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Agreement with Minor

Agreement with Minor

Edited By Ritika Jonwal | Updated on Jul 02, 2025 05:49 PM IST

One important piece of legislation that controls Indian business law is the Indian Contract Act of 1872. It is essential to the regulation of contractual responsibilities and relationships. Nonetheless, there is a specific area of complication that comes up when working with agreements involving small parties. Such agreements without constraints or limitations are prohibited by the Act.

This Story also Contains
  1. Meaning of Minor under Indian Contract Act, 1872
  2. Rules Regarding Minor’s Agreement
  3. Significant Landmark Case
  4. Minor's Responsibility under the Negotiable Instruments Act
  5. Conclusion
Agreement with Minor
Agreement with Minor

This presents a problem because contracts with children are not expressly allowed under the legal framework. Therefore, to ensure compliance with the Indian Contract Act, it becomes crucial to grasp the particular guidelines and requirements that regulate transactions involving minors.

Meaning of Minor under Indian Contract Act, 1872

  • In India, anyone who is younger than eighteen is legally regarded as a minor. A 17-year-old and 364-day-old would still be considered a juvenile.

  • The Indian Majority Act of 1875 establishes the age of majority or the point at which a person becomes an adult.

  • Minors are considered legally incapable of engaging in any kind of contract, as per the Indian Contract Act 1872.

  • Contracts involving minors are thus regarded as null, invalid and unenforceable.

  • The law limits a minor's contractual ability until the age of majority, acknowledging the necessity to safeguard minors' interests and welfare.

  • Based on Indian law, a minor's agreement is void, meaning that neither party may enforce it, making it null and void and having no legal significance.

  • Furthermore, he will not be able to ratify the same deal even after achieving a majority.

  • The distinction here is that although a minor's contract is worthless or null, it is not unlawful because there is no statutory provision regarding this.

Rules Regarding Minor’s Agreement

The rules for minors' agreements are as follows:

  1. A Minor's Agreement Is Null and Void: A minor is not permitted to enter into a contract, according to Section 10 of the Indian Contract Act. In the same vein, Section 11 makes it clear that a minor is incapable of signing a contract. Indian courts disagreed over whether a contract with a minor was invalid or voidable before 1903. The case of Mohri Bibi v. Dharmo Das Ghose (1903) provided a final resolution to this issue.

  1. Lack of Ratification: A contract with a minor is null and invalid: A minor is unable to ratify an agreement that is null and invalid, even after reaching a majority. An act approved by an incompetent person cannot be given legality by the Act of Ratification. On the other hand, if a juvenile, upon becoming an adult, makes a new pledge backed by a new thought, that new promise shall stand.

  1. Minor as a Recipient or Promisee: A minor has the legal authority to enforce a contract in which they are a promisee or beneficiary. A kid may be a beneficiary without any limitations, much as a payee or promisee in a contract. Consequently, once a kid tenders the purchase money, they are allowed to seek possession recovery and can buy immovable property. Likewise, a promissory note written for the benefit of a minor may be enforced.

  1. Nothing to Estoppel a Minor: A minor cannot be held accountable for a contract they engage in if they deceive the other party about their age. A minor may use their minority as a defence to avoid entering into a contract, as estoppel does not apply to them.

  1. Specific Performance, With Exceptions: A contract made by a minor is null and invalid and cannot be subject to specific performance. An agreement for the acquisition of real estate cannot be binding on a minor under the guardian's authority. As a result, the child cannot demand particular fulfilment of a deal that the guardian was not legally authorised to make.

  1. Not bankrupt: Since a minor cannot incur debt, they cannot be declared insolvent. The minor is not held personally responsible for any obligations or debts; instead, they would be paid from their belongings.

  1. Partnership: A minor is not permitted to be a partner in a partnership business due to their incapacity to engage in contracts. However, a minor may be permitted to benefit from a partnership under Section 30 of the Indian Contract Act.

  1. Minor as an Agent: An agent can be a minor. They won't be accountable to their principal for their actions, though. Negotiable documents may be drawn, delivered, and endorsed by minors without exposing them to personal risk.

