Contract with a Minor under the Indian Contract Act, 1872

Who is a Minor?

According to Section 3 of the Indian Majority Act, 1875, a person attains majority at the age of 18 years. However, if a guardian is appointed by the court, the age of majority extends to 21 years.

Minor’s Capacity to Contract

As per Section 11 of the Indian Contract Act, 1872, a minor is incompetent to contract. This means:

• A contract with a minor is void ab initio (void from the beginning).

• A minor cannot be sued for breach of contract.

• A minor cannot ratify a contract upon attaining majority.

Leading Case Law:

Mohori Bibee v. Dharmodas Ghose (1903)

This is the landmark judgment by the Privy Council, which held that:

• A contract with a minor is absolutely void and not merely voidable.

• The minor cannot be compelled to repay any loan taken.

• Even doctrine of restitution does not apply if the minor has misrepresented their age.

Exceptions to the Rule

Though a minor cannot enter into a contract, there are certain exceptions:

• Contracts for Necessaries (Section 68): A minor’s guardian can enter into a contract on their behalf for basic necessities like food, shelter, education, and medical expenses. The minor is not personally liable, but their property can be held accountable.

• Beneficial Contracts: If a contract is purely for the benefit of the minor, such as a scholarship or employment contract with no liabilities, it may be enforceable.

• Agency Contract: A minor can act as an agent but cannot be held personally liable.

• Partnership: A minor cannot be a partner but can be admitted to the benefits of a partnership (as per the Indian Partnership Act, 1932).

Effect of a Minor’s Contract

• A minor cannot be declared insolvent as they cannot incur debts legally.

• Doctrine of Restitution: If a minor fraudulently misrepresents their age, they may be required to return the benefits (but not enforce the contract).

• Guarantee for a Minor’s Loan: If a third party guarantees a loan taken by a minor, the guarantee is invalid.

Conclusion

The Indian Contract Act strictly protects minors from being bound by legal obligations. While they cannot enter into binding agreements, they are safeguarded from financial liabilities to prevent exploitation. However, courts may allow contracts that serve their welfare, ensuring a balance between legal protection and commercial transactions.