NMIMS SCHOOL OF LAW

A PROJECT SUBMITTED ON;

Position of Minor in a Contract
IN COMPLIANCE TO PARTIAL FULFILLMENT OF THE MARKING
SCHEME, FOR TRIMESTER III OF 2014-2015, IN THE SUBJECT OF LAW
OF CONTRACT SUBMITTED TO FACULTY:
PROF. SUNIL GEORGE
SUBMITTED BY:
Neel Narsinghani
BBA LLB (HONS) ROLL NO A059

RECEIVED BY: ____________________________

ON DATE: __________ TIME: _______

Page 1 of 28

Chapter 1

Introduction
Evolution
Underlining principle
Brief outline of chapters

7-10

Chapter 2

Legal Analysis
Study of Contractual Provisions
Present Legal Framework
Issues and Challenges

11-15

Chapter 3

Role of Judiciary
Landmark Cases
Other Cases

16-19

Chapter 4

Comparative Study
With other countries
I. England
II. Australia
With other laws
I. Minor Under Tort Laws
Conclusions and Suggestions

20-23

Bibliography

28

Chapter 5

24-27

INDEX

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Abbreviations
Sr.
No.

Abbreviation

Full-form

S.

Section

SC

Supreme Court

AIR

All India Reporter

A.D.

Anno dominie

Ors.

Others

ICA

Indian Contract Act

Co.

Company

UK

United Kingdom

Table of Statues Referred

Sr
No
.
1.

Statue

Year

Indian Contract Act,

1872

2.

Indian Majority Act, 1875

1875

3.

Indian Evidence Act

1872

4.

Transfer of Property Act

1882

5.

Family Law Reform Act, 1969(England)

1969

6.

Infant's Relief Act(England)

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Table of Cases Referred

Sr.No
1

Case
Mohori Bibee v. Dharmodas Ghose

Year
1903

Sri Kakulam Subrahmanyam vs Kurra Subba Rao

1944

Ramchandra vs Manikchand And Anr

1968

Suresh Chandra Pradhan vs Ganesh Chandra De And Ors.

1949

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Research Methodology
Relevance of the Topic:
The topic being Position of Minor in a contract aims at researching on the current
prevailing laws regarding the same and thus becomes a highly important study to be
undertaken by a Law student. This topic is relevant because it adds to current knowledge of
the researcher and helps in having a better understanding of the topic. Moreover, as a law
student, this study helps in expanding ones own chunk of knowledge on law.
Objective of the study:
The primary objective of the study has been to gain more knowledge on the topic where the
interests of the researcher lie. Moreover, the aim is also to bring out the details regarding the
position of a minor in any contract and also to explain the principle behind having such laws.
The project has been made with an aim to benefit the researcher and also the reader by
providing information on the subject.

Research questions:
What is the position of Minor in a contract in India?
Is a minor incompetent for entering into each and every type of contract?
What are the laws on the topic that are followed by other countries?
What are loop holes in our laws on the subject?
Which measures can be taken to bring about a positive change in the laws relating to
topic?

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Limitations:
The project is only limited to secondary sources of data. No primary data has been collected
in the process of making of the project. The research of the project is limited to books,
articles and internet websites. Moreover few sections of the guidelines stand irrelevant with
the topic and thus no research has been conducted on those sectors, For eg. The principles set
out by the judiciary are reflected in the Cases and their judgements, so only the section that
contains cases has been focused upon.

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CHAPTER- I
Introduction
What is a Contract?
A written or spoken agreement, especially one concerning employment, sales, or tenancy,
that is intended to be enforceable by law.
Section 2 (h) of the Indian Contract Act, 1872 defines a contract as: An agreement
enforceable by law is a contract. Contract is a combination of agreement and
enforceability. Creation of obligation on the part of the parties to an agreement to
perform their liabilities gives the cause o f e n f o r c e a b i l i t y o f a n a g r e e m e n t . T h e
n a t u r e o f a g r e e m e n t i s t h e n changed into a contract.
Miserable must the conditions of minors be; excluded from the society and commerce of the
world.1
When penned well over two hundred years ago, this quote was thought to capture the
sentiment that minors were regarded as incompetent to contract. However, minors seem to
have the last laugh in today's society of technologically driven commerce. In fact, minors are
not excluded from the world's commerce at all; they are squarely in the middle of it. The
reality is that adults have always contracted with minors in some form or fashion. Major
industries strategically target those under the age of eighteen, confirming that this segment of
the population is viewed as an important part of the economy. Other industries depend upon
patronage by minors for their very existence, particularly those industries that provide
products and services associated with electronic commerce; and therein lies the problem.
There are some rules and regulation laid by each countrys government in this regard. Here
in India we have 3 categories of people that are incompetent to form a contract:
i)
ii)
iii)

Minors
Persons of Unsound Mind
Persons disqualified by law to which they are subject2

