Mortgage in the name of Minor

As per the Contract Act, 1872, it is clearly stated that for an agreement to become a contract, the parties must be competent to contract, wherein age of majority is a condition for competency. A deed of mortgage is a contract and it cannot be held that a mortgage in the name of a minor is valid, simply because it in the interest of the minor unless he/she is represented by her natural guardian or guardian appointed by the Court. The law cannot be read differently for a minor who is a mortgagor and a minor who is a mortgagee as there are rights and liabilities in respect of the immovable property would flow out of such a contract on both of them. Mathai Mathai v. Joseph Mary, (2015) 5 SCC 622.

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1 Comment

Filed under Contract Law, Mortgage

One response to “Mortgage in the name of Minor

  1. Shipra Gupta

    This judgement has thrown away various previous decisions on minor’s contracts that have held such beneficial contracts to be enforceable at the instance of the minor provided no contractual liabilty was outstanding on his/her side. It would be interesting to assess the impact of this judgement on all beneficial contract that raises a big question mark on the enforceability of such contracts. This judgement is technically sound, but what about keeping up with the policy of law that seeks to protect the interest of the minor by making him/her incompetent to contract.

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