Section 68 of the Indian Contract Act: Minor’s Liability for Necessary Goods

Anirud Raghav S U |

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Section 68 is classified under the Chapter V of the Indian Contract Act entitled “of certain relations resembling those created by contract”. Much controversy surrounds whether “quasi contracts” is an appropriate expression. In brief, the history of quasi-contracts suggests that the common law world wrestled with the idea of quasi-contracts, which featured situations where obligations did not arise from contract. For the longest time, assumpsit actions (on which contractual claims were grounded) relied on the idea of a request, a contractual concept (analogous to the modern “offer”).[1] Yet, certain sitautions emerged where there was no explicit request; yet, equity demanded that certain sums be returned, or payments made. It is this conundrum that initially manifested in Courts engaging in theoretical acrobatics—and thus came the “implied request” form of action, within the realm of assumpsits.[2] It is only when the common law world migrated from the rigidity of assumpsit actions that the scholarly world had a chance to doctrinally distinguish the different types of obligations arising at contract, and those arising at equity (i.e., quasi contract).

This will be the first piece in what will hopefully be a longer series of pieces that address the doctrines and development of quasi-contract law in India, and its relationship to ordinary contract law.

I.             SECTION 68 AND 'NECESSARY' GOODS IN INDIAN LAW

Section 68 provides that any supplier of necessaries to a person incompetent to contract is entitled to be reimbursed from the latter’s property. This rule is understood as an ‘exception’ to the rule that infants are incapable of contracting (see Ryder v. Woombell (1868) L.R. 3 Exch, 90).

It is well settled that there is no straitjacket rule for determining which articles qualify as ‘necessaries’. This is a mixed question of law and fact[3] to be assessed on a case by case basis.[4] The Indian standard for assessing a ‘necessary’ has borrowed from English law, particularly from Parke B’s illuminating dictum in Peter v. Fleming (1840) 6 M. & W. 42 at 46: ‘the word 'necessaries' is not confined in its strict sense to such articles as were necessary to support life, but extended to articles fit to maintain the particular person in the state, degree and station in life in which he is’. Typically, in judging the character of a necessary, English courts have also had regard to the minor’s station in life, and the extent of necessaries he already had access to.[5] Some courts have held that the provision is meant to benefit the infant, not the supplier, because it allows the infant to contract for necessaries for his benefit (see Ryder v. Woombell (1868) L.R. 3 Exch, 90: 4 Exch. 32, 38.) However, scholars opine that the broad construction of ‘necessity’ also serves to protect the supplier, who now has an extended pool from which he can recover payment who made on credit.[6] 

The most significant decision on s.68 comes by way of a Calcutta High Court decision in Jagon Ram Marwari v. Mahadeo Prosad Sahu. In this case, the plaintiffs had supplied certain articles to the defendant closely following the latter’s marriage. They then sought to recover the economic equivalent of such articles. The defendant resisted the claim on the ground that he received the articles when he was a minor, and that contracts with minors are illegal. This engendered the court’s discussion on necessaries, which was the Court held was an exception to the rule that minors lack the capacity to contract. In elaborating the principles, the Court approvingly cited various common law judgments on the area, including Peter v. Fleming and Ryder v. Woombell. The main facets of the decision can be summarized as follows: one, necessity is a mixed question of law and fact. Two, the guiding standard for determining a necessary is that it must maintain the infant’s state, degree and station in life, and must not merely be necessary for his bare sustenance. In making such a determination, the peculiar circumstances of the infant shall bear consideration, such as the circumstances of purchase of the article and the use to whcih it is put. Three, the burden of proving that the articles were necessary is on the supplier. However, where special circumstances exist within the knowledge of the infant himself, which render the articles not necessary, he may be called upon to prove them.

Relatedly, some other questions of law have arisen in the Indian context. Could a guardian contract on behalf of the minor for the supply of necessaries? It is necessary to state the prior proposition that a guardian cannot enter into a covenant that binds the minor in his personal capacity (see: Waghela Rajsanji v. Shekh Masludin, 11 Bom. 551; Indur Chunder Singh v. Radhakrishore Ghose 19 Cal. 507). However, if the guardian covenants for the supply of necessaries to the minor, such a contract is enforceable. The Bombay High Court in a case holds the guardian is entitled to make such contracts with third parties for the benefit of minors, and that the benefiting minors will be liable to return the value of necessaries from his estate ( see Raj Rani v. Prem Adib, 1948 SCC OnLine Bom 92 [40]; a similar holding features in the common law case of Roberts v. Gray [1913] 1 K.B. 520. Another comprehensive decision is the Calcutta High Court case of Bhawal Sahu v. Baij Nath Pertab Narain Singh (1907 SCC OnLine Cal 174) where the court held:

a guardian cannot bind his ward personally by a simple contract debt, by a covenant, or by any promise to pay money or damages, but that broad proposition is subject to the modification that the promise will not bind the minor unless it has been made merely to keep alive a debt for which the ward's property was liable. Where the promise is to pay money which has been expended for necessaries the estate of the minor may be liable not on the promise but because the money has been supplied.

