NATI

ONALUNI
VERSI
TYOFSTUDYANDRESEARCHI
NLAW

RESEARCHTOPI
C–COMPARI
SONBETWEENI
NDI
ANANDENGLI
SHCONTRACT

SUBMI
TTEDTO–MS.PRAGYAAI
SHWARYA

ASSI
STANTPROFESSOR,
LAW

N.
U.S.
R.L.
,RANCHI

SUBMI
TTED BY – HARSHI
T
PRASAD

ROLL NO. –
865

SECTI
ON-
A

1
 SEMESTER
–I

Unsoundnessofmi
ndi
ncont
ract
:Engl
i
shl
awv
s.I
ndi
anl
aw
Wr
it
tenby–Har
shi
t

Whenwest
udysomet
hingnewt
hef
oremostquer
ywhi
chst
ri
kesouri
ntel
l
ecti
swhy
weneedi
tandwhati
tsappl
i
cabi
l
ityi
sinourev
ery
dayl
i
fe.Sopr
iort
odi
scussi
onon
ourt
opi
cwemustknow t
her
ati
onal
ebehi
ndcont
ract
.Theessent
ialpur
poseof
cont
ractl
awi
stopr
ovi
deaf
ramewor
kwi
thi
nwhi
chi
ndi
vi
dual
scanf
reel
ycont
ract
.
Thewor
dfr
eel
ymeanst
hatt
her
eshoul
dbef
ullandf
reeconsentoft
hepar
ti
es.
Consentcanbef
reeonl
ywheni
tisr
ati
onal
anddel
i
ber
ate.Rat
ional
consentcanonl
y
begi
venwhenaper
soni
sofsoundmi
nd.Theaut
hort
hrought
hisar
ti
clewi
l
ltr
yto
doananal
ysi
sofr
oleofunsoundnessofmi
ndi
ncaseofcont
ractwi
tht
hehel
pof
st
atut
es,
casel
awsandj
udgement
swi
thr
espectt
oEngl
i
shandI
ndi
anl
aw.

Engl
i
shl
awv
s.I
ndi
anl
aw:
Ananal
ysi
s
Engl
i
shcont
ractl
aw i
sthekeysour
ceofi
tsI
ndi
ancount
erpar
t.Ev
ent
hent
her
eis
somedi
sti
nct
ionbet
weent
het
wo.Theaut
horwi
l
lfur
theri
nthi
sar
ti
clet
ryt
oanal
yse
t
hosedi
ssi
mil
ari
ti
es.
Whati
ssoundmi
ndf
ort
hepur
poseofcont
ract
ing?
UnderEngl
i
shl
awi
ndi
vi
dual
swhohav
ebeeni
dent
if
iedwi
thai
ntel
l
ect
uali
ncapaci
ty
ar
erest
ri
ctedf
rom ent
eri
ngi
ntocont
ract
s.Nowt
hequest
ioni
swhol
ackscapaci
ty
underEngl
i
shl
aw?
Aper
sonunderEngl
i
shl
awl
acksabi
l
ityi
nrel
ati
ont
oamat
teri
fatt
hemat
eri
alt
ime
hei
sunabl
etomakeaj
udgmentf
orhi
msel
finr
elat
iont
othemat
terbecauseofan
i
mpai
rmentof
,orahi
ndr
ancei
ntheexecut
ionof
,themi
ndorbr
ain.I
tisi
rr
elev
ant
1
whet
hert
hei
mpai
rmentordi
stur
bancei
sper
manentort
empor
ary.Aper
soncannot
bedecl
aredi
ncapabl
esi
mpl
yongr
oundsofageorappear
anceoront
hebasi
sofany
2
assumpt
ionswhi
chi
sresul
tofhi
sconduct.Aper
soni
sconsi
der
edasunabl
eto
makedeci
sionsf
orhi
msel
fifhef
ail
stounder
standt
hei
nfor
mat
ionsi
gni
fi
cantt
othe
deci
si
on,t
oret
aint
hati
nfor
mat
ion,t
omakeuseoft
hati
nfor
mat
ionf
ormaki
ngt
he
1
Ment
alCapaci
tyAct
,2005c9,
s.2
2
I
bid.

2
deci
si
on,
ort
ocommuni
cat
ehi
sdeci
sionbyt
alki
ng,
usi
ngsi
gnl
anguageoranyot
her
means3.Aper
soni
snotdecl
aredi
ncompet
entonl
yont
hegr
oundst
hathei
sabl
eto
keephol
doft
hei
nfor
mat
ionr
elev
antt
oadeci
sionf
orashor
tper
iod.

