According to section 10: All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void.
According to section 11: the following persons are incompetent to contract:
(a) minors;
(b) person of unsound mind; and
(c) persons disqualified from contracting by any law to which they are subject.
A person who has not attained the age of majority is a minor. Section 3 of the Indian Majority Act, 1875, about the age of majority. It states that a person is deemed to have attained the age of majority when he completes the age of 18 years, except in case of a person of whose person or property a guardian has been appointed by the court, in which case the age of majority is 21 years. In England, the age of majority is 18 years.
According to section 11, a minor is incompetent to contract but the Indian Contract Act is conscious by its silence about the nature of minor's contract. That is to say, it is not clear as to whether it is void or simply voidable. This controversy was only resolved in 1903 by the judicial committee of the Privcy Council in their well-known pronouncement in-
Mohori Bibi v. Dharmodas Ghose, (1903) 30 IA 114: The plaintiff, Dharmodas Ghose, while he was a minor, mortgaged his property in favour of the defendant, Brahmodutt, who was a money-lender to secure a loan. At the time of the transaction the attorney, who acted on behalf of the money-lender, had the knowledge that the plaintiff was a minor.
The minor brought an action against the money-lender stating that he was a minor when the mortgage was executed by him and therefore, the mortgage was void and inoperative and same should be cancelled. By the time of Appeal to the Privy Council the defendant, Brahmo Dutt and Appeal was prosecuted by his executors.
Sir Lord North observed-"Act makes it essential that all the contracting parties should be competent to contract and expressly provides that a person who by reason of infancy is incompetent to contract cannot make a contract within the meaning of the Act. The question whether a contract is void or voidable presupposes the existence of a contract within the meaning of the Act and cannot arise in the case of an infant." A minor's contract is, therefore ab initio and wholly void. In the view of Privy Council, this was also in accordance with the Hindu nation of a minor's incompetent to contract.
The ruling of the Privy Council in the Mohori Bibi case has been generally followed by the courts in India and applied both to the advantage and disadvantage of minors.
Mir Sarwajan v. Fakhruddin Mohd. Chowdhury, (1912) 39 Cal 232 (PC): A contract to purchase certain immovable property had been made by a guardian on behalf of a minor and the minor sued the other party for a decree of specific performance to recover possession. His action was rejected.
The court said that it was not within the competence either of the manager of the minor's estate or of the guardion of the minor, to bind the minor or the minor's estate by a contract for the purchase of immovable property; that as the minor was not bound by the contract, there was no mutuality, and that consequently the minor could not obtain specific performance of the contract.
Srikakulam Subramanyam v. Kurra Sabha Rao, (1949) 75 IA 115: In order to pay off the debts of his father, which were promissory notes owing to the appellants and a mortgage to another, a minor son and his mother sold a piece of land to the appellants in satisfaction of the notes, requiring that the appellants pay off the debts of his father, which were promissory notes owing to the appellants and a mortgage to another, a minor son and her mother sold a piece of land to the appellants in satisfaction of the notes requiring that the appellants pay off the mortgage debt. The appellants, accordingly, paid off the mortgagee and took possession. Afterwards the minor brought an action to recover back the land. It was found as a fact that the transaction was for the benefit of the minor and the guardian had the capacity to contract on his behalf.
The Privy Council held that if the guardian transfers property inherited by minor in lieu of the payment of debt the transfer shall be binding. Thus if the contract is in the interest of the minor, court may declare such a contract as valid.
Chacko v. Mahadevan, MANU/SC/3566/2007 : AIR 2007 SC 2967: Under section 11 of the Contract Act in order to be capable of entering into a contract, a person must be of sound mind. If the deed of sale is signed at the time when a person is under influence of wine and sells valuable land for less price, such a contract will be void and will be liable to set aside because then he was not of sound mind.
A minor's agreement being void, ordinarily it should be wholly devoid of all effects. If there is no contract, there should indeed, be no contractual obligation on the either side. Consequently, all the effects of a minor's agreement must be worked out independently of any contract.