  1. Unable to bind parent or guardian, Minor: Even for necessities, a child cannot bind their parent or guardian without explicit or implicit authorisation. Parents are only accountable when their child is representing them.

  1. Guarantee for a Minor: Since there is a direct contract between the surety and the third party in a contract of guarantee where an adult acts as a guarantor for a child, the adult is accountable to the third party.

  1. Joint Agreement between a minor and an adult: When an adult and a juvenile enter into a joint contract, the adult will be responsible for the terms of the agreement and the youngster won't. It was decided that the vendor may enforce the contract against the adult purchaser but not the juvenile in the Sain Das v. Ram Chand case, which included a joint purchase with one of the purchasers being a minor.

  1. Minor as a Shareholder: A minor cannot become a shareholder in a firm since they are not allowed to engage in contracts. The business reserves the right to cancel the transaction and delete the minor's name from the register if they unintentionally become members. On the other hand, a minor may transfer or transmit fully paid shares to become a shareholder through their legal guardian.

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Significant Landmark Case

Mohiri Bibi v. Dharmodas Ghosh

The case dates back to 1903 when the Privy Council determined that a contract entered into by a minor is void ab initio, meaning that it is void from the start.

Fact about the Case: The plaintiff, Dharmodas Ghosh, mortgaged his belongings to the defendant, a moneylender, while still a child. The plaintiff's age was known to the defendant's counsel at the time. Later, the plaintiff only paid Rs 8,000 and refused to give the remaining sum of money. At that point, the plaintiff's mother served as his next best friend and legal guardian. He filed a lawsuit against the defendant, claiming that because he was underage when the contract was made, it was null and invalid and that he was not obligated by it.

Judgement of the Case: The court decided that an agreement is not a contract unless both parties meet the requirements of Section 11 of the Act.

Srikakulam Subramaniam v. Subba Rao

Fact about the Case: The minor sold a plot of property to the holders of the promissory note to satisfy the obligation and pay off the mortgage debt owed by his mother, father, and minor. After paying off the debt, he was granted ownership of the land. However, the minor later requested ownership of the land, claiming that the contract was null and void due to his minor status.

Judgement of the Case: However, the court determined that this agreement was legitimate since it was made by his mother, who was acting as his guardian, and it was for the minor's benefit.

Kundan Bibee v. Sree Narayan

After reaching the majority, S took out a bond to pay K the full amount he owed him after, as a minor, he had received certain items from K in connection with his company which was owed to him. S argued that K was not obligated to pay since he was allegedly underage in an attempt to recoup the stated sum. However, because there was an additional factor, S was forced to pay the whole sum.

Implications of a Minor's Agreement

The consequences can be understood in light of this historic ruling:

  • The doctrine of Estoppel: It is a legal principle of evidence that forbids a person from making an allegation that is inconsistent with what he has already said. The defendant's counsel in this case knew that the plaintiff was a juvenile, and the court decided that the notion of estoppel does not apply in situations when someone is aware of the facts beforehand. Therefore, this rule is not relevant.

  • Benefit Restitution: Under Section 64 of the Indian Contract Act, if one party rescinds a contract that is voidable at their discretion, the other party is not required to fulfil their end of the bargain. This applies to voidable contracts; however, since a minor's contract is null and void, the moneylender cannot demand that he return the money.

  • No obligation resulting from a contract or tort: Since a minor cannot provide consent, any agreement they make is void and cannot be enforced.

Minor's Responsibility under the Negotiable Instruments Act

  • A minor may draw, endorse, and negotiate under Section 26 of the Act, and he may bind everyone but himself.

  • A promissory note, cheque or bill of exchange may be made, drawn, accepted, delivered and negotiated by any person who is competent to enter into contracts under the laws to which he is subject.

Conclusion

When it comes to a minor's agreement, there are a few key guidelines. Finally, the regulations governing a minor's agreement are as follows: it is null and invalid, there are limited liability exceptions for necessities, it cannot bind third parties, and there are particular considerations for partnerships, suretyship, and torts.

