capacity of the parties
TRANSCRIPT
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CAPACITY OF THE
PARTIES
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SECTION 11
A PERSON IS COMPETENT TO
CONTRACT IF:
He is of the age of majority,
Who is of sound mind, and
Not disqualified from contracting
by any law in force in India
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The following persons are not competent to
contract
Minor
Person of unsound mind
Persons disqualified by anylaw to which they are subject
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MINOR
According to Indian Majority Act, 1875:
A minor is one who has not completedhis/her 18th year of age.
A person continues to be a minor until
he attains 21 years; Where, a guardian of a minors property
or person has been appointed underthe Guardians and Wards Act, 1890; or
The superintendence of minorsproperty is assumed by a court ofwards.
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Doctrine of mutuality
It is not within the competence either of the manager ofthe minors estate or of the guardian of the minor, to bind
the minor or the minors estate by a contract for the
purchase of immovable property. As the minor was not
bound by it, there was no mutuality, and consequently
the minor could not obtain specific performance of thecontract
[Mir Sarwajan v. Fakhruddin Mohd Chowdhary ]
A contract to purchase certain immovable property had
been made by a guardian on behalf of the minor, and theminor sued the other party for a decree of specific
performance to recover possession. His action was
rejected.
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In todays life it is not desirable for law to
adhere to the categorical declaration that a
minors agreement is always void ab
initio. A minor has to travel, to get his dress
tailored, cleaned, to visit cinema halls, to
deal with educational institutions and to
purchase so many things for the facility oflife and education.
Hence, the new law is that if thecontract is within the competence of
the guardian and if it is for the benefitof the minor, it is specificallyenforceable.
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Srikakulam Subramanyam v. Kurra Subba Rao
In order to pay off the promissory note and mortgage
debt of his father, the minor son and his mother sold apiece of land to the holders of the promissory note in
satisfaction of the note. He paid off the mortgagee
accordingly and the possession of land was given to
them. Afterwards, minor brought an action to recover the
land. It was held that he was not entitled to do so as thecontract was for his benefit and had entered into by the
guardian in his competency.
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Effects of a minors agreement
An agreement with or by a minor
is void ab initio
Beneficial contracts
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Whether a minors agreement is a void or
voidable one was debated for a long time.
Then in 1903, the Privy council in Mohoribibiv. Dharmodas Ghose resolved the conflictand declared that a minors agreement is
void.
A child show poor judgment in making aparticular contract, and it is a protectionagainst his own ignorance and immaturity-
not mere fraudulent manipulation by others-that the law affords. The general presumptionthat every man is the best judge of his owninterests is suspended in the case of
children.
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No ratification
A minors agreement is a void
agreement. Therefore, the minorcannot ratify the agreement onattaining majority.
Ratification relates back to the date
of the making of the contract and,therefore, a contract which was thenvoid cannot be made valid bysubsequent ratification.
But on attaining majority, if hemakes a new promise on a freshconsideration, then that agreementis binding.
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A minor borrowed a sum of money,executing a simple bond for it, and afterattaining majority executed a secondbond in respect of the original loan plus
interest. Held that the suit upon thesecond bond was not maintainable. the consideration which passed underthe earlier contract cannot be impliedinto the contract into which the minor
enters on attaining majority.
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Minor can be a promisee or
beneficiary
He can purchase a property, being
beneficiary or promisee
But he cant be a promisor. He cant sell
a property.
A contract executed in favour of a
minor can be enforced by him.
He could get a decree on mortgage
executed in his favour.
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NO ESTOPPEL AGAINST A MINOR
THE RULE OF ESTOPPEL IS NOT
APPLIED AGAINST A MINOR.
If he commits fraud and
misrepresentation and enters into a
contract, he cannot be made liable on
the contract but the court will ask him
to restore the benefit he has obtained
out of that fraud or misrepresentation.
He is not estopped from pleading hisinfancy so as to avoid the contract
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NO SPECIFIC PERFORMANCE
EXCEPT IN CERTAIN CASES
A minors contract is void ab initio.Hence he cannot be asked to performthe contract.
If the guardian of a minor enters into acontract of which he has no authority,the minor cannot be asked to performthe contract.
