Scribd Logo
Upload

Welcome to Scribd!

  • Chapter 4 Capacity of Parties

    Uploaded by

    FINGER GAMING YT
    10 views6 pages

    Original Title

    chapter 4 capacity of parties

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    10 views6 pages

    Chapter 4 Capacity of Parties

    Uploaded by

    FINGER GAMING YT

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    of 6
    KISALAY COMMERCE CLASSES BUSINESS LAW 18.COM. PARTI [| CHAPTER - 4 _CHAPTER - 4 t | | Mh CAPACITY OF PARTIES #1 INTRODUCTION Parties entering into contracts must be capable. Capacity of parties emphasises that the parties entering into a contract should be capable of understanding it and forming a rational judgment as to its effect upon their interests, It is possible only when the parties are mature enough to understand the effect of an agreement. For this purpose law insists that the parties should be major, ie, they should have attained the age of eighteen years. Again, even if the parties are mature they should be in their senses, otherwise they will not understand properly the effect of a contract entered by them. Therefore, law requires that the parties should have sound mind. Only a person with a sound mind can properly understand the implications of a contract. Thus law does not allow an agreement with an idiot or a drunken person because he will not be able to understand the consequences of the agreement entered into by him. Similarly, law does not allow certain persons to enter into an’agreement in public interest. Such persons are disqualified by law to enter into contracts. For example, a contract with an alien enemy (a person ‘whose Government is at war with the Government of India) is not in the interest of our country. Likewise, a person undergoing imprisonment is disqualified by law to enter into contracts, CAPACITY OF PARTIES Sec. 11 of the Indian Contract Act provides that "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 disqualified from contracting by any law to which he is subject" We can easily explain the persons incapable of entering into a contract with the help of the following chart INCAPACITY OF PARTIES a Minor Unsound Mind Disqualified by law (Immature Mind) (Deficiency of mind) (Status) Idiot Lunatic Drunkard v v v v v Alien Enemy Foreign Sovereign Insolvent Convict Married Woman Negatively speaking, a person is not capable of entering into contracts if he is : (i) aminor, of unsound mind, and (ii) disqualified by law to enter into contracts I. MINOR ‘According to the Indian Majority Act, 1875, a minor s a person who has not completed 18 years of ‘Mob, 9451506506, 9451070072 (22) Taran lear Banshi Bhawan, Tagore Town, Prayagra}. Scanned with CamScanner KISALAY COMMERCE CLASSES BUSINESS LAW| B.COM, PART-1 his/her age. However, where a guardian of a minor's person or property has been appointed under the Guardians and Wards Act, 1890, or a Court of Wards has taken charge of minor's property, during his/her minority, a minor will attain the age of majority after 21 years of age. Object of law is to protect the interest of the society. The law provides special clock of protection to the minors because of their inability to understand the effects or consequence of an agreement and their inexperience. This philosophy is clear form the following observations made by POSITION OF MINOR IN INDIA LAW 4, Anagreement with or by a minor subject to certain exceptions is absolutely void and inoperative— A contact with a minor is absolutely void. In one case a minor executed a mortgage for € 20,000 and the mortgagee (the moneylender) paid a sum of % 8,000 to the minor, Later on the minor field a suit to set aside the mortgage. The mortgagee wanted refund of % 8,000 paid by him to the minor. The Court held that [Position of Minor in Indian Law since the agreement with a minor was void, there was | 1. Anagreementwith or by a minor is no question of any refund. Hence, mort- gagee could not absolutely void and inoperative. recover anything from the minor. [Mohiri Bibiv. Dhara- | 2 Aminorcanbeapromiseeor beneficiary. modas Ghosh (1903) 30 Cal. 539]. 3, Amagreement with a minor, cannot be ratified. 4. Aminor cannotbe asked to return any benefit enjoyed. 2. A minor can be a promisee or_beneficiary—The intention of law is to protect the interest of the minor. Hence law permits a minor to be abeneficiary. ie cat"). 5" ginor can lvays plead minor be a promise. Again, an agreement ifit is beneficial to | "6, 4 minor canbean agent. the minor can be enforced against him. 7, Aminot’s estates lable for necessaries Examples. supplied to him. 1. A (major) executed promissory note in favour of B-| 8 Aminor cannotbe declared insolvent. (minor). The minor can

    You might also like