JAMIA MILLIA ISLAMIA

FACULTY OF LAW

LAW OF CONTRACTS RELATED TO

MINORS

SUBMITTED BY: KHUSHI ANWER

COURSE: B.A.LLB. (Regular), 1st semester
 CONTENTS

 Introduction
 Who exactly is a minor?
 Is agreement by a minor void or voidable?
 What does the English law say?
 Ratification
 Can the law of estoppel be applied to minors?
 What about returning the benefit secured by a fraudulent minor?
 Amendment of the Specific Relief Act
 The final verdict
Note-Unless otherwise stated, the section mentioned in the text are of the Indian Contract Act, 1872

INTRODUCTION

Contracts are an essential part of our everyday life. Contracts are imperative for sustaining
human life and their interactions. Minors are also substantial members of society yet under
most circumstances, minors are barred from forming a legal, valid contract. The position of
minors with reference to contract is rather peculiar. This anomaly arises due to the
underdeveloped understanding of the implications of a contract.

In this project we will discuss the important aspects of law of contracts in relation with
minors as mentioned in the Indian contract Act, 1872.

INDIAN CONTRACT ACT, 1872: The Indian Contract Act, 1872 prescribes the law relating
to contracts in India and is the key act regulating Indian contract law. The Act is based on the
principles of English Common Law. It is applicable to all the states of India.

CONTRACT: According to section 2(h) of the Indian Contract Act “An agreement
enforceable by law is a contract.” 1 All agreements are not contracts. Only the agreements
which satisfy section 10 are considered contracts.
According to section 10, the parties to contract should be competent to contract.2

SECTION 11: “Every person is competent to contract who is of the age of majority according
to the law to which he is subject, and who is of sound mind, and is not disqualified from
contracting by any law to which he is subject.” 3
As stated above, this section clearly mentions that one of the requirements for being
competent to contract is being of the age of MAJORITY or not being a minor. To precisely
understand the above-mentioned section, we first need to understand the exact meaning of a
minor.
1
Indian Contract Act,1872 S.2(h)
2
Indian Contract Act, 1872 S.10
3
Indian Contract Act,1872 S.11
 WHO EXACTLY IS A MINOR?

A minor, more broadly can be defined as someone who is below the age of legal adulthood or
majority. This age can vary in different jurisdictions. The concept of minority rest on the
assumption that children are incapable of self-management.
According to section 3 of The Indian Majority Act, 1875, the age of majority in India is 18
years.4
Now that we clearly understand what a minor is and also than a minor is not competent to
contract, we move on to our next question- Is a contract made by a minor void or voidable?

IS AGREEMENT BY A MINOR VOID OR VOIDABLE?

There are a few things that deserve mention before we proceed to answer this question:
VOID CONTRACT: According to section 2(g), An agreement not enforceable by law is
void.5
According to section 2(j), a contract which ceases to be enforceable by law becomes void
when it ceases to be enforceable.6
VOIDABLE CONTRACT: According to section 2(i), An agreement which is enforceable by
law at the option of one or more of the parties thereto, but not at the option of the other or
others, is a voidable contract.7
This question was for long left for debate and discussion as neither section 10 nor section 11
makes any directly mentions if a contract made by a minor id voidable or altogether void. But
the controversy ended after the decision in Mohiri Bibee v. Dharmodas Ghose case.8
AN AGREEMENT MADE WITH A MINOR IS VOID.
After the decision on the Mohiri Bibee case it was held that the agreement by a minor is void.
The following is a brief summary of the case:

4
Indian Majority Act, 1875 S.3
5
Indian Contract Act, 1872 S.2(g)
6
Indian Contract Act, 1872 S.2(j)
7
Indian Contract Act, 1872 S.2(i)
8
Dharmodas Ghose (plaintiff), a minor, had mortgaged his property to Brahmo Dutta. When
he later sought to void the contract, the court ruled in his favour, declaring the agreement
with the minor void ab initio. The court rejected the application of estoppel, as Brahmo
Dutta’s agent knew of Dharmodas’s minority. Sections 64 and 65 of the Indian Contract Act
were deemed inapplicable because the parties were not competent due to Dharmodas’s minor
status.
It is evident from the facts and decision of the above-mentioned case that a minor’s
agreement is void and completely devoid of any effect. The only exception is when a contract
is for the benefit of a minor.

WHAT DOES THE ENGLISH LAW SAY?

As mentioned in the English law, contract made by a minor is voidable and not completely
void. This means that a minor can cancel or avoid any contract at any time before reaching
the age of majority (18 years). This should be done for a reasonable time afterwards. Also,
the minor is not obliged to give any reason for cancelling the contract.

There are also certain exceptions:

1. Contracts of service
2. Contracts of apprenticeship
3. Contracts of education with children.

These are exceptions because they are considered to be beneficial for minors.

RATIFICATION

Ratification is literally defined as ‘the process of making an agreement official.’9

According to Privy Council, “A ratification in law is treated as equivalent to a previous

authority and it follows that as a general rule, a person or a body of persons, not
competent to authorise an act can’t give validity after ratifying it.”

9
From Cambridge Business English Dictionary
 As the contract with a minor is void, it cannot be ratified after reaching the age of
majority because it is dead and cannot be revived. This point can be explained with the
help of the Suraj Narain v. Sukhu Aheer.10 The facts and decision of the case are as
follows:

A person when he was minor borrowed some money from moneylender. After attaining
majority, he made a fresh promise that he will pay the sum plus interest thereon. It was
held by the Allahabad High Court that the fresh consideration is necessary for the fresh
promise.