But if the guardian or manager hasauthority to enter into a contract onbehalf of the minor,
For the minors benefit; Then minor can be sued for specific
performance.
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LIABILITY FOR TORTS
Minor can be held liable for tort unlessthat tort is a breach of contract.
Minor was rented certain instrumentsfor his use and handed over it to his
friend. It was lost. He can be sued forthe tort.
The principle is that you cannotconvert a contract into a tort to enableyou to sue an infant.
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Burnard v. Haggis
The defendant a Cambridge universitystudent and minor, hired a horse for thepurpose of riding, expressly stated thathe did not want a horse for jumping.
The defendant let the horse to a friend,who used it for jumping, with the resultthat it fell and was injured. Thedefendant held liable on the ground thatthe act was outside the contract and
not an abuse of the contract.
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NO INSOLVENCY
A minor cannot contract a debt.
Hence he cant be declared insolvent or
pauper
He is not personally liable
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PARTNERSHIP
He cant be a partner.
But he can reap out the benefits of a
partnership
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AGENT
Minor can act as an agent
But he will not be liable to the principal.
A minor can draw, deliver and endorse
negotiable instruments without himselfbeing liable
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MINOR CANT BIND HIS PARENTS
OR GUARDIAN
Minor cant make his parent or guardian
liable for his acts even if it for his
necessaries.
He can make them liable only when he
acts as their agent
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In the case of a joint contract by a
minor and an adult, the adult will be
liable but not the minor.
In the contract of guarantee, when an
adult stands surety for a minor, the
adult will be liable to the third party.
A minor cant be a shareholder.
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SECTION 68: MINOR CAN BE HELD LIABLE
FOR THE NECESSARIES SUPPLIED TO HIM
No personal liability on the minor
Only his property will be held liable.
A minor liable for the value of necessaries
supplied to his wife
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Conditions to make minors estate liable for the
necessaries supplied to him
The contract should be for goods
reasonable necessary for his supportin his station in life
The minor must not have already a
sufficient supply of these necessaries
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A supplies B a minor with necessaries
suitable to his life. A is entitled to be
reimbursed from Bs property.
Things necessary are those without
which an individual cannot reasonable
exist. Food, raiment, lodging and the
like.
What are necessaries has to be
determined with reference to the
fortune and circumstances of the
particular minor. Articles therefore that
to one person might be mereconvenience or taste may in another
case be the necessaries for yet another
person.
Doctrine of restitution
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Doctrine of restitution
If an infant obtains property or goods by
misrepresenting his age, he can be compelled to
restore it, as long as the same is traceable in his
possession. This is known as the equitable doctrine of
restitution.
Restitution stopped where repayment began. Where
the infant has sold the goods or converted them, he
cannot be made to repay the value of the goods,because that would amount to enforcing a void
contract
The doctrine of restitution is not applicable if the infant
has obtained cash instead of goods. Leslie ( R) Ltd. v. Sheill: in this case, an infant
succeeded in deceiving some money lenders with a lie
about his age, and so got them to lend him 400 pounds
on the faith of being adult. Their case to recover the
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PERSONS OF UNSOUND MIND
SECTION 11 & 12
PERSONS OF UNSOUND MIND ARE
INCOMPETENT TO CONTRACT
SUCH TYPE OF CONTRACTS ARE
VOID
A person is said to be of sound mind
for the purposes of making a contract,
if, at the time of making the contract, he
is capable of understanding it and of
forming a rational judgment as to theeffects of that contract upon his
interests.
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A person usually of unsound mind but
occasionally of sound mind is
competent to contract when he is of
sound mind. e.g.insane
A person usually of sound mind but
occasionally of unsound mind cannot
contract when he is of unsound mind.
E.g. drunkard
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UNSOUNDNESS OF MIND
Idiocy- lack of capacity to understand
the terms of the contract and its effects
Lunacy/ Insanity- disease of the brain-
can enter into contract at times when
he is sane
Drunkenness- temporary incapacity-
same as lunatic
Hypnotism- temporary- artificially
induced sleep
Mental decay- on account of old age
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PERSONS DISQUALIFIED UNDER
LAW
ALIEN ENEMIES
FOREIGN SOVEREIGN &
AMBASSODORS
INSOLVENTS
CORPORATIONS- ONLY THROUGH
AGENTS