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“ Every person is competent to contract who is of the age of majority according to the law to which he is subject, & who is of sound mind , and is not disqualified from contracting by any law to which he is subject.”
Persons disqualified from entering into the contract…
Minors, who are not of the age of majority.
Persons of unsound mind, and
Persons disqualified to contract by any law ( Insolvents )
Case mohori bibi vs. Dharmodas Ghose – Dharmodas , a minor executed a mortgage for Rs. 20000 declaring himself major & received Rs. 8000 from mohori bibi, a mortgagee. The minor wanted to set aside the mortgage. The mortgagee wanted the refund of Rs 8000. It was held that the agreement with the minor was void ab initio & question of refunding money does not arise.
4. A minor is not liable to restore the property or goods.
Minor can be compelled :
If goods are traceable in his possession.
If minor has sold the goods then nothing can be claimed.
5. No specific Performance – means actual performance of contract as agreed as contract is void ab intio. But in case guardians enterd into a contract if they have the authority and it is for the benefit of minor, it is valid
6. Minor can be a promisee or a beneficiary – Where the minor bears no obligation & rather the agreement is for his benefit, then such agreement is valid. ( A promissory note executed in favor of minor is valid )
7. Minor as a partner – A minor cannot become a partner in the partnership firm ….but he can be admitted to benefits of the partnership with consent of all the partners. The minor is liable to losses but not his personal property.
Necessaries is not confined to food, clothing & shelter but it also includes articles or services which are reasonably necessary for a minor suitable to his conditions in life … a watch or a bicycle may be necessary for a minor.
“ A person is said to be of sound mind for the purpose of making a contract if, at the time when he makes it, he is capable of understanding it & of forming a rational judgment as to its effect upon his interest.”