1 Zouch v. Parsons, (1765) 97 Eng. Rep. 1103, 1106-07 (K.B.)

2 Ashok Kumar J PAndya v Suyog Co-op housing society Ltd, AIR 2003
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The term Minor has nowhere been defined under the Indian contract Act. But the age of
majority of a person is regulated by Section 3 of the Indian Majority Act, 1857. The Indian
Majority Act 1875 declares in section 3 that every person domiciled in India shall be deemed
to have attained his majority when he shall have completed the age of 18 years, and not
before. The age of majority being 18 years, a person less than that age even by a day would
be a minor for purposes of contracting.3 If a guardian has been appointed by the court, an
agreement entered into by the minor before completing 21 years of age is void.4

Evolution:
Before India had a contract act of its own governing the contracts happening in the country, It
was following the laws under the common law as India was ruled by British people. The
rules and regulation back then were quite similar, only a few sections had a deviation. Thus
the law in India that are still used to govern the Contracts have a lot of similarity to the
Common Law Laws that were used back then in India. Back then, the contract by a minor
was Voidable. This clause when adopted by India while forming its own contract act, was
changed. The Evolution took the shape of the Indian Contract Act, 1872. But even after the
formation of the Indian Contract Act, no section made it clear whether, if a minor enters into
an agreement, it would be voidable at his option or altogether void. These provisions had,
therefore, quite naturally given rise to a controversy about the nature of minors agreement.
The controversy was only resolved in 1903 by the Privy Council in Mohori Bibee v.
Dharmodas Ghose5 by declaring that the agreement would be void. The ruling of the privy
council has been generally followed by the courts in India and applied both to the advantage
and the dis-advantage of the minors.
In the modern circumstances of society it does not seem to be possible to adhere to the
categorical declaration that a minors agreement is always absolutely void. Over time, the
common law has shifted its view of minors' ability to enter binding contracts. The harsh rule
prohibiting minors from entering into contracts was eventually tempered to allow minors to
3 Bhim Mandal v Magaram Corain AIR 1961 Pat 21
4 Ajudhia Prasad v. Chandan Lal AIR 1937 All 610
5 (1903) 30 Cal. 539
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make certain kinds of agreements. Courts began to determine the validity of minors' contracts
based on the fairness of the terms of the contract. Based on these categories, courts held the
contracts to be void, voidable, and binding, respectively.6Eventually, this stratified rule was
discarded and supplanted by the modern view. The law, however, grants minors a special
privilege to disaffirm their contracts.7 After a contract is disaffirmed, the contract is to be
treated as if it never existed, and any consideration that changed hands is to be returned. The
reasoning behind allowing minors to choose when to disaffirm their contracts is that minors,
it is assumed, will only choose to disaffirm contracts that are prejudicial. The privilege to
disaffirm, however, is not unqualified. For example, states generally agree that minors may
not disaffirm contracts for the necessities of life (e.g., clothing, food, medical care).If minors
were allowed to disaffirm these types of contracts, then businesses would not deal with
minors and minors would be denied access to the necessities of life. Minors are appearing
public life today more frequently than ever before. The privy council had, therefore, to
modify its earlier decisions and held in Sri Kakulam Subrahmanyam vs Kurra Subba Rao 8
that the transfer of the transfer of the inherited property of a minor effected by his guardian to
pay off an inherited debt was binding on him for his benefit.

Underlying principle:
Society continues to view minors as vulnerable victims subject to detrimental contractual
terms. Minors possess a powerful privilege to protect themselves from terms that no longer
exist in most modern online agreements. Some commentators have opined that minors were
traditionally restricted from entering into contracts so that they would be protected from their
own navet, and from adults who would take advantage of them. This rationale parallels
modern doctrines. While modern courts do not often delve into the relative merits of a
bargain, instead preferring to leave the value judgment up to the parties, they do examine
whether the parties were capable of making the bargain in the first place. 9 For example,
courts commonly will void contracts where the information presented by one party misled
6 RICHARD A. LORD, WILLISTON ON CONTRACTS at 9:9 (4th ed. 2009)
7 Ibid at 9.5
8 AIR (1948) PC 25
9 7 JOSEPH M. PERJLLO, CORBIN ON CONTRACTS 28.1-.2 (2002)
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the other party,10 or where a party was not able to understand the ramifications of the
agreement.11 As one scholar commented, While Nomad tribes might abandon... infants who
appeared to be weak, the solicitudes of our law makers for the welfare of the young and
otherwise helpless individuals goes far back in our civilization. In fact, the protection of the
weak, helpless, and unfortunate has been strongly stressed in the religions of all our people
from ancient times.'