Frequently Asked Questions (FAQs)

1. Is a minor's contract invalid in India?

A contract formed by a minor is void, and unless it is made by his natural guardian or a guardian appointed by the court, we cannot consider a contract binding on a minor only because it is in the minor's best interests." The High Court's viewpoint was deemed to be error-free by the Supreme Court.

2. Is an agreement void ab initio with a Minor?

Lack of Agreement Ratification: A minor cannot later become a majority and then revoke an agreement they made. This is so because a minor's agreement is null and invalid from the beginning and cannot be ratified to become enforceable.

3. What is the Indian legal status of a minor agreement?

A minor lacks the legal capacity to sign contracts. Under Section 11 of the Indian Contract Act of 1872, it is null and invalid. As a result, the lawsuit that was based on this null and invalid agreement may be dismissed.

4. Does a minor's agreement violate the law?

A juvenile cannot ever be held accountable for anything he does under the terms of a void contract. Unless a statute expressly permits it, the minor party cannot ratify the agreement after reaching a majority. A contract with a juvenile is invalid entirely, thus no court may order a particular performance under any circumstances.

5. What is a minor's ability to enter into a contract?

A minor lacks the legal competence to enter into a business deal. Any business arrangement with a minor is null and invalid ab initio, which translates to "from the beginning." A person who signs a contract before turning 18 is not able to ratify it after he reaches that age.