When a minor represents at the time of contract that he has attained the age of majority, the question which arises in such a case is does the law of estoppel apply against him, so as to prevent him from alleging that he was a minor, when the contract was made?
Mohori Bibi v. Dharmodas Ghose, (1903) 30 IA 114: The Court held that the section 115 does not apply to a case like the present, where the statement relied upon is made to a person who knows the real facts and is not misled by the untrue statement. There can be no estoppel where the truth of the matter is down to both parties.
Khan Gul v. Lakha Singh, AIR 1928 Lah 609: The law of estoppel is a general law applicable to old persons, while the law of contract relating to capacity to enter into a contract is directed towards a special object and it is a will established principal that, where a general intention is expressed by the legislature and also a particular prevails over the general one.
Lakhwinder Singh v. Paramjit Kaur, AIR 2004 P&H 6: The Court held that the contention that the transferee was a bona fide purchaser would not be available since he did not make all reasonable and diligent enquiries regarding the capacity of the transferor and the necessity to alienate the estate of the minor.
If the tort is directly connected with the contract and in the means of effecting it and is a parcel of the same transaction, the minor is not liable in tort. You can't convert a contract into a tort to enable you to sue an infant. A minor's agreement is of course, in principle devoid of all legal effects. A minor is in law inapplicable of giving consent, and there being no consent there could be no change in the character.
Johnson v. Pye, (1665) 1 Sid 258: An infant by fraudulently misrepresenting his age induced to plaintiff to lend him œ 300. The plaintiff brought an action against for the tort of deceit. The action was rejected by the court on the ground that it was an indirect way of enforcing the contract which is void. Thus, an action of contract cannot be converted into an action in tort so as to make the infant responsible. The court added that if an action in contract is allowed to be converted into an action in tort, all the minors in England may be ruined.
If a minor obtains some property by fraudulently misrepresenting his age, he can be ordered to restore the property or goods thus obtained. This is called the equitable doctrine. Under English law a minor may be compelled to restore the goods or property so long as they are traceable. Money being generally not traceable, a minor cannot be asked to restore it.
Leslie v. Sheill, (1914) 3 KB 607: An infant succeeded in deceiving some money-lenders by telling them a lie about his age and so got them to lend him œ 400 on the faith of his being an adult.
It was held by the court of appeal that the money could not be recovered if that were allowed, that would amount to enforcing the agreement to repay loan which is void under the Infant's Relief Act, 1874.
Lord Summer observed that unless there is a fiduciary relationship or accountability between the parties, the minor is entitled to repudiate the transaction on attaining majority. There is, however, an exception where the minor is in possession of the property which he can return in specie. But if it is repayment, the minor is not bound to pay it for it would amount to enforce a void contract.
Ajodhia Prasad v. Chandan Lal, MANU/UP/0066/1937 : AIR 1937 All 610 (FB): The mortgage-deed was executed by defendants in favour of the plaintiff. The defendants pleaded that they were minors at the time of the execution of the mortgage-deed and a guardian had been appointed for them. The plaintiff also asserted that the defendants were liable to pay the amount under section 68 of the Contract Act.
The court remarked that there was fraudulent misrepresentation made by on behalf of the respondents.
In accordance with the recommendation of the Law Commission, the principle of compensation has now been incorporated in section 33, Specific Relief Act, 1963. This provision now requires the payment of money compensation by a minor irrespective of the fact whether the minor as the plaintiff or the defendant in the case. The provision is as under-
(1) On adjudging the cancellation of an instrument, the court may require the party to whom such relief is granted, to restore, so far as may be, any benefit which he may have received from the other party and to make any compensation to him which justice may require.
(2) Where a defendant successfully resist any suit on the ground-
(a) that the instrument sought to be enforced against him in the suit is voidable, the court may, if the defendant has received any benefit under the instrument from the other party, require him to restore, as far as may be, such benefit to that party as to make compensation for it.