Scheme and scope of topic:

This study has been focused on the laws regarding the competency of minors to the contract.
The study gives a brief introduction and evolution of the topic with the underlying principle
that is kept in mind by the law-makers while framing the laws on the subject. The contractual
provisions in the Indian contract act are elaborated upon so as to bring clear understanding.
This study is backed by various Case Studies as to how does the Indian judiciary interprets
the laws relating to the minors competency in the contract. The laws in the India on the
subject are to the prevailing laws in England. And the liability of minor in contract is
compared to liability of a minor in torts and proper elaboration has been done one the same.
The study ends with a conclusion and the suggestion part in which various measures are
suggested which can bring about a positive change in the laws and fill in the loop holes.

10 Ibid 28.13
11 Ibid 27.14
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CHAPTER- II

Legal Analysis
One of the essential for a valid contract is that the party must be competent to contract. This
has been stated in the Section 10 of the Indian Contract Act, 1872. Section 11 further
explains as to which parties are competent to contract and who are not.
Section 11 provides that 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.
But again, the question arises of, who is considered to be a minor? As nowhere in the Indian
Contract Act, the term minor has been explained.

According to Section 3 of the Indian

Majority Act, 1875, a minor is a person who has not completed 18 years of age. However, in
the following two cases, a minor attains majority after 21 years of age:
i)
ii)

Where a guardian of minors person or property has been appointed under the
Guardians and Wards Act, 1890,or
Where the superintendence of minors property is assumed by a Court of Wards.

I n I n d i a S e c t i o n 11 e x p r e s s l y p r o v i d e s t h a t t h e a g e o f m a j o r i t y o f a
person is to be determined according to the law to which he is subject. The Courts of Law
used to decide the competency of contract by the law of domicile and not by the
law of the place where the contract is e n t e r e d i n t o . B u t t h e l a t e r t r e n d o f
l a w f o r d e t e r m i n i n g t h e a g e o f majority is:
a) In the case of contracts relating to ordinary mercantile transactions, the age
of majority is to be determined by the law of the place where the contract is made;
b) In the case of contracts relating to land, the age of majority is to be
determined by the law of the place where the land is situated.12

12 T.N.S. firm vs. Mohd Hussain.

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Law regarding minors contract:

The section 11 of the Indian Contract Act can be Analysed in the following manner:
1. A contract by a minor is absolutely void:
A contract by a minor is absolutely void and inoperative. Further where a minor is charged
with obligations and the other contracting party seeks to enforce those obligations against
minor, the contract is deemed as void ab initio. A minors contract being absolutely void,
neither he nor the other party acquires any rights or incurs any liability under the contract. So
a minor is neither liable to perform what he has promised to do under a contract, nor is he
liable to repay money that he has received under it. The principle behind this ruling is, a
minor is incapable of judging what is good for him. A minor, however, can derive benefits
under the Act. That means, a minor can be a beneficiary i.e. a payee, an endorsee or a
promise under the Act.
2. A minor cannot be compelled to compensate for or refund any benefit which he has
received under a void contract:
Section 64 and 65 of the Contract Act, which deal with restitution, apply only to contracts
between competent parties and are not applicable to a case where there is not and could not
have been any contract at all. It has also been observed in many cases that the court may, on
adjudging the cancellation of an instrument at the instance of a minor, require the minor to
make compensation to the other party to the instrument.
3. A minor cannot ratify an agreement on attaining majority:
Ratification means consenting to a past contract entered into during minority at a future date
on attaining majority. A minors contract being nullity and void ab initio has no existence in
the eye of law. Therefore, a minor on attaining majority cannot ratify a contract entered into
while he was a minor. The reason is that a void contract cannot be validated by any
subsequent action and a minors contract is void ab initio.
4. Minors liability for necessaries supplied to him or to anyone whom the minor is
bound to support:
The case of necessaries supplied to a minor is covered by Section 68 of the Contract Act
which provides as follows-If a person incapable of entering into a contract, or anyone 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 property of such incapable person. The minors property is liable for the payment of a
reasonable price and not the price for necessaries supplied to the minor or to anyone whom
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the minor is bound to support. What is a necessary article is to be determined from the status
and the social position of the minor.
5. The Rule of Estoppel does not apply to a minor:
Section 115 of the Indian Evidence Act explains that-The principle of estoppel is a rule of
evidence. When a man has, by words spoken or written or by conduct, induced another to
believe that a certain state of things exists, he will not be allowed to deny the existence of
that state of things. Lord Halsbury has written that-Estoppel arises when you are precluded
from denying the truth of anything which you have represented as a fact, although it is not a
fact. In India it has been held that the court can direct the minor to pay compensation to the
other party in cases where an infant obtains a loan by falsely representing his age he cannot
be made to pay the amount of the loan as damages for fraud, nor can be compelled in equity
to repay the money.
6. Specific Performance Order by Court will never be issued to a minor:
As we are aware that an agreement by as minor is absolutely void, the court will never direct
specific performance of such a contract by a minor. But a contract entered into, on behalf of a
minor, by his guardian or by the manager of his estate will be binding on the minor and can
be specifically enforced by or against the minor provide(i) The contract is within the authority of the guardian or manager;
(ii) It is for the benefit of the minor.
7. Minor as a Partner:
Law says that A minor being incompetent to enter into contract cannot be a partner in a
partnership firm; but under Section 30 of the Indian Partnership Act 1932, he can be admitted
to the benefits of partnership with the consent of all the partners by an agreement executed
through his lawful guardian with the other partners. Such a partner will have a right to
receive share of the property or profits of the firm and can have an access to and inspect the
books of account of the firm. The minor cannot participate in the management of the business
and can bear losses of the firm only up to the extent of the capital contribution in the firm. He
cannot be made personally liable for any obligations of the firm, although he may after
attaining majority accept those obligations if he thinks fit to do so.
8. Minor as an Agent:
A minor can be appointed as an agent (Sec 184). He can draw, make, indorse and deliver
negotiable instruments so as to bind all parties except himself. In other words, it can be said

