NMIMS SCHOOL OF LAW

A PROJECT SUBMITTED ON;Position of Minor in a ContractIN COMPLIANCE TO PARTIAL FULFILLMENT OF THE MARKING SCHEME, FOR TRIMESTER III OF 2014-2015, IN THE SUBJECT OF LAW OF CONTRACT SUBMITTED TO FACULTY:PROF. SUNIL GEORGESUBMITTED BY:Neel NarsinghaniBBA LLB (HONS) ROLL NO A059

RECEIVED BY: ____________________________ON DATE: __________ TIME: _______

Chapter 1Introduction1. Evolution1. Underlining principle1. Brief outline of chapters7-10

Chapter 2Legal Analysis1. Study of Contractual Provisions1. Present Legal Framework1. Issues and Challenges11-15

Chapter 3 Role of Judiciary1. Landmark Cases1. Other Cases16-19

Chapter 4Comparative Study With other countriesI. EnglandII. Australia With other lawsI. Minor Under Tort Laws20-23

Chapter 5 Conclusions and Suggestions24-27

Bibliography28

INDEX

AbbreviationsSr. No.AbbreviationFull-form

1S.Section

2SCSupreme Court

3AIRAll India Reporter

4A.D.Anno dominie

5Ors.Others

6ICAIndian Contract Act

7Co.Company

8UKUnited Kingdom

Table of Statues ReferredSr No.StatueYear

1.IndianContract Act,1872

2.Indian Majority Act, 1875

1875

3.Indian Evidence Act

1872

4.Transfer of Property Act

1882

5.Family Law Reform Act, 1969(England)

1969

6.Infant's Relief Act(England)

Table of Cases ReferredSr.No CaseYear

1. Mohori Bibee v. Dharmodas Ghose

1903

1. Sri Kakulam Subrahmanyam vs Kurra Subba Rao

1944

1. Ramchandra vs Manikchand And Anr

1968

1. Suresh Chandra Pradhan vs Ganesh Chandra De And Ors.

1949

Research MethodologyRelevance of the Topic:The topic being Position of Minor in a contract aims at researching on the current prevailing laws regarding the same and thus becomes a highly important study to be undertaken by a Law student. This topic is relevant because it adds to current knowledge of the researcher and helps in having a better understanding of the topic. Moreover, as a law student, this study helps in expanding ones own chunk of knowledge on law. Objective of the study:The primary objective of the study has been to gain more knowledge on the topic where the interests of the researcher lie. Moreover, the aim is also to bring out the details regarding the position of a minor in any contract and also to explain the principle behind having such laws. The project has been made with an aim to benefit the researcher and also the reader by providing information on the subject.

Research questions: What is the position of Minor in a contract in India?

Is a minor incompetent for entering into each and every type of contract?

What are the laws on the topic that are followed by other countries?

What are loop holes in our laws on the subject?

Which measures can be taken to bring about a positive change in the laws relating to topic?

Limitations:The project is only limited to secondary sources of data. No primary data has been collected in the process of making of the project. The research of the project is limited to books, articles and internet websites. Moreover few sections of the guidelines stand irrelevant with the topic and thus no research has been conducted on those sectors, For eg. The principles set out by the judiciary are reflected in the Cases and their judgements, so only the section that contains cases has been focused upon.

CHAPTER- IIntroductionWhat is a Contract?A written or spoken agreement, especially one concerning employment, sales, or tenancy, that is intended to be enforceable by law.Section 2 (h) of the IndianContract Act, 1872 defines a contract as: An agreement enforceable by law is a contract. Contract is a combination of agreement and enforceability. Creation of obligation on the part ofthe parties to an agreement to perform their liabilities gives the cause of enforceability of an agreement. The nature of agreement is then changed into a contract.Miserable must the conditions of minors be; excluded from the society and commerce of the world.[footnoteRef:1]When penned well over two hundred years ago, this quote was thought to capture the sentiment that minors were regarded as incompetent to contract. However, minors seem to have the last laugh in today's society of technologically driven commerce. In fact, minors are not excluded from the world's commerce at all; they are squarely in the middle of it. The reality is that adults have always contracted with minors in some form or fashion. Major industries strategically target those under the age of eighteen, confirming that this segment of the population is viewed as an important part of the economy. Other industries depend upon patronage by minors for their very existence, particularly those industries that provide products and services associated with electronic commerce; and therein lies the problem. [1: Zouch v. Parsons, (1765) 97 Eng. Rep. 1103, 1106-07 (K.B.)]

