CHANAKYA NATIONAL LAW UNIVERSITY

NYAYA NAGAR, MITHAPUR, PATNA - 800001

FINAL DRAFT SUBMITTED IN THE FULFILMENT OF THE COURSE

TITLED –

Law Of Contracts
Beneficial Contracts and Contracts For Apprenticeship Of
Minor

SUBMITTED TO: -
Mrs. Sushmita Singh
Teacher Associate
SUBMITTED BY:
NAME: KARAN SINGH RAUTELA
SEMESTER: II
ROLL NO.: 1736
COURSE: B.A., L.L.B(HONS)
SESSION: (2017-2022)

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 1.INTRODUCTION
Section 10 of the Indian Contract Act, 1872, requires that the parties must be competent to
contract. It states that “All agreements are contracts if they are made by the free consent of
parties competent to contract, for a lawful consideration and with a lawful object, and are not
hereby expressly declared to be void”1. Section 11 of Indian Contract Act deals with the parties
competent to contract. It states that “Every person is competent to contract who is of the age of
majority according to the law to which he is a subject, and who is of sound mind and is not
disqualified from contracting by any law to which he is a subject”2.

Thus, the section declares the following persons to be incompetent to contract -

(1) Minors
(2) Persons of unsound mind, and
(3) Persons disqualified by law to which they are subject.

In this project, the researcher will discuss the contracts which are beneficial and are made for
the apprenticeship of a minor.

A person is said to be major who is the age of 18 or more except when a guardian of a minor’s
person or property has been appointed by the court, in which case it is 21.3

In England the age of majority formerly was 21 years. But now under the Family Law Reform
Act, 1969, “a minor is a person under the age of eighteen years”. Formerly a minor was
referred to as an “infant”, but this act has changed the term to “minor”.

Section 10 and section 11 does not make clear whether, if a minor enters into an agreement, it
would be voidable at the option of minor or altogether void. These provisions had quite
naturally given rise to a controversy about the nature of a minor’s agreement. This controversy
was only resolved in 1903 by the judicial committee of the privy council in the case of Mohori
Bibee vs. Dharmodas Ghosh4, Sir Lord North held that the party incompetent to contract cannot
make a contract within the meaning of the act. Ever since the decision it has not been doubted
that a minor’s agreement is absolutely void.

1
Indian Contract Act, 1872 (9 of 1872), s.10
2
Indian Contract Act, 1872 (9 of 1872), s.11
3
The Indian Majority Act, 1875, s.3
4
(1903) 30 Cal. 539

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The ruling of the privy council in the Mohori Bibee case has been generally followed by the
courts in India and applied both to the advantage and disadvantage of the minors.5 Another
decision of the privy council in line is Mir Sarwarjan vs Fakharuddin Mahomed Chowdhury6,
“a contract to purchase certain immovable property had been made by a guardian on behalf of
a minor, and the minor sued the other party for a decree of specific performance to recover
possession. His action was rejected.” It was held that no one was competent to bind the minor’s
estate by a contract for the purchase of the immovable property.

In its subsequent pronouncement in Sirkakulam Subramanyam v Kurra subba Rao7 the Privy
Council overruled earlier decisions and entertained no doubt that it was within the powers of
the mother of a minor as guardian to enter into a contract of sale for the purpose of discharging
his father's debts. Following this decision the Orissa High Court held that endowment of
property for religious purposes by guardians on behalf of minors, being within their
competence, was specifically enforceable. The other High Courts have also expressed the view
that the doctrine of mutuality should not have been imported into the matter where the contract
was within the competence of the guardian and that there is no scope for this doctrine under
Section 20 of the Specific Relief Act, 1963. If the contract is within the competence of the
guardian and it is for the benefit of the minor it is specifically enforceable.8

In this project, the researcher will further deal with the Beneficial contracts and contracts for
apprenticeship of minor with respect to England and India.

5
Avtar Singh, Contract and Specific Relief, 155, (Eastern Book Company, Lucknow, 12 th ed, 2017)
6
(1907) ILR 34 Cal 163
7
(1948) 50 BOMLR 646
8
Supra note 5

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AIMS AND OBJECTIVES

 To discuss about the contracts of benefits and apprenticeship entered into by a minor.
 To find out in which cases the contracts entered into by the minor is valid or void.
 To find out how it prevents a minor from using his age to gain benefits.

HYPOTHESIS:

 The researcher presumes that these laws prevent unnecessary hardships to adults who
deal fairly with the minors.
 The researcher also presumes that it protects the minor against his own inexperience.

