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CMA Foundation · Fundamentals of Business Laws and Business Communication · Capacity of Parties, Free Consent

Riya, a minor, enters into an agreement to sell her inherited plot to Mr. Sethi. After attaining majority she says she will treat the sale as binding and asks Sethi to pay. Which statement is correct as per the rule on minors' agreements taught for this exam?

The agreement stays void. A minor's agreement cannot be ratified after the minor attains majority because a void agreement cannot be validated later. Riya and Sethi would need to make a fresh contract with fresh consideration if they want a binding arrangement.

  1. ARatification after majority makes the agreement valid, because consent is free
  2. BSethi may enforce the agreement because Riya has now become competent
  3. CThe agreement remains void; a minor's agreement cannot be ratified on attaining majority, so a fresh contract with fresh consideration is neededCorrect
  4. DThe agreement becomes voidable at Sethi's option

Explanation

An agreement with a minor is void from the start, so there is nothing to ratify. Subsequent promise to be bound would lack consideration from the earlier past benefit, so a new agreement with fresh consideration is required. Voidability at Sethi's option is wrong as it is void, not voidable.

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