Laws of

Business &
Taxation
Module 3
 CONSIDERATION

► Consideration is one of the essential elements to

support a contract. Subject to certain exceptions,
an agreement made without consideration is
“nudum pactum” (a nude contract) and is void.
► Justice Patterson defines consideration in the
following words: “Consideration means something
which is of some value in the eye of law…It may
be some benefit to the plaintiff or some
detriment to the defendant.” [Thomas vs.
Thomas(1842)].There are two leading cases which
explain this point.
 Definition of Consideration
[Section 2(d) of Indian Contract Act,1872]
► “When at the desire of the promisor, promisee
or any other person has done or abstained from
doing or does or abstains from doing, or
promises to do or to abstain from doing,
something, such act or abstinence or promise is
called a consideration for the promise.”
 Analysis of
Definition of Consideration
► (1) An act, i.e., doing of something. In this sense consideration is in
an affirmative form.
Example: A promises B to guarantee payment of price of the
goods which B sells on credit to C. Here selling of goods by B to C is
consideration for A’s promise.
(2) An abstinence or forbearance, i.e., abstaining or refraining from
doing something. In this sense consideration is in a negative form.
Example :A promises B not to file a suit against him if he pays
him Rs.500.The abstinence of A is the consideration for B’s payment.
(3) A return promise.
Example: A agrees to sell his horse to B for Rs 10,000. Here B’s
promise to pay the sum of Rs.10,000 is the consideration for A ’s
promise to sell the horse, and A’s promise to sell the horse is the
consideration for B’s promise to pay the sum of Rs.10,000.
 Essentials of Valid Consideration
► 1.It must move at the desire of the promisor.
► 2.It may move from the promisee or any other
person.
► 3.It may be an act, abstinence or a return
promise.
► 4.It may be past, present or future.
► 5.It need not be adequate.
► 6.It must be real and not illusory
► 7.It must be something which the promisor is not
already bound to do.
► 8.It must not be illegal, immoral or opposed to
public policy (Sec.23).
 Essentials of Valid Consideration

► 1.It must move at the desire of the

promisor:
An act constituting consideration must have
been done at the desire or request of the
promisor. If it is done at the instance of
a third party or without the desire of the
promisor, it will not be a good
consideration.
Example:A saves B’s goods from fire
without being asked to do so. A cannot
demand payment for his services.
 Essentials of Valid Consideration
► 2.It may move from the promisee or
any other person.
Consideration may move from promisee or
any other person, i.e., even a
stranger. This means that as long as
there is consideration for a promise
it is immaterial who has furnished it.
But the stranger to consideration
will be able to sue only if he is a
party to the contract.
 Essentials of Valid Consideration

► 2.It may move from the promisee or any other person

Example: An old lady, by a deed of gift,
made over certain property to her daughter D,
under the direction that she should pay her
aunt, P (sister of the old lady), a certain
sum of money annually. The same day D entered
in an agreement with P to pay her the agreed
amount. Later, D refused to pay the amount on
the plea that no consideration had moved from
P to D. Held, P was entitled to maintain suit
as consideration had moved from the old lady,
sister of P, to the daughter.
[Chinnayya vs.Ramayya(1882)]
 Essentials of Valid Consideration

► 3.It may be an act, abstinence or a a return promise.( The

following are good consideration for a contract)
(1)Forbearance to sue: If a person who could sue
another for the enforcement of a right agrees not to
pursue his claim, this constitutes a good
consideration for the promise by the other person.
This results in a benefit to the person not sued and
a detriment to the person who could sue.
Example: A borrows from B Rs.100 at 20 percent
p.a., and fails to pay the amount. When B is about
to file a suit, A agrees to pay a higher rate of
interest. B, as a result, does not file the suit.
This forbearance on the part of B to file a suit is
a sufficient consideration and B can enforce the
promise by A to pay the higher rate of interest.
 Essentials of Valid Consideration

3.It may be an act, abstinence or a return promise.

