Introduction. Under Section 10 and Section 11 of the Indian Contract Act, 1872, competency of parties is a fundamental requirement for a valid contract. A contract made by a person who is not legally competent is void. Among the categories of incompetency, the position of a minor is the most significant and widely tested in examinations. The law protects minors from contractual liability and ensures they do not suffer due to their lack of maturity and judgment.
Competency to Enter into a Contract (Section 11)
Section 11 states that a person is competent to contract if they satisfy the following conditions:
1. Must be of the Age of Majority
A person must have completed 18 years of age. In cases where a guardian or court supervision is involved, the age of majority is 21 years. A minor (below 18) is not competent to enter into a contract.
2. Must Be of Sound Mind
A person entering into a contract must be capable of understanding its terms and forming a rational judgment regarding its effect on their interest. A person of unsound mind includes:
- Lunatics
- Idiots
- Drunken persons
- Persons temporarily incapable of understanding the contract
A person usually of unsound mind but occasionally sane can contract during lucid intervals.
3. Must Not Be Disqualified by Law
Certain persons are legally disqualified from contracting, such as:
- Alien enemies
- Foreign sovereigns and ambassadors
- Insolvents
- Convicts
- Corporations acting beyond their capacity
Position of a Minor in Contract Law
The position of minors in contract law has been clearly defined through Section 11 and judicial interpretation. The landmark judgment of Mohori Bibee v. Dharmodas Ghose (1903) firmly established the principles governing minor’s contracts.
1. Minor’s Agreement is Absolutely Void
The Privy Council held that an agreement with a minor is void ab initio — void from the very beginning. A minor cannot be held liable for any contractual obligation.
2. No Estoppel Against a Minor
A minor is not estopped (prevented) from pleading minority. Even if a minor misrepresents their age, they cannot be forced to fulfill the contract. The law protects minors from the consequences of their own misrepresentation.
3. Minor Cannot Ratify a Contract on Attaining Majority
A contract made during minority cannot be ratified after the minor attains majority. Ratification must relate to an agreement that was valid at the time it was made, which is not the case for minor’s agreements.
4. Contract for the Benefit of Minor is Valid
If an agreement is for the minor’s benefit—such as for education, training, necessities—then it is enforceable. The law protects minors by allowing beneficial arrangements.
5. Minor’s Liability for Necessaries (Section 68)
A minor is not personally liable for necessities supplied to him, but the supplier may claim reimbursement from the minor’s property. “Necessaries” include food, clothing, education, and essential services.
6. Minor as Beneficiary
A minor can enforce a contract where he is the beneficiary. He may receive gifts, benefits, or advantages arising out of a contract.
7. Minor and Partnership
A minor may be admitted to the benefits of partnership but cannot be a partner personally liable for firm obligations.
8. Guardian Contracts
Contracts entered into by a guardian on behalf of a minor are valid if they are clearly for the benefit of the minor and within the guardian’s authority.
Additional Explanation
The strict rules protecting minors ensure that they do not become victims of exploitation or unfair dealings. Since minors lack legal maturity, the law prioritizes their welfare over the interests of other contracting parties. The law distinguishes between agreements that impose obligations on minors and those that confer benefits, allowing the latter but rejecting the former.
The principles safeguard both minors and society by ensuring that legal responsibility corresponds with mental and physical maturity. These protections encourage fairness, prevent abuse, and maintain integrity in contractual relations.
Conclusion: A person must be a major, of sound mind, and not disqualified by law to be competent to contract. Minor’s agreements are void ab initio, but minors can enforce contracts made for their benefit. The law of competency ensures protection of minors while balancing fairness in commercial transactions.