RESEARCH METHODOLOGY:

The researcher will be relying on Doctrinal method of research to complete the project. These
involve various primary and secondary sources of literature and insights.

SOURCS OF STUDY

Secondary Sources : Books, Journals, articles and others

LIMITATIONS OF THE STUDY:

The researcher has territorial, monetary and time limitations in completing the project.

SOURCES OF LITERATURE

a. R K Bangia, CONTRACT-I (7 ed. 2017).

b. Avtar Singh, CONTRACT & SPECIFIC RELIEF (12 ed. 2017).

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2 POSITION IN ENGLAND
Under English law, an infant is bound by the contract of apprenticeship or services because
such contracts are beneficial to him in earning his livelihood. Contracts of apprenticeship stand
on the same footing as the contract for necessaries.

2.1 CONTRACT OF SERVICE OR APPRENTICESHIP

An infant is not liable for every beneficial contract. The liability is only for contracts of service
or apprenticeship. There is no liability trading contract. In Cowern v. Nield9, the defendant, an
infant, was a trader in hay and straw, agreed to supply some clover hay to the plaintiff. He
received the payment from the plaintiff advance but failed to supply the material. In an action
against the infant defendant to recover back the price paid, it was held that even though the
contract was beneficial to the defendant, he being an infant, could not he made liable for the
same.

A minor is bound by beneficial contract of service or apprenticeship, or any contract analogous

there.10 This may be illustrated by referring to the decision in Doyle v. White City Stadium
Ltd.' The plaintiff, who was an infant, applied for license as a boxer, stating as under:

“"I hereby apply for a license as a boxer and, if the license is granted to me, I declare
to adhere strictly to the rules of the British Boxing Board (1929) as printed and abide by any
further rule or alterations to the existing rules as may be passed.''

A license was duly granted to him and renewed thereafter. In accordance with the rules the
plaintiff was disqualified in one of the contests for hitting below the belt and a sum of £ 3,000
due to him was withheld. The infant sued to recover that amount. It was held that the infant's
contract with the Board of Control was so closely connected with the contract of service that
the same was binding against him and, therefore, he could not recover the amount.11

9
(1912) 2 K.B. 412
10
Cowern v. Nield, (1912) 2 K.B. 419
11
Dr. R.K. Bangia, Contract-I, 126, (Allahabad Law Agency, Haryana, 7th ed., 2017)

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 2.2 CONTRACTS BENEFICIAL TO MINOR

Infant's liability is only in respect of those contracts which are beneficial to him. If the contract
is substantially beneficial to an infant even though there are some minor disadvantages to him,
the contract is binding. If, however, the contract is not substantially beneficial to the infant, but
is prejudicial to his interest, the same is voidable at his option.

Generally, in any contract there may be some terms which are beneficial and the other onerous
to each party to the contract. The courts have to look to the contract as a whole to decide
whether the contact is to the infant's benefit, or it contains terms which are unreasonably
prejudicial to him. Thus, in Clements v. London and North Western Rail Co.12, an infant, who
was employed as a porter in a railway company agreed with his employers that he would join
company's own insurance scheme and would not make any claim for personal injury under the
Employers' Liability Act, 1880. Under the company's insurance scheme, the rate of
compensation was lower but it covered more cases of accidents for which compensation could
than under the Employers' Liability Act. It was held whole the agreement was beneficial to the
minor and, therefore same was binding on him.

If, on the whole, the contract is prejudicial to the interests of the same is voidable at his option.
In De Francesco v. Barnum13, a girl of 14 years was engaged by the plaintiff as an apprentice
for training in stage dancing. The terms to which she was made to agree included that she would
not marry during apprenticeship, she would not accept any professional engagement without
the plaintiff's consent, and she would be willing to go for the performances abroad. The
remuneration to be paid to the infant aged between 6 d. and 9 d. per show during the first three
years and between 6d. and 1sh. thereafter. Nothing was to be paid to her when she was not
employed and the plaintiff could terminate the contract, if she was not found suitable for stage
dancing. It was held that considering the contract as a whole, its terms were unreasonably
prejudicial to the interests of the infant apprentice and were, therefore, not enforceable against
her.

Trade contracts are not included in beneficial contracts. This category of beneficial contracts
does not include ordinary trade contracts. In Cower v. Nield, for example, a minor was carrying
on business as a hay and straw merchant. He received a cheque from the plaintiff for the supply
of clover and hay. He delivered the clover which was rejected as bad and failed to deliver hay.

