INTRODUCTION
The journey of understanding a minor’s capacity to contract in Indian law is far from linear. From the firmly upheld position in Mohori Bibee v Dharmodas Ghose[1], which rendered these contracts void ab initio, to exceptions established in judicial decisions like Raghava Chariar[2] and Fernandez v. Gonsalves[3], courts seem to have recognised that a more flexible, context-based approach was required. Tracing this legal trajectory reveals the tension between the intention to protect minors from exploitation and the realities of minors entering into transactions in the real world.
This blog explores how minors’ capacity to contract has been treated by Indian courts over time, and suggests that the strict legal framework which governs minors’ contracts should be re-evaluated.
MOHORI BIBEE & THE VOID-NESS OF MINORS’ CONTRACTS
The Privy Council’s judgement in Mohori Bibee v Dharmodas Ghose[4] held that any agreement made by a minor is void ab initio. The Court held that a minor is incompetent to contract under section 11 of the Indian Contract Act, 1872[5] and thus, any contract made by a minor is of no legal effect from its inception. This meant that neither party to the agreement could enforce the contract, or exercise a right of restitution under section 65 of the Indian Contract Act, 1872[6], or assert estoppel under section 115 of the Indian Evidence Act, 1872[7] against the minor.
This rigid approach was intended to protect minors from future financial or legal liabilities or obligations which they may not have comprehended, but it also meant that minors could not access rights or enforcement capacity which they may require in the real world.
JUDICIAL EXCEPTIONS & DOCTRINAL CONFLICTS
The strictness of Mohori Bibee was subsequently disputed in A.T. Raghava Chariar v. O.A. Srinivasa.[8] In this case, a minor had lent money for a mortgage, and the issue was whether a mortgage deed in his favour could be enforced. The Madras High Court held affirmatively, reasoning that while a minor could not bind himself, there was no statutory bar against a minor being a transferee of property or enforcing a contract once he had performed his part and no further action was required from him.[9]
This ruling created an important exception: the court ruled that where the minor had fully performed his obligations and sought enforcement only against the adult party, the contract could be upheld to the extent it benefited the minor.
THE PROBLEM OF PART PERFORMANCE & INCOMPLETE CONSIDERATION
The judicial reasoning in Raghava Chariar did not extend to contracts where the minor has performed partially. Courts had been unwilling to enforce such agreements, often applying the rules of mutuality and also citing that the minor’s liability continued to exist as a barrier. This leaves the minor, who has already acted, in a void, unable to recover from the other party when default occurs.
For example, in Raj Rani v Prem Adib[10], the Bombay High Court simply denied the enforcement of a service contract, even though it was entered into by the minor’s fathers, for her benefit. The Court held that the minor’s promise to serve was not legally enforceable and therefore did not constitute valid consideration.[11] Consequently, the entire contract was void, and neither the minor nor her guardian could sue for damages.[12]
THE GUARDIAN EXCEPTIONS & CONTRACTS FOR MINORS’ BENEFIT
Despite Mohori Bibee, the Indian courts have sometimes recognised contracts from guardians, especially contracts that improve a minor’s position. In Fernandez v Gonsalves[13], the court recognised that a guardian can contract on behalf of a minor if the contract is related to the minor’s benefit. This understanding aligns with the equitable idea that legal incapacity should not cause detriment to a minor. However, if the contract is not entirely for the benefit of the minor or if performance is unclear, the courts resort to Mohori Bibee’s blanket invalidation.
THE PROBLEM WITH A RIGID RULE
In Mathai v Joseph Mary[14], the Supreme Court held that a contract by a 15-year-old for the sale of land was void despite the claim being in her favour, as she lacked capacity. A contract cannot be binding unless the minor is represented by her natural guardian or a guardian appointed by the court.[15]
The strictness of the rule does not recognise the realities of contemporary life, where children regularly engage in economic activities, particularly in the form of child artists, influencers, and small business owners.
REAL-WORLD COMPLEXITIES: MINORS IN MODERN COMMERCE
While courts continue to refer to a 1903-era legal precedent, the economic lives of minors have changed significantly. Today, it is commonplace for minors to be involved in different commercial endeavours, often requiring them to enter into contracts, either directly or through representatives. Indian law does not seem to have internalised these changes.
