As per the Indian Contract Act, 1872, under its section 2 (h), a contract can be defined as an agreement made between two or more individuals that are enforceable by law. A contract is an agreement enforceable by law. The Contracts or agreements among various individuals are formed and validated as per the provisions of the Indian Contract Act. Show
The essentials of a valid Contract are:
Section 10 of the Indian Contract Act states that the parties must be competent to contract. Competence is defined in Section 11 of the Indian Contract Act. It says that Thus, this section declared the following persons to be incapable of forming a contract
Minor
However. The terms mentioned in Section 10 and 11 of the Indian Contract Act do not clear that whether it would be voidable at his option or altogether void if a minor enters into a contract. This controversy was resolved in 1903 by the Judicial Committee of the Privy Council in their judgment in the case Mohori Bibee V Dhurniodas Ghose. According to the facts of this case, Dharmodas Ghosh, the plaintiff (a minor) mortgaged his property to the defendant who was a moneylender. At that time, the defendant's attorney had knowledge about the plaintiff's age. The plaintiff paid only Rs 8000 and refused to pay the remaining amount. The mother of the plaintiff
was his next friend or legal guardian at that time. The court held that unless the parties have competence under Section 11 of the Act, no agreement is a contract. This ruling has been used time and again in various cases to both advantages and disadvantages to minors. Another major judgment by the Privy Council regarding this matter is Mir Sarwarjan V Fakhruddin Mahomed Chowdhury. In this case, the contract to purchase some immovable property had been made by the guardian on behalf of the minor. Later, that minor sued the other party for a decree of specific performance to recover possession. His action was rejected by the court. The court, in its judgment, said that it was not possible to bind the minor's property, both movable and immovable, by any contract. This is because the minor is not competent to contract, there was no mutuality, and as a result, the minor could not obtain specific performance of the contract. It was subsequently case of Srikakulam Subramanyam V Kurra Subba Rao, the Privy Council overruled the earlier decision and entertained no doubt that was within the power of the mother of minor as a guardian to enter into a contract on the behalf of the minor to enter into a contract of the sale for the purpose of discharging his father's debts. Following these orders, the Orissa High Court held that holding of property for religious purposes by the guardians on behalf of the minor was specifically enforceable. A few years later, according to the doctrine under Section 20 of the Specific Relief Act, 1963, if the contract is within the competence of the minor's guardian, then for the minor's benefit it is specifically enforceable. Effects Of Minor's Agreement
Section 33(1) of the Specific Relief Act, 1963 did not change the earlier law. If the plaintiff goes to the court as a plaintiff, he can be compelled to repay the benefits he received under the agreement. Sub section (2), makes the difference that if a minor is brought before the court as a defendant, he can be made to account for the portion of the money or anything received by him as a benefit personally. Beneficial ContractThe contracts beneficial to a minor in the following instances:
A minor cannot be a partner in a partnership firm. However, he can be admitted to the benefits of partnership as per Section 30 of the Indian Partnership Act. The minor shall not share losses except when liability to third parties has arisen. But then too, he is liable only up to his share in the partnership assets. He cannot be made personally liable. Where an adult and a minor jointly enter into an agreement with a third party, the minor cannot be held liable but the contract as a whole can be enforced against the adult [Jamna Bai v Vasanta Rao ]. The liability will be of the principal even of the agent is a minor. A minor cannot be adjudicated insolvent because he is not capable of contracting debts. The parents of a minor are not liable for the agreements made by a minor, whether the agreement is for the purchase of necessaries or not. The parents can be held liable only when the parents are the principles the minor is contracting as an agent for the parents. Contract Of MarriageA contract for the minor is also prima facie for is his or her benefit. But according to Hindu Marriage Act, 1995, the age of girl at the time of marriage must be at least 18 years. Even in the case if a girl is less than 18 years old when the marriage was fixed but she has passed the age of 18 years at the time of marriages, it is valid. Contracts Of ApprenticeshipIt is another contract made for the benefit of minors. The Indian Apprentices Act, 1850 provides for the nature of contracts for service which are binding for minors. This was done for better enabling the children, and specifically children with special needs, poor children and orphans, to learn trade, crafts and employments by which when they come of age, they can gain livelihood This act required a contract to be made by the guardian on the behalf of the minor. The well-known English case on this subject is Roberts V Gary According to the facts of this case, the defendant, a minor, agreed to join the plaintiff, a renowned billiard player, to join him on a billiard playing tour across the world. The defendant rejected