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that a minor can bind the principal by his acts done in the course of the agency, but he cannot
be held personally liable for negligence or breach of duty.
9. Minor and the insolvency:
A minor cannot be adjudicated as an insolvent as he is incapable of entering into contracting
debts. Even for the necessaries supplied to him, he is not personally liable, only if his
property is liable (Sec 68).
10. Contract by a minor and a major jointly:
Where a minor and a major jointly enter into a contract with another person the minor has no
liability but the contract as a whole can be enforced against the major.
11. Surety for a minor:
A contract by s minor is void, but a contract by a guardian on his behalf is valid. Where a
guardian enters into a contract in respect of his property on behalf of the minor, it is valid,
provided it is for his benefit or for legal necessity.
12. Position of minors guardian:
A contract entered into by the guardian of a minor on his behalf stands on a different footing
from a contract entered into by a minor himself. A contract by a minor is void but a contract
by a guardian on his behalf is valid provided the obligations undertaken are within the
powers of the guardian. A contract made by the guardian is binding on the minor if it is for
the benefit of the minor or is for legal necessity.
13. Minor as shareholder:
According to Contract Act, a minor being incompetent to contract can not be a shareholder
of the company. Therefore a company can refuse to register, transfer or transmission of
shares in favour of a minor unless the shares are fully paid. A minor acting through his lawful
guardian may become a shareholder of the company, in case of transfer or transmission of
fully paid shares to him.
15. Minors marriage:
Minors contracted by their parents and guardians is valid. It is valid on the ground of the
custom of the community.
16. Relinquishment by a minor:
A release by a minor of his rights in a property is absolutely in fructuous in law.
17. Service contracts:

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(i) A contract for personal service by a minor is void under the Indian law and the mere fact it
is for his benefit would not entitle the minor to sue under the contact.
(ii) A minor may bind himself by a contract of apprenticeship if it be for his benefit but he
cannot be used for failing to serve as such.
(iii) Contract with minor does not create legal contractual relationship between the parties.
Minor girls entering into a contract of service a person can leave the service at any time
without committing any actionable wrong.
18. Minors Parents:
The parents of a minor cannot be held liable for any contract that a minor enters into.
However, they can be held liable in case the minor is acting as their agent.

Issues:

Our legal systems respond with a set of provisions which are quite often obsolete and
in need of reform to the new freedom accorded to minors, their growing purchasing
power, and generally, their increasingly important participation in almost every aspect

of contemporary life.
Minors are granted more power than necessary. Some minors, mature enough can
take undue advantage of the laws that are bent towards them. For eg- Minors can
disaffirm to majority of the contracts. This is not encouraging on the side of a
business owner. The minor not disclosing his age, if enters into the contract and
disaffirms to the same, the other party can run into losses without having much fault

on his part.
Minors possess a powerful privilege to protect themselves from terms that no longer
exist in most modern online agreements. Because businesses often no longer have this
information available when transacting online, the privilege should be mitigated to
remediate the loss of the ability of an adult to avoid contracting with minors.

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CHAPTER-III

Role of Judiciary
Landmark cases:
Mohiri Bibi v. Dharmodas Ghose13
Held : That in India minors contracts are absolutely void and not merely voidable. The facts
of the case were:
Dharmodas Ghose, a minor, entered into a contract for borrowing a sum of Rs. 20,000 out of
which the lender paid the minor a sum of Rs. 8,000. The minor executed mortgage of
property in favour of the lender. Subsequently, the minor sued for setting aside the mortgage.
The Privy Council had to ascertain the validity of the mortgage. Under Section 7 of the
Transfer of Property Act, every person competent to contract is competent to mortgage. The
Privy Council decided that Sections 10 and 11 of the Indian Contract Act make the minor s
contract void. The mortgagee prayed for refund of Rs. 8,000 by the minor. The Privy Council
further held that as a minors contract is void, any money advanced to a minor cannot be
recovered.
Lord North observed- The question wheather a contract is void or voidable presupposes the
existence of the contract within the meaning of the act, which cannot arise in the case of a
minor.
After the judgement, the principle that minors contract is absolutely void is laid down. The
law is to merely to protect the child fraudulent manipulations by others but also to provide
him protection against its own ignorance and immaturity of a child may show poor judgment
in making any contract. The generally accepted doctrine that the man is best judge of his own
interests, is not applicable in the case of a minor .