12
(1894) 2 Q.B. 282
13
(1890) 45 Ch. D. 430

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The plaintiff's action for recovering back the amount of the cheque failed. PHILLIMORE J
observed: "In a general sense contracts, which can be brought within certain categories and are
also for the benefit of the infant can be supported. A trading contract does not come within any
of these categories. The only contracts of an infant which can be enforced are which relate to
the infant's person, as contracts by which he provides himself with clothes, food, or lodging or
contracts of marriage, apprenticeship and service.14

A major has also option to retire from beneficial contracts on attaining the age of majority. A
minor will have the option of retiring from a contract of beneficial nature on attaining majority
provided that he exercises the option within a reasonable time.15 Where a minor in pursuance
of a marriage settled his after-acquired property and after attaining majority he received a large
sum of money under the will of his father which came under the settlement, and, therefore, he
attempted to repudiate the settlement, the House of Lords held that the repudiation coming five
years after attaining majority was too late.16

14
supra note 5, P.no. 168
15
Gillhams Solicitors, Gillhams, (Apr. 12, 2018, 10:25 PM),
https://www.gillhams.com/site/library/legal_articles/minors_and_contractual_agreements.html
16
John Edwards and Henry Issacs v. Robert Brudenell Carter, 1893 AC 360 (HL)

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 3. POSITION IN INDIA

Unlike English law, there are different rules in India for contract of service than those of
apprenticeship. Minor’s contract of service is void, whereas that of apprenticeship is valid.

3.1 CONTRACTS OF SERVICES

In India also, a contract of service entered into by a minor is void. This may be explained by
referring to Raj Rani v. Prem Adib17. The facts of the case are as follows: The father of Rai
Rani, who was a minor, entered into a contract on her behalf with Prem Adib, a film producer.
According to the contract, Raj Rani was to act as a film actress in the defendant's studio, on
payment of a certain amount. Raj Rani was not given any work. She sued the producer, Prem
Adib for the breach of contract. It was held that the plaintiff, being a minor, the contract was
void. It was also observed that the contract of service entered into by the father on behalf of his
minor daughter was void for another reason also, that is, the same was without any
consideration because consideration moving from a third party, who is a minor, is no
consideration.

3.2 CONTRACTS OF APPRENTICESHIP

Contracts of apprenticeship is another species of contracts which are for the benefit of minors.
Although Indian law does not make a minor bound by the contract of service, contracts of
apprenticeship are binding under the Indian Apprentice Act, 1850 18. The Indian Apprentices
Act, 1850 provides for contracts in the nature of contracts of service which are binding on
minors. Such contracts could be validly entered into by a minor’s guardian on behalf of the
minor. The Act was passed, as the preamble of the Act shows: "For better enabling children,
and specially orphans and poor children brought up by public charity to learn trades, crafts and
employments, by which, when they come to full age, they may gain a livelihood.”19

The act requires the contract to be made by a guardian on behalf of the minor. [S.9]

“In English law contracts of service and apprenticeship are put on the same footing and
in the same category as contracts for necessaries." The well-known English case on the subject
is Roberts v Gray:

17
A.I.R. 1949 Bom. 315
18
Sylvine, Minor’s Capacity To Enter into a contract, ipleaders, (Apr. 13,2018, 1:17 A.M.),
https://blog.ipleaders.in/minors-capacity-enter-contract/
19
Supra note 5, P.No. 167

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 The defendant, an infant, agreed with the plaintiff, a noted billiards player, to join him
in a billiards-playing tour of the world. The plaintiff spent time and money in making
arrangements for billiards matches, but the defendant repudiated the contract. The plaintiff
succeeded in recovering damages for the breach of the contract.20

The contract was held to be one for necessaries as it was for the infant's "good teaching or
instruction whereby he may profit afterwards". The most important part of the contract was the
instruction that would be received by the defendant from playing constantly with the plaintiff
under the conditions of a worldwide tour, a thing which a distinguished billiards player
apparently contemplates as part of his career.

It has been suggested by DESAI J of the Bombay High Court in Raj Rani v Prem Adib21 that
"though according to English Law the minor would be liable in the case of a contract of service
where the contract was for his benefit, it is clear that under Section 11, the minor's contract
being void, the minor would not be held liable".

