Law relating to Minor’s Agreement | Why are Minors not competent to Contract?

A Person under the age of eighteen years is called a Minor. Since they have an immature mind, they are very often exploited. There are laws to protect the minors from unnecessary hardships when they enter into an agreement.

Law relating to Minor's Agreement
Agreement – Law relating to Minor’s Agreement, Why are Minors not competent to Contract

Law relating to Minor’s Agreements under the Indian Law can be summed up as follows:

1. Void abinitio

A contract by a minor is void ab initio i.e., from the very beginning and not merely voidable.

2. No Estoppel Against Minor

When someone makes another person to believe that a particular fact or thing is true, then later on he cannot be allowed to deny the truth of that thing (Sec. 115 of the Indian Evidence Act, 1872). However, there is no such estoppel against the minor.

3. Beneficial Contracts

A minor can be a promisee or a beneficiary of a contract. Due to his minority, he can’t bind himself by a contract, but he can derive benefit under the contract.

4. No Ratification of Agreement

An agreement made by a minor cannot be confirmed by him on attaining majority. This is because, minor’s agreement is void ab initio, and, therefore cannot be made valid by ratification.

5. No Liability in Contract or in Tort Arising out of Contract

The term tort means any wrong for which a civil suit can be brought. If a minor enters into an agreement by misrepresenting his age, he cannot be sued either in contract or in tort for deceit (i.e., fraud). This is because, if the injured party were allowed to sue, it would be an indirect method of enforcing the void agreement.

6. Doctrine of Restitution

It implies that when a person obtains property or goods by false representation, he can be compelled to restore it to the person from whom he has received it. This doctrine applies to minors also. But, the minor can be compelled to restore the property or goods so long as the same is traceable in his possession.

7. Liability for Necessaries

If a person supplies necessaries to a person who is incapable of entering into a contract or to anyone whom such incapable person is legally bound to support, he can claim reimbursement from the property of such incapable person. A minor is also liable for the value of necessaries supplied to his wife.

8. Minor as an Agent

A minor can be appointed as an agent because an agent is merely a connecting like between the principal and the third party. But he will not be personally liable for his acts as an agent.

9. Minor as an Insolvent

All agreements with a minor are absolutely void. Therefore, a minor cannot be declared as insolvent.

10. Minor can Execute Negotiable Instrument

A minor is competent to draw, negotiate or endorse the negotiable instruments. However, it may be noted that the minor will not incur any personal liability under such instruments. But the minor can enforce the negotiable instruments executed in favour of him

11. The Liability of Minor’s Parents or Guardians

The minor’s contracts do not impose any liability on his parents/guardians even if the contracts are for necessaries. However, if the minor is acting as an agent for the parents/ guardian, then the parents/guardians shall be liable under the contract.

12. Minor as a Partner

A minor cannot be a partner in the partnership firm. However, he can be admitted to the benefits of the firm with the consent of all other partners. He has no right to take part in the management of the firm. But his liabilities are limited to the extent of his interest in the partnership.