13 (1903) 30 Cal. 539

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Case studies:
CASE I:
Ramchandra vs Manikchand And Anr14. on 9/2/1968 (This appeal is by the defendant. The
trial Court has passed a decree for specific performance.)
The suit was filed by the plaintiffs (respondents 1 and 2), when they were minors, through
their guardian, Smt. Phulibai, their mother. Smt. Phulibai had entered into an agreement
dated 30-9-1961 on behalf of the minors for purchasing house property from the defendant
(appellant) for a consideration of Rs. 11,000. Rs. 1,000 was paid towards earnest and the rest
of the amount was to be paid at the time of the registration of the sale-deed. The relevant
term of the agreement was: The purchaser shall construct a partition wall at his own cost and
in the presence and help of the vendor. The plaintiffs' case was that the defendant did not
obtain permission from the Municipal Corporation and hence the construction could not be
completed. The suit for specific performance was filed. The defence was that the breach was
committed by the plaintiffs themselves and that they were not entitled to the specific
performance. The defendant, claimed that he was entitled to the expenses incurred by them;
and as the plaintiffs' guardian was not prepared to pay the amount, the sale-deed was not
executed. Thus, the breach was committed by the plaintiffs. The trial Court found that the
responsibility of constructing the partition wall was that of the purchaser, even if the
defendant spent any amount, he did it at his own risk; and that, the plaintiffs were always
willing to purchase the property and hence decreed their suit for specific performance. The
plaintiffs were not guilty of committing any breach of the contract and that the defendant was
not willing to execute the sale-deed as per the agreement.
Solution:
The trial court is right as the responsibility of constructing the wall was of plaintiff
(purchaser) and if seller spends the money he did it at his own cost/risk and cannot claim the
amount from the purchaser. Plaintiff has full rights to claim the property of which she has
paid the earnest money and defendant (appellant) has to execute the sale deed as per the
agreement dated 30/09/1961. The appeal should be dismissed.
CASE II: Subrahmanyam's case. 75 Ind App 115 = (AIR 1948 PC 95) 1948
A had executed promissory notes in the sum of Rs. 16,000 in favour of B. He had also
mortgaged certain property to a third party in the sum of Rs. 1,200. A died on 4-10-1935. His
widow entered into an agreement dated 29-11-1935 on behalf of her minor son to transfer the
14

AIR 1968 MP 150

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mortgaged property to B for a consideration of Rs. 17,000. Out of this amount, B was to
utilize Rupees 1,200 in redeeming the mortgage and rest of the amount towards satisfaction
of his own debt under the promissory notes. A suit was filed on behalf of the minor for
possession of the property on the ground that the agreement entered into by his mother was
not binding on him. The defence was that B was protected under Section 53A of the Transfer
of Property Act. The trial Court held that as A and his son, the minor, were members of a
joint Hindu family, the minor was bound to satisfy the debt. His guardian could have,
therefore, validly transferred the property, as the transfer would have
been for the benefit of the minor. Even though no sale-deed was executed in favour of B, he
was entitled to protection under Section 53A of the Transfer of Property Act. This decision
was reversed by the first appellate Court and was confirmed by the High Court.
The guardian of the Hindu minor was, called upon to decide as to whether the expression 'the
transferor' would include a minor on whose behalf the agreement had been entered into by
the guardian. If the transfer would have been affected, the transfer would have been of the
minor's property, and not of his mother, and hence there was no reason why the minor should
not be treated as a transferor. The High Court was of the view that the observations of the
guardians are not applicable to all contracts entered into on behalf of the minor. We have
already pointed out that the guardian of a Hindu minor could validly transfer his property if it
was for legal necessity or benefit of the estate of the minor; but he had no authority to
purchase any property.
Solution:
A contract by a guardian on his behalf is valid provided the obligations undertaken are within
the powers of the guardian. A contract made by the guardian is binding on the minor if it is
for the benefit of the minor or is for legal necessity. Here the agreement entered into by the
mother of minors is not binding on the minor as the agreement is not for their benefit. Minor
are not bound to satisfy the debt taken by their guardian. The transfer of the said property to
B is not for the benefit of the estate of the minor, thus null & void
CASE III:
Suresh Chandra Pradhan vs Ganesh Chandra De And Ors. On 2/9/1949
Defendants 1 & 2 are minors & the suit-contract is one entered into on their behalf by their
mother as guardian. The contract was for sailing the property for a sum of Rs. 75 out of
which Rs. 35 was paid as advance & the balance was to be paid later. Defendant 3 who is the

