Indian contract act, 1872
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CAPACITY TO CONTRACT
Meaning: Capacity refers to the competence of the parties to make a contract. It is one of the essential element to form a valid contract. Who is competent to contract (Section 11) . "Every person is competent to contract who is of the age of majority according to the law to which he is subject, and who is of sound mind and is not disquali ed from contracting by any law to which he is subject"
This section deals with personal capacity of three types of individuals only Every person is competent to contract who- (A) has attained the age of majority (B) is of sound mind and (C) is not disquali ed from contracting by any law to which he is subject.
(A) Age of Majority: In India, the age of majority is regulated by the Indian Majority Act, 1875: Every person domiciled in India shal attain the age of majority on the completion of 18 years of age and not before. The age of majority being 18 years, a person less than that age even by a day would be minor for the purpose of contracting. Law relating to Minor's agreement/Position of Minor 1. A contract made with or by a minor is void ab-initio: 2. No ratification after attaining majority: Minor can be a bene ciary or can take bene t out of a contract: Though a minor is not competent to contract, nothing in the Contract Act prevents him from making the other party bound to the minor. 4. A minor can always plead minority
5. Liability for necessaries: The case of necessaries supplied to a minor or to any other person whom such minor is legally bound. A claim for necessaries supplied to a minor is enforceable by law. There is no personal liability of the minor, but only his property is liable. To render minor's estate liable for necessaries two conditions must be satis ed () The contract must be for the goods reasonably necessary for his support in the station in life. (ii) The minor must not have already a su cient supply of these necessaries. Necessaries mean those things that are essentially needed by a minor. They cannot include luxuries or costly or unnecessary articles.
6. Contract by guardian - how far enforceable 7. No specific performance: 8. No insolvency 9 Partnership 10. Minor can be a agent
(B) Person of sound mind:"a person is said to be of sound mind for the purposes of making a contract if, at the time when he makes it is capable of understanding it and of forming a rational judgement as to its e ect upon his interests." >A person who is usually of unsound mind, but occasionally of sound mind, may make a contract when he is of sound mind. A person who is usually of sound mind, but occasionally of unsound mind, may not make a contract when he is of unsound mind.
. Example 1: A patient in a lunatic asylum, who is at intervals, of sound mind, may contract during those intervals. Position of unsound mind person making a contract: A contract by a person who is not of sound mind is void
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