3.3 CONTRACT BENEFICIAL FOR MINOR

The law declared by the Privy Council in the Mohori Bibi case that a minor's agreement is
"absolutely void" has been generally followed, but it has been growingly "confined to cases
where a minor is charged with obligations and the other contracting party seeks to enforce those
obligations against the minor."" It was observed by ABDUR RAHIM J of the Madras High
Court that "what is meant by the proposition that an infant is incompetent to contract or that
his contract is void is that the law will not enforce any contractual obligation of an infant".
Accordingly, a minor is allowed to enforce a contract which is of some benefit to him and
under which he is required to bear no obligation. In Raghava Chariar v Srinivasa22, the
following question was referred for the decision of a Full Bench of the Madras High Court:
"Whether a mortgage executed in favour of a minor who has advanced the whole of the
mortgage money is enforceable by him or by any other person on his behalf."

The unanimous opinion of the Full Bench was that the transaction was enforceable by or on
behalf of the minor. WALLIS CJ said: "The provision of law which renders minors
incompetent to bind themselves by contract was enacted in their favour and for their protection,

20
Supra note 18
21
AIR 1949 Bom 215
22
(1916) 31 MLJ 575

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and it would be a strange consequence of this legislation if they are to take nothing under
transfers in consideration of which they have parted with their money."23

The same opinion was expressed by BEAUMONT CJ of the Bombay High Court: 24 "The
provisions of the law which make a contract by a minor not binding were no doubt intended to
be for the benefit of the minors, and the courts in this country when faced with a contract which
has been carried out by or on behalf of the minor, the performance of which by the other party
is then resisted on the ground of minority, have struggled hard to avoid holding the contract
wholly void to the detriment of the minor."

Accordingly, the learned Chief Justice rejected the defence of an insurance company that the
person on whose behalf certain goods were insured was a minor and allowed the minor to
recover the insurance money. On the same principle it has been held that "a minor is capable
for purchasing immovable property and he may sue to recover the possession of the property
purchased upon tender of the purchase money."" A transfer which has already been executed
in favour of a minor can, of course, be much less impeached."

"A lease, however, is not like other transfers of property and a lease to a minor has been held
to be void."25 The cases proceed on the principle that the minor has already given the full
consideration to be supplied by him and there is nothing that remains to be done by him under
the contract. He is now a mere promisee and prays the court for recovering the benefit
stipulated. But where the contract is still executory or the consideration is still to be supplied,
the principle of the Mohori Bibi case will thwart any action on the contract. In Raj Rani v Prem
Adib:

The plaintiff, a minor, was allotted by the defendant, a film producer, the role of an actress
in a particular film. The agreement was made with her father. The defendant subsequently
allotted that role to another artist and terminated the contract with the plaintiff's father.

The Bombay High Court held that neither she nor her father could have sued on the promise.
If it was a contract with the plaintiff, she being a minor, it was nullity. If it was a contract with
her father it was void for being without consideration. The promise of a minor girl to serve,
being not enforceable against her, cannot furnish any consideration for the defend-ant's promise
to pay her a salary.

23
Supra note 5, P.no. 164
24
Great American Insurance Co. Ltd. V Mandanlal Sonulal, ILR (1935) 59 Bom 656
25
Jaykant Harkishandas Shah v Durgashankar Vilji Pandaya, AIR 1970 Guj 106

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Where a minor has given consideration under a contract, but the consideration given to him has
failed, he may have restitution. Thus, where a minor bought a zamindari property on payment
of money, but he was ousted on a suit by a third party, it was held "that the minor was at any
rate entitled to recover from the vendor the sum which he had paid as purchase money".

For this principle to apply there should be total failure of consideration. Where, for example, a
minor purchased shares in a company and then repudiated them and also asked for refund of
the partly paid purchase price, the court held that the price which he has already paid was not
refundable, because there was evidence that the shares were of some value. If the shares were
totally worthless there would have been a total failure of consideration entitling the minor to
refund. But he was not liable to pay further demands or calls for payment.

"When an infant has paid for something and has consumed or used it, it is contrary to natural
justice that he should recover back the money which he has paid." This is the principle of the
well-known case of Valentini v Canali:26

The plaintiff, a minor, agreed with the defendant to become a tenant of his house and
to pay £100 for the furniture therein. He paid 68 in cash and gave a promissory note for the
balance. The plaintiff occupied the premises and used the furniture for some months and then
brought an action for the refund of the consideration paid by him.

