Law of Contracts with Minor
Updated: Dec 17, 2022
Nature of minor's contract:
Let's first understand who is a minor? A minor is someone who is below 18 years old. The age of the guardian of a minor's property or person should be 21 years old. Section 11 states that minors are incompetent to enter into a contract but the Indian Contract Act is not clear as to whether such contract is void (formal agreement that is effectively illegitimate and unenforceable from the moment it is created) or voidable (it is a valid contract which may be either affirmed or rejected at the option of one of the parties. At most, one party to the contract is bound). Privy Council of 1903 held that the minor's contract is void and merely voidable based on sections 10,11,183,184 and old sections 246 and 247 (now section 30 of the Indian Partnership Act).
Equitable Doctrine of Restitution:
According to this if a minor obtains property by the fraudulent representation of age then he/she can be ordered to restore property/goods obtained by him/her. By the English law, if the minors are traceable then they can be compelled to restore the property/good. Money is generally not traceable hence restoring the property/good from minors is not easy.
Privy Council declared the law in the Mohori Bibee case stating that the minor's agreement is void generally, but it has been growingly "confined to cases where a minor is charged with obligations and the other contracting party seeks to enforce those obligations against the minor". Minors are allowed to enforce a contract if they get a benefit out of it and do not have to bear any obligation.
Minor is capable of purchasing immovable property and he may
sue to recover the possession of the property purchased upon tender of the purchase of money. Transfer that has already been executed in favour of minor is much less impeached. Minor may enforce promissory notes executed in his favour. In case of consideration given to minor fails, he may have restitution. For restitution to happen there should be a complete failure of consideration.
1) To understand the effect of fraudulent misrepresentation of age by minor: Mohori Bibee v. Dharmodas Ghose
2)To understand Equitable Doctrine of Restitution: Leslie v. Sheill, Khan Gul v. Lakha Singh and Wasinda Ram v. Sita Ram
Minors ( less than 18 years old) and their guardians should be well aware of some facts like the Rule of Estoppel doesn't apply to minors and many more before entering into a contract to ensure smooth and legal transactions