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sister's husband of defendants l & 2 has purchased the suit property on 3-2-1943 subsequent
to the agreement in favour of the plaintiffs. The genuineness of the consideration alleged to
have been paid thereunder were denied by the defendants & contested in the courts below. It
has been found by the trial Court that the agreement was true & that a sum of Rs. 35 was paid
as an advance under it. It was also found that the agreement was executed in order to raise
money to repay a decretal debt for Rs. 60 against the minors in respect of which there was an
execution pending at the time. It was further found that defendant 3 was fully aware of the
agreement & took the sale deed in his favour with notice of the same. The argument that has
been advanced on behalf of the defendants is that no specific performance can be decreed
against the minors on the basis of a contract entered into on their behalf by their guardian
even though it may be for legal necessity or for the benefit of the minor. This contention has
been accepted by both the Courts below & the suit has been accordingly dismissed.
It has been taken as settled law that a mere executory contract entered into by a guardian on
behalf of a minor imposing a personal obligation on the minor's estate is not valid & binding
& it makes no difference that it is for necessity or benefit.
Solution:
A contract by a minor is void but a contract by a guardian on his behalf is valid provided the
obligations undertaken are within the powers of the guardian. A contract made by the
guardian is binding on the minor if it is for the benefit of the minor or is for legal necessity.
Here the contract entered into on their behalf by their guardian is for legal necessity but no
specific performance can be decreed against the minors because Minors liability is only for
the necessaries supplied to him.

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CHAPTER IV

Comparative Study:
England:
Modern Contract Law is fundamentally a creature of the nineteenth century. It arose as a
reaction to and criticism of the medieval tradition if substantive justice.15
The age of majority in England was formerly 21 years. But now under the Family Law
Reform Act, 1969, a minor is a person under the age of eighteen years 16. Formerly a minor
was referred to as an infant, but this Act has changed the term to minor. 17 When the
adult reasonably believes that the minor

is over twenty-one, either because the latter

misrepresents his age or engages in business as an adult 18, the minor is not allowed to
disaffirm the contract. At common law the minor was permitted to disaffirm the contract
although he had lied as to his age.19 The English Infant's Relief Act applies a stringent rule in
some instances by declaring certain contracts of a minor to be void and therefore impossible
of ratification. The common law, however, has long rejected the notion that the power to
disaffirm is not sufficient protection for the infant. It is difficult to see, therefore, the utility
of reviving the category of void contracts.20 Since the common law rule has occasioned no
difficulty in its application, and since it permits a minor to determine for himself, after
attaining majority, whether or not the agreement is beneficial, it should be retained. There
was never any authority under the English law stating that infants were absolutely
incompetent to contract.
Distinction between English law and Indian Law as to Minors Contract:
15 The Historical Foundations of Modern Contract Law, Morton J. Horwitz, Harvard Law
Review, Vo. 87, No.5(Mar., 1974), p. 917

16 Section 1, Family Reform Act, 1969

17 0 Section 12, Family Reform Act, 1969
18 St. John's L. Rev. 154, 157 (1941
19 Sternlieb v. Normandie Natl Sec. Corp., 263 N.Y
20 CAN. B. REV. 319, 323, 324 (1935)
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The English Law is the principal source of Indian Law. But the Indian Law differs from the
English Law on the subject of minors contracts on the following points:
1. In India the minors contract is altogether void but in England it is sometimes void and
sometimes voidable. In England the loan of money to a minor is void.
2. In India, a minor can ratify a fresh consideration of a contract entered into during minority
where as in England he cannot do so.
3. In India a minor on attaining majority can neither sue nor be sued on contracts entered into
by him during minority but in England he can sue on the contract for damages.
4. In India a minors property is liable for the necessaries and not his personal self acquired
property but in England the minor is personally liable.
Australia:
In general, for a contract to be binding, the minor will have to affirm the contract, that is,
agree to be bound by it, after turning 18. A minor cannot be forced to affirm a contract, so
there is a certain risk in contracting with a minor other than as described below.
On the other hand, although many contracts cannot be enforced against a minor, the minor
can still enforce the contract against the other party.
Some contracts are binding on the minor without the minor affirming them. For example:

A minor can make a legally binding contract for goods or services that are usual
or appropriate to their way of life (called 'necessaries'). These will be such things as
food, clothing, accommodation, medical care, school requirements or sporting goods
appropriate to their age and their standard of living. 'Necessary' goes beyond things
which are essential for survival and includes things which it would be normal for the
minor to have and use at the time the contract is made. A minor can also make
a valid contract for services of instructional or educational benefit, which could include
such things as music lessons, sports coaching, educational tutoring, etc.

