What is the Minor’s Position in the Law of Contract?

[1] A minor is a person who has not attained the age of majority according to the law to which he is subject. This age has been fixed differently by different legal systems at different times, and different ages may be fixed for different purposes by the same legal system at the same time. The age of majority for purposes of contracts is determined by the Indian Majority Act, 1875. According to section 3 of the Act, a person is deemed to have attained majority, when he completes 18 years, but a minor under the superintendence of a court of wards, or of whose person or property a guardian has been appointed by the court, becomes major on the completion of his 21st year. The law tries to reconcile two conflicting positions a minor due to his immaturity arising out of his age has to be protected against enforcing unconscionable contracts which he may be led to enter, but a minor like an adult has to have his existence in the world and, therefore,some protection has to be extended even to minor’s agreements.


According to the section, a minor is not competent to contract. The privy council upheld the contention of the minor. Whether the minor could be compelled to restore the benefit received under a void contract is considered shortly. A minor’s agreement being void cannot be ratified on attaining majority. Thus, a promissory note executed in consideration of debts received during a minority is bad for want of consideration and will not be enforceable.

CASE LAW- The privy council in its judgment in Mohori Bibee v. Dhurmodas  Ghose held that the minor’s contracts were void ab initio. In this case, a minor executed a mortgage in favor of a money-lender as security against repayment of a loan of Rs.20,000 at 12% advanced to him. Later on, the action was taken against the moneylender on behalf of the minor for a declaration that the mortgage was void and inoperative.


Necessaries must be things which the minor actually needs. According to section 68 of the Indian Contract Act,1872 specially exempts minor’s contracts for necessaries from the vice of nullity. It provides: If a person incapable of entering into a contract, or any one of 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, that is, a reasonable price and not the contracted price.


In India, however, the position is different. For determining whether a contract is beneficial to him or not, the contract as a whole is beneficial, the fact that a certain stipulation is onerous to the infant will be immaterial. A contract of service of beneficial to the minor even coming within the category of necessaries was void. It is suggested that section II of the Indian Contract Act should contain a provision excluding from the preview of the section contracts of service of minors if in the opinion of the court they are beneficial to the minor.


[2]According to section 65 of the Indian Contract Act provides-when an agreement is discovered to be void or when a contract becomes void, any person who has an advantage under such agreement or contract is bound to restore it or to make compensation for it, to the person from whom he received it. This section did not apply to agreements with minors. The law commission there is now a specific provision in section 33(2) of Specific Relief Act,1963 which says that where the minor has been sued under a void contract that is, where he is a defendant, the court may, if he 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 that party, to the extent to which he or his estate has benefited thereby”.The position remains unchanged so far as the minor is a plaintiff. It may be better to clarify the position adding a suitable provision in section 65 of the Indian Contract Act making it applicable to those cases where a person is induced to enter into an agreement with a minor on false representation that he is a major, or the person is able to prove that he was not aware or his minority. Similarly, section 65 should be applied in favor of the minor where, say the minor has sold goods to a person who has paid him the price. Probably section 30 of the Specific Relief Act,1963 is sufficient to take care of the situation.


A factor to consider in the legality of a contract is whether the parties are of the standing required by the law to make binding agreement. If a child in a playground agrees to sell one his toys, this would not normally be binding. The law requires a legal capacity to contract, and generally, adults over the age of 18 are said to have this, then it can said as the capacity to contract.[3]If all four of these requirements are present, then there will normally be a binding contract. The final category of those protected by the law of contractual capacity, a minor is a person who is below 18, although recently as 1969, before the Family Law Reform Act was passed, a person under 21 was referred to as an ‘infant’.The above Act lowered the age of majority to 18 and introduced the term minor.

A somewhat paternalistic approach is taken in contract law, by restricting the minor’s capacity to contract. The aim then is to protect minors from their own inexperience and perhaps from unwise transactions, whilst not being too hard on any adult dealing fairly with a minor. A minor can enforce a contract against the other party, providing it is an adult, but there is a general presumption that contracts with minors are unenforceable. However, some contracts with a minor are valid, and therefore enforceable.


A minor will be liable for a contract for the sale of necessaries. If all contracts with minors were unenforceable, retailers would be reluctant to sell to them on credit under any circumstances. So, to enable a minor as being bound under a contract for the sale of necessaries sold and delivered to them. The term‘necessaries’ covers more than just items needed to stay alive, such as shelter, food and clothing, but those things which are essential and suited to the minor’s position will be liable for payment for more than a minor in a lower position financially. There is a twofold definition of necessaries, therefore, defendant on both social status and genuine need.

‘The sale of goods Act 1979 Section3(3) defines necessaries as goods suitable to the condition in life of the minor and to his actual requirements at the time of sale and delivery.


The second type of contract which may be valid against a minor is the beneficial contract of service, often this takes the form of a contract of employment, education or training for a minor.It is obviously of major concern economically that minors develop the skills and in an environment which enables them to learn a trade or profession, and that they are able to form satisfactory contracts of employment.With these contracts the court take view that an oppressive contract is unenforceable against a minor,but that if a contract is,on the whole, beneficial to the minor, then it be binding, even though an individual clause may not be to his advantage.


The third type of contract with a minor which may be binding or when a minor enters into an agreement of continuing obligation. This is a contract of an ongoing nature, such as the renting of accommodation. In this case the contract will be regarded as valid, unless the minor repudiates it before reaching 18, within a reasonable time afterward. This leaves a workable arrangement for those dealing with a minor, but gives the minor an opportunity to ‘escape’ if he later regrets his action.


According to section 3 of the [5]Minor’s Contract Act 1987 gives the court a discretionary power to insist on the handing back of goods or things under an unenforceable contract with a minor (the statute says that the court ‘may’ order restitution, not that they always will).This means that if the minor has been exploited by an adult, the court may well feel that it is just not to order restitution. However in the event that a minor has taken advantage of an adult, using the law to escape from obligations,then restitution will go some way to providing a remedy for other party. The courts have a final decision to make on this, but they are the ones who will be knowledge of the facts of the case. The power of restitution does gives the courts the possibility of providing a just outcome in more situations than before the Minor’s Contracts Act passed.


The Indian Contract Act,1872 by Universal Law Publishing

Reference- Contract Law by Mary Charman; published by William Publishing

This Article Written by Suchismita Sarangi, Student of SOA National Institute of Law.

Also Read: Contingent Contracts And Its Scope in India

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