(2)Compromise of a disputed claim:
Compromise is a kind of forbearance. Originally ,
the claim should be reasonable and the person
claiming should honestly believe that it is a valid
claim. He should also act bona fide (in good
faith).
(3) Composition with creditors: A debtor who is
financially embarrassed may call a meeting of his
creditors and request them to accept a lesser amount
in satisfaction of their debt. If the creditors
agree to it, the agreement is binding both upon the
debtor and the creditors and this amounts to a
compromise of the claims of the creditors.
 Essentials of Valid Consideration

► 4.It may be past, present or f uture.

(1)Past Consideration:
When consideration by a party for a present
promise was given in the past, i.e., before
the date of the promise, it is said to be
past consideration.
Example: A renders some service to B at
latter’s desire. After a month B promises to
compensate A for services rendered to him. It
is past consideration. A can recover promised
amount.
 Essentials of Valid Consideration

►4.It may be past, present or future.

(2) Present or Executed Consideration:
When consideration is given simultaneously with
promise, i.e., at the time of promise, it is said to
be present consideration. In case sale, for example,
consideration is present or executed.
Example: A receives Rs. 50 in return for which
he promises to deliver certain goods to B. The money
A receives which he promises to deliver certain
goods to B. The money A receives is the present
consideration for the promise he makes to deliver
the goods.
 Essentials of Valid Consideration

► 4.It may be past, present or future.

(3) Future or executory consideration:
When consideration from one party to the other
is to pass subsequently to the making of the
contract, it is future or executory consideration.
Example:
D promises to deliver certain goods to P
after a week; P promises to pay the price
after a fortnight. The promise of D is
supported by the promise of P. Consideration
in this case is future or executory.
 Essentials of Valid Consideration

► 5.Itneed not be adequate.

Consideration, as already explained, means
“something in return”.
This something in return need not necessarily be
equal to “something given”.
The law simply provides that a contract should be
supported by consideration.
So long as consideration exists, the Courts are not
concerned as to it’s adequacy, provided it is of
some value.
 Essentials of Valid Consideration

► Ex:
►A agrees to sell a horse worth rs.1,000 for
rs.10.
► A denies that his consent to the agreement
was freely given.
► The inadequacy of the consideration is a
fact which the Court should take into
account in considering whether or not A’s
consent was freely given.
 Essentials of Valid Consideration

► 6.It must be real, and not illusory.

Although consideration need not be adequate, it must be real,
competent and of some value in the eyes of the law.
There is no real consideration in the following cases:
(1) Physical Impossibility: A promises to put life in to B’s dead
wife and B should pay him Rs.500.A’s promise is physically
impossible of performance.
(2) Legal Impossibility: A owes Rs 100 to B. He promises to pay
Rs.20 to C, the servant of B, who in return promises to
discharge A from the debt. This is legally impossible
because C cannot give discharge for a debt due to B, his
master [Harvey vs. Gibbons, (1675)].
 Essentials of Valid Consideration

► ………….6.It must be real, and not illusory

(3) Uncertain consideration:
A engages B for doing a certain work and promises to pay a
“reasonable” sum. There is no recognized method of
ascertaining the “reasonable” remuneration. The promise is
unenforceable as consideration is uncertain.
(4) Illusory consideration:
Two of the crew of a ship deserted it half way through a voyage.
The captain thereby promised to divide the salary of the
deserters among the rest of the crew if they worked the
vessel home. Held, they could not recover the amount as the
consideration was illusory. They were already under an
obligation to bring the vessel home.
 Essentials of Valid Consideration

► 7.It must be something which the promisor is not

already bound to do.
A promise to do what is already bound to do, either by
general law or under an existing contract, is not a
good consideration for a new promise, since it adds
nothing to the pre-existing legal or contractual
obligation.
Likewise a promise to perform a public duty by a
public servant is not a consideration.
 Essentials of Valid Consideration

