Indian Contract Act Case Study

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The law relating to contracts in India is contained in Indian Contract Act, 1872.Under Section 2 (H) of this act, it is said that an agreement enforceable by law is said to be a contract when documented and signed. For the first time in 1903, the Privy Council held that the minor’s contract is void and not merely voidable. The Privy Council reached this conclusion on the basis of various Sections of the Indian Contract Act.
The plaintiff, Dharmodas Ghose, while he was a minor, mortgaged his property in favour of the defendant, Brahmo Dutt, who was a moneylender to secure a loan of Rs. 20,000. The plaintiff brought an action against the defendant stating that the mortgage was void and cannot be executed as he was a minor when the
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But neither section makes it clear whether, if a minor enters into an agreement, it would be voidable at his option or altogether void. These provisions had, therefore, quite naturally given rise to controversy about the nature of a minor’s agreement. The controversy was only resolved in 1903 by Judicial Committee of the Privy Council in their well-known pronouncement in Mohiri Bibee v. Dharmodas Ghose.
Ever since this decision it has not been doubted that a minor’s agreement is absolutely void. In England also the Infant’s Relief Act of 1874 declares the following categories of a minor’s agreement to be “absolutely void”.
1. Contract for repayment of money lent or to be lent, or
2. Contract for goods supplied or to be supplied(other than necessary), and
3. Contract for accounts stated.
A child may show poor judgment in 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
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The first well-known case decided under the section is that of Mohiri Bibee v. Dharmodas Ghose. The relief of cancelled has to be granted in the above case as the plaintiff was entitled to it under section 39 of the Specific Relief Act, 1877.
Beneficial contracts
The law declared by the Privy Council in the Mohiri Bibee case that a minor’s agreement is “absolutely void” is “confined to cases where a minor is charged with obligations and the other contracting party seeks to enforce those obligations against the minor. 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.
A contract for the marriage of a minor in muslim shariyat or Contracts of apprenticeship are another species of contracts which are for the benefit of minors. The Indian Apprentices Act, 1850 provides for contracts in the nature of contracts of service which are binding on minors. The Act requires the contract to be made by a guardian on behalf of the minor.

The following is the summary of the laws of contract with a