CAPACITY TO CONTRACT CAPACITY = COMPETENCE Sec.

11: Competent parties [Major, Of Sound Mind, Not disqualified under any law- Director under Companies Act] i) MINOR’S AGREEMENTS Void and inoperative ab initio: Minor mortgaging his property and taking advance. The mortgage is not enforceable. Advance money can not be recovered. ii) He can be a promisee or beneficiary (he can enforce at his option): X promises to sell his watch to a minor for Rs.500. The minor can enforce this agreement. iii) Can not be ratified at attaining majority: Consideration of earlier contract cannot be implied into the new contract. Fresh contract with fresh consideration is possible. Ex- A new pronote in discharge of old pronote is not possible. iv) Benefit received under a void agreement cannot be refunded from a minor: Even in case of fraudulent representation. Even right to damage is not there for the other party. However, the court may direct restoring of money or property obtained on grounds of equity provided it is traceable. v) Always plead minority (tracing order for things in specie is possible) vi) He cannot enter into a contract of partnership, can be admitted to the benefit of existing partnership vii) Can not be adjudged insolvent viii) Can be an agent ix) His parents / guardians are not liable for contracts entered into by him.

MINOR’S LIABILITY FOR NECESSARIES: - goods / services Liable to pay out of his property for necessaries supplied to him (Only the property is liable, not personally) What is necessary goods/ services? : A wedding ring might be a necessity, but not a vanity bag for fiancee. Loan for necessaries is also recoverable. PERSONS OF UNSOUND MIND The presumption is in favour of sanity. The burden of proving insanity is not on the prosecution. Who can understand the content and form a rational judgment about the impact of the contract on his interest when it is made. Lunatic: Periodical insanity (can enter into a contract when sane) Idiot: (completely lost his mental power: void contract) Drunken / Intoxicated persons: (similar to lunatic) Agreements entered into by persons of unsound mind are void. Exception: Their estate is liable for necessities supplied to them or their minor dependents.

then dissolved) 2. Contracts before war . Insolvent: Only his official receiver or assignee can enter into contract relating to his property / can sue or be sued on his behalf. Alien enemies: Contracts during war are not possible. 3.suspended or dissolved (if against public policy and would benefit the enemy.OTHER PERSONS 1. Convicts: Incapacitated when undergoing imprisonment unless licensed to hold ticket of leave ******************* .

Sign up to vote on this title
UsefulNot useful