Contracts which give the minor some continuing legal obligations are binding
unless the minor chooses to opt out of the contract before, or reasonably soon after,
they turn 18. This is called 'avoiding' the contract. Examples of these types of contracts
are contracts of business partnership, or contracts to lease land. If the minor avoids the
contract, he or she is only responsible for the obligations which have already arisen, not
for any future ones. They cannot avoid past obligations or get back money they have

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paid out in respect of these. However, the minor may be able to get a court order for the
return of their property, previously transferred under the contract, on fair terms.

A minor may make a binding contract with the consent of a court. The minor's
parents can apply on his or her behalf, if the minor wishes to be bound; or the other
party can apply, if he or she wants to make the contract enforceable against the minor. If
the court decides to approve the contract, it will then be legally binding [Minors
Contracts (Miscellaneous Provisions) Act 1978 (SA) s 6].

A minor's performance of a contract may be guaranteed. If the adult party to a

contract wants greater security in contracting with a minor, they can ask the parents (or
some other adult) to guarantee the minor's performance of the contract. The minor's
legal position is unchanged, but the guarantors take on a separate obligation of their
own. If the minor does not do as the contract requires, the other party has a separate
right to sue the guarantors for any loss.

Thus, it can be seen that the laws in Australia are quite similar to that of the laws in India
which govern the contracts.
Other laws:
Minor in Tort Laws:
Minors can be sued if they are old enough to form intent to commit a particular tort or are
sensible enough to prevent from a negligent act done by them. They can sue just like adults
but through their next friends who are obviously their parents. There is no minimum age for
the existence of tortuous liability . A minor, can be very well sued like an adult, if the action
committed by him is in contrast with the reasonable action expected from the child of that
age in a particular situation.
In Gorely v. Codd [1967] 1 W.L.R. 19 , Nield J. held a boy of age more than 16 years for
shooting the claimant with an air rifle in the course of larking about. In the foregoing case
ofTillander v. Gosselin (1966) 60 D.L.R. (2d) 18 the High Court of Ontario, Canada,
established that a minor can be sued if he is old enough to form an intention to do the
necessary act . Similarly in negligence, where intention is not the pre-requisite, the court in
Mullin v. Richards established that a 15 year old school girl was not negligent when she
injured a school friend while fencing with a plastic ruler. Therefore a minor is negligently

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liable if he failed to show the amount of care reasonably to be expected from a child of that
age
A minor is liable in tort as an adult but the tort must be independent of the contract. A Minor
will not be held liable if the tort is based on a contract. A minors agreement is void even if
he fraudulently represents himself to be of full age as established in Sadik Ali Khan v.
Jaikishore. Similarly, in R. Leslie Ltd v. Shiell [1914] 3 K.B. 607 at 620 a minor was immune
to any contractual charges or reimbursement inspite of availing loan facilities by fraudulently
projecting himself of full age. In the same case it was established that it is possible to compel
a minor for specific restitution if he fraudulently acquired some property and is still in
control and possession of that property.

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CHAPTER-V

Conclusion
Society continues to view minors as vulnerable victims subject to detrimental contractual
terms. The competence of minor to the contract has been a controversial issue. Each
countries government has its own rules on the subject, with the majority stating minors as
incompetent to contract. Those declaring minors as incompetent to contract also have slight
deviation of rules from one another. For example, the laws under the common law were quite
different to those followed in England today, and the laws in England are not similar to those
followed in India.
Legal systems restrict the contractual freedom of those involved to protect the interests of
third parties and the society at large. Such restraints aim to protect people from themselves
by limiting their capacity. The special protection traditionally accorded to minors by English
Law has resulted in serious inconvenience and uncertainty to all who deal with them. The
essence of this protection has been a power in the minor to disaffirm any of his contracts,
with varying effect, depending in part on the nature of the contract and in part on the stage of
its performance. On the other hand, after attaining majority a minor has the power to adopt
his contract and bind the other party. Implicit in this protection is the policy of shielding the
infant from the effects of his immaturity and inexperience.
The laws in this aspect all over the world have been changing from time to time. As in, the
Common Law, the age of maturity was 21 years, which with time was found to stringent and
in England it was brought down to 18. Even In India there was a huge cause of contention
regarding whether contracts with Minors are voidable or altogether void. To which, the
principle was finally established in the Mohiri bibi v. Dharmodas Ghose by the Privy
Council. Even the court stated that the contract by a minor was altogether void, but still the
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courts of India from time to time have deviated from the principle as with the changing times
the principles turn obsolete.
In India, we have Section 10 of the Indian Contract Act, taking about the essentials of a valid
contract, and parties competent to contract being one of the essentials. Section 11 further
elaborates as to which are the parties competent to contract. Although there is only one
clause stating that minors are incompetent to contract, the Indian judiciary has interpreted it
in a wide manner. Under which conditions contract with a minor is valid or voidable has been
determined by the judiciary over the period of years. It is due to wide interpretation that
today minors are able to form certain contracts with adults. The laws and the structure in
which the system worked have drastically changed in this aspect.
Although with the changing times, the laws have change drastically there are still loopholes
and scope of improvement in the same. No countrys law can be stated perfect, as with the
changing times, even the best of the laws turn obsolete and have to be amended so as to keep
the rights of the people intact. And the Laws of each country have majority of the part same
but still have minute differences because the majority part, that is same for all the countries is
based on fundamental principles that stay same everywhere, there are only these minute
differences in these laws from place to place as they help in shaping the laws that can most
suitable for that country.

