Legal Position of a Minor / Rules regarding Minor’s Agreement* According to Section 3 of the Indian Majority Act, 1875, "A minor is a person who has not completed eighteen years of age."* Section 11 clearly states that a minor is not competent to contract. If a person enters into a contract with a minor, then such contract is void and inoperative ab initio. * The law protects the minors since minors need protection because they have no experience of legal issues involved in a contract.* A minor can receive benefit of action but is not bound by any obligation or answerable for any action. The law goes to the extent that even if a minor enters into a contract by telling a lie , no legal action can be taken against him. * But according to Section 68, the property of a minor is liable to pay for the necessaries' required by the minor . The main purpose of this section is to protect the rights of those supplying these 'necessaries' to the minor. But what is important to note is that the minor personally cannot be held liable — it is his property that is liable, not the minor.Case: Mohri Bibi Vs. Dharmodas Ghosh (1903) * A minor , Dharmodas mortgaged some property in favour of Brahm Dutt, husband of Mohri for a loan of Rs. 20,000 , out of which Brahm Dutt paid the minor a sum of Rs. 8000. He became a major a few months later and filed a suit for the declaration that the mortgage executed by him during his minority was void and should be cancelled. It was held that a mortgage by a minor was void and Brahm Dutt was not entitled to repayment of money.(1) Contract with a Minor is Absolutely Void * Contract with a minor is absolutely void because according to Section 11 ,a minor is not competent to make a contract. If a minor receives some money and promises to do something in return, he cannot be enforced by law to perform the act for which he has received money, or to return the money. * The case of Mohri Bibi v Dharmodas Ghosh is an important example in this caseLegal Position of Minor 1) Contract with a Minor is Absolutely Void 2) Contract for Necessaries of Life 3) Minor's Contract for his Benefits 4) Contract by Parents or Guardians of the Minor 5) Minor's Contracts cannot be Ratified on his Becoming a Major 6) There can be no Restitution or Refund of Benefit 7) The Doctrine of Estopple does not Apply against a Minor8) 9) 10) 11) 12) 13 14) 15) Minor as an Agent Minor as a Partner Minor as Shareholder Surety's Liability for Minor Position of a Minor in a Negotiable Instruments Liability for Torts No insolvency Minor cannot bind parent or guardian(1) Contract with a Minor is Absolutely Void * Contract with a minor is absolutely void because according to Section 11 ,a minor is not competent to make a contract. If a minor receives some money and promises to do something in return, he cannot be enforced by law to perform the act for which he has received money, or to return the money. * The case of Mohri Bibi v Dharmodas Ghosh is an important example in this caseCYP) Tas le ee tle be) * A minor sold his shop. The buyer made the payment, but the sale deed could not be registered because the seller was a minor. When the buyer filed a suit, the court held that a contract with a minor is void, and the money that has been paid cannot be reclaimed(2) Contract for Necessaries of Life * Section 68 specifies that a contract made by a minor for the procurement of the necessaries of life is a valid contract. * The minor personally cannot be held liable — it is his property that is liable, for the payment of necessaries. If the minor does not own any property, then the provider or supplier of these necessities cannot recover his price.* The necessaries depend on the economic condition and life style of the minor. * Necessaries mean those things that are essentially needed by a minor. They cannot include luxuries or costly or unnecessary articles.* Food and clothing, rent for the house, expense for medicine, travelling expense, money spent on birth or death rites, expense on maintaining the normal standard of living, expense on the maintenance of property are recognized as necessities under the Indian law. * But if the minor is in possession of any or some of these necessities, a loan taken by the minor to buy such necessities is not taken to be a valid contract.(3) Minor's Contract for his Benefits * A minor can make a contract for his benefit. If a contract is beneficial to a minor it can be enforced by him. * There is no restriction on a minor from being a beneficiary The Contract Act does not classify such contract as void.Case : Roberts vs. Gray * A minor made a contract with a professional billiard player under which the professional player agreed to teach the minor (Roberts) the game and take him along on his foreign tours for an agreed amount of money: The court held the contract as valid because it was for the benefit of the minorCase: The General American Insurance Company Ltd. vs. Madan Ve EB ELD) * X, a minor, insured his goods with an insurance company. The goods were damaged. X filed a suit for claim. The insurance company took the plea that the person on whose behalf the goods were insured was a minor. The court rejected the plea and allowed the minor to recover the insurance money.