► Ex:
► (1) A promised to pay B, who had received
summons to appear at a trial in a civil suit, a
certain sum being a compensation for the loss of
time during his attendance.
► Held, the promise was without consideration, for B
was under a duty imposed by law to appear and
give evidence.
► (Collins v. Godefroy,(1831))
 Essentials of Valid Consideration
► Ex:
► (2) There was a promise to pay to a lawyer an
additional sum if the suit was successful. Held,
the promise was void for want of consideration.
► The lawyer was under a pre-existing contractual
obligation to render the best of his services
under the original contract.
► But where a person being already under a legal
or contractual duty to do something undertakes
to do something than he is bound to do under
the original contract, this will be a good
consideration for the promise.
 Essentials of Valid Consideration

► 8.Itmust not be illegal, immoral or opposed

to public policy.
The consideration given for an agreement must
not be unlawful.
Where it is unlawful, the Court do not allow an
action on the agreement.
 “A contract without consideration is void”
-Exceptions

► The general rule is ex nudo pacto non oritur

actio,
i.e., an agreement made without
consideration is void.
Sec.25 and 185 dealt with the exceptions to
this rule.
In such cases agreements are enforceable
even though they are made without
consideration. These cases are---
 “A contract without consideration is void”
-Exceptions……….

1.Love and Affection [Sec.25(1)]:

Such agreement made without consideration is
valid if:
(i) It is expressed in writing
(ii) It is registered under the law
(iii) It is made on account of love and affection,
and
(iv) It is between parties standing in a near
relation to each other.
 Examples:
(a) F ,for natural love and affection,
promises to give his son, S, Rs.1,000.F
puts his promise to S in writing and
registers it . There is a contract.
(b) By a registered agreement, V on account of
natural love and affection for his
brother, R, promises to discharge his debt
to B. If V does not discharge the debt, R
may discharge it and then sue V to recover
the amount.
[Venkataswamy vs. Ramaswamy, (1903)
 A contract without consideration is void
-Exceptions

► 2.Compensation for voluntary services.[Sec.25(2)]

A promise to compensate, wholly or in part, a person who
has already voluntarily done something for the promisor,
is enforceable, even though without consideration. In
simple words, a promise to pay for a past voluntary
service is binding.
Examples: (a) A finds B’s purse and gives it to him. B
promises to give rs. 50 .There is a contract.

(b) A says to B, “ At the risk of your life you saved

me from a serious accident. I promise to pay you
Rs.1,000.”There is a contract between A and B.
 Continued………
► (c) X, a neighbor helped putting down the
fire in Y’s house. Afterwards , Y promised X
to give Rs.1000. This is a valid contract
even though the consideration did not move
at the desire of the promisor.
► (d) X, supported Y’s infant son. Y promised
to pay X’s expenses in so doing. This is a
valid contract. Here, X has done that act
which Y was legally bound to do.
 A contract without consideration is void
-Exceptions

► 3.Promise to pay a time barred debt:

► Such promise with out consideration is valid if:
► (1) It is made in writing
► (2) It is signed by the debtor or his agent, and
► (3) It relates to a debt which could not be enforced by a
creditor because of limitation.
Note: According to the Law of limitation, a debt which
remains unpaid or unclaimed for a period of 3 years
becomes a time barred debt which is legally not
recoverable.
 A contract without consideration is void
-Exceptions

Example: D owes C Rs.1,000 but the debt is

barred by the Limitation Act. D signs a
written promise o pay C Rs.500 on account
of the debt. This is a contract.
 A contract without consideration is void
-Exceptions

4.Completed Gift:
The rule “ No consideration, no
contract” does not apply to completed
gifts..
e.g., X transferred some property to Y
by a duly written and registered deed
as a gift. This is a valid contract
even though no consideration.
5.Agency [Sec.185]
No consideration is necessary to
 A contract without consideration is void
-Exceptions