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Suggestions:
The laws in each country regarding minors competency to contract has been under constant
evolution. This is the reason the laws are able safeguard the interest of the people of each
times. Although there are several amendments from time to time and also the judiciary has
been taking active part in interpreting the law in new and better manner which suits the
society better, the laws that are prevalent today still have a few loopholes that need to be
taken in consideration so as to form new and better laws for the new societies. The following
measures can be undertaken so as to improvise upon the current prevailing laws:

Our legal systems respond with a set of provisions which are quite often obsolete and
in need of reform to the new freedom accorded to minors, their growing purchasing
power, and generally, their increasingly important participation in almost every aspect
of contemporary life. All this should be taken into consideration while amending the
prevailing laws.
For the minor who is mature and desires to engage in business, the courts should be
empowered, after adequate enquiry, to remove all the disabilities of infancy.
There are minors who are mature enough to enter into a contract. If they want to enter
into an contract or remove their disabilities of infancy, their request should be taken
into consideration and if proven mature enough to contract after proper examination,
they should be allowed to enter into a contract.
Another provision is needed to cover the situation in which the minor is unready for
complete removal of disabilities but should be bound to an isolated contract. Courts
should be empowered, on petition of either party, to approve single contracts in such
instances. Such a provision would enable an adult to protect himself so long as he has
not overreached.
Minors are granted more power than necessary. Some minors, mature enough can
take undue advantage of the laws that are bent towards them. For eg- Minors can
disaffirm to majority of the contracts. This is not encouraging on the side of a
business owner. The minor not disclosing his age, if enters into the contract and
disaffirms to the same, the other party can run into losses without having much fault
on his part.
Minors possess a powerful privilege to protect themselves from terms that no longer
exist in most modern online agreements. Worse yet, there is no way of avoiding
agreements with minors. Businesses have lost the ability to avoid exposing
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themselves to void contracts. Thus, not only have minors been given a privilege that
is largely unnecessary, but businesses' balance against this privilege has been
completely removed by the inability to identify and avoid agreements with minors in
the first place. Therefore, what was once a balance between the minors' privilege to
disaffirm and the businesses' privilege to avoid contracting with minors has now been
reduced to a privilege only benefiting minors. In the past, adults have been able to
rely on their knowledge that they were dealing with minors to avoid entering into
binding agreements with them. Because businesses often no longer have this
information available when transacting online, the privilege should be mitigated to
remediate the loss of the ability of an adult to avoid contracting with minors. The
solution is to require a factual inquiry before a minor can assert the privilege of
disaffirmance. In the past, courts may have been able to rely on the fact that adults
were often aware that they were dealing with minors and had accepted that risk when
making their agreements. Now that courts can no longer presume that knowledge
exists, they must take active roles in determining whether the minors in question
understood what they were doing when entering a contract and balancing this finding
against whether the adults knew they were dealing with minors before allowing
minors to avoid their contracts.
A fair and adequate solution to the problem might be to deny any power to disaffirm
to a minor who has, by misrepresenting his age in writing in a separate instrument,
led an adult reasonably to believe him capable of contracting.
In addition, a minor engaging in business should be required to disclose his age to
anyone with whom he deals. The affirmative duty to disclose his age would prevent
the minor from misleading the adult by his silence and would reduce the uncertainty
of the other party.

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BIBILIOGRAPHY

WEBSITES REFFERED:

http://lex-warrier.in/2010/08/minors-contract-under-indian-contract-act/

http://www.inbrief.co.uk/contract-law/contract-with-minors.htm

http://mercantilelaws.blogspot.in/2012/05/positions-of-minor-in-contracts.html

http://www.klelawcollege.org/content/uploads/documents/5.%20Capacity%20of
%20Parties.pdf

http://www.duhaime.org/LegalResources/Contracts/LawArticle-651/ContractsWith-Children.aspx

http://www.australiancontractlaw.com/law/formation-capacity.html

http://www.lawhandbook.sa.gov.au/ch10s02s03s01.php

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