Contract With Minor – Legal Position in India

Diwakar Prakash Garg, a 3rd-Year BBA LL.B, UPES Student has written this Article explaining”Contract With Minor – Legal Position in India”

INTRODUCTION:

Contracts are enforceable agreements that bind two or more parties and establish duties. However, not everyone has the legal capacity to sign contracts. The Indian Contract Act, of 1872 regulates contract law in India. According to Section 11 of the Contract Act, everyone who is of legal age and sound mind can form a contract. A juvenile, or someone below the age of 18, is not, however, regarded as competent to enter into a contract. In this post, we’ll talk about the Indian Contract Act’s pertinent clauses as well as the legal status of contracts with minors[1].

MINOR’S LEGAL STATUS IN A CONTRACT

Only agreements signed by parties that are legally fit to enter into a contract are recognized as contracts under the Indian Contract Act of 1872. A minor is someone who hasn’t reached the legal age of majority. People in India who are younger than 18 are referred to as minors. According to the Indian Contract Act of 1872, children lack the legal capacity to enter into any kind of contract, and any agreement they enter into is null and invalid. This implies that any party may take advantage of the minor or disregard him on the pretext that their agreement is invalid[2].

RULES WITH EXCEPTIONS

There are a few exceptions to this rule, though.

A minor’s contract for necessities like food, clothing, or shelter is valid and enforceable. Similarly to this, a juvenile who engages in a contract while misrepresenting their age may be prevented from contesting the legality of the agreement[3].

LEGAL PROTECTION FOR MINORS

Minors are entering public life more quickly than ever before in today’s society. A minor is required to travel, see theatres, interact with educational institutions, and make several purchases on his own. Because the agreement is worthless, any party can take advantage of the minor or disregard him. Legal representation of the minor’s standing in the Indian Contract Act of 1872, whether for or against him, is so crucial[4].

THE REPERCUSSIONS OF A MINOR SIGNING A CONTRACT IN INDIA

According to the Indian Contract Act of 1872, children lack the legal capacity to enter into any kind of contract, and any agreement they enter into is null and invalid. That implication is incorrect; the law allows minors to enter into contracts for necessities and provides them protection. When a juvenile enters into a contract, the child cannot be held accountable for any contract violations and the contract may not be legally enforceable.

Additionally, the juvenile has the right to revoke the agreement at any point before reaching legal adulthood. There are a few exceptions to this rule, though. A contract for needs like food, clothes, or housing, for instance, is enforceable if it is signed by a minor. Similarly to this, a minor who engages in a contract while misrepresenting their age may be prevented from contesting the legality of the agreement. Overall, when a minor enters such a contract in India, the agreement is voidable and the child is not responsible for any contract violations[5].

VOID VERSUS VOIDABLE CONTRACTS

One party can annul a void contract, whereas it is unenforceable from the beginning, unlike a voidable contract. A minor-related contract is voidable but not void. This indicates that although the contract is originally enforceable, the minor has the right to revoke it whenever they are under the age of majority. Both parties are relieved from their contractual responsibilities if the minor chooses to invalidate the agreement[6].

SECTION 10 – AGREEMENT

An agreement described in Section 10 of the Indian Contract Act includes ” every promise and  set of promises, constituting the consideration for each other.” Thus, there needs to be an agreement among the parties for an agreement to be enforceable in court. Only parties who are legally capable of entering into a contract may do so, and children are not regarded as capable of entering into a contract[7].

 SECTION 13

A contract that was acquired by duress is not enforceable, according to Section 13 of the Indian Contract Act. The application of force or intimidation to persuade someone to do something despite their will is known as coercion. Minors are more vulnerable to pressure than adults because they lack the legal capacity to enter into contracts. Consequently, if a contract was made with a kid under duress, it cannot be upheld[8].