► 6.Remission by Promisee

► When a person agrees to receive less

than what is due, it is called
remission.
► Ex 1. A creditor gives up part of his
claim
► Ex 2. An agreement to extend
performance of a contract
 STRANGER TO CONTRACT

It is a general rule of law that only parties to a

contract may sue and be sued on that contract.
This rule is known as the “Doctrine of privity of
contract. ”
► Privity of contract means relationship subsisting
between the parties who have entered in to
contractual obligations.
► It implies a mutuality of will and creates a legal
bond or tie between the parties to contract.
 Two Consequences of the
“Doctrine of Privity of Contract”
► (1) A person who is not a party to a
contract cannot sue upon it even
though the contract is for his benefit
and he provided consideration.
► (2) A contract cannot confer rights or
impose obligation arising under it on
any person other than the parties to
it.
Thus, if there is a contract between A and B,
C cannot enforce.
[Dunlop Pneumatic Tyre Co.Ltd. Vs. Selfridge & Co.Ltd.,( 1915)]
 Dunlop Pneumatic Tyre Co.Ltd.
Vs.
Selfridge & Co.Ltd.,(1915)
►S bought tyres from the Dunlop Rubber Co.
and sold them to P, a sub-dealer, who
agreed with S not to sell below Dunlop’s list
price and to pay the Dunlop Co., 5 pounds
as damages on every tyre P undersold.
► P sold two tyres at less than the list price
and thereupon the Dunlop Co. sued him for
the breach.
► Held, the Dunlop Co. could not maintain
the suit as it was a stranger to the contract.
 Exceptions to the rule
“Stranger to a contract cannot sue.”

► 1.A trust or charge: A person (called beneficiary) in

whose favor a trust or other interest is created can
enforce it even though he is not a party to the
contract.
Example: A agrees to transfer certain properties to
be held by T in trust for the benefit of B. B can
enforce the agreement
(i.e., the trust) even though he is not a party to the
agreement
[M.K. Rapai vs. John(1965)]
 Exceptions to the rule
“Stranger to a contract cannot sue.”

► 2.Marriage settlement, partition or other family

arrangements.
Example: Two brothers, on a partition of joint
properties, agreed to invest in equal shares a
certain sum of money for the maintenance of their
mother.
Held, she was entitled to require her sons to make
the investment.
[Shuppu Ammal vs. Subramaniam (1910) Madras High Court.]
 Exceptions to the rule
“Stranger to a contract cannot sue.”

► 3.Acknowledgement or estoppel:
Where the promisor by his conduct,
acknowledges or otherwise constitutes
himself as an agent of a third party, a
binding obligation is thereby incurred by
him towards the third party.
Example: ‘A’ receives some money from ‘T’ to be paid
over to ‘P’. A admits of this receipt to ‘P’. ‘P’ can
recover the amount from ‘A’ who shall be regarded
as the agent of ‘P’.
 Exceptions to the rule
“Stranger to a contract cannot sue.”

► 4.Assignment of contract : Where a benefit

under a contract has been assigned, the assignee
can enforce the contract subject to all equities
between the original parties to the contract
► e.g. the assignee of an insurance policy.
► 5.Contracts entered in to through an agent:
The principal can enforce the contracts
entered in to by his agent provided the agent
acts within the scope of his authority and in the
name of the principal.
 Exceptions to the rule
“Stranger to a contract cannot sue.”

► 6.Immovable Property
► Owner of property is entitled to certain rights and
obligations created by an agreement affecting a
property.

► Example
►Y Buys a home through a loan from Bank. Y sells
home to X without returning the loan to Bank. The
Bank can sue X
 Unlawful Consideration & Objects

► Ifthe consideration or object of a contract is

unlawful, the agreement is illegal and therefore
void.

