Tag: Estoppel

Who Can Enter Into A Contract? | Capacity To Contract

Law

April 18, 2022
/ Leave a Comment on Who Can Enter Into A Contract? | Capacity To Contract

5 min
2 years
849 words

Tagged Beneficial contract, Capacity to contract, Contract, Estoppel, Minor

Who Can Enter Into A Contract? | Capacity To Contract

The ability of the parties to contract is the Capacity to contract. It fundamentally means the competency of the parties to deal.

Keyword : Minor, Contract, Estoppel, Tort, Restitution, Beneficial contract, Unsound Mind, English Common Law.

Author: Sonali Singh

Edited By: Sharon Paul

Introduction

A contract is defined under Section 2(h) of the Indian Contracts Act, 1872 as a legally binding arrangement. The Act’s Section – 10 lays forth the conditions that must be met for the agreement to be enforceable. The ability of the parties to contract is one such requirement. Capacity to contract fundamentally means the competency of the parties to deal. Section 11 of the Act lists the people qualified to engage in a contract. Every person of legal age, of sane mind and un-disqualified by the law of which s/he is subject, is qualified.

In a nutshell, minors, those of unsound minds, and people barred by law from contracting are incompetent. The ability to contract is crucial, as its absence renders the agreements null and void.

MINOR

In India, the age of the majority is 18 years. When a guardian is appointed for a minor person and his/her property, the minor must be below 18 years old. Neither Section 10 nor Section 11 specify whether the consequence of the minor’s agreement is null or void. However, a landmark judgement took place in Mohiri Biwi vs. Damodardas Ghosh’s case. The judicial committee decreed that the agreement with juvenile was void due to lack of contractual responsibility on both sides. The council reasoned that a child’s poor judgement could lead to a contract that is harmful to the child’s interests. As a result, declaring the minor’s agreement void may be the best option for him.

Effects Of Minors’ Contracts

a. No estoppel against a minor:

A minor is not barred from raising the defence of infancy. The objective of contract law is to protect minors from contractual liability. Therefore, the doctrine of estoppel, of course, cannot be used to oppose that policy.

b. No tort liability stemming from the contract:

Because of his inability to grant permission, a minor’s agreement has no legal consequences. As a result, a minor cannot be held liable for that is construed as indirect means of enforcing his agreement. As a result, if a tort is closely related to a contract, minor will not be held accountable in tort. This happens because fulfilling the contract would be tantamount to suing a new-born. Burnard versus Haggis (1863) asserted, if the tort is unrelated, the minor is not absolved by involvement of a contract.

c. The doctrine of restitution

The doctrine of restitution was first established in the case of Leslie vs. Shell. Here, an infant deceived money lenders by lying about his age and borrowed 400 euros claiming to be an adult. Decision entailed that only goods/property (not cash) could be returned, obtained by deceiving, if any found in his possession. Because the lawsuit included money, the plaintiff’s attempt to recover money from the child was unsuccessful.

The Chief Justice extended the above principle to monetary matters in the case of Khan Gul vs. Lakha Singh. The defendant, a minor, fraudulently concealed his age, contracted to sell land. After taking an amount of Rs. 17500 from the plaintiff, refused to perform his part of the obligation. The Chief Justice held the minor liable to refund the consideration. Finally, the Law Commission of India included the notion of restitution in Specific Relief Act 1963 by adopting Section 33. This states that minors may be asked to restore the benefits gained during the contract to the degree they benefited.

Beneficial Contract: A contract is made for the advantage of a minor and the he/she bears no obligations towards contracts. Therefore, the minor may enforce the contract as long as suitable to his/her interests. Minors have the right to seek restitution. For example: a contract for marriage, apprenticeship, etc.

It is to be noted, that a minor cannot ratify an agreement made in his minor years, when he reaches

A Person with an Unsound Mind

The idea of a sound mind to contract is defined in Section 12 of the Act. A person capable of understanding and making logical decisions regarding the contract, is considered as a person of sound mind. Person of usually sound and occasionally unsound mind (and vice versa), shall not engage in a contract if unsound at that time.

We can use the example of a patient in a mental institution to better grasp the above proposition. Similarly, a drunk person unable to make reasonable decisions or comprehend the contract is incapable of contracting until inebriation subsides. In Indian Law (unlike English law, where such agreements are voidable), agreements with mentally ill people are void.

