe poor judgment in making a particular contract. The generally accepted doctrine that man is the best judge of his own interests is not applicable in case of a minor.

The ruling of the Privy Council in the Mohoribibee case has been generally followed by the Indian courts and applied both to the advantage and disadvantage of the minors. Mir Sarwarjan v. Fakhruddin Mohd. Chowdhury case is an example where the court ruled against the minor.

Facts – A contract to purchase certain immovable property had been made by guardian on behalf of a minor, and the minor sued the other party for recovering the possession. His action was rejected. The court held- The manager of the minor’s estate or the guardian of the minor were not competent to bind the minor’s estate by a contract to purchase immovable property and therefore there was no contract and so the minor could not abstain specific performance of the contract.

But now as minors are coming to the forefront of society with the changing times the Privy Council has had to modify its previous decision through the Subrahmanyam v. Kurra Sabha Rao that the transfer of inherited property of a minor by his guardian pay off an inherited debt was binding on him being for his benefit.

EFFECTS OF A MINOR’S CONTRACT

A minor’s agreement being void should be wholly devoid of all effects. If there is no contract then there should be no contractual obligation on either side therefore all effects of a minor’s contract are worked out independently of any contract.

NO ESTOPPEL AGAINST MINOR

A minor who has made an agreement by representing his age can later disclose his age. There is no estoppel against him.
The Bombay High Court in a case held- Where an infant represents fraudulently or otherwise that he of age thereby inducing another to enter into a contract with him then he is not estopped from setting up infancy in an action founded on the contract.

NO LIABILTY IN CONTRACT OR IN TORT ARISING OUT OF CONTRACT

In England in the case of Johnson v. Pyeit was laid own that “a minor who obtains a loan of money by misrepresenting his age cannot be made to repay the amount of the loan of money in form of damages for deceit.” Hence a minor cannot be held liable for anything which would be an indirect way enforcing his contract i.e. you cannot convert a contract into tort to enable you to sue an infant.

Indian courts too follow this principle. The Calcutta High Court refused to hold a minor liable in tort for money lent in bond in Hari Mohan v. Dulu Miya. Where a tort is independent of contract, the mere fact that a contract is also involved will not absolve the minor from liability.

In Fawcett v. Smethurst a car was hired for the purpose of going to Cairn Ryan and back, but was in fact driven further. It was held that nothing was upon that further journey which made the defendant an independent tortfeasor and that if any damage was done to the car on the journey the defendant would only be liable if he was liable under the contract.

In Jennings v. Rundall, the defendant infant had hired a horse to ridden for a short journey but took it for a much longer journey as result consequence of which the horse was injured. The court held the minor not liable based on the grounds that the action was founded in the contract and that the plaintiff could not turn what was in substance a claim in contract to one in tort.

DOCTRINE OF RESTITUTION

If an infant obtains a property by misrepresenting his age, he can be compelled to restore it, but only so long as the property remains in his possession. This is known as the equitable doctrine of restitution

EXCEPTIONS

· If the minor has sold the goods or converted them he cannot be made to pay back the value of the goods as that would amount to enforcing a void contract.

· The doctrine of restitution is not applied where the infant has obtained cash instead of goods. Well known authority Leslie Ltd v. Sheill.

In this case- An infant succeeded in deceiving some money –lenders by telling them a lie about his age, and so got them to lend him 400 pounds on the faith of his being an adult. Attempt for restitution of amount and interest failed. The plaintiffs then claimed damages under quasi –contract to which the court held that “it was impossible to enforce in a roundabout way an unenforceable contract in form of an action quasi ex contractu.”

Finally the money lenders relied on the doctrine of restitution which again was rejected by LORD SUMNER who said-“the minor might have spent the as his own and that there was no possibility of tracing it and no possibility of restoring the very thing got by fraud and that they would not hold the minor liable.

Where an infant invokes the aid of the court for the cancellation of his contract, the court may grant relief subject to the condition that he shall restore all benefits obtained by him under the contract or make suitable compensation to the other party.

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