Thei
nfor
mat
ioni
nthi
scasei
ncl
udesi
nfor
mat
ionaboutt
her
easonabl
yant
ici
pat
ed
4
consequencesofdeci
dingonewayoranot
her
,orf
ail
i
ngt
omaket
hedeci
sion.
Nowl
et’
scomet
othedef
ini
ti
onofsoundmi
ndwi
thr
espectt
otheI
ndi
anCont
ract
l
aw.Accor
dingt
oIndi
anl
aw,
Aper
soni
ssai
dtobeofsoundmi
ndf
ort
hepur
posesofmaki
ngacont
ract
,if
,att
he
t
imewhenhemakesi
t,hei
scapabl
eofunder
standi
ngi
tandoff
ormi
ngar
ati
onal
5
j
udgmentas t
oit
s ef
fectupon hi
sint
erest
s. Mer
e weakness ofmi
nd i
s not
6
unsoundnessofmi
nd. Ment
ali
ncapaci
ty,ar
isi
ngoutofanyr
eason,depr
ivesa
per
sonnotonl
yofaf
ullunder
standi
ngoft
ransact
ion,
butal
sooft
heawar
enesst
hat
hedoesnotunder
standi
t.A per
sonofunsoundmi
ndi
sthusnotnecessar
il
ya
l
unat
ic.I
tissuf
fi
ci
enti
ftheper
soni
sincapabl
eofj
udgi
ngt
heconsequencesofhi
s
act nI
s.I nderSi
nghv
.Par
meshwar
dhar ngh7 j
iSi ust
iceSi
nhaexpl
ainedt
heef
fectof
sect
ion12i
nfol
l
owi
ngpassage:
“
Accor
dingt
othi
ssect
ion,
ther
efor
etheper
sonent
eri
ngi
ntot
hecont
ractmustbea
per
sonwhounder
standswhathei
sdoi
ngandi
sabl
etof
orm ar
ati
onalj
udgement
ast
owhet
herwhathei
saboutt
odoi
stohi
sint
erestornot
.Thecr
uci
alpoi
nt,
t
her
efor
e,i
stof
ind outwhet
herhei
sent
eri
ng i
ntot
hecont
ractaf
terhehas
under
stoodi
tandhasdeci
dedt
oent
eri
ntot
hatcont
ractaf
terf
ormi
ngar
ati
onal
j
udgementi
nregar
dto hi
sint
erest
….I
tdoesnotmeant
hatt
hemanmustbe
suf
fer
ingf
rom l
unacyt
odi
sabl
ehi
mfr
om ent
eri
ngi
ntoacont
ract
.Aper
sonmayt
o
al
lappear
ancesbehav
einanor
malf
ashi
on,but
,att
hesamet
ime,hemaybe
i
ncapabl
eoff
ormi
ngaj
udgementofhi
sown,
ast
owhet
hert
heacthei
saboutt
odo
i
stohi
sint
erestornot
.”
Thi
sdi
sti
ngui
shesi
tfr
om l
ackofabi
l
ityar
isi
ngduet
oil
l
iter
acyandunf
ami
l
iar
it
ywi
th

3
Ment
alCapaci
tyAct
,2005c9,
s.3
4
I
d.At1.
5
TheI
ndi
anCont
ractAct
,1872(
Act9of1872)
,s.
12
6
Kanhai
yal
alv
.Har
singLaxmanWanj
ari
,AI
R1944Nag232.
7
AI
R1957Pat491.

3
 8
l
anguage.