► Unlawful Consideration
1. Forbidden by Law e.g. Division of theft proceeds
2. Defeats Provisions of Law e.g. Home Re-buy
3. Fraudulent e.g. underpricing by agent
4. Injury to Person or Property e.g. target killing
5. Court Regards as Immoral e.g. Borrow & Marry
6. Court Considers Against Public Policy e.g. Aliens
Module 4
 CAPACITY TO CONTRACT
[COMPETENCY OF THE PARTIES]

► The parties who enter in to contract must have capacity to do so.

Capacity here means competency of the parties to enter in to contract.
According to Sec.10 an agreement becomes a contract if it is entered
in to between the parties who are competent to contract
► According to Sec.11 every person is competent to enter in to contract
who (a) is of the age of majority.
(b) is of sound mind, and
(c) is not disqualified from contracting by any law to which he is
subject.
► Thus Section 11 declares the following persons to be incompetent to
contract; 1.Minor
2.Persons of unsound mind
3.Persons disqualified by any law to which they are
subject.
 1.Minors
► According to Majority Act,1875, a minor is a person who
has not completed 18 years of age. In the following case, a
person attains majority after 21 years of age.

(1) Where a guardian of a minor’s person or property has

been appointed by the court
 Minor’s Agreements
► 1. Void Agreement
► An agreement with or by a minor is void and inoperative
ab initio. [Mohiribibi vs.
Dharmodas Ghose,(1903) Calcutta High Court]

► In this case a minor mortgage his house in favor of a money lender to

secure a loan of Rs.20,000 out of which the mortgagee (the money
lender) paid the minor a sum of Rs.8000. Subsequently the minor
sued for setting aside the mortgage, stating that he was underage
when he executed the mortgage.

► Held, the mortgage was void and, therefore, it was cancelled. Further
the money lender’s request for the repayment of the amount
advanced to the minor as part of the consideration for the mortgage
was also not accepted.
 Minor’s Agreements
► 2. Minor & Ratification
► RATIFICATION BY A MINOR IS NOT VALID.
► His agreement cannot be ratified by him on attaining the
age of majority.
► “Consideration which passed under the earlier contract
cannot be implied in to the contract which the minor enters
on attaining majority.”
Thus consideration given during minority is no
consideration.
► If it is necessary a fresh contract may be entered in to by
the minor on attaining majority provided it is supported by
fresh consideration
 Minor’s Agreements
► 3.He can be a promisee or a beneficiary:
Incapacity of a minor to enter in to a contract means
incapacity to bind himself by a contract. There is nothing
which debars from becoming a beneficiary. Such contracts
may be enforced at his option, but not at the option of the
other party. [Sharafat Ali Vs. Noor Mohammed(1924)].
Example: (a) M, aged 17, agreed to purchase a second-hand
scooter for Rs.5,000 from S. He paid Rs.200 as advance
and agreed to pay the balance the next day and collect the
scooter. When he came with the money the next day, S
told him that he had changed his mind and offered to
return the advance. S cannot avoid the contract, though
M may, if he likes.
 Minor’s Agreements
► 4.If he has received any benefit under a void
agreement , he cannot be asked to compensate
or pay for it.
► Sec.65 provides for restitution in case of
agreements discovered to be void does not apply
to a minor.
Example: M, a minor, obtains a loan by mortgaging
his property. He is not liable to refund the loan.
Not only this, even his mortgaged property
cannot be made liable to pay the debt.
 Minor’s Agreements
► 5.He can always plead minority:
Even ,if he has , by misrepresenting his age,
induced the other party to contract with
him, he cannot be sued in contract for fraud
because if the injured party were allowed to
sue for fraud, it would be giving him an
indirect means of enforcing the void
agreement.
 Minor’s Agreements
5.He can always plead minority:

Example: S, minor, by fraudulently representing himself to be

of full age, induced L to lend him 400 POUNDS. He refused
to repay it and L sued him for the money .
Held, the contract was void and S was not liable to repay the
amount [Leslie vs. Shiell,1914] Lawrence J observed that
in this case “ Wherever an infant is still in possession of
any property in specie which he has obtained by his fraud,
he will be made to restore to it’s former owner. But I think
it is incorrect to say that he can be made to repay money
which he has spent , merely because he received it under
a contract induced by fraud”.
 Minor’s Agreements
5.He can always plead minority:

► TheCourt may, where some loan or

property is obtained by the minor by some
fraudulent representation and the
agreement is set aside , direct him, on
equitable considerations, to restore the
money or property to the other party.
Where as the law gives protection to the
minors , it does not give them liberty “to
cheat men.”
 Minor’s Agreements
► 6.He cannot enter in to a contract of partnership.
But he may be admitted to the benefits of an already
existing partnership with the consent of the other
partners.
► 7.He cannot be adjudged insolvent.
This is because he is incapable of contracting debts.
 Minor’s Agreements
► 8.Heis liable for the ‘necessaries’ supplied or
necessary services rendered to him or anyone
whom he is legally bound to support.

► 9.He can be an agent. An agent is merely a

connecting link between his principal and third
party. As soon as the principal and the third party
are brought together, the agent drops out. A
minor binds the principal by his acts without
incurring any personal liability.
 Minor’s Agreements
► 10.Aminor is liable in tort (A civil wrong).
But where a tort arises out of contract
a minor is not liable in tort as an indirect
way of enforcing a invalid contract.
 Minor’s Liability for Necessaries
of Life.
► A minor is liable to pay out of his property for
‘necessaries’ supplied to him or to anyone whom he is
legally bound to support.(Sec.68). The claim arises not out
of contract but out of what is known as ‘quasi contracts’.
► Again it is only the property of the minor that is liable for
meeting the liability arising out of such contracts. He is not
personally liable.
► The law has provided this exception intentionally because
if it were not so, it would be impossible for minors even to
live.
 What are necessaries of life ?

► The term necessaries is not defined in, ICA,1872.

The English Sale of Goods Act 1893, defines it in Sec.2 as “
goods suitable to the condition in life of such infant or
other person, and to his actual requirement at the time of
sale and delivery”.
► Such goods need not necessarily belong to a class of
goods, but they must be (I) suitable to the position and
financial status of the minor, and (ii) necessaries both at
the time of sale and at the time of delivery
 2.Persons of Unsound Mind.
► One of the essential conditions of competency of parties to a contract
is that they should be of sound mind.Sec.12 lays down a test of
soundness of mind. It reads as follows:
“ A person is said to be of sound mind, for the purpose of
making a contract if, at the time when he makes it, he is
capable of understanding it and of forming a rational
judgment as to its effect upon his interests.

A person who is usually of unsound mind but

occasionally of sound mind, may make a contract when he is
of sound mind.

A person who is usually of sound mind, but occasionally

of unsound mind, may not make a contract when he is of
unsound mind.” EXAMPLES………..
 Persons of Unsound Mind.
► Examples:
(a) A patient in a lunatic asylum, who is at intervals of sound
mind, may contract during those intervals.
(b) A sane man who is delirious from fever, or who is so
drunk that he cannot understand the terms of a contract,
or form a rational judgment as to it’s effect on his
interests, cannot contract while such delirium or
drunkenness lasts.
 Persons of Unsound Mind
Soundness of mind of a person depends upon two facts:
1.His capacity to understand the contents of the business
concerned, and
2.His ability to form a rational judgment as to it’s effect
upon his interests.
If a person is incapable of both, he suffers from unsoundness of
mind. Whether a party to a contract is of sound mind or not is a
question of fact to be decided by the Court. There is a
presumption in favor of sanity.
If a person relies on unsoundness of mind, he must prove it
sufficiently to satisfy the Court.
 Contracts of Persons of Unsound
Mind
► LUNATICS. A lunatic is a person who is mentally deranged
due to some mental strain or other personal experience.
He suffers from intermittent intervals of sanity and
insanity. He can enter in to contract when he is of
sound mind.
► IDIOTS. An idiot is a person who has completely lost his
mental powers.
He does not exhibit understanding of even ordinary
matters. Idiocy is permanent where as lunacy denotes
periodical insanity with lucid intervals. An agreement of
an idiot, like that of a minor, is void.
 Contracts of
Persons of Unsound Mind

► DRUNKEN OR INTOXICATED PERSONS.