SECTION 14 – UNRESTRICTED CONSENT

As per Indian Contract Act’s Section 14, contracts without the free consent of parties are unenforceable. Free consent has been provided voluntarily and without the use of compulsion, undue influence, fraud, deception, or error. Minors’ permission could not be seen as free consent since they aren’t thought to be competent to enter into contracts. A contract that was made with a minor without their free agreement is, therefore, unenforceable[9].

IN INDIA, WHAT HAPPENS IF A MINOR SIGNS A CONTRACT

According to the Indian Contract Act of 1872, children lack the legal capacity to enter into any kind of contract, and any agreement they enter into is null and invalid. This implies that any party may take advantage of the minor or disregard him on the pretext that the agreement is invalid. When a juvenile enters into a contract, the child cannot be held responsible for any contract violations and the contract will not be legally enforceable. Additionally, the juvenile has the right to revoke the agreement at any point before reaching legal adulthood.

There are a few exceptions to this rule, though. A contract for needs like food, clothes, or housing, for instance, is enforceable if it is signed by a minor. Similarly to this, a minor who engages in a contract while misrepresenting their age may be prevented from contesting the legality of the agreement. In India, when a minor enters into a contract, the result is that the deal is voidable and that the juvenile is not responsible for any contract violations. To avoid any future legal issues, it is crucial to comprehend the legal standing of a minor in an Indian contract[10]. The following succinctly describes the ramifications of a minor signing a contract in India:

Void Agreement

A minor’s agreement is recognized as invalid in India according to Sections 10 and 11 of the Indian Contract Act. As a result, the contract is not enforceable and the minor cannot be held accountable for any violations. The agreement is regarded as invalid from the start.

No Legal Obligation

The contract’s duties cannot be used to hold a minor legally accountable. The minor is not liable for losses or damages resulting from contract breach due to their legal protection.

Contract repudiation

Before reaching the age of majority, a minor may withdraw from the agreement at any time. This indicates that the kid may end the contract without facing any repercussions.

Exceptions to the Rule

There are various exceptions to the generalization that a minor’s agreement is invalid. For instance, if a youngster signs a contract for a basic need like food, clothes, or shelter, the agreement is valid and enforceable. Similarly to this, a juvenile who enters into a contract while misrepresenting their age may be prevented from contesting the legality of the agreement.

Legal Defence

Under the Indian Contract Act of 1872, the minor must be legally protected from harm or indicate his viewpoint. This is due to the increased rate at which juveniles are entering the public sphere. A minor is required to travel, see theatres, interact with educational institutions, and make several purchases on his own. Therefore, legal defense of or against the child is required to prevent any future legal issues.

No Liability for Fraud

Fraud performed during the contract cannot be held against a juvenile. A minor cannot be held responsible for fraud in a contract, even if they intentionally conceal or misrepresent information.

THE DOCTRINE OF GUARDIAN’S CONSENT

Guardian’s consent is an exception to the general rule that minors lack the legal capacity to contract. If their legal guardian agrees, this theory enables a juvenile to sign a contract that is enforceable to both parties. The guardian who holds the legal right to act on behalf of the child must, however, provide this permission at the moment the contract is signed and they must do so by the guardian’s signature.

According to the Supreme Court of India, the guardian’s approval must be provided knowing the contract’s contents and its legal ramifications in full. When providing their assent, the guardian also has to act in the minor’s best interests. The contract may nonetheless be deemed voidable at the minor’s discretion if the guardian fails to act in the minor’s best interests[11].

A MINOR’S AGREEMENT’S EFFECTS

A minor’s agreement is typically voidable at their discretion. This indicates that the decision to uphold or reject the contract is up to the minor. If it benefits them, the minor may decide to enforce the contract; nevertheless, if it is not in their greatest interests, the minor may decide to reject the agreement. Minors are not legally bound by their agreement, and they can opt-out of the contract’s responsibilities. This indicates that the opposite party to the agreement cannot use the minor as a witness to the agreement’s provisions.