It is also to be noted that the minors will only be liable to reimburse to the extent of the necessary supplied (see Ananta Krishna Shastri v. Prayag Das, 1935 SCC OnLine Cal 292).

II.            BASIS OF MINIR'S LIABILITY AND s.68

A)   Why does it matter?

The old debate from English law was on the question of whether the basis of minor’s liability to reimburse for necessaries supplied was contractual or quasi contractual. More practical-minded readers would ask why this distinction matters. Asking this question will unravel some conceptual concerns. Consider what Cheshire & Fifoot say about why the distinction matters:

The question whether a minor is liable on an executory contract for necessaries depends upon which of these two theories is correct. If his obligation arises re (i.e. at quasi contract) and is non-existent in the absence of delivery, he clearly cannot be liable for goods not actually supplied, and presumably his refusal of them when tendered is justifiable. A learned writer on the subject failed to find a single case where liability has been established in the absence of delivery, and it is probably safe to assume that in the case of goods the second theory is correct and that an executory contract is unenforceable.

In saying this, he suggests two propositions. First, that if the basis of minor’s liability is quasi-contractual, then where the goods are never delivered, there would be no liability to pay. This is a fairly uncontroversial proposition. But second, what would be the case if the basis is contractual? The authors do not complete their line of thought. Reading the first line would make one think that things would be different if there was a contract for supply of necessaries. Are we then to think that even where there is no delivery, the minor would be liable to pay? Surely, this would run contrary to common sense. The only way that this could be so is if the minor’s liability to pay is independent of the supplier’s obligation to deliver the goods. But this type of a contract hardly seems realistic. At first blush, no reasonable minor will agree to a non-contingent obligation to make a payment even though the supplier does not deliver the necessaries.

The choice of words is also interesting: “whether a minor is liable on an executory contract for necessaries”. The words “executory contract” squarely places the discussion within the realm of contract already. In my reading, the choice of words suggest that minors would indeed be liable only on (executory) contract; and not in quasi-contracts. But this entire question only arises where we are given to understand that there is no delivery. So, under quasi contract, it is fairly straightforward that no liability exists, since there is no benefit or enrichment. But under contract, am I to pay pursuant to an executory obligation even if there is no delivery? Cheshire & Fifoot’s choice of words here would suggest that they are. As mentioned above, much would turn on how the contract itself is phrased—particularly, whether it obliges the minor to pay even if the supplier does not deliver.

Aside from this, the distinction would matter in determining the contract formation factors under the Indian Contract Act. In other words, factors required for a valid contract would need to be met. These include free consent and capacity. The question of capacity would be, as explored in greater detail below, a thorny one—but the judicial approach has been to treat s.68 contracts as exceptions to s.11’s rule that minors are not capable of contracting. Moreover, other vitiating factors like mistakes, duress, misrepresentation and fraud would still bear on determining the validity of the contract.

B)   The Debate in Common Law

The origins of this debate, as noted by leading scholars,[7] was with Buckley LJ’s dictum Nash v. Inman where he states:

the plaintiff ‘when he sues the defendant for goods supplied during infancy, is suing him in contract on the footing that the contract was such as the infant, notwithstanding infancy, could make.’

This contractual origin theory was further solidified with the judgment in Robert v. Gray, where Hamilton J. held that a contract for necessaries will not cease to be binding simply because it is executory.[8] This decision was highly criticized,[9] and if anything, could only be taken as implicitly supporting the idea that the liability is contractual because an executory quasi-contractual liability seems ‘hardly conceivable’.[10] The contractual camp would then be further solidified by the decision in Doyle v. White City Stadium Ltd [1935] 1 KB 110. The opposing, quasi-contractual camp was first heralded in the case of Rhodes v Rhodes (44 Ch. D. 94, at 107)whereby Lindley LJ believed that such obligations of repayment on the part of incapacitated persons (discussing in the context of a lunatic) was ‘an obligation implied by law which is not a contract at law. This would then go on to be reaffirmed in Fletcher Moulton LJ’s dictum in Nash v. Inman [1908] 2 KB 1.

An infant, like a lunatic, is incapable of making a contract of purchase in the strict sense of the words; but if a man satisfies the needs of the infant or lunatic by supplying to him necessaries, the law will imply an obligation to repay him for the services so rendered, and will enforce that obligation against the estate of the infant or lunatic. The consequence is that the basis of the action is hardly contract. Its real foundation is an obligation which the law imposes on the infant to make a fair payment in respect of needs satisfied.

It is interesting to note that the decision in Rhodes precedes both Nash v. Inman and Robert v. Gray, which means that the quasi-contractual conception of liability emerged first. Some scholars contend that even today, the question of basis has not been satisfactorily settled.[11]

C)   Does Indian Law resolve the problem?