(b) that the agreement sought to be enforced against him in the suit is void by reason of his not having been competent to contract under
section 11 of the Indian Contract Act, 1872 (9 of 1872) the court may if the defendant has received any benefit under the agreement from the other party, require him to restore so far as may be, such benefit to that party, to the extent to which he or his estate had benefited thereby.
Infant's liability is only in respect of those contracts which are benefical to him. If the contract is substantially beneficial to an infant even though there are some minor disadvantageous to him, the contract is binding.
Raghava Charior v. Srinivasa, (1916) 40 Mad 308: Whether a mortgage executed in favour of a minor who was advanced the whole of the mortgage property is enforceable by him or by any other person on his behalf.
Contract of marriage are supposed to be beneficial to minors and therefore a minor is entitled to enforce them. A contract for the marriage of a minor is also prima facie for his or her benefit is customary amongst most of the communities in India for parents to arrange marriages between their minor children and the law has to adopt itself to the habits and customs of the people.
Khimji Kuverji v. Lalji Karamsi, AIR 1941 Bom 315: Contracts of marriage are supposed to be beneficial to minors and a minor in entitled to enforce these contracts. The question before the Bombay High Court was whether the contract of marriage of a minor girl entered into by her mother on her behalf with a major buy could be enforced and she could sue for the breach of contract. In this case, her action was allowed.
Contracts of apprenticeship is another species of contracts which are for the benefit of minors. The Indian Apprentices Act, 1850 provides for contracts in the nature of contracts of service which are binding on minors.
Roberts v. Gray, (1913) 1 KB 520: The defendant, an infant agreed with the plaintiff, a noted billiards player to join him in a billiards playing tour of the world. The plaintiff spent time and money in making arrangements for billiards matches, but the defendant repudiate the contract. The plaintiff succeeded in recovering damages for the breach of the contract.
The contract was held to be one for necessaries as it was for the infant's "good teaching or instruction whereby he may profit afterwards".
A minor's agreement being void ab initio, it is incapable of being validated by a subsequent ratification after the minor has attained the age of majority. The consideration furnished in respect of a transaction during minority cannot be considered to be a valid consideration for a subsequent promise after attaining majority and thus no ratification is possible of a promise made by a person during his minority. A contract by a minor is void. A void contract which is a dead letter cannot be revived and cannot constitute a valid consideration for a subsequent contract and, therefore, a transaction entered into by a minor during minority, cannot be ratified.
If a person, incapable of entering into a contract, or any one whom he is legally bound to support, is supplied by another person with necessaries suited to his condition in life, the person who has furnished such supplies is entitled to be reimbursed from the property of such incapable person.
Illustrations
(1) A supplies B, a lunatic, with necessaries suitable to his condition in life. A is entitled to be reimbursed from B's property.
(2) A supplies the wife and children of B, a lunatic, with necessaries suitable to their condition in life. A is entitled to be reimbursed from B's property.
Pollock and Mulla: Necessaries must be things which the minor actually needs, it is not enough that they be of a kind which a person of his condition may reasonably want for ordinary use, they will not be necessary if he is already supplied with things of that kind and it is immaterial whether the party knows or not.
Nash v. Inman, (1908) 2 KB 1: A minor who was already having sufficient supply of clothing suitable to his position, was supplied further clothing by a trader. It was held that the price of the clothes so supplied could not be recovered.
A person is said to be of sound mind for the purpose of making a contract, if, at the time when he makes it, he is capable of understanding it and of forming a rational judgment as to its effects upon his interest.
A person who is usually of unsound mind, but occasionally of sound mind, may make a contract when he is of sound mind.
A person who is usually of sound mind, but occasionally of unsound mind, may not make a contract when he is of unsound mind.
Illustrations
(a) A patient in a lunatic asylum, who is, at intervals, of sound mind, may contract during those intervals.
(b) A sane man, who is delirious from fever, or who is so drunk that he cannot understand the terms of a contract, or form a rational judgment as to its effect on his interests, cannot contract whilst such delirium or drunkenness lasts.
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