There are some rules and regulation laid by each countrys government in this regard. Here in India we have 3 categories of people that are incompetent to form a contract:i) Minorsii) Persons of Unsound Mindiii) Persons disqualified by law to which they are subject[footnoteRef:2] [2: Ashok Kumar J PAndya v Suyog Co-op housing society Ltd, AIR 2003]

The term Minor has nowhere been defined under the Indian contract Act. But the age of majority of a person is regulated by Section 3 of the Indian Majority Act, 1857. The Indian Majority Act 1875 declares in section 3 that every person domiciled in India shall be deemed to have attained his majority when he shall have completed the age of 18 years, and not before. The age of majority being 18 years, a person less than that age even by a day would be a minor for purposes of contracting.[footnoteRef:3] If a guardian has been appointed by the court, an agreement entered into by the minor before completing 21 years of age is void.[footnoteRef:4] [3: Bhim Mandal v Magaram Corain AIR 1961 Pat 21] [4: Ajudhia Prasad v. Chandan Lal AIR 1937 All 610]

Evolution:Before India had a contract act of its own governing the contracts happening in the country, It was following the laws under the common law as India was ruled by British people. The rules and regulation back then were quite similar, only a few sections had a deviation. Thus the law in India that are still used to govern the Contracts have a lot of similarity to the Common Law Laws that were used back then in India. Back then, the contract by a minor was Voidable. This clause when adopted by India while forming its own contract act, was changed. The Evolution took the shape of the Indian Contract Act, 1872. But even after the formation of the Indian Contract Act, no section made it clear whether, if a minor enters into an agreement, it would be voidable at his option or altogether void. These provisions had, therefore, quite naturally given rise to a controversy about the nature of minors agreement. The controversy was only resolved in 1903 by the Privy Council in Mohori Bibee v. Dharmodas Ghose[footnoteRef:5] by declaring that the agreement would be void. The ruling of the privy council has been generally followed by the courts in India and applied both to the advantage and the dis-advantage of the minors. [5: (1903) 30 Cal. 539]

In the modern circumstances of society it does not seem to be possible to adhere to the categorical declaration that a minors agreement is always absolutely void. Over time, the common law has shifted its view of minors' ability to enter binding contracts. The harsh rule prohibiting minors from entering into contracts was eventually tempered to allow minors to make certain kinds of agreements. Courts began to determine the validity of minors' contracts based on the fairness of the terms of the contract. Based on these categories, courts held the contracts to be void, voidable, and binding, respectively.[footnoteRef:6]Eventually, this stratified rule was discarded and supplanted by the modern view. The law, however, grants minors a special privilege to disaffirm their contracts.[footnoteRef:7] After a contract is disaffirmed, the contract is to be treated as if it never existed, and any consideration that changed hands is to be returned. The reasoning behind allowing minors to choose when to disaffirm their contracts is that minors, it is assumed, will only choose to disaffirm contracts that are prejudicial. The privilege to disaffirm, however, is not unqualified. For example, states generally agree that minors may not disaffirm contracts for the necessities of life (e.g., clothing, food, medical care).If minors were allowed to disaffirm these types of contracts, then businesses would not deal with minors and minors would be denied access to the necessities of life. Minors are appearing public life today more frequently than ever before. The privy council had, therefore, to modify its earlier decisions and held in Sri Kakulam Subrahmanyam vs Kurra Subba Rao[footnoteRef:8] that the transfer of the transfer of the inherited property of a minor effected by his guardian to pay off an inherited debt was binding on him for his benefit. [6: RICHARD A. LORD, WILLISTON ON CONTRACTS at 9:9 (4th ed. 2009)] [7: Ibid at 9.5] [8: AIR (1948) PC 25]

Underlying principle:Society continues to view minors as vulnerable victims subject to detrimental contractual terms. Minors possess a powerful privilege to protect themselves from terms that no longer exist in most modern online agreements. Some commentators have opined that minors were traditionally restricted from entering into contracts so that they would be protected from their own navet, and from adults who would take advantage of them. This rationale parallels modern doctrines. While modern courts do not often delve into the relative merits of a bargain, instead preferring to leave the value judgment up to the parties, they do examine whether the parties were capable of making the bargain in the first place.[footnoteRef:9] For example, courts commonly will void contracts where the information presented by one party misled the other party,[footnoteRef:10] or where a party was not able to understand the ramifications of the agreement.[footnoteRef:11] As one scholar commented, While Nomad tribes might abandon... infants who appeared to be weak, the solicitudes of our law makers for the welfare of the young and otherwise helpless individuals goes far back in our civilization. In fact, the protection of the weak, helpless, and unfortunate has been strongly stressed in the religions of all our people from ancient times.' [9: 7 JOSEPH M. PERJLLO, CORBIN ON CONTRACTS 28.1-.2 (2002)] [10: Ibid 28.13] [11: Ibid 27.14]

Scheme and scope of topic:This study has been focused on the laws regarding the competency of minors to the contract. The study gives a brief introduction and evolution of the topic with the underlying principle that is kept in mind by the law-makers while framing the laws on the subject. The contractual provisions in the Indian contract act are elaborated upon so as to bring clear understanding.This study is backed by various Case Studies as to how does the Indian judiciary interprets the laws relating to the minors competency in the contract. The laws in the India on the subject are to the prevailing laws in England. And the liability of minor in contract is compared to liability of a minor in torts and proper elaboration has been done one the same.The study ends with a conclusion and the suggestion part in which various measures are suggested which can bring about a positive change in the laws and fill in the loop holes.

