Special Contract Act

1. Mohori Bibee v. Dharmodas Ghose (1903):

• The legality of a contract involving a minor was decided by the Privy Council in the case of Mohori Bibee v. Dharmodas Ghose (1903). Mohori Bibee obtained a loan from Dharmodas Ghose, a minor, who mortgaged his property. When Dharmodas grew up, he attempted to break the agreement and get his belongings back, claiming that he was not old enough to make a legally binding agreement.
• The Privy Council ruled that the minor might choose to cancel the contract. They stressed that kids are not legally able to engage in contracts and are legally shielded from being held to agreements they made before becoming adults. Dharmodas therefore had the right, once he reached age, to renounce the agreement and reclaim his belongings.
• The notion that special contract act signed by minors are voidable—that is, they can be revoked or affirmed by the child before they become an adult—was established by this seminal decision. It established an important precedent for the enforceability of special contract act involving children and confirmed the legal protections granted to them under contract law.

2. Nash v. Inman (1908):

• The court reviewed a special contract act for the sale of clothing to a minor university student in the case of Nash v. Inman (1908). Mr. Inman, the student, had received clothes on credit from Mr. Nash, a tailor. Mr. Inman, however, declined to pay for the clothing, claiming that he was not legally responsible for payment since he was a child at the time the special contract act was made.
• The court determined that the special contract act was for necessities and decided in favour of Mr Nash, the tailor. They concluded that Mr. Inman’s garments from Mr. Nash were vital or required items for him since they fit his situation as a university student. Consequently, even though Mr. Inman was underage at the time of the transaction, he was held accountable for paying a fair price for the clothing.
• The notion that contracts for necessities are an exception to the general rule that contracts with minors are voidable was established by this case. It made clear that necessities—items or services appropriate for their current living situation and necessary for their support—may be held accountable for minors. The Nash v. Inman decision offered guidelines for figuring out whether contracts with minors are enforceable in particular situations when necessities are involved.

3. Mohammad Ali v. Mohammad Ibrahim (1930): 

• In the 1930 case of Muhammad Ali v. Muhammad Ibrahim, the court looked into a contract that an insane individual had signed. Muhammad Ibrahim, who then attempted to execute the agreement, had given money to Muhammad Ali.
• The court decided that parties may choose to nullify contracts they entered into with mentally incompetent parties. They stressed that a person cannot be legally bound by a contract if they are mentally incapable of understanding its contents. Consequently, it was decided that the contract in question was voidable, and Muhammad Ibrahim was unable to use it as leverage against Mohammad Ali.
• This decision upheld the general rule that agreements made by mentally incompetent people are voidable, meaning that the party that is impacted by them may annul them. It emphasized how crucial it is to guarantee that, for a contract to be legitimate and enforceable, each party must be able to comprehend its contents and provide their assent.

4. Firm Bhagwandas v. Firm Ishwardas (1958):

• The court examined a contract between two businesses in the 1958 case of Firm Bhagwandas v. Firm Ishwardas, where one of the firms was represented by a partner who was legally disqualified because of insolvency. Whether the agreement signed by the bankrupt partner was lawful and enforceable was the question at hand.
• The court decided that agreements made by those who are not eligible to engage in contracts, such as insolvents, are usually null and invalid. They underlined that people cannot bind their companies or other parties to contracts if they are legally prohibited from doing so. As a result, the contract in question—which was signed by a disqualified partner—was declared null and invalid against the company that the bankrupt partner was representing.
• This case brought to light the rule that agreements made by those who are legally ineligible are null and invalid and that the parties to them cannot be held legally liable. It emphasized how crucial it is to confirm that all parties to a contract are legally allowed to enter into enforceable agreements for the contract to be deemed genuine.

5. Madhusudan Gordhandas v. Madhu Woollen Industries (1971):

• A contract of restriction of commerce was addressed by the court in Madhusudan Gordhandas v. Madhu Woollen Industries (1971). Madhusudan Gordhandas, the plaintiff, sold his firm to Madhu Woollen Industries, the defendant, by a contract that prohibited Madhusudan from operating a rival company for a predetermined amount of time within a given territory.
• Contracts that unfairly restrict commerce are deemed invalid by the court because they violate public policy. They stressed that contracts that unnecessarily limit someone’s capacity to practise their trade or profession are unlawful since they harm free competition.
• The court determined that the restraint of trade provision, in this case, was unfair and too wide since it prevented Madhusudan from doing any competitive business for a long length of time throughout a sizable geographic region. The provision was declared unlawful and unenforceable by the court as a result.
• The 1971 case Madhusudan Gordhandas v. Madhu Woollen Industries upheld the rule that contracts imposing unreasonable trade restrictions are null and unenforceable. It emphasized how crucial it is to make sure that these contracts strike a fair balance between upholding free competition and safeguarding legal corporate interests.