Under Section 10 of the Contract Act requires that the parties must be competent to contract. Sec.11 defines who are competent to contract: “Every person is competent to contract who is the age of majority according to the law to which he is subject, and who is of sound mind, and is not disqualified from contracting by any law to which he is subject”.
Thus minors, persons of unsound mind and persons disqualified by law are incompetent to contract. the age of the majority is 18, but where a guardian is appointed it is 21.
Neither Sec.10 nor Sec.11 makes it clear whether, if a minor enters into an agreement, it would be voidable at his option or altogether void. However, after the decision in Maharibibi Case, it is now well settled that a minor’s agreement is absolutely void. A minor cannot makes promise enforceable in law. The ‘specific performance of contract (actual carrying out of the contract as agreed) is possible in the case of an agreement by a minor.
The rationale behind is clear. A child may show poor judgment making a particular contract, and it is a protection against his own ignorance and immaturity–not merely fraudulent manipulation by others–that the law affords. The general presumption that every man is the best judge of his own interests is suspended in the case of children. Thus, law acts as the guardian of minors and protects their right because their mental faculties are not mature.
A minor’s agreement being void, ordinarily it should be wholly devoid of all effects (except where the contract is for the benefit of minor). As there is o contract, all the effects of a minor’s agreement must be worked out independently of any contract.
No Estopped Against Minor:
When a minor misrepresents at the time of the contract that he is a major, the question arises-does the law of estoppel contained in Sec. 115, evidence Act, apply against him, so as to prevent him from alleging that he was a minor when the contract was a minor when the contract was made? as per sec. 115:”when one person has, by his declaration, act or omission, intentionally caused or permitted another person to believe a thing to be true and to act upon such belief, neither he nor his representative shall be allowed in any suit or proceeding between himself and such other person or his representative to deny the truth of that thing”
It is now well settled that there is no such estoppel against the minor even if he has acted fraudulently. The minor is not estoppel against a statute which has declared a minor’s contract to be void.