Minor
1) A minor is a person who is below the age of 18. Anyone who has not attained the age of 18 is a minor.
A contract with a minor is void ab initio that is void since the beginning.A minor cannot enter into a valid contract. There are exceptions to a contract with a minor,which could be discussed later in the blog.
2) Minors position in a contract was established in the famous case mohiri bibi vs D.Ghose. In this case A who is a minor misrepresented his age and obtained a certain sum from a money lender. The money lenders agent knew that A was a minor but he kept quiet. Later when the debt became due A's mother m brought a suit as guardian and next friend of the minor A for cancellation of the deed and for declaration that the transaction was void.
The defendant argued that the minor and his representative were estopped under the indian evidence act 1872 which would be voidable. The court rejected the theory of estoppel brought by the defendant,opining that the defendants agent knew the age of the minor but kept quiet, and that agreement between minor and major is purely void. It gives full protection to every minor in India.
As a general rule a minors agreement is absolutely void, but there are certain exceptions to it such as:
1) Minor can be admitted to the benefit of transfer such as sale mortgage contracts. The guardian of the minor may enter into a contract with the other on the behalf of the minor for the minors benefit.2) Minor can be admitted to the benefits of a partnership firm.There is no personal liability in this case.
3) It is allowed in law for a minor to elect to repay the debts that have been incurred during his minority after attaining majority.
4) A contract for the benefit of the minor entered into by the guardian can be specifically enforced.
5) Minor is liable for necessaries supplied to him during his minority. Education,food,clothing,house are necessaries and not anything luxurious. The liability is not personal. It pertains to the estate of the minor.
6) A guardian of a minor can enter into a contract of insurance on behalf of the minor,but it shall only be for minors goods are property and not the person of the minor.
7) When a joint document is executed by minor and a adult only the adult is liable in the contract.The document is void in respect of the minor and valid in respect of the major.
8) Marriage : Minors marriage is a voidable marriage.
7) Contracts of apprenticeship : The Indian apprenticeship act 1850 provides for service contracts to be entered into by the guardian of a minor on behalf of the minor for the minors benefit. Such contract is binding on the minor.
Doctrine of restitution
What has to be done if a minor misrepresents his age and obtains goods from another. Such person can take the goods back from the minor if the goods are still in the possession of the minor. If the minor has already sold the goods then such person has no remedy at all. The doctrine of restitution applies only to goods and not cash as in the case of mohiribibi vs D.ghose.This doctrine enables the aggrieved lender of the goods to regain possession of the goods if the goods are intact.
James discovered that John owns a small, local health food products business and that he is interested in growing the business by adding some new product lines. James informed John of the high anti-oxidant qualities of the Scuppernong grapes his family produces company sells, and James asked John if he might be interested in promoting either the grapes themselves or the various products and pills developed using their seeds. John was interested, and, a few days later, James supplied him with some samples. The samples turned out to be a very popular item with his regular customers, so he placed a modest phone order with James' company. Over time, John placed regular, increasing phone orders, and he began investing heavily in advertising for the Scuppernong products at his store. James company has faithfully delivered everything requested, promptly, and at consistent prices. James typically sent an invoice with each delivery, requiring payment within 30 days, and, though John had frequently been late making payment, he had generally paid each invoice within 45 to 60 days. James had elected not to charge John any interest or penalties though James invoices state that he reserve the right to do so. On one occasion when James 17-year-old son, a part-time deliveryman for his company, delivered some product to John’s store, John handed James son a requirements contract and asked him to sign it on behalf of James company. The contract included a guaranteed price schedule consistent with what he had been paying. John told James' son that it was “just a formality” to guarantee a continuing business relationship. James son signed the contract and gave it back to John. Neither John nor James son mentioned the contract to James. After a columnist for the New York Times wrote an article praising the anti-oxidant qualities of Scuppernongs, the demand for Scuppernongs skyrocketed nationwide. James company became inundated with orders, far in excess of your ability to meet the demand. A company in Connecticut offered to pay James twice the going rate for your products, but the company also required James to sign an output contract as a part of the deal. Though this contract would represent a substantial financial windfall for James company, he felt bad about potentially leaving John out to dry. James called John, advised him of the offer he had received, and, to try and soften the blow, James suggested to John the names of other reputable potential suppliers in the area.
ReplyDeleteTo James surprise, John became very angry and told James that he expected him to continue to supply him with all the product he needed, when he needed it, and at the prices he had always paid per the requirements contract between his businesses as well as in accord with an implied duty of good faith and fair dealing that had evolved based on his ongoing business relationship. When James asked what requirements contract John was talking about, John faxed James a copy of the contract that had been signed by his son.
Looking at the situation from both a legal perspective:
1. What should James do about continuing to do business with John?
2. If James elect to stop doing business with John, what legal causes of action might he bring against James company, what damages or remedies might he seek, and what legal defenses might James company have?
Here since James's son is 17 years old, he is a minor, as one has to be above the age of 18 to be a major.
DeleteA minor does not have any capacity to enter into a contract, and all contracts with minors are void. But this has a few exceptions as mentioned above.
It is mentioned in the infants relief act in England that a contract for the supply of goods( other than necessary goods) with a minor is absolutely void.
James need not honor the contract.
Plus James's son is only an employee and not a co owner, which again dis entitles him from entering a contract on behalf of James's company.
Please refer the Mohiri Bibi case , which is a landmark Indian Judicial decision and also refer Johnson vs Pye.
Regarding the original contract between James and John, it can be continued based on their wishes. Since John has deceitfully obtained a contract by making a minor party to it, it can be one of the grounds for terminating the existing business with John.
Mentioned above is purely my personal opinion. For professional legal advice please seek the expertise of a legal counsel.