CHAPTER- IILegal AnalysisOne of the essential for a valid contract is that the party must be competent to contract. This has been stated in the Section 10 of the Indian Contract Act, 1872. Section 11 further explains as to which parties are competent to contract and who are not. Section 11 provides that Every person is competent to contract who is of the age of majority according to the law to which he is subject, and who is of sound mind and is not disqualified from contracting by any law to which he is subject.But again, the question arises of, who is considered to be a minor? As nowhere in the Indian Contract Act, the term minor has been explained. According to Section 3 of the Indian Majority Act, 1875, a minor is a person who hasnot completed 18years ofage. However, in the following two cases, a minor attainsmajority after 21years of age:i) Where a guardian of minors person or property has been appointed under the Guardians and Wards Act, 1890,orii) Where the superintendence of minors property is assumed by a Court of Wards.In India Section 11 expressly provides that the age of majority of a person is to be determined according to the law to which he is subject.The Courts of Law used to decide the competency of contract by the law of domicile and not by the law of the place where the contract is entered into. But the later trend of law for determining the age ofmajority is:a) In thecase of contracts relating to ordinary mercantile transactions, the age of majority is to be determined by the law of the place where the contract is made;b) In the case of contracts relating to land, the age of majority is tobe determined by the law of theplace where the land issituated.[footnoteRef:12] [12: T.N.S. firm vs. Mohd Hussain.]

Law regarding minors contract:The section 11 of the Indian Contract Act can be Analysed in the following manner:1. A contract by a minor is absolutely void: A contract by a minor is absolutely void and inoperative. Further where a minor is charged with obligations and the other contracting party seeks to enforce those obligations against minor, the contract is deemed as void ab initio. A minors contract being absolutely void, neither he nor the other party acquires any rights or incurs any liability under the contract. So a minor is neither liable to perform what he has promised to do under a contract, nor is he liable to repay money that he has received under it. The principle behind this ruling is, a minor is incapable of judging what is good for him. A minor, however, can derive benefits under the Act. That means, a minor can be a beneficiary i.e. a payee, an endorsee or a promise under the Act.2. A minor cannot be compelled to compensate for or refund any benefit which he has received under a void contract:Section 64 and 65 of the Contract Act, which deal with restitution, apply only to contracts between competent parties and are not applicable to a case where there is not and could not have been any contract at all. It has also been observed in many cases that the court may, on adjudging the cancellation of an instrument at the instance of a minor, require the minor to make compensation to the other party to the instrument.3. A minor cannot ratify an agreement on attaining majority:Ratification means consenting to a past contract entered into during minority at a future date on attaining majority. A minors contract being nullity and void ab initio has no existence in the eye of law. Therefore, a minor on attaining majority cannot ratify a contract entered into while he was a minor. The reason is that a void contract cannot be validated by any subsequent action and a minors contract is void ab initio.4. Minors liability for necessaries supplied to him or to anyone whom the minor is bound to support: The case of necessaries supplied to a minor is covered by Section 68 of the Contract Act which provides as follows-If a person incapable of entering into a contract, or anyone 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 from property of such incapable person. The minors property is liable for the payment of a reasonable price and not the price for necessaries supplied to the minor or to anyone whom the minor is bound to support. What is a necessary article is to be determined from the status and the social position of the minor. 5. The Rule of Estoppel does not apply to a minor: Section 115 of the Indian Evidence Act explains that-The principle of estoppel is a rule of evidence. When a man has, by words spoken or written or by conduct, induced another to believe that a certain state of things exists, he will not be allowed to deny the existence of that state of things. Lord Halsbury has written that-Estoppel arises when you are precluded from denying the truth of anything which you have represented as a fact, although it is not a fact. In India it has been held that the court can direct the minor to pay compensation to the other party in cases where an infant obtains a loan by falsely representing his age he cannot be made to pay the amount of the loan as damages for fraud, nor can be compelled in equity to repay the money.6. Specific Performance Order by Court will never be issued to a minor: As we are aware that an agreement by as minor is absolutely void, the court will never direct specific performance of such a contract by a minor. But a contract entered into, on behalf of a minor, by his guardian or by the manager of his estate will be binding on the minor and can be specifically enforced by or against the minor provide-(i) The contract is within the authority of the guardian or manager; (ii) It is for the benefit of the minor.7. Minor as a Partner: Law says that A minor being incompetent to enter into contract cannot be a partner in a partnership firm; but under Section 30 of the Indian Partnership Act 1932, he can be admitted to the benefits of partnership with the consent of all the partners by an agreement executed through his lawful guardian with the other partners. Such a partner will have a right to receive share of the property or profits of the firm and can have an access to and inspect the books of account of the firm. The minor cannot participate in the management of the business and can bear losses of the firm only up to the extent of the capital contribution in the firm. He cannot be made personally liable for any obligations of the firm, although he may after attaining majority accept those obligations if he thinks fit to do so.8. Minor as an Agent: A minor can be appointed as an agent (Sec 184). He can draw, make, indorse and deliver negotiable instruments so as to bind all parties except himself. In other words, it can be said that a minor can bind the principal by his acts done in the course of the agency, but he cannot be held personally liable for negligence or breach of duty. 9. Minor and the insolvency: A minor cannot be adjudicated as an insolvent as he is incapable of entering into contracting debts. Even for the necessaries supplied to him, he is not personally liable, only if his property is liable (Sec 68). 10. Contract by a minor and a major jointly: Where a minor and a major jointly enter into a contract with another person the minor has no liability but the contract as a whole can be enforced against the major.11. Surety for a minor: A contract by s minor is void, but a contract by a guardian on his behalf is valid. Where a guardian enters into a contract in respect of his property on behalf of the minor, it is valid, provided it is for his benefit or for legal necessity.12. Position of minors guardian: A contract entered into by the guardian of a minor on his behalf stands on a different footing from a contract entered into by a minor himself. A contract by a minor is void but a contract by a guardian on his behalf is valid provided the obligations undertaken are within the powers of the guardian. A contract made by the guardian is binding on the minor if it is for the benefit of the minor or is for legal necessity.13. Minor as shareholder: According to Contract Act, a minor being incompetent to contract can not be a shareholder of the company. Therefore a company can refuse to register, transfer or transmission of shares in favour of a minor unless the shares are fully paid. A minor acting through his lawful guardian may become a shareholder of the company, in case of transfer or transmission of fully paid shares to him.

