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Competence of contracting partiesSection 11 of the Indian contract act states that every person is competent to contract, who is the age of majority ,who is of sound mind and who is not disqualified from contracting by law

Prof Shweta Verma, faculty, IMM

Following persons are incapable of contractingA person disqualifiedBy lawA person of Unsound mindA minorA minor ,person of unsound mind and personDisqualified by law cannot enter into contractAny contract with any such party will be voidAb intio


MINORA PERSON WHO HAS NOT COMPLETED HIS 18TH YEAR OF AGE IS CONSIDERED TO BE A MINOR.IN CASE A GUARDIAN TO THE PERSON OR PROPERTY OF THE MINOR IS APPOINTED BY THE COURT OR THE PROPERTY OF THE MINOR IS PUT UNDER THE CHARGE OF A COURT OF WARDS ,DURING THE PERIOD OF HIS MINORITY .


LAW RELATING TO MINORS AGREEMENTA minor can take advantage of his acts but does not incur any kind of obligations.He/she can not be personally liable for any of his wrongs.No legal action can be taken against him for his misbehaviour or false promises.The parents of the minor are not legally liable unless he acts as his/her agent.


Special provisions governing agreementmade with a minor1.Absolutely void: An agreement with minor is void ab initio.it is considered to be a nullity and non existent from the very beginning and therefore devoid of any consequencesEXAMPLE:Bittoo a minor sold scooter to bhuvan for Rs1000 and receive 500 as advance .later on bhuvan refuses to buy the scooter and sued the advance money .held that he cannot sued it as the contract was void and no question of refunding money could arise in these circumstances.


Agreement with minor is VOIDdecided caseIn Mohiri Bibis case ,the minor had executed a mortgage for the sum of Rs20000 out of which the lender had paid the minor only about Rs8000.The mortgagee filed a suit for the recovery of his mortgage money and for sale of the property in case of default .The privy council held that an agreement by a minor was absolutely void as against him and therefore the mortgagee could not recover the mortgage money nor could he have the minors property sold under his mortgage.


2.No RatificationContract with minor is void and ,he cannot ratify contracts entered into by him during his minority even after attaining the age of majority.Example:A,minor borrows Rs.5000 from B and executes a promissory note in Bs favour.after attaining the age of majority A executes a fresh promissory note in favor of B for this amount . B cannot sue on this promissory note as the agreement is void for lack of consideration .because consideration in minority age is no consideration.


3.No RestitutionA minor is not liable to repay any money or compensate for any benefit that he might have received under a void contract .Example:Bittoo ,a minor ,sold a shop to Ram a major. The consideration was paid to Bittoo but the sale deed could not be registered as Bittoo was minor. On a suit by Ram for recovery of the consideration ,it was held that the agreement being void ,the amount of consideration was not recoverable.


4.No EstoppelA minor is not bound by his misrepresentations. If a minor enters into a contract by fraudulently representing himself to be a major. He will not be liable under the contract. the contract will be void. If the injured party were allowed to sue for fraud, it would be giving him an indirect means of enforcing the void agreement.It does not mean that a minor can protect himself from any such act. court will order ,on equitable consideration for restitution if the minor is still in possession of the money or the things purchased out of it.and he will not be liable if the money is spent and any thing bought out of that money is cannot be traced out.


Example No EstoppelBittoo a minor borrowed Rs.1000 on a faudulent representation that he was a major to Ram a major.Now Ram cannot sue Bittoo Rs1000.because any contract with minor is void and Bittoo can escape from the liability .But an order of restitution can be issued if the amount can be found with Bittoo or if he has purchased anything from that money then that thing can also taken but if he has spent whole money ,nothing can be recovered from him.


Decided case on pleading minorityLESLIE vs SHIELL, (1914) 3 K.B .6071S a minor by fraudulent representing himself to be of full age induced L to lend him 400 pounds. He refused to repay it and L sued him for the money. Held the contract was void and S was not liable to repay the amount.


5.Minor BeneficiaryAll such contracts under which the minor is to receive some benefit or which are beneficial to him are valid .but in no case ,he is personally liable. M aged 17 agreed to purchase a second hand scooter for Rs.5000 from S. He paid Rs200 as advance and agreed to pay the balance the next day and collect the scooter, when he came with the money the next day, S told him that he had changed his mind and offered to return the advance. S cannot avoid the contract, though M may if he likes.