Does Indian law implicitly resolve this troublesome knot in English law and commit to the quasi-contractual view? Potentially, it could be argued that the very use of the term ‘quasi contract’ in Indian law is fallacious, since most developments in the common law arena on quasi contracts have taken place after the enactment of the ICA itself. However, this is debatable, given that Moses v. Macfarlane in passing references ‘quasi ex contractu’. Nonetheless, it is not to be doubted that the chapter deals with relations – and attendant obligations – not arising from contract, but simply resembling those that do. Hence, strictly speaking, these are not relations that arise from contract, but those that are imposed by law. This being so, the debate would still be open in Indian law – does the liability of reimbursement have a contractual basis or a non-contractual, potentially quasi-contractual basis? It appears that a stronger case can be made that the basis is a non-contractual, and potentially quasi contractual.

The choice to classify the provision under Chapter V (titled ‘of certain relations resembling those created by contract’) seems to suggest that it was a commitment to the view that the basis of liability is non-contractual, even if not precisely quasi contractual as we now know it. This is especially so, because it was perfectly open to the draftsmen to make the minor’s ability to contract for necessaries an exception under s.11, to the rule that minors cannot ordinarily contract. Had this been done, one could make the argument that the origins of this rule, and thus the liability of repayment, is contractual and not quasi-contractual. However, this is not so; consequently, a non-contractual conception holds more purchase.

Remarkably, the major origins of this debate on the nature of the liability only began at around 1890s with the decision in Rhodes v. Rhodes, much after the promulgation of the ICA in 1872.[12] For the reasons mentioned above, it would be incorrect to attribute the classification of s.68 under Chapter V to drafting ingenuity. Despite this, one could argue that the classification had some degree of clarificatory potential as to the basis of liability being quasi-contractual.

Regardless, whatever tentative clarificatory potential existed was extinguished by judicial decisions. These decisions have effectively imported the conceptual ambiguity that hounded common law, by implicitly relying on the idea of a contractual basis of liability. A prime example is the decision in Jagon Ram Marwari, where the Calcutta High Court cites English precedents, holding that the rule on supply of necessaries is an ‘exception’ to the rule that minors cannot contract. This implies that the supply of necessaries to the minor is a contractual transaction. This undermines the idea that s.68 is of quasi-contractual origins and bolsters the conclusion that the law on the subject is still unsettled as of today.

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[1] J.B. Ames, ‘The History of Assumpsit. I. Express Assumpsit’ (1888) 2 Harvard Law Review 1.

[2] J.B. Ames, ‘The History of Assumpsit. II. Implied Assumpsit’ (1888) 2 Harvard Law Review 53.

[3] Sir Jack Beatson, Andrew Burrows & John Cartwright, Anson’s Law of Contract (29th ed, OUP 2010), 234.; Edwin Peel, Treitel: The Law of Contract (14th ed., Sweet & Maxwell 2015) 12-006.

[4] Ryder v. Woombell (1868) L.R. 3 Exch, 90: 4 Exch. 32, 38.

[5] Sir Jack Beatson, Andrew Burrows & John Cartwright, Anson’s Law of Contract (OUP 2010, 29th ed.) 234.

[6] Edwin Peel, Treitel: The Law of Contract (14th ed., Sweet & Maxwell 2015) 12-006.

[7] Cheshire, John D. McCamus, 'Restitution of Benefits Conferred under Minors' Contracts' (1979) 28 UNBLJ 89, 97.

[8] Roberts v. Gray [1913] 1 K.B. 520.

[9] John C. Miles, 'The Infant's Liability for Necessaries' (1927) 43 L Q Rev 389, 391; John D. McCamus, 'Restitution of Benefits Conferred under Minors' Contracts' (1979) 28 UNBLJ 89, 97.

[10] John C. Miles, 'The Infant's Liability for Necessaries' (1927) 43 L Q Rev 389, 391.

[11] Michael Furmston, Cheshire Fifoot & Furmston’s Law of Contract (16th ed, OUP 2012) 540; John D. McCamus, 'Restitution of Benefits Conferred under Minors' Contracts' (1979) 28 UNBLJ 89, 96.

[12] One could argue that the seeds of the discussion began almost a decade back in 1882 with the inconclusive decision In re Weaver., (1882) 21 Ch.D. 615, in response to which Lindell LJ makes his quoted dictum. In any case, this is still a decade after the enactment of the ICA, and the argument made stands.

Further reading:

1.     John C. Miles, 'The Infant's Liability for Necessaries' (1927) 43 L Q Rev 389, 391.

2.     John D. McCamus, 'Restitution of Benefits Conferred under Minors' Contracts' (1979) 28 UNBLJ 89.

3.     Steven Wolfe, 'A Reevaluation of the Contractual Rights of Minors' (1988) 57 UMKC L Rev 145.