Legal Reasoning Practice Test (CLAT) - 04 [CONTRACT (Agreement)]

Direction for question: Read the passage given below and answer the question that follows:

An agreement made with a minor is void ab initio ie., void from the very beginning. Any agreement made with a minor is not a contract. It is an agreement which does not have any legal effect in a court of law.

Minors‘ agreements are absolutely void and it was so observed in the Privy Council judgment of MohiriiBibi v. Dharmadas Gosh. The plaintiff was DharmodasGhosh, a minor, who mortgaged his property to the defendant, a moneylender. The defendant‘s attorney had the knowledge about the plaintiff‘s age at the time of the contract. The plaintiff later paid only Rs. 8,000 and refused to pay the remaining amount. The plaintiff‘s mother was his legal guardian at that time, so he commenced an action against the defendant saying that at the time of making of a contract, he was a minor, so the contract being a void one, he was not bound by the same. The court held that unless the parties have competence under Section 11 of the Indian Contract Act, no agreement would be a contract. The agreement was considered to be a nullity and non-existent in the eyes of law.

Only two types of contracts with a minor are considered valid: a contracts for necessaries and beneficial contracts of service. Necessaries include items and services that are necessary or indispensable to the minor‘s health and safety, such as food, lodging, shelter and clothing. In some instances, automobiles are considered necessaries. The minor‘s and his or her parents‘ economic status can be considered in determining whether an item is considered a necessary. There is no definition of what constitutes necessaries in the Indian Contract Act. There is no specific section clearly mentioned or defined the necessaries too. Judicial pronouncements provide more comprehensive explanation of minor and comprehensive meaning of necessaries. A minor cannot be bound by a contract entered into for her by a third party, even though that might be her guardian.

In the case of Sharafat Ali v. Noor Mohd, a promissory note was executed in favour of a minor. Subsequently, the drawer refused to honour the note on the ground that it is void as it was drawn in favour of a minor. It was held that since the contract was for the benefit of the minor, he could enforce it.

A contract with a minor cannot be ratified by the minor subsequent to her attaining the age of majority. She cannot legally ratify an act done on her behalf because the whole question of ratification is based on the assumption that authority could have been conferred by the person ratifying the acts at the date when acts were performed. In the case of Nazir Ahmed v. Jiwandas, it was held that if the parties to a void contract (due to the minority of one of them) are interested, they can draw up a fresh contract after the concerned party attains majority. The new contract would require a fresh consideration. The consideration given under the earlier void contract cannot serve as consideration in the new contract entered into after attaining majority.

In the case of Smt. M.C. Nagalakshmi and Ors. v. Sri. M.A. Farook, a minor executed a deed with regard to his interest in an estate. A suit was filed when he attained majority. The person admitted the agreement and did not repudiate it. It was held that the contract was enforceable to the extent of the minor‘s interest in the estate.

Q ➤ Ramdas, the father of a child actress, Sunayna entered into a contract with a film director, Pradeep, for the role of his daughter in a film by the director. The father and director agree upon the date and timings of the filming schedule, the remuneration and release date of the film. However, the week when the filming is to commence, Sunayna is taken seriously ill and cannot commence the filming. Ramdas decides to sue the father for breach of contract. Would Ramdas‘s claim be acceptable in a court of law?

a) Yes, as the contract was entered into by Sunayna‘s father (her guardian) for her benefit.
b) No, as Sunayna cannot be bound by the contract by her guardian.
c) Yes, as the contract between Ramdas and Pradeep is a valid agreement because it is between people above 18 years of age.
d) No, as this contract would only be valid once Sunayna attains majorityAns ➤ Answer: Option B.
Explanation
As has been stated in the passage, any contract entered into on behalf of the minor cannot bind the minor to the performance of obligations under the contract. Hence, (b).

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Q ➤ Consider Sunayna is 17 years of age (due to turn 18 in a month), and she herself enters into an agreement with Pradeep. The filming schedule is to begin after her eighteenth birthday. However, due to a family emergency, Sunaynais unable to commence filming on the day stipulated in the contract. Pradeep decides to sue her in court for breach of contract. Would his claim be successful in a court of law?

a) No, as only Sunayna‘s legal guardian could enter into a contract on behalf of her.
b) Yes, as Sunyana would have turned 18 in a month from the signing of the contract.
c) No, as at the time of entering into a contract, Sunayna was still a minor.
d) Yes, as by the time the filming commenced, Sunayna would have attained majority.Ans ➤ Answer: Option C.
Explanation
Irrespective of the fact that Sunayna would have turned 18 years of age within a month of the signing of the contract, the fact remained that she was a minor at the time of the contract. Hence, any agreement entered into by her would be void, meaning she would not be bound by its terms

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Q ➤ In the facts given in above question, consider Sunayna commences filming per schedule and finishes it on time. As per the agreement, her remuneration is supposed to be released in four tranches upon completion of filming, within a period of four weeks. She receives the first two tranches in time but the remaining two are not remitted to her, even after four weeks have lapsed. She decides to sue Pradeep for breach of contract. Would her claim be successful in a court of law?

a) No, as Sunayna was a minor when the contract was entered into, the contract is void ab initio.
b) Yes, as the remuneration for Sunayna under the contract was for her benefit.
c) No, it is only Sunayna‘s guardian who can enforce the contract in a court of law.
d) Yes, as by the time she commenced her obligations under the contract, she had attained majority.Ans ➤ Answer: Option B.
Explanation
Even though a contract entered into by a minor is invalid, a minor can enforce the same as long as it is for her benefit. In the present situation, non-payment of remuneration to Sunayna acts against her benefit from the contract, hence, she can demand an enforcement of the same in a court of law.

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Q ➤ Consider Sunayna is paid the remuneration on time on order of the court, but the court holds the agreement between her and Pradeep as invalid. However, Pradeep and Sunayna wish to continue working together and they need to film more scenes. They decide that since Sunayna has now attained majority, she can authorise the earlier agreement as the film remained the same. Is this action justified under the law?

a) Yes, as Sunayna has attained majority, she can agree to ratify an earlier contract.
b) No, as agreement entered into when a minor, cannot be ratified post majority.
c) Yes, as Sunayna and Pradeep (both above 18 years of age) have agreed to do this.
d) No, as it is only Sunayna‘s guardian who can ratify an earlier contract.Ans ➤ Answer: Option B.
Explanation
As is stated in the passage, a contract with a minor cannot be ratified by the minor subsequent to her attaining the age of majority. In the factual scenario presented above, the agreement Sunayna and Pradeep seek to authorize/ratify is the one which was entered into when Sunayna was still a minor. Hence, (b).

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Q ➤ Consider the factual scenario presented in the above question. Which amongst the following is a valid recourse that Pradeep and Sunayna can take, if they wish to continue filming?

a) Ramdas enters into a fresh contract with Pradeep on behalf of Sunayna.
b) The court appoints a legal guardian (other than Pradeep) to enter into a contract with Pradeep.
c) Sunayna continues to act under the terms of the previous contract.
d) Sunayna enters into a fresh contract with Pradeep, with updated terms and conditions.Ans ➤ Answer: Option D.
Explanation
As is stated in the passage, if the parties to a void contract (due to the minority of one of them) are interested, they can draw up a fresh contract after the concerned party attains majority. The new contract would require a fresh consideration. Hence, (d).

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