15. Minors marriage: Minors contracted by their parents and guardians is valid. It is valid on the ground of the custom of the community.16. Relinquishment by a minor: A release by a minor of his rights in a property is absolutely in fructuous in law.17. Service contracts:(i) A contract for personal service by a minor is void under the Indian law and the mere fact it is for his benefit would not entitle the minor to sue under the contact.(ii) A minor may bind himself by a contract of apprenticeship if it be for his benefit but he cannot be used for failing to serve as such.(iii) Contract with minor does not create legal contractual relationship between the parties. Minor girls entering into a contract of service a person can leave the service at any time without committing any actionable wrong.18. Minors Parents:The parents of a minor cannot be held liable for any contract that a minor enters into. However, they can be held liable in case the minor is acting as their agent.

Issues: Our legal systems respond with a set of provisions which are quite often obsolete and in need of reform to the new freedom accorded to minors, their growing purchasing power, and generally, their increasingly important participation in almost every aspect of contemporary life. Minors are granted more power than necessary. Some minors, mature enough can take undue advantage of the laws that are bent towards them. For eg- Minors can disaffirm to majority of the contracts. This is not encouraging on the side of a business owner. The minor not disclosing his age, if enters into the contract and disaffirms to the same, the other party can run into losses without having much fault on his part. Minors possess a powerful privilege to protect themselves from terms that no longer exist in most modern online agreements. Because businesses often no longer have this information available when transacting online, the privilege should be mitigated to remediate the loss of the ability of an adult to avoid contracting with minors.

CHAPTER-IIIRole of Judiciary

Landmark cases:Mohiri Bibi v.DharmodasGhose[footnoteRef:13] [13: (1903) 30 Cal. 539]

Held : That in India minors contracts are absolutely void andnot merely voidable. The facts of the case were:Dharmodas Ghose, a minor, entered into acontract for borrowing a sum of Rs. 20,000 out of which the lenderpaid the minor a sum of Rs. 8,000. The minor executed mortgage of property infavour of the lender. Subsequently, the minor suedfor setting asidethe mortgage. The Privy Council had to ascertain thevalidity of the mortgage. Under Section 7 of the Transfer of Property Act, every person competentto contract is competent to mortgage. The Privy Council decided that Sections 10 and 11of the Indian Contract Act make theminor s contract void. The mortgagee prayed for refund of Rs. 8,000 by the minor. The Privy Council further held thatas a minors contract is void, any money advanced to a minor cannot be recovered.Lord North observed- The question wheather a contract is void or voidable presupposes the existence of the contract within the meaning of the act, which cannot arise in the case of a minor. After the judgement, the principle that minors contract is absolutely void is laid down. The law is to merely to protect the child fraudulent manipulations by others but also to provide him protection against its own ignorance and immaturity of a child may show poor judgment in making any contract. The generally accepted doctrine that the man is best judge of his own interests, is not applicable in the case of a minor .

