The Indian Contract Act, 1872 defines a contract as any agreement that is enforceable by law. According to the act, there are several essentials of a valid contract, and if any of these essentials are missing, then the agreement cannot be called a valid contract. Some of the main essentials of a valid contract are offer and acceptance, lawful consideration, lawful object, intention to create a contract, and competence of the parties. The competence of parties to enter into a contract is explained in section 11 of the Indian Contract Act, of 1872.
Meaning of ‘Contract’ as per The Indian Contract Act, 1872
The Indian Contract Act, 1872 defines the term “Contract” under its Section 2(h) as “An agreement enforceable by law”. In other words, we can say that a contract is anything that is an agreement and enforceable by the law of the land.
Geeky Takeaways:
- Any contract by a minor is a void contract and cannot be enforceable by law.
- According to the laws of the country attaining the age of majority is one of the essential requirements of a valid contract.
- The Indian Contract Act, 1872 explains that any person who has attained the age of majority as per the law, is of sound mind, and is not disqualified by law to agree is competent for entering into any contract.
- The Indian Apprentices Act, 1850 allows minors to enter into a contract in certain exceptional cases.
Who is a Minor?
According to the laws of the country, any person who has not completed the age of majority is a minor. The Indian Majority Act, 1875 defines majority under the act. Under this section, it is written that a person shall attain the age of majority only when he/she shall complete 18 years.
According to the Indian Contract Act, 1872, a minor is incompetent to enter into a contract. Attaining the age of majority is one of the prerequisites for any person who wants to enter into a contract. Even after attaining the age of majority, a minor cannot enforce any contract that he/she has entered when they were a minor. A contract by a minor is not considered illegal according to the laws of India, these contracts are considered null/void in our country.
As per Section 3 of The Majority Act, 1875 as amended by the Majority (Amendment) Act, 1999, “a person domiciled in India, who is under 18 years of age is a minor. Accordingly, every person who has completed the age of 18 years becomes a major.”
Case Law: Mohiri Bibi v. Dharmodas Ghosh
Facts of the Case: In this case, Dharmodas Ghosh was the plaintiff and had taken a loan by giving his property as a mortgage to a moneylender. He entered into the agreement while he was a minor. The defendant’s attorney has knowledge regarding the age of the plaintiff and still enters into an agreement with him. The plaintiff has paid ₹8000 to the defendant but has refused to pay any further amount. The plaintiff along with his mother who is his legal guardian initiated a case against the defendant.
Judgement of the Court: The court in this case has declared that there is no contract between the plaintiff and the defendant and the defendant cannot force the plaintiff to repay the amount. At the time of the agreement, the plaintiff was a minor and could not enter into any contract which is enforceable by law. The agreement between the plaintiff and the defendant is void and the plaintiff need not pay the amount.
Effects of Minor’s Agreement
1. No Liability arising out of either Tort/Contract: In Indian law, a minor is not allowed to enter into any contract, and all the contracts made by them are void, and no one can enforce such contract. In Johnson V Pye, the court explained that even if the minor has fraudulently obtained a loan from the other person on a contract, the other party cannot enforce such a contract because the other party is a minor. The High Court of Calcutta also upheld this judgment and said a contract cannot be converted into a tort to sue a minor.
2. Rule of Estoppel: The Rule of Estoppel does apply to minors. This rule restricts people from their statement of what they have previously stated. But in the case of minors, even if they have misrepresented their facts, then also other people cannot use the rule of estoppel against them.
3. Restitution of Benefit: The minor is compelled to return the benefits or property received under the contract only when it is identifiable. This principle is only applicable to voidable contracts, but a minor contract is void and illegal so this doctrine does not apply to a minor’s contract.
4. Position of Minor’s Parents: The parents of the minor are not liable for agreements that are made by a minor, whether the agreement is for purchasing necessities or not. Parents will be held liable only in cases when the child is contracting as an agent for the parents.
5. Beneficial Agreements are Valid Contracts: Any agreement which provides benefit to a minor, and under which he is required to bear no obligation is valid.
Exception to General Rule
According to the law of our country, any contract with a minor is void. This rule is established in our country to protect minors from any kind of contractual liabilities. But certain exceptions to this rule are explained below:
1. When Minor has Performed his Obligation: A contract with a minor is void, and according to the act, a minor cannot be a promisor in an agreement. But a minor can be a promisee in certain cases and when the minor has performed in part of the contract, then he has the right to force the other party to perform their part as well.
2. A Contract entered into by Guardian of Minor for his Benefit: The Indian Contract Act, 1872 allows the guardian of the minor to enter into a contract on behalf of the minor. The minor can enforce such a contract when the other party is not performing their part in the agreement.
3. Contract of Apprenticeship: The Indian Apprentices Act, 1850 allows minors to enter into a contract in certain special cases. The government made this act so that children with special needs can enter into a contract and learn certain things that will help them when they have attained the age of majority.
Can a Minor be a Partner?
A contract is an agreement that is enforceable by law, and for any agreement to be enforceable, it must fulfill all the essentials of a valid contract. Attaining a majority is one of the prerequisites of a valid contract. However, according to Section 30 of the Indian Partnership Act, 1932 a minor can be admitted into the benefits of the partnership with the consent of all the partners. This section also states that the minor is not liable for any of his/her acts within the partnership, and he/she will only have the benefit of the partnership.
Conclusion
The Indian Contract Act, 1872 does not allow minors to enter into any kind of contractual relationship, and thus, any contract by a minor is void. The government has established this law only to protect minors. They protect the minors from any contractual relationship that they will not regret. According to the act, minors are incapable of giving their assent to such a contractual relationship.
Minor under Indian Contract Act- FAQs
What is a Contract?
According to section 2(h) of The Indian Contract Act, 1872, any agreement enforceable by law is a contract.
Can a Minor enter into a Contract?
No, a minor cannot enter into a contract as per the provisions of the Indian Contract Act, 1972.
Who is a Minor?
According to the laws of the country, any person who has not completed the age of majority is a minor.
What is the age of Majority in India?
The Indian Majority Act, 1875 defines Majority under Section 3(1) of the act. Under this section, it is written that a person shall attain the age of majority only when he/she shall complete 18 years.
Can a Minor become a Partner?
A minor being incompetent to enter into a contract, cannot be a partner in a partnership firm. However, under Section 30 of the Indian Partnership Act, 1930, he can be admitted to the ‘benefits of partnership’ with the consent of all the partners by an agreement.
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