It is crucial to remember that the contract is not always null and invalid or unenforceable. It can only be revoked at the minor’s request. Thus, if the minor decides to execute the agreement, they will be subject to its terms, while the other party may enforce those provisions against them[12].

HOW DOES ESTOPPEL WORK IN INDIA FOR MINORS?

In India, estoppel cannot be used to hold a minor responsible for a contract. A kid is not legally allowed to engage in a contract. Therefore, estoppel cannot be used to hold them accountable for a contract, as stated in Section 11 of the Indian Contract Act. The Indian Evidence Act’s Section 115 cannot be used to hold a kid accountable for a contract even if they falsify their age and enter into one. In other words, when it comes to contracts in India, estoppel doesn’t apply to minors.

According to Sections 10 and 11 of the Indian Contract Act, a minor’s agreement is void and they are not responsible for any responsibilities that result from it. In India, a minor has restricted capacity and protection while entering into a contract. A minor is ineligible to enter into any kind of contract, and any agreement they enter into is invalid. To avoid any future legal issues, it is crucial to comprehend the legal standing of a minor in an Indian contract[13].

LEGAL CONSEQUENCES OF MINORS ENTERING INTO CONTRACTS:

Contracts made by minors are not enforceable against them and are not legally binding. This implies that neither the other party under the agreement nor any damages for any harm that they may have experienced as a result of the minor’s violation may be sought from the minor.

Juveniles can’t be held accountable for deeds due to their lack of contractual legal capacity. This is because it is unfair to hold children accountable for the terms of a contract that they were entering into since they lack the mental capacity to comprehend the legal repercussions of their conduct[14].

THE DEGREE TO WHICH MINORS ARE LIABLE FOR THEIR ACTS:

Although minors are not held to the same standards of accountability as adults. But then also they are nonetheless required to comply with some legal requirements. For instance, minors continue to bear responsibility for their tortious behaviors, such as carelessness or malicious injury to another person.

Minors can still be held accountable for their acts if they cause harm to others or damage property. However, because the child is not financially independent and is not anticipated to be, the damages that may be recovered are constrained[15].

WHAT HAPPENS IF A MINOR FALSELY REPRESENTS THEIR AGE IN A CONTRACT

Falsely declaring age in a contract may have varying consequences depending on state regulations. Most states allow children who misrepresent their age to cancel contracts. A juvenile who provides a fraudulent date of birth, however, may be held accountable for the misdemeanor of false representation. This implies that any losses or damages suffered by the other party as a result of the minor’s false assertion of age may be brought against the minor. In any instance, the agreement is still void, and the minor may still revoke it.  

The contract is still invalid and the minor cannot be held accountable for any liabilities resulting from the transaction if they proclaim themselves to be minor. In addition, although they still have rights, children are responsible for their torts, delinquent, or criminal behavior. A Minor’s negligence in causing harm to someone’s property may result in tort liability.

Overall, it’s critical to comprehend the legal status of a juvenile in an Indian contract. As well as the repercussions of misrepresenting their age. An agreement made by a minor is deemed invalid, and they are not responsible for any responsibilities that result from the agreement. However, if an underage person gives a fake age, they might be held accountable for the tort of false representation as well as any losses or damages suffered by the other party as a result of the false age claim[16].

REMEDIES OFFERED TO MINORS:

The opposite party may be entitled to specific legal remedies in the case that a minor violates a contract. The contract is voidable depending on the minor’s discretion, hence this limits the remedies available.

Specific performance is one remedy that the opposite party could have access to. Specific performance is a fair remedy that compels the party in breach to fulfill their contractual commitments. This remedy is, however, seldom provided in situations involving minors since it would require the youngster to abide by a contract that they could not completely comprehend.

Restitution is another option that could be accessible. Restitution is a remedy that calls for the person that violated the agreement to give back whatever property or advantages they had obtained as a result of the agreement. Because this remedy doesn’t necessitate the minor to keep striving to fulfill the contract’s responsibilities, it is more frequently employed in situations involving minors[17].