WHAT ABOUT THE RATIFICATION OF ACTS DONE ON BEHALF OF A MINOR?

As the agreement by a minor is void ab initio, even if he authorises another person, he

cannot enter into a contract. Due to this, a minor cannot ratify an act done on his behalf.

CAN THE LAW OF ESTOPPEL BE APPLIED TO A MINOR?

Contract with a minor is as previously mention, void ab initio. This means that it is void
from the beginning. So, this type of contract has no value in the eyes of law and the law
of estoppel cannot be applied in this case. Section 115 of The Indian Evidence Act, 1872:

“When one person has, by his declaration, act or omission, intentionally caused or
permitted another person to believe a thing to be true and to act upon such belief, neither
he nor his representative shall be allowed, in any suit or proceeding between himself and
such person or his representative, to deny the truth of that thing.”11

A minor can plead minority and avoid the contract at any time.

The issue of law of estoppel in relation to minors was brought to the courts in Mohiri
Bibee v. Dharmodas Ghose12. A brief summary of the case is already given previously.

WHAT ABOUT RETURNING OF BENEFIT SECURED BY A

FRAUDULENT MINOR?
10
A.I.R. 1928 All. 440
11
Sec.115, Indian Evidence Act, 1872
12
 There are certain differences when it comes to returning the benefit secured by a
fraudulent minor between English law and Indian law. Both the laws will be briefly
discussed.

Returning of
benefit secured

English law Indian law

ENGLISH LAW
The Doctrine of Restitution: According to this, a fraudulent minor has to return exactly
what he has obtained as part of undue benefit. But this is only applicable to goods and
services that are traceable, which means that they have not been transferred and are still in his
possession.
The doctrine of restitution does not apply to money as it is not easily traced. The objective of
this is not to enforce an agreement on a minor but rather to restore the undue benefit he has
received. So, repayment is not the same as restitution and the both should not be confused.
The following case serves as good explanation of this doctrine:
Leslie v. Sheill13: Defendant obtained loans from plaintiff by fraudulently misrepresenting
that he was of full age at the time of contract. Defendant sued him to recover the money. The
court held that in present case, since the money was spent by the defendant, there was neither
any possibility of tracing it nor any possibility of restoring the thing got by fraud, for if the
court will ask defendant to pay the equivalent sum as that of loan received, it would amount
to enforcing a void contract.

INDIAN LAW

Compensation by
a minor

Under sections Under specific

64, 65 and 70 Relief Act

i. Compensation under section 64, 65 and 70 of Indian Contract Act

13
(1914) 3 K.B. 607.
 Section 64 and 65: It was held during the Mohiri Bibee v. Dharmodas Ghose case
that section 64 and 65 in which compensation arises where the parties are competent
to contract. But this does not apply to a minor.

Section 70: According to this, compensation has to be done due to quasi-contractual

liability. Now there are two different views on this. One is that the minor is not
included in section 70 because his case has been dealt with specifically in section 68.
The other argument is that there is no rule against the fact that section 70 can be
applied to a minor in addition with section 68.

ii. Compensation under Specific Relief Act, 1877

Section 39: “Any person against whom a written instrument is void or voidable, who
has reasonable apprehension that such instrument, if left outstanding, may cause him
serious injury, may sue to have it adjudged void or voidable; and the Court may, in its
discretion, so adjudge it and order it to be delivered up and cancelled.”

Section 41: “On adjusting the cancellation of an instrument, the court may require the
party to whom such relief is granted to make any compensation to the other which
justice may require.”
In the case of the above section, there are two different opinions by two different
courts – the Lahore High Court and the Allahabad Court.

 The Lahore High Court

The question of compensation arose in Khan Gul v. Lakha Singh.14

The decision in this case was derived from what was said in the English law in
the Doctrine of Restitution along with section 39 of the Specific Relief Act.
Asking the minor to return the money is not the enforcement of contract. He is
asked to return the money simply because he has unjustly benefited from it.

 The Allahabad High Court

The question of compensation arose in Ajudhia Prasad v. Chandan Lal.15

The following points were put forward:
I. Under the Specific Relief Act, it was held that if the minor is the defendant,
he is not liable to compensate. He only has to do so if he himself is the
plaintiff. If this is not followed then it will go against section 41 of Specific
Relief Act, 1877
II. Deriving from the doctrine of restitution and the decision on Leslie v.
Sheill case, it was said that a minor may be asked to restore the property
only if it is traceable.

AMENDMENT OF THE SPECIFIC RELIEF ACT

14
A.I.R. 1928 Lahore 609
15
A.I.R. 1937 All. 610
The Law Commission in its reports, have favoured the view of the Lahore High Court. It was
in favour of permitting an action against a fraudulent minor irrespective of the fact that he is a
defendant. The commission recommended a suitable amendment of the Specific Relief Act
and to include a sub-section in the new provision.
The provision is as follows:
“Power to require benefit to be restored or compensation to be made when instrument is
cancelled or is successfully resisted as being void or voidable. —

(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.”16

“(2) Where a defendant successfully resists 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, so far as may be, such benefit to that party or 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 has benefited thereby.”

WHAT’S THE FINAL VERDICT?

If a minor goes to court as plaintiff, he can be made to repay the benefits received by him
under the agreement. But if a minor goes to court as a defendant, he can be made to repay
the benefit that he has received personally. This compensation can also be in the form of
money unlike the English law.

BIBLIOGRAPHY

 Indian Contract

16