Law of Contract:
History:
The word contract is derived from a lactic word ‘contractus’, which means collect, combine or make an agreement between any two parties. Simply, a contract will have two parties who maintain a relationship between both of them where they can have their own rights, liabilities and obligations. In other words, the law of contract confines itself to the enforcement of voluntarily created civil obligations, but does not cover all of civil obligations. There are many obligations which come under other branches of law like law of torts etc. The fundamental requirement to have obligations(enforceable) in a contract is that the contract must be valid and enforceable.
In general, rights, liabilities and the obligations are chosen by the parties only. In this case, there is no point of discussion of law enforceable. But when you want the terms and conditions to be enforceable then you must need to enter into an agreement which is enforceable by the law. So, simply a contract law will lead you to the agreement which is enforceable.
Case Analysis : Mohori Bibee Vs Dharmodas Ghose
Mohori Bibee V/S Dharmodas Ghose :-
Bench of Judges: Lord McNaughton, Lord Davey, Lord Lindley, Sir Ford North, Sir Andrew Scoble, Sir Andrew Wilson, JJ.
Introduction:
Basically this case is all about a contract with a minor or we can call it a minor contract. In India, an agreement made with a minor (minor means whose age is less than 18 years or any person who has not completed 18 years of age legally) is void ab-initio (void from very beginning).
According to the Indian Law, any person whose age is below or less than 18 years or who has not completed 18 years of age legally, cannot create a contract or directly involve in any type of contracts. i.e. in other words, the parties involved in the contract should be competent to make a contract.
Here we can recollect section 11, which says that every person is competent to make a contract who is of age of majority according to the law.
Facts of the Case:
In this case, Dharmodas Ghose who is minor and only owner of his immovable property. And the mother of Dharmodas Ghose as the legal custodian of the Kolkata High Court.
Dharmodas Ghose while he was minor entered into an agreement with a money lender named Brahmodutt to secure a loan amount of Rs. 20,000.00 with the interest rate of 12% per annum.
At the time of the transaction the attorney named as Kedarnath, who acted on behalf of the money lender Brahmodutt, had the knowledge that the Dharmodas Ghose is a minor. At the time of the agreement mother of Dharmodas sent notification and told about the age of Dharmodas to the Brahmodutt.
Here the representative of the defendant who is acting as a money lender has full knowledge about his minority and the defendant knows that any agreement with a minor is void ab into, in action to this he agreed with the defendant.
On September 1895, Dharmodas and his mother sue a legal action against Brahmo Dutt, the money lender, by saying that the mortgage deed is void and not a valid contract as because at the time of mortgage, Dharmodas is minor or infant as a result of which the contract should be revoked. But by the time of this petition and process were claimed the money lender Brahmo Dutt died and further the appeal was litigated by his executors.
So, in this case appeal was filed by Brahmo Dutt executors and they contended that the minor represented his age fraudulently therefore law of estoppel should apply and also if the contract is canceled as pleaded by Dharmodas the he should be made to pay the loan according the Indian Contract Act 1872 under the sections of 64 and 65.
Issues Before the Court:
- Whether the deed was void under the section 2,10,11 of Indian Contract Act,1872 or not?
- Whether the defendant is liable to pay back the said deed amount received under such mortgage?
- Whether the mortgage commenced by the defendant was voidable or not?
Judgment:
After considering the fact of the case, Privy Council concluded that any type of agreement with a minor is void ab-initio i.e. void from the very beginning and along with this, firstly law of estoppel will not apply since the attorney of Brahmo Dutt had knowledge of fact, i.e Dharmodas was minor. Secondly, they revealed that there is no scope to apply section 64 and 65 of Indian Contract Act as there was no valid contract between competent parties.
Therefore, a precedent of minor’s agreement is void ab-initio had been laid down in the present case.