Case studies:CASE I: Ramchandra vs Manikchand And Anr[footnoteRef:14]. on 9/2/1968 (This appeal is by the defendant. The trial Court has passed a decree for specific performance.) [14: AIR 1968 MP 150]

The suit was filed by the plaintiffs (respondents 1 and 2), when they were minors, through their guardian, Smt. Phulibai, their mother. Smt. Phulibai had entered into an agreement dated 30-9-1961 on behalf of the minors for purchasing house property from the defendant (appellant) for a consideration of Rs. 11,000. Rs. 1,000 was paid towards earnest and the rest of the amount was to be paid at the time of the registration of the sale-deed. The relevant term of the agreement was: The purchaser shall construct a partition wall at his own cost and in the presence and help of the vendor. The plaintiffs' case was that the defendant did not obtain permission from the Municipal Corporation and hence the construction could not be completed. The suit for specific performance was filed. The defence was that the breach was committed by the plaintiffs themselves and that they were not entitled to the specific performance. The defendant, claimed that he was entitled to the expenses incurred by them; and as the plaintiffs' guardian was not prepared to pay the amount, the sale-deed was not executed. Thus, the breach was committed by the plaintiffs. The trial Court found that the responsibility of constructing the partition wall was that of the purchaser, even if the defendant spent any amount, he did it at his own risk; and that, the plaintiffs were always willing to purchase the property and hence decreed their suit for specific performance. The plaintiffs were not guilty of committing any breach of the contract and that the defendant was not willing to execute the sale-deed as per the agreement. Solution:The trial court is right as the responsibility of constructing the wall was of plaintiff (purchaser) and if seller spends the money he did it at his own cost/risk and cannot claim the amount from the purchaser. Plaintiff has full rights to claim the property of which she has paid the earnest money and defendant (appellant) has to execute the sale deed as per the agreement dated 30/09/1961. The appeal should be dismissed.CASE II: Subrahmanyam's case. 75 Ind App 115 = (AIR 1948 PC 95) 1948A had executed promissory notes in the sum of Rs. 16,000 in favour of B. He had also mortgaged certain property to a third party in the sum of Rs. 1,200. A died on 4-10-1935. His widow entered into an agreement dated 29-11-1935 on behalf of her minor son to transfer the mortgaged property to B for a consideration of Rs. 17,000. Out of this amount, B was to utilize Rupees 1,200 in redeeming the mortgage and rest of the amount towards satisfaction of his own debt under the promissory notes. A suit was filed on behalf of the minor for possession of the property on the ground that the agreement entered into by his mother was not binding on him. The defence was that B was protected under Section 53A of the Transfer of Property Act. The trial Court held that as A and his son, the minor, were members of a joint Hindu family, the minor was bound to satisfy the debt. His guardian could have, therefore, validly transferred the property, as the transfer would havebeen for the benefit of the minor. Even though no sale-deed was executed in favour of B, he was entitled to protection under Section 53A of the Transfer of Property Act. This decision was reversed by the first appellate Court and was confirmed by the High Court. The guardian of the Hindu minor was, called upon to decide as to whether the expression 'the transferor' would include a minor on whose behalf the agreement had been entered into by the guardian. If the transfer would have been affected, the transfer would have been of the minor's property, and not of his mother, and hence there was no reason why the minor should not be treated as a transferor. The High Court was of the view that the observations of the guardians are not applicable to all contracts entered into on behalf of the minor. We have already pointed out that the guardian of a Hindu minor could validly transfer his property if it was for legal necessity or benefit of the estate of the minor; but he had no authority to purchase any property.Solution:A contract by a guardian on his behalf is valid provided the obligations undertaken are within the powers of the guardian. A contract made by the guardian is binding on the minor if it is for the benefit of the minor or is for legal necessity. Here the agreement entered into by the mother of minors is not binding on the minor as the agreement is not for their benefit. Minor are not bound to satisfy the debt taken by their guardian. The transfer of the said property to B is not for the benefit of the estate of the minor, thus null & void