6. What is the general rule regarding contracts with minors?
The general rule is that contracts with minors (individuals under the legal age of majority, typically 18) are voidable at the minor's option. This means the minor can choose to cancel or enforce the contract, while the adult party is bound by it.
7. Why are contracts with minors treated differently from those with adults?
Contracts with minors are treated differently to protect them from their own inexperience and potential exploitation by adults. The law recognizes that minors may lack the maturity and judgment to fully understand the consequences of their contractual obligations.
8. Can a minor ratify a contract upon reaching the age of majority?
Yes, a minor can ratify (confirm or approve) a contract upon reaching the age of majority. By doing so, they make the contract fully binding and lose the right to void it based on their former minor status.
9. Are digital contracts with minors treated differently from traditional contracts?
Generally, the same principles apply to digital contracts as to traditional ones. However, some jurisdictions may have specific laws addressing electronic agreements with minors, particularly in the context of online purchases or social media.
10. Can a parent or guardian void a contract on behalf of a minor?
In most cases, only the minor has the right to void the contract. Parents or guardians typically cannot void a contract on the minor's behalf unless they have specific legal authority to do so.
11. What happens if a minor misrepresents their age when entering a contract?
If a minor misrepresents their age, claiming to be an adult, they may still have the right to void the contract in many jurisdictions. However, some courts may hold the minor liable for fraud or refuse to allow them to void the contract.
12. What is the "infancy defense" in contract law?
The infancy defense is a legal principle that allows minors to avoid contractual obligations by asserting their lack of legal capacity to enter into contracts due to their age.
13. Can a minor void a contract at any time?
Generally, a minor can void a contract at any time before reaching the age of majority or within a reasonable time afterward. However, some jurisdictions may impose time limits or other restrictions on when a contract can be voided.
14. Can a minor be held liable for damages if they void a contract?
Generally, a minor cannot be held liable for damages when voiding a contract. However, they may be required to return any property or benefits received under the contract if they still possess them.
15. Can a minor enter into a binding contract for a student loan?
In many jurisdictions, student loans are considered an exception to the general rule, and minors may be held to these contracts. However, specific laws and regulations regarding student loans and minors can vary by country and state.
16. What does it mean for a contract to be "voidable"?
A voidable contract is one that can be canceled or "voided" by one party (in this case, the minor) but remains valid and enforceable unless and until that party chooses to void it. The other party (the adult) cannot void the contract.
17. What happens if a minor voids a contract?
When a minor voids a contract, they are released from their obligations under the agreement. However, they may be required to return any benefits received under the contract if they still possess them.
18. Are there any exceptions to the rule that minors can void contracts?
Yes, there are exceptions. Contracts for necessities (such as food, clothing, and shelter) are generally binding on minors. Some jurisdictions also consider certain other types of contracts, like those for education or employment, to be binding.
19. What are "necessities" in the context of contracts with minors?
Necessities are goods or services essential for the minor's health, safety, or well-being. These typically include food, clothing, shelter, and medical care. The exact definition can vary by jurisdiction and may depend on the minor's circumstances.
20. What constitutes ratification of a contract by a former minor?
Ratification can occur through express statements or actions that demonstrate an intent to be bound by the contract. This might include continuing to make payments, using the goods or services, or explicitly stating an intention to honor the agreement.
21. What happens if a minor has already performed their part of the contract?
Even if a minor has performed their part of the contract, they generally still retain the right to void it. However, they may be required to return any benefits received if they still possess them.
22. What is the "doctrine of necessaries" in relation to contracts with minors?
The doctrine of necessaries is an exception to the general rule that minors can void contracts. It holds that contracts for goods or services necessary for the minor's survival or basic well-being are binding and cannot be voided.
23. What happens if a minor breaches a contract before voiding it?
If a minor breaches a contract before voiding it, they generally cannot be held liable for damages resulting from the breach. However, they may be required to return any benefits received under the contract if they still possess them.
24. What is the "benefit rule" in contracts with minors?
The benefit rule states that when a minor voids a contract, they must return any benefits received under the contract if they still possess them. This rule aims to prevent unjust enrichment while still protecting the minor's interests.
25. Can a minor enter into a binding lease agreement?
Generally, lease agreements with minors are voidable at the minor's option, like most other contracts. However, some jurisdictions may have specific rules regarding residential leases for minors, especially for students or emancipated minors.
26. What is the status of a contract between two minors?
Contracts between two minors are generally voidable by either party. Both minors have the option to enforce or void the contract, creating a situation where the agreement is essentially unenforceable until both parties reach the age of majority and choose to ratify it.
27. Can a minor enter into a binding contract for medical treatment?
The rules for medical treatment contracts with minors can be complex and vary by jurisdiction. Generally, contracts for necessary medical treatment are considered binding, but there may be exceptions or special rules for certain types of treatment or procedures.
28. What is the "infancy doctrine" in contract law?
The infancy doctrine is another term for the legal principle that allows minors to void contracts. It's based on the presumption that minors lack the capacity to fully understand and consent to contractual obligations.
29. What is the concept of "necessaries" in relation to contracts with minors?
Necessaries are goods or services considered essential for the minor's health, safety, or well-being. Contracts for necessaries are an exception to the general rule and are typically binding on minors.
30. What happens if a minor ratifies a contract after reaching the age of majority?
If a minor ratifies a contract after reaching the age of majority, the contract becomes fully binding and enforceable. The former minor loses the right to void the contract based on their previous minor status.
31. What is the "clean hands" doctrine in relation to contracts with minors?
