02-02-2013, 01:04 PM
CAPACITY TO CONTRACT
CAPACITY TO CONTRACT.ppt (Size: 1.61 MB / Downloads: 38)
An agreement becomes a contract if it is entered into between the parties who are competent to contract (Sec. 10).
Every person is competent to Contract
who is of the age of majority;
who is of sound mind; and
who is not disqualified from contracting by any law.
Contracts by a Minor
A ‘minor’ is a person who has not completed the age of 18 years.
However in the following cases, a person continues to be a minor up to 21 years of age:
Where a guardian of a minors person or property is appointed.
Where the superintendence or a minors property is assumed by a court of wards.
Rules regarding contracts with Minors
Minor can always plead Minority.
No ratification(=approval) on attaining majority.
Contracts by a parent or guardian –whether enforceable.
Meaning of Rule of Estopple
As per rule of Estoppel when one person has by his declaration, act or omission, intentionally caused or permitted another person to believe a thing to be true.
It does not apply to Minor.
Contracts for Necessaries
Necessary goods – defined in Sec.3(3), SOGA 1979 as ‘goods suitable for his condition in life, and to his actual requirements at the time of sale and delivery’.
Minors should pay for those goods and services actually supplied to them that are necessaries according to their station in life.
Purpose of this rule
To allow minors to enter into contracts beneficial to them
To prevent unscrupulous businesses from taking advantage of their youth and inexperience.
Agreements with Minor
the case of Mohoribibi vs. Dharmodas Ghosh in 1903, a minor had taken a loan and then he sued to avoid the contract. Privy Council held that any contract with a minor is void ab initio and so the loaner cannot get any money that he gave as advance back. This rule is adopted all over India whether or not it benefits the minor.
In the case of Mir Sarwarjan vs. Fakhruddin Mohd. Chaudhary 1912, a contract to purchase a property was done on behalf of minor.
It was held that the minor could not be sue for getting the possession of property.