competent parties minor agreements
competent parties minor agreements
A minor enjoys peculiar position in relation to the agreements entered into by or with him. The law protects interests of a minor with regard to an agreement made by him. In fact, law protects a minor against his own inexperience and against improper and evil designs of those advanced in age and experience. It has been rightly observed that, “the law protects minor persons; preserves their rights and estates, excuses their laches and assists them in their pleadings; the judges are their counsellors, the juries arc their servants and law is their guardian”. Moreover, a minor can always plead his minority and can gain advantage on this ground.
Rules Regarding Contracts Made by Minors
In India, the following are the common rules regarding the contracts made by the minors:
(1) An Agreement with or by a Minor is In-operative and Void ab initio. If an agreement is entered into by or with a minor, such an agreement is void ab initio and is not operative few exceptions, cannot be enforced by law.
(2) A Minor may be a Promisee or Beneficiary. Al-
though an agreement entered into by or with a minor is void ab initio, yet the law doesn’t debar him from being a promisee or payee or beneficiary. A contract entered into by or with a minor can be enforced at the will of the minor for his benefit, and not at the will of other party. The law does not debar him from accepting a benefit.
Ex: P, a minor, under a contract of sale delivered
goods to the buyer. Held, he was entitled to maintain a suit for the recovery of price.
(3) A Minor is not Required to Compensate or Pay
for Any Benefit Derived. In case a minor has received any benefit out of any void agreement, he cannot be asked to compensate or pay to the other party..
Example. If a minor has obtained a loan by mortgaging any property, neither the property nor the minor is liable to payoff the loan.
(4) A Minor can Always Plead Minority. In case, a
minor, by misrepresenting his age, has induced the other party to enter into a contract with him, the minor cannot be sued for fraud. But where the minor has obtained any loan or property by misrepresentation or fraudulent act, the court may direct the minor to return the loan or property to the other party. The law does not permit the minor to cheat others.
(5) Agreements with Minor cannot be Ratified by
him on Attaining the Age of Majority. A minor cannot ratify an agreement, entered into by him, even after attaining the majority. After attaining majority, the minor may enter into a fresh contract, for which there should be adequate consideration.
(6) Specific Performance of a Contract Entered into by a Minor cannot be Demanded. There can be no specific performance of an agreement entered into by or with a minor since the agreement is void ab initio. But in case, an agreement is entered into, on behalf of the minor, by his parents, or guardians or the manager of his estate, such an agreement can be enforced provided the agreement lies within the expressed scope of the authority of the parents or the guardian or the manager and the agreement is for the benefit of the minor.
(7) A Minor can be Admitted to a Partnership Firm for Benefits Only. Normally a minor cannot be admitted to a partnership firm. But a minor can be admitted to the benefits of an already-existing partnership with the consent of other partners. A minor shall not be liable for the losses in the firm.
A minor being incompetent to contract can not be a partner in a partnership firm, but under section 30 of the Indian Partnership Act, he can be admitted to the benefits of partnership with the consent of all the partners by an agreement executed through his lawful guardian. Such a
minor will have a right to such share of the property or profits of the firm as may be agreed upon and he would have access to and inspect and copy any of the accounts of the firm. The minor can not participate in the management of the business and shall not share losses. He can not be made personally liable for any obligations of the firm, although he may after attaining majority accept thos obligations if he thinks fit to do so.
(8) A Minor may be an Agent. A minor who is ap-
pointed as an agent shall bind his principal by his acts but he does not incur any personal liability. However, the principal of the minor shall be liable to the third party for the acts done by the minor in his capacity as an agent of the principal.Fry for Thus in appointing a minor as an agent, the principal runs a great risk.
(9) Minor is Liable for Necessary Services. A minor can be held liable to payout of his property for necessaries supplied to him or his minor dependents whom he is legally bound to support. But in this case, the minor is not personally liable. A loan taken by a minor to obtain necessaries also renders his property liable and binds him to pay off the loan as if the lender has supplied the necessaries to him.
(10) Minor cannot be Adjudged as Insolvent. Since a minor is incapable to enter into a contract of debt, he cannot be adjudged as insolvent.
(11) Liability of Minor’s Parents/Guardians. A minor’s parents or guardians are not liable for the contracts entered into by a minor unless the minor has acted as an agent of the parents or guardians, etc.