1. INTRODUCTION

In our daily life, we all are surrounded by several agreements. From breakfast to supper we make a number of agreements, irrespective of our ability to do so. For example, the formation of partnerships and companies, performing arbitration, mediation, negotiation, registration of patents, copyrights, transfer of property through sale, mortgage, lease, exchange or gift etc. [1] The term agreement is used commonly without knowing its essentials. Section 2(e) of the Indian Contract Act,1872 defines an agreement as, every promise or set of promises forming the consideration for each other. The essentials which turn an agreement into a contract give weight to the agreement in the eyes of the law in terms of determining the obligations of the contracting parties. When these agreements are combined with enforceability by law then these turn into contracts. According to Section 2(h) of the Indian Contract Act, 1872, an agreement enforceable by law is a contract.[1]

2. ESSENTIALS OF A CONTRACT

There are certain essentials of a contract which are considered for a valid contract [3]

1 1. Identification

2. Offer and Acceptance

3 3.Intention to create a legal relationship

4. Lawful Consideration

5 5.Competent parties

6.Meeting of the minds

7. Legality

8.Not being expressly declared void

Section 10 of the Indian Contract Act states that the parties must be competent to enter into a contract. Competence is defined in Section 11 of the Indian Contract Act. It says that, Every person is competent to enter in a contract who is the age of the majority according to the law to which he is subject, and who is of unsound mind, and is not disqualified from contracting by any law to which he is subject.[3]

Thus, this sections declared the following persons to be incapable of forming a contract

1. Minors

2. Persons of unsound mind, and

3. Persons disqualified from law to which they are the subject

The Indian Contract Act 1872, plays a crucial role in regulating contractual relationships and obligations. However, one particular area of complexity arises when dealing with agreements involving minor parties. The Act does not allow such agreements without limitations or restrictions.

This poses a challenge as the legal framework does not explicitly permit contracts with minors. Therefore, it becomes important to understand the specific rules and provisions that govern agreements involving minors to ensure compliance with the Indian Contract Act.[4]

3. WHO IS A MINOR UNDER INDIAN CONTRACT ACT?

In India, individuals below the age of 18 are considered minors under the law. Even a person who is 17 years and 364 days old would be regarded as a minor. The age of majority, defining when a person becomes an adult, is determined by theIndian Majority Act of 1875.[4]

The age of majority is generally eighteen years except for the cases where a guardian of person, property, or both have been appointed by the court, in which case the age of majority is twenty-one years. Earlier, a minor is a person was referred to as an infant but this was further changed to minor due to Family Law Reform Act,1969.

The terms which are mentioned in Section 10 and 11 of the Indian Contract Act do not clear that whether the contract is voidable at his option or altogether void if a minor has entered into the contract.

This controversy was resolved in the case Mohiri Bibee V. Dhurniodas Ghose [5]where the judgement was passed by the Judicial Committee of the Privy Council. According to the facts of the case, Dharmodas Ghosh, the plaintiff (a minor) mortgaged his property to the defendant who was a moneylender. During that time the defendants attorney was aware of the plaintiffs age. The plaintiff paid only 8000 and refused to pay the rest. Plaintiffs mother was his next friend or legal guardian at that time. He initiated an action against the defendant stating that at the time when the contract was made, he was a minor. So, the contract being, is a void one and hence is not bound by the contract.

The court held that unless the parties have competence under Section 11 of the Act, no agreement is a contract.

5. NATURE OF MINORS AGREEMENT

An agreement entered into by a minor is considered void ab intio and has no legal effect. As a result, it lacks any enforceable contractual obligations on both parties. Since a contract with a minor is deemed invalid from the beginning, it is essentially non-existent in the eyes of the law.