Conclusion

While Indian Contract Law originates from English Law, the interpretations and positions of both differ on various points, as highlighted. Precisely, English law is clearer, for interpretations are codified and grey areas are not to be filled by judicial decisions.

Finally, the English Common Law demonstrates a broader scope by dealing with unsoundness under incapacity. This covers public corporations, minorities, and those who are inebriated or mentally ill.

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Doctrine of Estoppel : Meaning, Definition and Kinds

Law

December 11, 2020
/ Leave a Comment on Doctrine of Estoppel : Meaning, Definition and Kinds

4 min
3 years
791 words

Tagged Doctrine, Estoppel, Evidence Law, Law of Evidence

Doctrine of Estoppel : Meaning, Definition and Kinds

Meaning of Estoppel The word “Estoppel” came from the French word ‘estouper’. Estoupe means to stop. In law, this term has been taken from English Jurisprudence to shut the mouth of a person who claimed […]

Meaning of Estoppel

The word “Estoppel” came from the French word ‘estouper’. Estoupe means to stop.

In law, this term has been taken from English Jurisprudence to shut the mouth of a person who claimed or pleaded or spoke or acted upon the truth in one previous occasion and tries to avoid or evade his allegation or pleading or speech or action with an ill intention.

Maxim

It is based on the maxim “Allegans contraria non-est audiendus” it means a person claiming that contradictory facts should not be heard.

Definition

According to Hulsbury’s Laws of England,

“An Estoppel is said to be there when a party is not allowed to say that a certain statement of fact is untrue, whether it’s in reality or not.”

Section 115 of the Indian Evidence Act:

When one person,

By his declaration or act or omission
Intentionally causes or permits another person to believe that a thing is true and to act upon such belief,
Neither he nor his representative is allowed in any lawsuit or proceedings between himself and such person or his representative,
To deny the truth of that thing.

Example:

Malang intentionally and falsely leads Jalan to believe that a specific House belongs to him. Malang induces Jalan to buy that house and pay for it. The house, later on, becomes the property of Malang, he sets aside the sale on the ground that, at the time of sale he had no title.

Malang must not be allowed to prove his want of title.

When one person by his conduct or words wilfully causes another one to believe in the existence of a certain state of things, the former is refrained from averring against the latter a different state of thing as existing of that time[ Pickard v. Sears].

Scope of Estoppel

Following conditions must be satisfied to bring a case under the scope of Estoppel:

The representation made by the person or his representative in any form

The representation must be of existence of fact. The misrepresentation must not be of promises or intention.
The representation should be such a way as if it was meant to rely upon it.
There must be a belief on the part of the other party in its truth.
Action on the faith of that declaration/act/omission.
Representation should be the proximate cause of leading the other party to act to his disadvantage.
The person asking for the benefit of an Estoppel must show that he was not aware of the real state of things.
The person for whom the representation was meant only that person can avail the doctrine of Estoppel for himself.

Kinds of Estoppel

Estoppel by a matter of record:

When a person is not allowed to dispute over the facts by which the judgement against him is going to be based on, it is called Estoppel by a matter of record.

Estoppel by deed:

When a party enters into a formal agreement by deed due to some specific facts, neither he nor his representative is allowed to deny those facts; this is called Estoppel by deed.

Estoppel by conduct:

If a man, either by words or by his conduct, has implied that he consents to an act which has been done and that he would not offer any objection to it, although it could not have been lawfully done without his consent and he persuaded others to do that from which they otherwise might have restrained from doing, he cannot question the legality of the act to the prejudice of those who have so given faith to his words, or to the fair conclusion to be drawn from his conduct.

Equitable Estoppel:

When a person tries to take a legal action that would conflict with his previously given statements, claims or acts, the court will prohibit him from doing so as the rule of equity does not permit.

Promissory Estoppel

When one party, by his words or conduct makes a legally binding promise to another party, and if the other party has acted upon those words or actions, the one who made the promise or gave assurance cannot revert to his previous position. It is called Promissory Estoppel.

Estoppel by negligence

The Estoppel which enables a party to go against the other party to claim a right of property which he does not possess, then it is called Estoppel by Negligence.

Estoppel on the viewpoint of law

There can be no estoppels on the point of law as the purpose of it is to create equity and not for the facility for inequity.

No Estoppel against statute:

There is no Estoppel against the act of the legislature.

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