The meaning of 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.
The decision in Mohoribibi case is confined to cases where a minor is charged with obligations and the other contracting party seeks to enforce those obligations against him. 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. A minor will have the option of retiring from a beneficial contract on attaining majority.
The following are the instances of contracts beneficial to a minor:
If a minor has advanced mortgage money and there is a mortgage in his favour, he can sue for enforcement of the contract.
Similarly, a minor can sue on a Promissory Note executed in his favour.
A contract for the marriage of a minor is also prima facie for his or her benefit. While the contract of marriage could be enforced against the other contracting party at the instance of the minor, it cannot be enforced against the minor.A minor can also be supplied with “necessaries suited to his condition in life” (e.g. food, lodging, education) and the supplier of such necessaries is entitled to be reimbursed from the property of the minor.
A lease to a minor is void.
Trade contracts are not included in beneficial contracts. Thus when a minor, while carrying on business, enters into a trade contract such contract, will not be binding on him.
A minor is bound by the contract of apprenticeship under the Indian Apprenticeship Act, 1850. Under English law, infant is bound by the contract of apprenticeship as well as contract of service because such contracts are beneficial to him and help him in earning his livelihood. Unlike English law, contracts of service entered into by a minor are void in India.
In Raj Rani v Prem Adib (AIR 1949 Bom 215), the father of Raj 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 on payment of a certain amount. Raj Rani was not given any work. She sued the producer for the breach of contract. 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 a nullity. If it was a contract with her father it was void for being without consideration.
A minor cannot be a partner in a partnership firm, but under Sec. 30 of the Indian Partnership Act, he can be admitted to the ‘benefits of partnership’. The minor shall not share losses except when liability to third parties has arisen but then too upto his share in the partnership assets; he cannot be made personally liable. Where a minor and an adult jointly enter into an agreement with another person, the minor has no liability but the contract as a whole can be enforced against the adult [Jamna Bai v Vasanta Rao (1916) 39 Mad 409 (PC)].
A minor can be an agent, but the liability will be of the principal. A minor cannot be adjudicated an insolvent, for, he is incapable of contracting debts. It may be noted that the parents of a minor are not liable for agreements made by a minor, whether the agreement is for the purchase of necessaries or not. The parents can be held liable only when the minor is contracting as an agent for the parents.