- There are child actors who regularly appear in films or TV, and enter into employment contracts as determined by production houses.
- Teenage athletes commonly sign training agreements and endorsement contracts.
- Social media influencers, sometimes as young as thirteen years of age, have paid collaborations with companies.
In these instances, minors would typically perform their obligations under the agreements through labour, a performance or a service. But if the adult counterparty fails to deliver on its obligations or refuses to pay the minor, the minor is unable to access the courts for relief because the contract is void ab initio.
This judicial stance discourages companies and/or agencies from contracting with minors, even when their agreement appears to be very ordinary or beneficial. In effect, despite understanding the terms of the transaction or even having performed under it, a minor is left without enforceable rights under the contract.
In practice, this leads to exploitation by adults who can break the contract without consequence, knowing the minor has no legal recourse. The rigid framework thus ends up harming, not protecting, those it intends to safeguard.
NECESSARIES: THE ONE NARROW WINDOW
One well-established exception to the general rule is for contracts concerning ‘necessaries’ supplied to minors. Under English law, this is codified in Section 2 of the Sale of Goods Act 1893[16], and adopted in Indian jurisprudence through Nash v Inman.[17] In this, the plaintiff was a tailor and supplied 11 fancy waistcoats to a minor on top of any clothing the minor had already received. The court held that although clothing was ‘necessary’ in a broader sense, it had to be “actually needed” at the time it was delivered.[18] The supplier has to prove both suitability and necessity.[19]
This exception further emphasises the protective aim of the law, but it still remains narrow because it will only apply to things that are necessary for survival and welfare; food, shelter, medical, education, etc, but not going to the movies or starting a business.
A CALL FOR REFORM: TOWARD A BALANCED DOCTRINE
The shift in commercial and digital environments requires a reconsideration of the absolutism of the doctrine presented in Mohori Bibee. There is a need for protection against minor agreements; however, the common law should permit the courts much more latitude in enforcing contracts in case:
- The minor has already performed his side
- The agreement is undeniably for the benefit of the minor
- A guardian has validly entered into the contract
- Restitution or enforcement of the contract is one way to prevent injustice.
Such reforms can either be part of the reforms to the statute, or developed as a result of the development of existing statutory clauses, such as section 25 of the Indian Contract Act, 1872[20] (where consideration is absent but is grounded by natural love and affection), or equitable doctrines.
CONCLUSION
Mohori Bibee is still regarded as good law, but its strict application can lead to unfairness and impracticality. The exceptions developed in cases such as Raghava Chariar and Fernandez offer positive limitations, but they also risk being narrow and unrepresentative of the nature of current engagement by minors. As minors increasingly engage with contracts in nuanced and sophisticated contexts, the Indian common law must evolve to understand and respond to this complexity, which calls neither for total immunity nor liability, but a balanced approach to accountability and protection.
Author(s) Name: Bhomira Goyal (O.P. Jindal Global University, Sonipat, Haryana)
References:
[1] Mohori Bibee v Dharomdas Ghose 1903 30 IA 114
[2] A.T. Raghava Chariar v O.A. Srinivasa (1916) 31 MLJ 575
[3] Fernandez v Gonsalves AIR 1925 Bom 9
[4] Mohori n(1)
[5] Indian Contract Act 1872, s 11
[6] Indian Contract Act 1872, s 65
[7] Indian Evidence Act 1872, s 115
[8] Raghava Chariar n(2)
[9] Raghava Chariar n(2)
[10] Raj Rani v Prem Adib AIR 1949 Bom 215
[11] Raj Rani n(10)
[12] Raj Rani n(10)
[13] Fernandez (n3)
[14] Mathai v Joseph Mary (2015) 5 SCC 622
[15] Mathai n (14) 7
[16] Sale of Goods Act, 1893 s 2
[17] Nash v Inman [1908] 2 KB 1
[18] Nash n(17)
[19] Nash n(17)
[20] Indian Contract Act 1872, s 25