Therefore, neither party is legally bound by any contractual obligations or duties arising from such an agreement. The concept of a void minors agreement ensures that the legal framework recognizes the minors limited capacity to enter into binding contracts, providing protection and safeguarding their rights and interests. [4]

6. LAW RELATING TO MINORS AGREEMENT

All the rules related to minors agreement are based on the fundamental thatLaw always protects the minors.[2]

The rules regarding minors agreement are as under-

1)A minors agreement is void ab initio:In India an agreement with or by a minor isvoid ab initioand inoperative as a minor has no capacity to enter into a contract. Section 10 of the Indian Contract Act states that a contract involving a minor is considered void. Similarly, Section 11 clarifies that a minor lacks the competence required for entering into a contract. A minor is neither liable to perform what he has promised to do under a contract nor is he liable to repay money which he might have received under a contract. [2]

2)A Minor can be a Promisee or a Beneficiary: A minor can be a promisee or beneficiary in a contract and have the right to enforce such a contract.He/she cannot be bound by contract but he can be a lawful beneficiary. Thus a promissory note executed in favour of a minor can be enforced.[2]

3)A minors property is liable for necessaries:Under Section 68 of the Indian Contract Act, if a person incapable of entering into a contract, or anyone whom he is 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 bereimbursedfrom the property of such person. It is to be noted that only minors property is liable, minor is not personally liable for necessaries supplied to him.

4)No estoppel against a minor: The term estoppel is a legal principle that prevents a person from arguing something or asserting a right that contradicts what they had previously said or agreed to by law. The rule of estoppel is only a rule of evidence i.e. a rule of formal law. This rule is not applicable to minors. A Minor who falsely represents himself to be a major and induces another person to enter into contract, can plead minority as a defence.[3]

5)No subsequent ratification of a minors agreement:Since a minors agreement is void ab initio, a minor who has entered into an agreement during his minority cannot subsequently ratify (approve) the contract on attaining majority.

6)No specific performance of a minors agreement: Neither the minor nor the other party can ask for the specific performance of a minors agreement.[3]

7)No insolvency for a minor:A Minor is incapable of contracting debts and hence he cannot be adjudged insolvent. Any dues or debts would be payable from the minors personal properties, and the minor is not personally liable for them.[2]

8)A minor can be admitted to the benefits of partnership:A minor cannot enter into an agreement of partnership, however with consent of all the partners he can be admitted to the benefits of partnership. Under Section 30 of the Indian Contract Act, a minor can be admitted to the benefits of apartnership.[2]

9)A Minor can act as an agent: A minor can become an agent, and by his acts he binds his principal; however, a minor is not personally liable for his principal.[2]

10) A minorcannot be member of a registered company: This is because a minor is not competent to apply for membership.[2]

11) A minor should be supplied with necessaries: Section 68 of the Indian Contract Act lays down terms for the liability for necessaries supplied to persons who are incompetent to contract. A claim for necessaries supplied to a minor is enforceable by law. However, a minor is not personally liable for the price he may have promised and is only liable for the value of the necessaries. The minors property, not the minor personally, is liable.[4]

7. CONCLUSION

In conclusion, the minors agreement serves as a fundamental tool in safeguarding the right and responsibilities of minors. It outlines clear parameters, ensuring protection and fair treatment for minors. The document with its emphasis on consent, empowerment, and guardianship, seeks to uphold the ethical standards and legal boundaries, which helps in fostering a safe environment for minors in various aspects. The rules regarding a minors agreement include its void nature, exceptions for enforceability, limited liability for necessaries, inability to bind others, and specific considerations for torts, partnerships, and suretyship. [4]

[1] Saman Narayan Upadhyay,"Legal consequences of a Minor's Agreement in India" Vol. 35, Issue 4,Bussiness Law Review, 136 (2014)

[2] Rishabh,"The laws relating to minor's agreement" available at https://rishabhasal.wordpress.com/2016/07/07/the-law-relating-to-minors-agreement/#:~:text=The%20Privy%20Council%20held%20that,a%20minor%20can%20be%20enforced

[3] Bhwana," Minor's Capacity to Contract", Legal Services India E-Journal

[4] Rules regarding Minor's Agreement , available at : https://lawbhoomi.com/rules-regarding-minors-agreement/

[5] ILR (1903) 30 CAL (PC)