The court ordered the cancellation of the promissory note, but refused to order refund of the
sum paid. "The infant plaintiff had the quantity use of furniture for some months. He could not
give back this benefit or replace the defendant in the position in which he was before the
contract .... The legislature never intended, in making provisions for this purpose (for the
protection of infants), to sanction a cruel justice.27

3.4 RATIFICATION

A person cannot on attaining majority ratify an agreement made by him during his minority.
Ratification relates back to the date of the making of the contract and, therefore, a contract
which was then void cannot be made valid by subsequent ratification. It would be a
contradiction in terms to say that a void contract can be ratified. If it is necessary, a fresh
contract should be made on attaining majority. And a new contract will also require fresh
consideration. "The consideration which passed under the earlier contract cannot be implied

26
(1889) 24 QBD 166
27
Supra note 5, P.no. 166

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into the contract into which the minor enters on attaining majority."28 In a case before the Full
Bench of the Allahahad High Court the facts were:29

A minor borrowed a sum of money, executing a simple bond for it, and after attaining
majority executed a second bond in respect of the original loan plus interest. It was held by a
majority of two as against one that the suit upon the second bond was not maintainable, as that
bond was without consideration and did not come under Section 25(2) of the Contract Act.
SULAIMAN CJ said: "Section 25(2), applies when there is promise to compensate wholly or
in part a person who has already voluntarily done something for the promisor. The word
'compensate' has been used advisedly and does not connote the same idea as a loan. The word
`'voluntarily' also indicates to my mind that something has been done without any promise of
compensation .... Similarly, the expression 'done something or' does not mean 'advance money
to another person'. Doing something for person is not paying money to him.30

Where, however, a person, after attaining majority has not only ratified but also paid the debt
incurred by him during minority, he cannot afterwards recover it back. In the view of the
Allahahad High Court such a debt only void and not unlawful.

Where, in addition to the consideration already given during minority, further advance is made
or a fresh consideration given after majority, a promise to pay the whole of the amount, in the
opinion of the Calcutta and Allahabad High Courts, becomes binding. "There is no question of
ratification in such cases."31 A person can always make a fresh promise after attaining majority
in terms of the promise made during minority. All that is necessary is that there should be some
fresh consideration for it.32

Some wind of change is reflected by the following decision. The defendant was minor at the
time when he executed a deed about his interest in the estate. The suit was filed at a time when
he had attained majority. He did of repudiate the agreement on attaining majority. He rather
admitted it. he contract became enforceable to the extent of the minor's interest in the estate.33

28
Nazir Ahmad v. Jiwan Das, AIR 1938 Lah 159
29
Suraj Narain v Sukhu Ahir, ILR (1928) 41 AII 164
30
Supra note 5, P. No. 169
31
SULAIMAN CJ in Surat Narain v Sukhu Ahir, ILR
32
Aishwarya Singh, Capacity to Contracts : Beneficial Contracts, RacolbLegal, (Apr.13, 2018, 10:37 A.M.),
http://racolblegal.com/capacity-to-contracts-beneficial-contracts/
33
MC Nagalakshmi v M.A. Farook, AIR 2007 Kant 105

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 4. CONCLUSION AND SUGGESTION

Generally, it is assumed that mental faculties of a minor are in developing state. He is not
mature enough to understand what is good and what its implications on his interest are. In the
light of it, law protects a minor, so that any person by making an agreement with him cannot
exploit him.

The Indian contract act 1872, has also granted privileged position to a minor with regard to
agreements made by him. In any agreement he does not incur personal liability. He is allowed
to get benefit in an agreement entered into by him. Not only this, but entire judicial mechanism
helps him, judges are their councellors, jury are their servants and law is their guardian. But at
the same time, it is ensured that while protecting interest of minor, unnecessary hardships
should not be created for the persons who deal with a minor.

The position of the law on the whole is satisfactory. However, in one. respect the law needs a
change. It is suggested that section 11 of the Contract Act may be amended so as to exclude
from its purview contracts of service of minors if in the opinion of the Court, they are beneficial
to the minor. It may also be better to clarify the position in the matter of restitution where the
minor is the plaintiff. Section 65 may be made applicable to those cases where a person is
induced to enter into an agreement with a minor on a false representation that he is a minor, or
where a person is able to prove that he was not aware of his minority (the burden to do so on
the party concerned). Similarly, section 65 should apply in favour of the minor where the minor
has sold the goods to a person who has not paid the price.

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 BIBLIOGRAPHY

PRIMARY SOURCES

a. R K Bangia, CONTRACT-I (7 ed. 2017).

b. Avtar Singh, CONTRACT & SPECIFIC RELIEF (12 ed. 2017).

SECONDARY SOURCES

a.) https://www.gillhams.com/site/library/legal_articles/minors_and_contractual_agreements.html

b.) https://blog.ipleaders.in/minors-capacity-enter-contract/

c.) http://racolblegal.com/capacity-to-contracts-beneficial-contracts/

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