CASE III: Suresh Chandra Pradhan vs Ganesh Chandra De And Ors. On 2/9/1949Defendants 1 & 2 are minors & the suit-contract is one entered into on their behalf by their mother as guardian. The contract was for sailing the property for a sum of Rs. 75 out of which Rs. 35 was paid as advance & the balance was to be paid later. Defendant 3 who is the sister's husband of defendants l & 2 has purchased the suit property on 3-2-1943 subsequent to the agreement in favour of the plaintiffs. The genuineness of the consideration alleged to have been paid thereunder were denied by the defendants & contested in the courts below. It has been found by the trial Court that the agreement was true & that a sum of Rs. 35 was paid as an advance under it. It was also found that the agreement was executed in order to raise money to repay a decretal debt for Rs. 60 against the minors in respect of which there was an execution pending at the time. It was further found that defendant 3 was fully aware of the agreement & took the sale deed in his favour with notice of the same. The argument that has been advanced on behalf of the defendants is that no specific performance can be decreed against the minors on the basis of a contract entered into on their behalf by their guardian even though it may be for legal necessity or for the benefit of the minor. This contention has been accepted by both the Courts below & the suit has been accordingly dismissed. It has been taken as settled law that a mere executory contract entered into by a guardian on behalf of a minor imposing a personal obligation on the minor's estate is not valid & binding & it makes no difference that it is for necessity or benefit. Solution:A contract by a minor is void but a contract by a guardian on his behalf is valid provided the obligations undertaken are within the powers of the guardian. A contract made by the guardian is binding on the minor if it is for the benefit of the minor or is for legal necessity. Here the contract entered into on their behalf by their guardian is for legal necessity but no specific performance can be decreed against the minors because Minors liability is only for the necessaries supplied to him.

CHAPTER IVComparative Study:

England:Modern Contract Law is fundamentally a creature of the nineteenth century. It arose as a reaction to and criticism of the medieval tradition if substantive justice.[footnoteRef:15] [15: The Historical Foundations of Modern Contract Law, Morton J. Horwitz, Harvard Law Review, Vo. 87, No.5(Mar., 1974), p. 917]

The age of majority in England was formerly 21 years. But now under the Family Law Reform Act, 1969, a minor is a person under the age of eighteen years[footnoteRef:16]. Formerly a minor was referred to as an infant, but this Act has changed the term to minor.[footnoteRef:17] When the adult reasonably believes that the minor is over twenty-one, either because the latter misrepresents his age or engages in business as an adult[footnoteRef:18], the minor is not allowed to disaffirm the contract. At common law the minor was permitted to disaffirm the contract although he had lied as to his age.[footnoteRef:19] The English Infant's Relief Act applies a stringent rule in some instances by declaring certain contracts of a minor to be void and therefore impossible of ratification. The common law, however, has long rejected the notion that the power to disaffirm is not sufficient protection for the infant. It is difficult to see, therefore, the utility of reviving the category of void contracts.[footnoteRef:20] Since the common law rule has occasioned no difficulty in its application, and since it permits a minor to determine for himself, after attaining majority, whether or not the agreement is beneficial, it should be retained. There was never any authority under the English law stating that infants were absolutely [16: Section 1, Family Reform Act, 1969] [17: 0 Section 12, Family Reform Act, 1969] [18: St. John's L. Rev. 154, 157 (1941] [19: Sternlieb v. Normandie Natl Sec. Corp., 263 N.Y] [20: CAN. B. REV. 319, 323, 324 (1935)]

incompetent to contract.Distinction between English law and Indian Law as to Minors Contract:The English Law is the principal source of Indian Law. But the Indian Law differs from the English Law on the subject of minors contracts on the following points:1. In India the minors contract is altogether void but in England it is sometimes void and sometimes voidable. In England the loan of money to a minor is void.2. In India, a minor can ratify a fresh consideration of a contract entered into during minority where as in England he cannot do so.3. In India a minor on attaining majority can neither sue nor be sued on contracts entered into by him during minority but in England he can sue on the contract for damages.4. In India a minors property is liable for the necessaries and not his personal self acquired property but in England the minor is personally liable.

