Indian Contract Act, 1872

Capacity of Parties

Case Study 1 : A, a minor, entered into a contract for borrowing a sum of Rs. 40,000 out of
which lender paid him a sum of Rs. 18,000. A (minor) executed mortgage of property in favour
of the lender. Is mortgage of property valid? Can lender enforce contract?

Case Analysis : Mortgage of property is not valid in favour of lender. Lender cannot enforce
contract against minor (A).

Minor cannot be promisor but he can be promisee. Any agreement entered into by minor is void
ab-initio. Loan taken by minor is void from the beginning. Mortgage of property is created as
part of this agreement and therefore it is not valid or enforceable.

Case Study 2 : A is a minor, B approaches A for a loan on the basis of a mortgage of the house
owned by B. Hence, A advances the money and B executed a mortgage in favour of A, a minor.
Is mortgage of property valid? Can minor enforce contract against B?

Case Analysis : Mortgage of property in favour of minor is valid. Minor can enforce contract
against B.

Minor can be promisee. If the minor is promisee he can enforce any agreement. In the given
case, minor has lend money. Here he is promisee. He has right to recover money as well as
enforce mortgage against B.

Case Study 3 : A, a minor entered into a contract with B. For the execution of the contract A
(minor), draws cheque in favour of B. On attaining majority, A (minor) makes out a fresh cheque
in lieu of the old one. Which cheque issued by minor is valid? Explain reason.

Case Analysis : Cheque issued by minor is not valid.

Minor cannot be promisor. Therefore, he cannot issue cheque. Fresh cheque issued by minor is
in lieu of old one. Issue of fresh cheque in lieu of old one amounts as ratification of transaction.
Minor cannot ratify the contract which he had entered into during course of minority.

Case Study 4 : Amit, 16 years of age, fractures his leg while playing cricket. He goes to a
doctor and gets his leg plastered. The doctor demands a fees of Rs. 1,000 but Amit refuses to

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pay on the ground that he is a minor. The doctor files a suit against Amit. Will the doctor
succeed? Give reason.

Case Analysis : Yes doctor has valid claim for his service.

Minor can enter into contract for necessity. Medical services are considered as necessity. But
doctor cannot claim anything against minor but he can recover it from property of minor if any.

Consideration

Case Study 5 : X transferred his house to his daughter M by way of gift. The gift deed,
executed by X, contained a direction that M shall pay a sum of Rs. 5,000 per month to N (the
sister of the executants). Consequently, M executed an instrument in favour of N agreeing to
pay the said sum. Afterwards, M refused to pay the sum to N saying that she is not liable to N
because no consideration had moved from her. Decide with reasons under the provisions of the
Indian Contract Act, 1872, whether M is liable to pay the said sum to N.

Case Analysis : M is liable to pay said sum to N.

Consideration need not necessarily move from the party itself, it may move from any other
person. Same reason apply here. Consideration has moved from X to M.

Case Study 6 : A, who is indebted to B, sells his property to C, and C purchased the property,
promises to pay off the debt to B. C fails to pay off B. Can B sue C?

Case Analysis : B has no right to sue C for there is no privity of contract between B and C.
Thus a person, who is not a party to a contract cannot sue upon it even though the contract is
for his benefit.

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