Effects of Minor’s Agreement

By | December 29, 2020
Effects of Minor's Agreement

This research essay focuses on what a minor’s agreement is and what are its effects. Section 11 of the Indian Contract Act, 1872 says that a minor (below 18 years of age) is not competent to enter into a contract. If he enters into the contract anyway, the contract is void. Now, a minor’s agreement is free of all its effects because the contract is void and anything void cannot have consequences. Following are some effects briefly described in this project-

  1. If a minor enters into a contract, even on false pretences, he will be free of all charges. 
  2. If a minor enters into a contract and commits a tort, he, again, must not be held liable for entering into the contract or the tort committed (if tort and the contract are connected).
  3. A minor cannot restitute a contract once he becomes a major. 

I. What is an Agreement?

An agreement, according to section 2 (e) of the Indian Contract Act, 1872, is the act of agreeing/accepting a proposal to perform an act or not to perform an act which mostly involves a certain amount of consideration.

A contract, according to section 10 of the Indian Contract Act, 1872 is an agreement which is enforceable by law. The person entering the contract should be, therefore, competent to enter into a contract.

II. Who is Competent to Enter Into a Contract?

According to the law, every person is competent to enter into a contract. Following are some of the exceptions-

  1. Below the age of maturity according to the law (a minor);
  2. Of unsound mind (a mentally ill person);
  3. Disqualified by the law (a convict).

III. Who is a Minor?

Any person who has not reached the age of majority, as stated by the law, is considered a minor.

Section 3 of the Indian Majority Act, 1875, states that a person who has not reached 18 years of age, is a minor. The exception to this is if the child’s guardian is appointed by the court (lawful guardian), then the age of majority is 21 years.

IV. What are Minor’s Agreements and Their Nature?

A minor’s agreement is when a minor enters into an agreement (which is void ab initio according to the law).

Section 10 of the Indian Contract Act, says that the parties entering into a contract must be competent to contract (suitable/qualified by law). On the other hand, section 11 of the Indian Contract Act says that a minor (below 18 years of age) is, therefore, not competent to enter into the contract.

In England, under the Infants Relief Act, 1874, the following situations are absolutely void-

  1. Repaying the lent money
  2. Goods that are supplied
  3. Accounts stated.

A controversy pertaining to section 10 and 11 started during the early 1900s; the controversy being if the minor’s agreement was void ab initio or was it voidable at minor’s convenience.

The following case highlights the solution to the debated question: 

  • Mohori Bibee v. Dharmodas Ghose[1]

Dharmodas Ghose (a minor) mortgaged his property in favour of Mr Brahmo Dutt (who had the knowledge that the plaintiff was minor). A suit was filed by Dharmodas against Mr Dutt on the basis that he was a minor and hence the mortgage should be void.

The judgement of the case was- any contract that involves a minor will be void ab initio so in this case, the mortgage deed was also void.

V. Effects of a Minor’s Agreement

Minors agreement, as stated above is void so both the parties involved in the contract are not obligated to perform, therefore, all the effects of this agreement work independently of the contract.

Following are the effects of minor’s agreement-

  1. No Estoppel Against Minor

A minor who enters a contract under false pretence and claims to be a major, there will be no estoppel against him and he legally does not need to prove his age in front of the court. The reason behind this is to protect the minors from liability he owes to the major.

For example- If A, who is a minor, pretends to be major and enters into a contract to sell his father’s car to make money for his PlayStation with B, who is unaware of the fact that A is a minor and locks a deal. Later, A’s father finds out about the contract; B angrily goes to the court and asks for compensation from the court. A being a minor, has no obligation to pay compensation to B and there will be no estoppel held against him.

The cases involved-

This was held in the following case of Jagar Nath Singh v. Lalta Prasad[2] that no estoppel shall be invoked in the case of a minor as the contract, by law, is already void ab initio.

  1. No Liability in Contract or in Tort Arising Out of Contract

A minor is incapable to give his consent to enter a contract and therefore, in a contract without consent, no legal action can be taken whatsoever as the contract is void (contract being non-consensual). Hence, an infant who falsifies his age to enter a contract is not liable to pay the compensation or damages during the breach of the contract. Therefore, a minor is not liable for anything in this case.

