Minors Cannot Enter Legally Binding Sale Agreements

In a recent landmark judgment, the Supreme Court of India reaffirmed a longstanding legal principle: sale agreements entered into by minors are not enforceable under law. This decision, delivered in the case of Krishnaveni vs. M.A. Shagul Hameed & Anr., serves as a crucial reminder of the legal protections in place for minors and the importance of legal competence in forming binding contracts.

The case involved a minor who, along with their mother, entered into an agreement to purchase property. However, due to the minor's age, the sellers contested the agreement's validity and refused to fulfill their obligations. The lower courts, and subsequently the Supreme Court, upheld the sellers' position, declaring the agreement void ab initio. This legal term signifies that the agreement was never legally valid due to the minor's lack of legal capacity to form binding contracts.

The Supreme Court's decision is anchored in the fundamental principle of contractual competence. As per the Indian Contract Act, 1872, individuals below the legal age of majority are deemed incompetent to enter into binding contracts. This legal framework is established to protect minors from potentially unequal bargaining power and the financial or legal consequences of complex agreements they may not fully understand.

The Court's judgment also draws upon its earlier decision in Mathai Mathai vs. Joseph Mary (2015). In that case, the Court had clarified that even agreements seemingly advantageous to a minor are considered void if they are not represented by a legal guardian, such as a parent or court-appointed guardian. By citing this precedent and overruling older, conflicting judgments, the Supreme Court aimed to bring clarity and consistency to the legal landscape regarding contracts involving minors.

This judgment holds significant implications for various stakeholders. It serves as a crucial reminder for individuals, particularly those dealing with minors, that verifying age and legal capacity is essential before entering into any contracts. This protects both parties from potential legal issues and ensures that minors are not taken advantage of. Furthermore, the decision reinforces the importance of seeking legal guidance before entering into complex agreements, especially when minors are involved.