6.Minors liability for necessitiesAll contracts relating to the necessities of the life supplied to a minor are valid. A person can claim reimbursement out of the property of the minor ,the amount of necessities suitable for the position in life supplied to him or to the members of his family whom he was bound to support .A minor shall have personal liability for such debts.


Case studyPETERS v FLEMINGMr Fleming during his career at the university of cambridge, and while under age, became indebted to a jeweller in the town for several articles of ornament which were supplied to him. Fleming ,who was a wealthy member of parliament and could easily have paid it if he had liked, wouldnt look at the hill when it was sent in; if he had, this is what he would have seen:-A fine gold ringA ring A short gold watchSo the dealer bought an action against the young man himself when he became of age, and (the judge having left it to the jury to say whether the articles were necessaries or not and they having found that they were)DECIDE


example

Ram cannot sue Bittoo as the contract with minor is void .if the goods would necessities then the property of Bittoo can be taken to recover it but here the goods are not of necessities nature thus Bittoo is not liable.At best court can allow Ram to recover the pen and registers supplied to Bittoo. if it can be traced in the hands of the minor.


7.minor asagentA minor can be agent. he can represent his principle in dealing with other parties. the principal will be responsible to third parties for the acts of his minor agent but he cannot hold the minor agent personally responsible for any wrongful acts. in the absence of any personal liability of the minor agent, the principal runs a great risk. he cannot recover any compensation from his minor agent for the loss caused to him by any fault of the minor agent.


8.Minor as partnerA minor cannot be a partner .he can, however be admitted to the benefit of the partnership. his liability is limited to the extent of his interest in the partnership .he has no right to take part in the mgmt of the firm or copy or inspect any of the books of accounts of firm.


9.Minor liability for tortMinor will be liable for tort (civil wrong). But where a tort arises out of a contract a minor is not liable in tort as an indirect way of enforcing an invalid contract.If the minor in the course of doing, what he is entitled to do under the contract, is found guilty of negligence, he cannot be made liable for a tort if he is not liable on the contract.(Burnard vs. Haggis (1863) 14 C.B 45)(Jennings vs. Rundell (1799) 8 T.R 335)


Minor liability for tort(Bernard vs. Haggis (1863) 14 C.B 45)

A minor hired a horse for riding under express instructions not to jump it. He lent the horse to one of his friends who jumped it over a long distance whereby it becomes sick become sick and ultimately died. The court held the minor liable for tort since it was bare trespass, not within the object and purpose of hiring for which the defendant was liable


Minors liability for tort (Jennings vs. Rundell (1799) 8 T.R 335)A minor hired a horse for riding. The horse was injured on account of over riding. It was held that a minor was not liable since the injury was due to his negligence in the course of what he was entitled to do under the contract. He was not liable on the contract himself and therefore he was not liable for this tort too.


Example onminors liability incase of tortBittoo hire horse .the horse was injured on account of over ridding .it was held that a minor was not liable since the injury was due to his negligence in the course of what he was entitled to do under the contract.he was not liable on the contract himself and therefore ,he was not liable for this tort too.


Decided case on pleading minorityLESLIE vs. SHIELL, (1914) 3 K.B .6071S a minor by fraudulent representing himself to be of full age induced L to lend him 400 pounds. He refused to repay it and L sued him for the money. Held the contract was void and S was not liable to repay the amount.


Introducing personof unsoundmind


Person of unsound mindA person is said to be of sound mind for the purpose of making a contract if at the time when he makes it, he is capable of understanding it and of forming a rational judgment as to its effect upon his interests.The idiot, lunatic and drunkards are the person of unsound mind.Section-12Of Indian Contract act


Meaning of idiot, lunatic and drunkardsIdiot: A person who is devoid of any faculties of thinking or rational judgment is called an idiot .all agreements other than those for necessaries of life, with idiots are absolutely void.Lunatics: A person, whose mental powers are deranged is called a lunatic. Agreement made with lunatic ,except those made during lucid intervals (period in which he is in his senses )are voidFor necessaries supplied to lunatic are valid. and the property of lunatic can be takenDrunkards: A person under the influence of drink or drug stands on the same footing as lunatic. An agreement with drunker is void.


Introducing person disqualified by law to enter into any contractI am declared disqualified By law to enter into any contract


Following are the people disqualified by lawAlien enemy: A person who is not a citizen of India is called an alien.Convicts: convict is incapable of entering into contract .and the incapability ends when sentence expires or punishment finish.Corporation: A company is artificial person created by law. it can only contract through its board of directors.


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