I
saper
sonofunsoundmi
ndcompet
entt
ocont
ract
?
I
ndi
anl
awhasadi
ff
erentopi
nionf
rom Engl
i
shl
awont
hisi
ssue.UnderEngl
i
shl
awa
per
sonofunsoundi
scompet
entt
ocont
ract
,al
thoughcont
ractcanbeav
oidedathi
s
opt
ioni
fhesat
isf
iest
hecour
tthathewasi
ncapabl
eofunder
standi
ngt
hecont
ract
andt
heot
herpar
tyhadt
heknowl
edgeoft
hesame.ThusunderEngl
i
shl
awcont
ract
i
svoi
dabl
eathi
sopt
ion.
9
I
tbecomesbi
ndi
ngonhi
m onl
yifheaf
fi
rmsi
t. I
nthi
scaseLor
dEshersai
dthata
ment
all
ydi
sor
der
edper
soncanonl
ysetasi
deacont
ractent
eredi
ntowi
thaper
son
ofsoundmi
ndi
nfol
l
owi
ngci
rcumst
ances:
“
Whenaper
sonent
ersi
ntoacont
ractandaf
ter
war
dsal
l
egest
hathewassoi
nsane
t
hathedi
dnotknowwhathewasdoi
ng,
andpr
ovest
heal
l
egat
ion,
thecont
racti
sas
bi
ndi
ngonhi
minev
eryr
espect
,whet
heri
tisexecut
oryorexecut
ed,asi
fhehad
beensanewhenhemadei
t,unl
esshecanpr
ovef
urt
hert
hatt
heper
sonwi
thwhom
hecont
ract
edknewhi
mtobesoi
nsaneasnott
obecapabl
eofunder
standi
ng,
what
i
twasabout
.”
Theposi
ti
onofEngl
i
shl
awi
ssamef
ordr
unkenpeopl
easi
tisf
oraper
sonwhoi
s
ment
all
yaf
fl
ict
ed;
suchcont
racti
snotal
toget
herv
oidbuti
svoi
dabl
eatt
heopt
ionof
t
heper
sonwhoent
eredi
ntot
hecont
racti
nsuchast
ateofdr
unkennessast
onot
10
knowwhathewasdoi
ngandsuchf
acti
sknownt
otheot
hercont
ract
ingpar
ty.
Ev
enunderEngl
i
shl
aw cont
ractbyal
unat
icper
soni
snotv
oi n Campbel
d.I lv.
11
Hooper wher
eamor
tgageesoughtadecr
eef
orr
epay
mentofdebtandev
idence
showedmor
tgagorwasl
unat
icwhencont
ract
edandi
naddi
ti
ont
oitmor
tgageewas
unawar
eofi
t.I
twashel
dthatmer
efactofl
unacycannotmakeacont
racti
nval
i
d.I
f
t
heot
herpar
tyhadknowl
edgeofi
t,i
tbecomesv
oidabl
eatt
heopt
ionoft
hel
unat
ic.
Thusi
tiscl
eart
hatunderEngl
i
shl
aw whati
smosti
mpor
tanti
sthatt
heot
her

8
Pol
l
ockAndMul
l
a,TheI
ndi
anCont
ractAndSpeci
fi
cRel
i
efAct
s(Lexi
sNexi
s,Gur
ugr
am,14t
hedn.
,
2013)

9
I
mper
ialLoanCov
.St
one,
(1892)1QB599(
CA)
.
10
Sur
reyv
.Gi
bson(
1845)13M&W 623.
11
(
1855)3Sm&G153.

4
per
sonwi
thwhom t
heper
sonofunsoundmancont
ract
edhadt
heknowl
edgeoft
he
ot
herpar
tybei
ngi
nunsoundst
ateofmi
ndornot
.
Ont
heot
herhandunderI
ndi
anl
aw aper
sonofunsoundmi
ndwheni
sst
ateof
unsoundnessi
snotcompet
entt
ocont
ract
.Theagr
eementofaper
sonofunsound
12
mi
ndi
svoi
d. Howev
er,aper
sonwhoi
susual
l
yofsoundmi
ndbutoccasi
onal
l
yof
unsoundmi
ndmaynotmakecont
ractwhenhei
sofunsoundmi
ndwher
easa
per
sonwhousual
l
yisofunsoundmi
ndbutsomet
imesbecomessoundcancont
ract
13
i
nthosei
nter
val
swhenhei
ssound. Themostr
elev
antt
hingf
ordecl
ari
ngan
agr
eementv
oidi
s whet
hert
he per
son i
n quest
ion was suf
fer
ing f
rom ment
al
14
di
sabi
l
ityont
hedat
eofexecut
ionoft
heagr
eement
.
I
ndi
aCont
ractl
awal
sot
reat
sadr
unkenper
sonsi
mil
art
oaper
sonofunsoundmi
nd.
15
nAshf
I aqQur
eshiv
.Ay
shaQur
eshi(
Niv
edi
taYadav
) aHi
ndugi
rlwasmar
ri
edt
oa
Musl
i
m man.Thegi
rlf
il
edasui
tont
hegr
oundst
hatshewasnoti
nhersenseasshe
wasunderi
ntoxi
cat
ionatt
hemat
eri
alt
imeandwasnotconsci
ousofongoi
ng
conv
ersi
onandni
kahcer
emony
.Andal
sot
hatshehadnotl
i
vedwi
tht
hatmanf
ora
si
ngl
eday
.Shepr
ovedal
lthest
atedf
act
sandt
hust
hemar
ri
agewasdecl
aredv
oid
ont
hegr
oundst
hatasshewasi
ntoxi
cat
edsoshewasnoti
naposi
ti
ont
otakea
deci
si
onsandf
ormi
ngar
ati
onal
judgementi
nregar
dtohi
sint
erest
.
Onwhom doest
hebur
denofpr
oofl
i
e?
I
nev
erycasei
nit
ial
l
ythepr
esumpt
ioni
sinf
avourofsani
tybutt
hepr
esenceor
absenceofi
tatt
het
imeofmaki
ngt
hecont
racti
saquest
ionoff
acti
nal
lcases.I
tis
i
mmat
eri
alt
hatt
heper
sonwasi
nsanei
napr
evi
ousorapostt
imeaf
tert
hepoi
ntof
t
imewhent
hecont
ractwasmadeexceptf
ori
tisl
i
kel
ytocr
eat
easuspi
cionof
16
l
i
kel
i
hoodofsuchdi
sor
deratt
het
imeoff
ormat
ionofcont
ract
. Theonusof
17
pr
ovi
ngi
nsani
tyi
sont
heper
sonwhoal
l
egesi
t. Itmustbepr
ovedt
hatt
hepoi
ntof
18
i
nsani
tywasatt
het
imeoff
ormat
ionofcont
ract
.
I
nthecasewher
eaper
soni
susual
l
yofunsoundmi
nd,
thebur
denofpr
ovi
ngt
hathe