Australia:In general, for a contract to be binding, the minor will have toaffirmthe contract, that is, agree to be bound by it, after turning 18. A minor cannot be forced to affirm a contract, so there is a certain risk in contracting with a minor other than as described below.On the other hand, although many contracts cannot be enforced against a minor, the minor can stillenforce the contract against the other party.Some contracts are binding on the minor without the minor affirming them. For example: A minor can make alegally bindingcontract forgoods or services that are usual or appropriate to their way of life(called 'necessaries'). These will be such things as food, clothing, accommodation, medical care, school requirements or sporting goods appropriate to their age and their standard of living. 'Necessary' goes beyond things which are essential for survival and includes things which it would be normal for the minor to have and use at the time the contract is made. A minor can also make avalidcontract for services of instructional or educational benefit, which could include such things as music lessons, sports coaching, educational tutoring, etc. Contracts which give the minor somecontinuing legal obligationsare binding unless the minor chooses to opt out of the contract before, or reasonably soon after, they turn 18.This is called 'avoiding' the contract. Examples of these types of contracts are contracts of business partnership, or contracts toleaseland. If the minor avoids the contract, he or she is only responsible for the obligations which have already arisen, not for any future ones. They cannot avoid past obligations or get back money they have paid out in respect of these. However, the minor may be able to get a court order for the return of their property, previously transferred under the contract, on fair terms. A minor may make a binding contract with theconsent of a court.The minor's parents can apply on his or her behalf, if the minor wishes to be bound; or the other party can apply, if he or she wants to make the contract enforceable against the minor. If the court decides to approve the contract, it will then be legally binding [Minors Contracts (Miscellaneous Provisions) Act 1978 (SA) s 6]. A minor's performance of a contract may beguaranteed.If the adult party to a contract wants greater security in contracting with a minor, they can ask the parents (or some other adult) to guarantee the minor's performance of the contract. The minor's legal position is unchanged, but the guarantors take on a separate obligation of their own. If the minor does not do as the contract requires, the other party has a separate right tosuethe guarantors for any loss.

Thus, it can be seen that the laws in Australia are quite similar to that of the laws in India which govern the contracts.

Other laws:Minor in Tort Laws:Minors can be sued if they are old enough to form intent to commit a particular tort or are sensible enough to prevent from a negligent act done by them. They can sue just like adults but through their next friends who are obviously their parents.There is no minimum age for the existence of tortuous liability . A minor, can be very well sued like an adult, if the action committed by him is in contrast with the reasonable action expected from the child of that age in a particular situation.InGorely v. Codd[1967] 1 W.L.R. 19 , Nield J. held a boy of age more than 16 years for shooting the claimant with an air rifle in the course of larking about. In the foregoing case ofTillander v. Gosselin(1966) 60 D.L.R. (2d) 18 the High Court of Ontario, Canada, established that a minor can be sued if he is old enough to form an intention to do the necessary act . Similarly in negligence, where intention is not the pre-requisite, the court in Mullin v. Richards established that a 15 year old school girl was not negligent when she injured a school friend while fencing with a plastic ruler. Therefore a minor is negligently liable if he failed to show the amount of care reasonably to be expected from a child of that ageA minor is liable in tort as an adult but the tort must be independent of the contract.A Minor will not be held liable if the tort is based on a contract. A minors agreement is void even if he fraudulently represents himself to be of full age as established inSadik Ali Khan v. Jaikishore. Similarly, inR. Leslie Ltd v. Shiell[1914] 3 K.B. 607 at 620 a minor was immune to any contractual charges or reimbursement inspite of availing loan facilities by fraudulently projecting himself of full age. In the same case it was established that it is possible to compel a minor for specific restitution if he fraudulently acquired some property and is still in control and possession of that property.

CHAPTER-VConclusion

Society continues to view minors as vulnerable victims subject to detrimental contractual terms. The competence of minor to the contract has been a controversial issue. Each countries government has its own rules on the subject, with the majority stating minors as incompetent to contract. Those declaring minors as incompetent to contract also have slight deviation of rules from one another. For example, the laws under the common law were quite different to those followed in England today, and the laws in England are not similar to those followed in India.Legal systems restrict the contractual freedom of those involved to protect the interests of third parties and the society at large. Such restraints aim to protect people from themselves by limiting their capacity. The special protection traditionally accorded to minors by English Law has resulted in serious inconvenience and uncertainty to all who deal with them. The essence of this protection has been a power in the minor to disaffirm any of his contracts, with varying effect, depending in part on the nature of the contract and in part on the stage of its performance. On the other hand, after attaining majority a minor has the power to adopt his contract and bind the other party. Implicit in this protection is the policy of shielding the infant from the effects of his immaturity and inexperience.The laws in this aspect all over the world have been changing from time to time. As in, the Common Law, the age of maturity was 21 years, which with time was found to stringent and in England it was brought down to 18. Even In India there was a huge cause of contention regarding whether contracts with Minors are voidable or altogether void. To which, the principle was finally established in the Mohiri bibi v. Dharmodas Ghose by the Privy Council. Even the court stated that the contract by a minor was altogether void, but still the courts of India from time to time have deviated from the principle as with the changing times the principles turn obsolete. In India, we have Section 10 of the Indian Contract Act, taking about the essentials of a valid contract, and parties competent to contract being one of the essentials. Section 11 further elaborates as to which are the parties competent to contract. Although there is only one clause stating that minors are incompetent to contract, the Indian judiciary has interpreted it in a wide manner. Under which conditions contract with a minor is valid or voidable has been determined by the judiciary over the period of years. It is due to wide interpretation that today minors are able to form certain contracts with adults. The laws and the structure in which the system worked have drastically changed in this aspect.Although with the changing times, the laws have change drastically there are still loopholes and scope of improvement in the same. No countrys law can be stated perfect, as with the changing times, even the best of the laws turn obsolete and have to be amended so as to keep the rights of the people intact. And the Laws of each country have majority of the part same but still have minute differences because the majority part, that is same for all the countries is based on fundamental principles that stay same everywhere, there are only these minute differences in these laws from place to place as they help in shaping the laws that can most suitable for that country.