The "clean hands" doctrine generally doesn't apply to minors voiding contracts. Even if a minor has acted unethically, they typically retain the right to void the contract, although there may be exceptions in cases of fraud or misrepresentation.
32. What is the status of a contract for a minor's artistic or athletic performances?
Contracts for a minor's artistic or athletic performances are often subject to special rules and may require court approval in some jurisdictions. These contracts may be treated differently from standard contracts with minors due to their potential long-term impact on the minor's career.
33. What is the concept of "restitution" in relation to voided contracts with minors?
Restitution in this context refers to the return of benefits received under a contract that a minor has voided. The minor may be required to restore the other party to their pre-contract position to the extent possible, but typically only if they still possess the benefits received.
34. What is the difference between a void contract and a voidable contract with a minor?
A void contract is invalid from the beginning and cannot be enforced by either party. A voidable contract with a minor is valid unless and until the minor chooses to void it. The adult party is bound, but the minor has the option to enforce or cancel the contract.
35. Can a minor void a contract for the purchase of a car?
Yes, in most cases, a minor can void a contract for the purchase of a car, as it is typically not considered a necessity. However, the minor may be required to return the car if they still possess it.
36. Can a business refuse to enter into a contract with a minor?
Yes, a business can refuse to enter into a contract with a minor. There is no legal obligation to contract with minors, and many businesses choose not to due to the risk of the contract being voided.
37. What is the concept of "emancipation" and how does it affect contracts with minors?
Emancipation is a legal process that grants a minor the legal rights of an adult. An emancipated minor can generally enter into binding contracts just like an adult, losing the protection of the infancy defense.
38. Can a minor be an agent for an adult in a contract?
Yes, a minor can act as an agent for an adult in a contract. The contract would be binding on the adult principal, not the minor agent. However, the minor's ability to enter into the agency agreement itself may be limited by their minor status.
39. How does marriage affect a minor's ability to contract?
In many jurisdictions, marriage emancipates a minor, granting them the legal capacity to enter into binding contracts. However, this can vary by location, and some jurisdictions may have specific rules about contracts entered into by married minors.
40. Can a minor form a valid contract for employment?
Employment contracts with minors are often treated as a special category. While minors can generally enter into employment agreements, there are usually strict regulations regarding working hours, conditions, and types of work permitted for minors.
41. What is the status of a contract signed by both a minor and their parent?
If both a minor and their parent sign a contract, the minor may still have the right to void it. The parent's signature doesn't necessarily make the contract binding on the minor, but it may create obligations for the parent.
42. Can a minor enter into a binding arbitration agreement?
Generally, arbitration agreements signed by minors are treated like other contracts and are voidable at the minor's option. Some courts have held that parents cannot bind their children to arbitration agreements.
43. Can a minor void a contract for insurance?
In most cases, a minor can void a contract for insurance. However, some jurisdictions may treat certain types of insurance (like auto insurance required by law) differently if the minor is legally permitted to drive.
44. How does the concept of "capacity" relate to contracts with minors?
Capacity refers to a person's legal ability to enter into a binding contract. Minors are generally considered to lack full legal capacity due to their age, which is why they have the option to void most contracts they enter into.
45. What is the "reasonable person" standard in relation to contracts with minors?
The "reasonable person" standard is not typically applied to minors in contract law. Instead, the law recognizes that minors may lack the judgment and experience of adults, which is why they are given special protections.
46. Can a minor void a contract for digital goods or in-app purchases?
Generally, contracts for digital goods or in-app purchases are treated like other contracts and can be voided by minors. However, some jurisdictions have specific laws or regulations addressing these types of transactions, especially given their prevalence and the ease with which minors can make such purchases.
47. What is the concept of "disaffirmance" in contracts with minors?
Disaffirmance is the legal term for a minor's act of voiding or canceling a contract. When a minor disaffirms a contract, they are essentially declaring that they no longer wish to be bound by its terms.
48. Can a minor be held liable for misrepresentation in a contract?
While minors generally cannot be held liable for breach of contract, they may potentially be held liable for fraudulent misrepresentation. However, courts often consider the minor's age and understanding when determining liability in such cases.
49. What is the status of a contract co-signed by a minor and an adult?
If a minor co-signs a contract with an adult, the minor typically retains the right to void their obligations under the contract. The adult co-signer, however, would remain bound by the contract terms.
50. Can a minor enter into a binding contract for a credit card?
Generally, credit card contracts with minors are voidable at the minor's option. However, some jurisdictions have specific laws regulating credit card issuance to minors, and co-signed credit card agreements may be treated differently.
51. Can a minor void a contract for services already rendered?
Yes, a minor can generally void a contract for services already rendered. However, under the benefit rule, they may be required to pay for the reasonable value of any benefits received that they cannot return.
52. Can a minor enter into a binding contract for a cell phone plan?
Generally, cell phone contracts with minors are voidable at the minor's option. However, some jurisdictions may have specific rules regarding these contracts, especially if they're considered necessary for the minor's safety or education.
53. Can a minor void a contract for educational services?
The status of educational service contracts with minors can vary by jurisdiction. Some courts consider these contracts to be for necessaries and thus binding, while others may allow them to be voided like most other contracts with minors.
54. Can a minor enter into a binding contract for a subscription service?
Generally, subscription service contracts with minors are voidable at the minor's option. However, the minor may be required to pay for services already received if they choose to void the contract.
55. Can a minor void a contract after partially performing it?
Yes, a minor can generally void a contract even after partially performing it. However, they may be required to return any benefits received under the contract if they still possess them.
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