the contract. The plaintiff succeeded in receiving damages for the breach of contract. The court held that one of the pre conditions of this contract to be formed is that the teaching or instructions my profit him afterward in future. It has also been suggested in the case Raj Rani V Prem Adib that though according to English Law, the minor is liable in the case of a contract of service where the contract is of benefit, it is given that, under Section 11, the contract by any minor is void and hence minor would not be held liable. The facts of the case were as follows, Raj Rani's father entered into a contract on her behalf (as she was a minor) with a film producer, Prem Adib. According to the terms of the contract, the minor was to act in a film on payment of a certain amount. Later, she was not given any work. As a result, she sued the producer of the movie for breach of contract. The Bombay High Court held that neither she nor her father could sue on the promise. If it was a contract with the plaintiff, she being a minor, it was void. The contract with the father was also void because there as no consideration. Trade Contracts Not Included In Beneficial ContractsThis category of beneficial contracts does not include ordinary trade contract. In Cowen V Nield, a minor was carrying a trade contract for the supply of clover and hay. The plaintiff paid him part of the payment. On this, the defendant delivered him clover but failed to deliver hay. The plaintiff's action for recovering the amount of the cheque failed. The court held that only the contracts which are for the benefit of the minor can be supported. The trade contract was dine done for the benefit of the minor hence the minor cannot be held liable. Option To Retire From The Beneficial Contract On MajorityA minor will have the option of retiring from the contract made for the benefit of the minor on attaining majority provided that he exercises the option within a reasonable amount of time. RatificationA person cannot ratify an agreement made by him during minority once he attains majority. Ratification deals back to the date of making of the contract. Once a contract which was then void cannot be made valid due to subsequent ratification. It would hence be a contradiction of terms to say that a once void contract can be made valid by subsequent ratification. When a minor attains majority. In a case decided by the Allahabad High Court, the court stated A minor borrowed a sum of money, placed a simple bond on it and, after reaching the majority, placed a second bond on the original loan plus interest. He argued that the claim to the second bond was not sustainable. As the bond was without consideration and did not come under Section 25(2) of the Indian Contract Act. In another case, the defendant, a minor, executed a deed about his interest in the estate. The suit was filed against him when he attained majority. He did not refute to the agreement on attaining majority. He rather admitted to it. The contract became enforceable to the extent of minor's interest in the estate. Liability For NeccssariesSection 68 of the Indian Contract Act lays down terms for the liability for necessaries supplied to persons who to incompetent to contract. It says that: In simple words, for example, A supplies B, a person of unsound mind, with necessaries suitable for living his life. A is entitled to adequate compensation from B's property. Necessaries The meaning of this term could be found in the judgment given in the case Chapple V Cooper The articles of mere luxury
are always excluded, though luxurious items may be necessary in some cases. In the case Peters V Fleming, the court said that prima facie, it was not unreasonable that an undergraduate college student should have a watch and a watch chain supplied on credit as such it was necessary to support him in his degree. Two conditions must be satisfied to render a minor's estate liable for necessaries:
Nature Of LiabilityThere are two theories relating to liability of a minor's estate for necessaries. In one of the theories, it is suggested that the liability
does not depend upon minor's consent. It arises due to the necessities supplied to him, and hence is quasi-contractual in nature Which of the following is true regarding how Chinese law treats contracts entered into by minors quizlet?Which of the following is true regarding how Chinese law treats contracts entered into by minors? Children between ten (10) and eighteen (18) are deemed competent for entering into certain contracts, appropriate to each child's mental state.
Which of the following is true of a contract made by a minor?Contracts made by minors are void since, by law, they lack the legal capacity or ability to enter into legally binding agreements or contracts by themselves. The law presumes that these individuals are not fully aware of what they are doing and as such, are placed into special categories.
What statement is true about the ability of minors to enter into contracts?Minors (those under the age of 18, in most states) lack the capacity to make a contract. So a minor who signs a contract can either honor the deal or void the contract. There are a few exceptions, however. For example, in most states, a minor cannot void a contract for necessities like food, clothing, and lodging.
What is a contract for necessaries?Contracts for necessaries
Minors are legally bound where a contract supplies them with "necessaries", or goods and services which are deemed necessary or beneficial to them.
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