BCOC-133 IMPORTANT NOTE UNIT-3 CAPACITY OF PARTIES

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h. BCOC-133 IMPORTANT NOTE UNIT-3 CAPACITY OF PARTIES 

POSITION OF MINOR:-
1. Who is minor:-minor ,individually who are below the age of majority ,typically lack of

legal capacity to enter in to a contract. In jurisdiction, the age of majority is 18 years old. 2. Position of agreement by a minor:-the position of agreement made by minors,

individuals below the age of majority is often governed by legal principles that recognise that limited capacity of minors to enter into contacts. Here are key aspects:-

  • Voidable contract:-contract made by minors are generally considered voidable at the minors option. This means that the minor, upon reaching the age of majority, can choose to either affirm or void the contact.

  • Fraudulent representation by minor:-it refers to a situation where an individual who is below the age of majority engages in deceptive or dishonest behavior to induce someone else into a contract or agreement.it involve false statements, concealment of important information or misrepresentation of facts.

  • Ratification:- if a minor doesn’t void the contract upon reaching age of majority, their continued actions can imply ratification, confirming the contract validity.

  • Minor’s contract jointly with a major person:-it. Involves an agreement where both a minor and an adult are parties to the contract. In such cases the minor may disaffirm or void contract.

  • Minor as a partner:- a minor cannot be a partner in the partnership firm but a minor my with the consent of all the partners for the time being.(he share the profit without incurring any personal liabilities for losses)

  • Minor as a agent:- a minor can act as an agent and bind his principal by his act without incurring any personal liabilities.

  • Minor as a share holder:-a minor can be a shareholder in a company, holding ownership In the form of shares. However, because minors have legal capacity, their ability to actively participate in shareholder decision may be restricted. These shares often managed by legal guardian or custodian until the minor reaches the age of majority. A minor’s ability to vote on cooperate matters or exercise certain rights may be deferred until they attain the legal age.

  • A minor cannot be declared insolvent because he is in capable of contracting debts. Exceptions :-

    a. Contract for the benefit of a minor:-it refers to an agreement entered into with the explicit purpose of benefiting a minor, in such contract third party typically undertakes obligations or provides benefits directly for the minor’s welfare eg:- education trusts/ fund, custodial accounts, insurance policies, gift of inheritance.

    b. Contract by guardian:-it refers to legal agreement entered in to by person acting in the capacity of a guardian. A guardian is someone appointed to make decisions on behalf of minority.

c. Necessaries:- minors can be held responsible for contact related to necessaries, items or service essential for their well being eg:- food, shelter, and medical care

Agreements by person of unsound mind:-
1. Who is a person of unsound mind:-it refers to an individual who lacks the mental capacity

to understand the nature and consequences of entering in to an contract Position of agreement by person of unsound mind:-

  • Lunatics:- who is mentally deranged due to some mental strain or other personal experience. He is not liable for the contacts entered into while unsound mind

  • Idiots:- an idiots who permanently unsound mind. He cannot make valid contacts

  • Drunken or intoxicated person:- a contact by drunken person altogether void,

    Persons disqualified by law:- besides minors and person of unsound mind there some other persons who have been declared in competent of contacting partially or wholly , so the contacts of such persons are void it may arise from the political status, corporate status , legal status etc.

  • Alien enemy:- an alien is a person who is the citizen of foreign country/ in Indian context an alien may be 1. An alien friend or 2. An alien enemy

  • Foreign sovereigns and ambassadors

  • Companies under the company act or statutory corporation under special act of

    parliament

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