Suggestions:The laws in each country regarding minors competency to contract has been under constant evolution. This is the reason the laws are able safeguard the interest of the people of each times. Although there are several amendments from time to time and also the judiciary has been taking active part in interpreting the law in new and better manner which suits the society better, the laws that are prevalent today still have a few loopholes that need to be taken in consideration so as to form new and better laws for the new societies. The following measures can be undertaken so as to improvise upon the current prevailing laws:

Our legal systems respond with a set of provisions which are quite often obsolete and in need of reform to the new freedom accorded to minors, their growing purchasing power, and generally, their increasingly important participation in almost every aspect of contemporary life. All this should be taken into consideration while amending the prevailing laws. For the minor who is mature and desires to engage in business, the courts should be empowered, after adequate enquiry, to remove all the disabilities of infancy.There are minors who are mature enough to enter into a contract. If they want to enter into an contract or remove their disabilities of infancy, their request should be taken into consideration and if proven mature enough to contract after proper examination, they should be allowed to enter into a contract. Another provision is needed to cover the situation in which the minor is unready for complete removal of disabilities but should be bound to an isolated contract. Courts should be empowered, on petition of either party, to approve single contracts in such instances. Such a provision would enable an adult to protect himself so long as he has not overreached. Minors are granted more power than necessary. Some minors, mature enough can take undue advantage of the laws that are bent towards them. For eg- Minors can disaffirm to majority of the contracts. This is not encouraging on the side of a business owner. The minor not disclosing his age, if enters into the contract and disaffirms to the same, the other party can run into losses without having much fault on his part. Minors possess a powerful privilege to protect themselves from terms that no longer exist in most modern online agreements. Worse yet, there is no way of avoiding agreements with minors. Businesses have lost the ability to avoid exposing themselves to void contracts. Thus, not only have minors been given a privilege that is largely unnecessary, but businesses' balance against this privilege has been completely removed by the inability to identify and avoid agreements with minors in the first place. Therefore, what was once a balance between the minors' privilege to disaffirm and the businesses' privilege to avoid contracting with minors has now been reduced to a privilege only benefiting minors. In the past, adults have been able to rely on their knowledge that they were dealing with minors to avoid entering into binding agreements with them. Because businesses often no longer have this information available when transacting online, the privilege should be mitigated to remediate the loss of the ability of an adult to avoid contracting with minors. The solution is to require a factual inquiry before a minor can assert the privilege of disaffirmance. In the past, courts may have been able to rely on the fact that adults were often aware that they were dealing with minors and had accepted that risk when making their agreements. Now that courts can no longer presume that knowledge exists, they must take active roles in determining whether the minors in question understood what they were doing when entering a contract and balancing this finding against whether the adults knew they were dealing with minors before allowing minors to avoid their contracts. A fair and adequate solution to the problem might be to deny any power to disaffirm to a minor who has, by misrepresenting his age in writing in a separate instrument, led an adult reasonably to believe him capable of contracting. In addition, a minor engaging in business should be required to disclose his age to anyone with whom he deals. The affirmative duty to disclose his age would prevent the minor from misleading the adult by his silence and would reduce the uncertainty of the other party.

BIBILIOGRAPHY

WEBSITES REFFERED: http://lex-warrier.in/2010/08/minors-contract-under-indian-contract-act/

http://www.inbrief.co.uk/contract-law/contract-with-minors.htm

http://mercantilelaws.blogspot.in/2012/05/positions-of-minor-in-contracts.html

http://www.klelawcollege.org/content/uploads/documents/5.%20Capacity%20of%20Parties.pdf

http://www.duhaime.org/LegalResources/Contracts/LawArticle-651/Contracts-With-Children.aspx

http://www.australiancontractlaw.com/law/formation-capacity.html

http://www.lawhandbook.sa.gov.au/ch10s02s03s01.php

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