(4) Contract by Parents or Guardians of the Minor * A contract made by the parent or guardian of a minor for the benefit of the minor is a valid contract. Such a contract can be enforced by the minor, but before enforcement, the following two conditions need to be met: (i) That the minor's guardian has the right to make a contract on behalf of the minor. (ii) That the contract is made lawfully and for the benefit of the minor.¢ Any contract made on behalf of or for a minor is void if the minor, on becoming a major, can prove that such contract was not made for the minor's benefit or gain.(5) Minor's Contracts cannot be Ratified on his Becoming a Major * A contract made with a minor is void ab initio and cannot be ratified because no void contract can be ratified.¢ If a minor A, makes a contract with B that the latter pay him 2,000 which he will return when he becomes a major, such contract is void and A does not incur any legal obligation to return the money(6) There can be no Resti EX sii4 * If minor has received a benefit or profit, he is not bound by law to pay for such benefit or compensate or restitute its provider. * Mohri Bibi vs. Dnharmodas Ghosh is a case in point.he Doctrine of Estopple does not Apply against a Minor * If a minor has, by misrepresenting his age, induced a party to make a contract with him, he cannot be sued for making the contract or for fraud. * If aloan or some property is obtained by the minor by fraud or misrepresentation and the agreement is set aside, the court can direct him, on equitable considerations, to restore the money or property to the other party. While the law gives protection to minors, it does not give then liberty to cheat(8) Minor as an Agent * A minor can be appointed as an agent but, according to Section 184, the person appointing the minor (or the principal) would be held responsible for the minor activities. * The principal cannot, by law, hold a minor agent responsible for carelessness, willful neglect or mis- performance of his duties. * A minor may be appointed as an agent, but he cannot appoint an agent. In other words, a minor can be an agent, but he cannot be the principal.(9) Minor as a Partner * According to Section 30 of Indian Partnership Act, a minor cannot enter into a partnership contract but, if other partners agree, a minor may be admitted to share the benefits of an existing partnership and can claim the agreed share of profit from the partnership firm. * A minor cannot personally be held responsible for non- performance of any duty assigned to him by the firm or for the loss that may accrue to the firm as a result of such non- performance.* Within six months of attaining the age of majority, he is obliged to declare whether or not he wants to continue his partnership, on the basis of which his new status will be decided. * If he gives no such public notice, he will be deemed to be a partner of the firm and have the same obligations as the other partners.(10) Minor as Shareholder * Aminor, being incompetent to contract cannot be a shareholder of the company. If by mistake he becomes a member, the company can rescind the transaction and remove his name from register. * But, a minor may, acting through his lawful guardian become a shareholder by transfer transmission of fully paid shares to him.ORR RT aveM RELA UIE * Ifa person has agreed to stand surety or be a guarantor for a minor, such person would be regarded as the principal debtor and would be liable to pay personally as the minor is not liable to pay. * It is to be noted that the surety must always be an adult. In the case of Kashiba vs. Shripat where an adult had given a guarantee for a minor, the court held the surety as the principal debtor since there could be no proceeding against the minor(12) Position of a Minor in a Negotiable Tie ia Luks) * According to Section 26 of the Negotiable Instruments Act, a minor can be a promisor, and can draw, deliver or endorse a bill of exchange, cheque or promissory note. * In case of such a document being dishonoured, a minor cannot be beld liable whereas the associated parties (if any) are liable for its payment.(13) Liability for Torts ¢ Atort in a civil wrong. A minor is liable in tort. ¢ Thus, where a minor borrowed a horse for riding only he was held liable when he lent the horse to one of his friends who jumped and killed the horse(14) No insolvency * A minor cannot be declared insolvent as he is incapable of contracting debts and dues are payable from the personal properties of minor and he is not personally liable.(15) Minor cannot bind parent or guardian * In the absence of authority, express or implied, a minor is not capable of binding his parent or guardian, even for necessaries. ¢ The parents will be held liable only when the child is acting as an agent for parents.