NEED FOR AMENDMENT

More than 150 years have passed since the Indian Contract Act of 1872 was passed, and a lot has changed in both society and the economy. It is necessary to revise the Act to address current problems and developments. It is necessary to review the rules governing contracts with minors in particular. The existing regulations’ ambiguity and obscurity are one of their key drawbacks. The Act, for instance, does not clearly define what is considered a contract involving a minor[18].

CONCLUSION

In conclusion, juveniles lack the legal capacity to enter into contracts, and any agreement made with a minor may be revoked at the minor’s discretion. The Indian Contract Act has safeguards that guard against coercion and guarantee that minors’ permission is given voluntarily. A juvenile may engage in a legally enforceable contract having the consent of their legal guardian.

However, the guardian is obligated to act in the minor’s best interests, and the permission must be granted fully aware of the agreement’s contents and its legal repercussions. It is crucial to remember that contracts involving children can be a complex legal matter. So, parties must make sure they are adhering to all applicable rules of the Indian Contract Act. To be sure that a contract you engage in with a child is valid and enforceable, it is always preferable to have legal counsel before doing so.

Minors can be held liable for their tortious activities even though they lack the legal capacity to enter into contracts. Yet they continue to be subject to certain legal responsibilities. Agreements involving minors may also include estoppel, bankruptcy, and agency. The opposing party may be entitled to some legal remedies in the case where a minor breaks a contract, but these remedies are constrained by the fact that the minor has the right to nullify the contract.

REFERENCES

[1] https://lexforti.com/legal-news/what-is-the-position-of-minor-under-indian-contract-act-1872/ (Last seen 19/04/2023 at 5:00 PM).

[2] https://www.toppr.com/guides/business-laws-cs/indian-contract-act-1872/agreement-with-minor/#:~:text=Agreement%20with%20Minor%20parties,-Section%2011%20states&text=In%20India%2C%20the%20Indian%20Majority,invalid%20as%20per%20the%20Act. (Last seen 19/04/2023 at 5:30 PM).

[3] Ibid.

[4] https://lexpeeps.in/minors-position-under-the-indian-contract-act-and-nature-effect-minors-agreement/ (Last seen 19/04/2023 at 11:00 AM).

[5]https://www.researchpublish.com/upload/book/Legal%20Position%20of%20Minor%20and%20Minors%20Agreement-1135.pdf ( Last seen 19/04/2023 at 12:10 PM).

[6] Ibid.

[7] https://www.indiacode.nic.in/show-data?actid=AC_CEN_3_20_00035_187209_1523268996428&sectionId=38613&sectionno=10&orderno=10 (Last seen 19/04/2023 at 12:35 PM).

[8] https://www.indiacode.nic.in/show-data?actid=AC_CEN_3_20_00035_187209_1523268996428&orderno=13 (Last seen 19/04/2023 at 12:45 PM).

[9] https://www.indiacode.nic.in/show-data?actid=AC_CEN_3_20_00035_187209_1523268996428&orderno=14 (Last seen 19/04/2023 at 12:55 PM).

[10] https://old.amu.ac.in/emp/studym/100005494.pdf (Last seen 19/04/2023 at 1:10 PM).

[11] Statutory Problems in the Law of Minors’ Contracts. (1948). Columbia Law Review, 48(2), 272–281. https://doi.org/10.2307/1118483

[12] Ibid.

[13] Pandey, R. S. (1972). MINORS’ AGREEMENTS IN INDIA AND THE U. K.- A COMPARATIVE SURVEY. Journal of the Indian Law Institute, 205–252. http://www.jstor.org/stable/43950180

[14] Supra at 1.

[15] Supra at 13.

[16] https://denhalaw.com/contracts-signed-by-minors-are-not-legally-binding/ (Last seen 19/04/2023 at 2:00 PM).

[17] https://www.scconline.com/blog/post/2021/05/24/contract-act/ (Last seen 19/04/2023 at 1:30 PM).

[18] Supra at 13.