Rules Regarding Minors agreement

1. An agreement with or by minor is void ab initio

Test case: Mohari Biwi V. Dharam Das Ghose, AIR (1903), 30 Calcutta, 539

In this case, a minor mortgaged house in favor of a mortgagee to secure a loan of Rs 2000 out of which a mortgagee paid the minor sum 8000.

Subsequently, the minor sued for setting aside the mortgage, stating that he has underage when he executed the mortgage.

The court held that “the mortgage was void and, therefore, it was cancelled.

2. The ratification after attaining the age of majority is not valid.

Ratification means the subsequent adoption and acceptance of an act or agreement. A minor agreement being a nullity and void ab initio has no existence in the eye of law. So far as Nepalese law is concern it is not clear but references can be drawn that contract done in situation when he is not able to know the benefit and loss and result of act is void itself and can’t be ratified by the person.

3. Principle of estoppels doesn’t apply to the minor

Estoppels means when you put forward any fact you are prevented to deny that fact or precluded to put different fact on same matter.

A minor is not estopped from pleading his minority in order to avoid the contract, even if he has entered into an agreement by falsely representing that he was full of age.

4. Minor can be beneficiary or promisee

Unlike Minor’s agreement that gives obligation to the minor, contract made for the benefit of minor is valid one and there is nothing, which debars him from becoming beneficiary. The nature of law that is law always protects weaker section also signifies here.

Test Case: The General American Insurance Co. Ltd v. Madan Lal Sonu Lal AIR (1935) 59 BOM 656

Contract made by minor where minor is beneficiary is valid and Minor can get the compensation for the loss of his property through insurance contract.

5.                 5. A minor cannot be a partner but can admitted to the benefits of partnerships

Partnership is a mutual agency and continuous relationship between the partners. Generally minor cannot be a partner because it has a chance of loss and benefits equally. But minor can admitted to the benefits of partnership. i.e he can be benefited out of partnership

6. A minor can be a agent

Since the agent work on behalf of the principle and agent is only bridge and doesn’t have any obligation rather work a minor can be an agent.

7. Minor can be liable for necessaries

The word necessaries are a vague one. It may include from basics things to suitable for his life. If any person provide necessaries for the minor then minor is liable for that. There is an implied contract between supplier and minor. But necessaries provided should be economical to the status of minor and socially acceptable.

8. A lawful guardian may make a contract for the benefit of minor

Minor Through his/her guardian can become the shareholder of the company