The case is, therefore, a little different when it comes to tortious liability, a minor can be sued and must pay compensation when it comes to committing torts like negligence or trespass.

But one must note:

“You cannot convert a contract into a tort to enable you to sue an infant.”

This means that if an infant enters into a contract and commits a tortious liability, he will be held liable for the tort, no. This means that the plaintiff cannot plead to sue the defendant (minor) because of the tort committed in order to get compensated for the breach of contract.

For example- If Mr X, a minor, rents a guitar from Mr Y, a major for 2000 rupees per week. Mr X without Mr Y’s permission gives the guitar to Mr Z. In this case, Mr X will be held liable as the act committed by him was not a breach of contract but a commission of a tort. Here, tort and contract are independent so the “minor” will be held liable.

The cases involved

In Burnard v. Haggis[3], an undergraduate (a minor) from Cambridge hired a horse for riding and during the contract mentioned that he would not use it for jumping. He further lent it to his friend who used the horse for jumping and the horse injured itself.  It was held that the infant was liable as the act which caused the injury was outside the range of the contract and could not be used to prove that it was a breach of the contract. It was not an abuse of the contract.

Likewise, in Ballet v. Mingay[4], an infant hired an instrument and passed it to his friend. When he was incapable to return it, he was held liable for the tort of detinue.

  1. Ratification of a Contract

There is no such thing as ratification of a minor’s contract. If a person, during the time of entering into the contract is minor, then the contract is void. The minor after becoming a major, cannot rectify the contract (the contract if rectified, will not be valid). It cannot be rectified as it is believed that if a minor does not have the mental capacity to enter into a contract, he shouldn’t be given the authority to rectify it.

In addition to this, if the parties who entered into the contract, show interest can make a new contract with the condition that the consideration in this new contract will be a fresh one as the previous consideration cannot be used again.

For example- Mr X (a minor) enters into a contract with Mr Y on 20th October 2019 (this contract is void) to sell his car to him for a certain amount. This contract being void is illegal but if they wish they can enter into a new contract as soon as Mr X turns 18 with a new consideration.       

The cases involved-

In the Kundan Bibi v. Sree Narayan[5] case, a minor enjoyed the benefits of a contract during his minority years and after attaining majority as well. It was held by the court that because there is valid consideration (after attaining majority), the contract is valid.

  1. Doctrine of Restitution

If a minor misrepresents his age and claims to be an adult and also enters into a contract, he can be asked to restore the goods in his possession that were part of the contract, as long as they are in his possession (not sold/given to someone else or converted them) and it is not consideration (money). If asked to do so otherwise, it would mean enforcing a void contract i.e., minor’s agreement.

For example- Mr. X (a minor) enters into a contract with Mr. Y and hires a car for three days. During those three days, he sells the car. Mr. Y after finding about it files a case in the court of law asking for compensation. As seen, Mr. X no more has the possession of the car, therefore, he will not be asked to compensate. But if the case was that he still had the car, and refused to give it back, the doctrine was restitution would have applied.

In addition to these four main effects, there are some other effects as well-

  1. The parents of a minor will not be held liable if the minor falsifies his age but they will be held liable if the minor was entering into the contract on his parents’ accord.
  2. A minor cannot declare bankruptcy
  3. A minor cannot hold, buy/sell any shares in a company but a major who is the minors guardian can do it on his behalf.

VI. Conclusion

In conclusion, according to section 11 of the Indian Contract Act, a minor cannot enter into a contract. After a productive debate, it was concluded that the minor’s agreement is void ab initio and not voidable at the minor’s will. It has many effects but they are independent of the agreement as a void contract cannot have consequences.

In the case Mohori Bibee v. Dharmodas Ghose[6], it was concluded that any contract that involves a minor will be void ab initio and will follow no consequences. This was the landmark judgement that stated the nature of the minor’s agreement.

So, if a minor enters into a contract, he will not be liable, he will not be asked to compensate for the breach of the contract and he cannot restitute a contract after he becomes a major.

[1] (1903) 30 Cal. 539

[2] (1908) 21 All 21

[3] 8 LT 328

[4] (1943) KB 281

[5] (1906) 11 CAL W.N. 135

[6] (1908) 21 All 21

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