12
Ami
naBi
biv
.sai
yi
dyusuf
,ILR(
1922)44Al
l748.
13
Supr
anot
e5at3.
14
Ni
l
imaGhoshv
.Har
jeetKaur
,AI
R2011Del
104.
15
AI
R2010chh58.
16
M’
Adam v
.Wal
ker
,(1813)1Dow148(
HL)
.
17
MahomedYakubv
.Abdul
Quddus,
AIR1923Pat187.
18
Lakshmiv
.Aj
ayKumar
,AI
R2006P&H77.

5
wasofsoundmi
ndatt
hatt
imel
i
esont
heper
sonwhoaf
fi
rmsi
t.Wher
eas,i
nthe
casewher
eaper
soni
susual
l
yinsoundst
ateofmi
ndt
hebur
denofpr
ovi
ngt
hathe
wasi
nunsoundst
ateofmi
ndl
i
esupont
heper
sonwhochal
l
engest
hev
ali
dit
yoft
he
19
cont
ract
.
Howev
eri
ncaseofdr
unkennessorot
hercause,t
heonusl
i
esonpar
tywhoset
sup
t
hatdi
sabi
l
ityt
opr
ovet
hati
texi
stedatt
het
imeoft
hecont
ractandi
thast
obe
pr
ovedt
hatt
hepar
tywassodr
unkast
ounabl
etocompr
ehendt
hemeani
ngand
ef
fect
sofanagr
eement
,and,undert
heEngl
i
shl
aw al
sot
hatt
heot
herpar
tywas
20
awar
eofhi
scondi
ti
on.
Concl
usi
on
Asgoi
ngt
hrought
hisr
esear
chwor
kiti
sest
abl
i
shedt
hatI
ndi
ancont
ractl
aw i
s
heav
il
ybor
rowed f
rom i
tsEngl
i
sh count
erpar
tbutbot
h di
ff
eri
n someaspect
s
howev
er,
theEngl
i
shmodelseemst
ohav
eawi
derambi
tascompar
edt
otheEngl
i
sh
Cont
ractl
aw.

REFERENCES
Pr
imar
ysour
ces
 Ment
alCapaci
tyAct
,2005c9
 TheI
ndi
anCont
ractAct
,1872(
Act9of1872)
Secondar
ysour
ce
 DRAv
tarSi
ngh,LawofCont
ractAndSpeci
fi
cRel
i
ef(
East
ernBookCompany
,
Lucknow,
12t
hedn.
,2017)
 Pol
l
ockAndMul
l
a,TheI
ndi
anCont
ractAndSpeci
fi
cRel
i
efAct
s(Lexi
sNexi
s,
Gur
ugr
am,
14t
hedn.
,2013)
 Manupat
ra
 SCCOnl
i
ne

19
Mohanl
alMadangopalMar
wadiv
.sadasheosonak,
AIR1941Nag251.
20
Cookev
.Cl
aywor
th,
34ER222.