Example Ali and a minor wishes to start a business and for that they asked for

Example ali and a minor wishes to start a business

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Example: Ali and a minor wishes to start a business and for that they asked for a loan from Calve, Ali will solely be liable for the loan’s repayment. Minor and Negotiable Instruments A negotiable instrument is a document which guarantees the payment of a specific amount of money, at a specific time or on demand. A Negotiable Instrument cannot be considered invalid only for the reason that one of the parties is a minor. Hence, a minor can draw, support, negotiate and he can bind everybody except himself. However, a minor cannot make a promissory note or be a drawee of bill of exchange because a person must be capable of contracting for such an arrangement and these activities entail direct liability. Example: A minor drew a bill on Ayesha for $200 which had to be paid to Rafia, the contract is valid as a minor can draw a bill. Position of Minor ’s Parents Generally, the minor must have a parent or guardian consent to the contract in order for it to be legally binding. Hence, if a minor makes an agreement with consent of his parents, then they are liable to fulfill the obligation. Example: Hunaid made an agreement to sell his laptop without the parents consents, therefore he will not be liable and the agreement will be considered void. Surety for Minor The liability of the surety is co-extensive to that of the principal debtor and since the liability of minor to repay the debt is nil, so is the liability of the surety too. However, where the guarantor
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specifically knew that he was guaranteeing the debt of a minor, he remains bound i.e. he can be held liable. Example: Riya a minor want to get a loan from Siya, Diya guaranteed for Riya and Siya gave a loan. Therefore, Diya will be liable for the loan. Minor and Reimbursement If a person lends money or sells to minor on credit under a specific agreement but the minor refuses to agree after he receives the good or money, then he cannot be sued for such act and won’t be considered liable. Example: A minor sold his watch for $20, after receiving the money he refused to give the watch, the money cannot be claimed from the minor.
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