A drunken or intoxicated person suffers from
temporary incapacity to contract, i.e. ,at the time
when he is so drunk or intoxicated that he is
incapable of forming a rational judgment.
However, persons of unsound mind are liable for
necessaries supplied to them or to anyone whom
they are legally bound to support .
 PERSONS DISQUALIFIED BY LAW
(other persons)
► 1. Alien Enemies
► 2. Foreign Sovereigns
► 3. Convicts
► 4. Insolvents
► 5. Joint Stock Company
 3. Other persons
► ALIEN ENEMIES. Contracts with alien enemy [an alien
whose State is at war with the IRP] may be studied under
two heads, namely-
(a) contracts during the war, and
(b) contracts made before the war

► Contract with an alien whose country is at Peace with

Pakistan is valid
► Contract with an alien whose country is at War with
Pakistan is illegal and void
 3. Other persons
► ALIEN ENEMIES.
(b) Contracts made before the war may either be suspended
or dissolved. They will be dissolved if they are against the
public policy or if their performance would benefit the
enemy.
For this purpose even a Pakistani who resides voluntarily in a
hostile country, or who is carrying on business there would
be treated as an alien enemy.
Foreign sovereigns, their diplomatic staff and
accredited representatives of foreign states

► They have some special privileges and

generally cannot be sued unless they of
their own submit to the jurisdiction of our
law Courts.
 CORPORATIONS & COMPANY
► A corporation is an artificial person created by law, having
a legal existence apart from it’s members. It may come in
to existence by a special act of legislature or registration
under relevant ordinance or act
► A contractual capacity of a company [corporation] is
regulated by the terms of Memorandum of Association.

► If it exceeds it’s powers, whether expressly conferred on it

or derived by reasonable implication from it’s objects
clause in the Memorandum, the contract ultra vires and is
void.
 INSOLVENTS & CONVICTS
► INSOLVENTS:
When a debtor is adjudged insolvent is deprived of his
power to deal in that property. It is only the official
Receiver or Official Assignee who can enter in to contracts
relating to his property, and sue and be sued on his
behalf.
► CONVICTS:
A convict when undergoing imprisonment is incapable of
entering in to contract.
 PRACTICAL PROBLEMS
► 1.Aminor fraudulently represented to a money
lender that he was of full age and executed a
mortgage deed for Rs.10.000. Has the money
lender any right of action against the minor for
the money lent or for damages for fraudulent
misrepresentation ?
 Answer to Case.1
► No. (Mohiri bibi v. Dharmodas Ghose)
(Leslie vs. Shiell)
 Case 2.
► 2.A minor is supplied with necessaries of life
by a grocer. He makes out a promissory note
in favor of the grocer. Is the grocer entitled to
claim payment under the promissory note (a)
from minor personally, (b) against his estate.
 Answer to Case.2
► (a) No
► (b) Yes(Sec.68)
 Case .3
► 3.M, a minor aged 17, broke his right arm
in a hockey game. He engaged a physician
to set it. Does the physician have a valid
claim for his services ?
 Answer to Case.3
► Yes, but it is only M’s estate which will be
liable(sec.68).
 Case.4
► A,an adult, said to M, a minor: “I will not
pay the commission I promised you for
selling my magazines. You are a minor and
cannot force me to pay.” Is A right?
 Answer to Case.4
► No.
A minor can be a beneficiary or a
promisee.