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CAPACITY TO CONTRACT
CAPACITY TO CONTRACT
 According to sec. 10. an agreement becomes a contract
if it is entered into between the parties who are
competent to contract.

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 According to sec.11 , every person is competent to
contract who:-
(a) is the age of majority according to the law to which
he is subject
(b)is of sound mind
(c)is not disqualified from contracting by any law to
which he is subject.
MINOR
 Minor is a person who has not completed 18 years of
age.

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 In following two cases , he attains majority after 21
years of age:
(a) where a guardian of a minor’s person or property has
been appointed under the guardians and wards act,1890,
or
(b) where the superintendence of a minor’s property is
assumed by a court of wards.
 MINOR’S AGREEMENT

 His agreement is altogether void and inoperative.

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 He can be promisee or a beneficiary in a contract.
 His estate is liable for the necessary goods supplied or
necessary services rendered to him or to anyone whom he
legally bound.
 He may enter into contract of apprenticeship,service,education
and instruction provided this are beneficial for him.
 He can be an agent.
CONTD.
 He cannot be partner but he can be beneficiary of
existing partnership.

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 If he has received any benefit under a void agreement, he
cannot be asked to compensate for it.
 The court never order specific performance of his
agreements
 He can always plead minority and is not stopped from
doing so even when he enters into an agreement by
falsely misrepresentation of his age.
 He cannot be adjudged insolvent.
PERSONS OF UNSOUND MIND
 Lunatics- a lunatic can enter into a contract when he is
of sound mind.

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 Idiots-an agreement of an idiot like that of minor is
altogether void.

 Drunken or intoxicated persons-their position is

similar to that of lunatics.
OTHER PERSONS
 Alien enemies-During war an Indian citizen can’t enter into an
contract with an alien enemy.
 Foreign sovereigns and accredited representatives of foreign

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states-They can enter into contracts and enforce these contacts in
our courts but they cannot be sued in our courts without prior
sanction of central government.
 Corporations- the contractual capacity of a statutory corporation is
limited by the statute governing it. As regards a company registered
under the companies act,1956,its contractual capacity is regulated
by its Memorandum of Association and the companies act 1956.
 Insolvents-when a debtor is adjudged insolvent, he is deprived of
his power to deal in his property divisible among his creditors.
 Convicts-a convict when undergoing imprisonment is incapable of
entering into a contract.
 Clare was age 17, a minor in her state, when she bought
a week’s worth of groceries at the local supermarket.
Later she discovered she spent too much money and was

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going to be over her weekly budget. So she took the
groceries back and asked for her money back. If she
sues, will she get her money back?
 Tanya, a minor, was the daughter of a construction
worker. When se was 17, she bought an evening gown
for $400.00 to wear to a school dance. After the dance,
Tanya decided she didn’t like the dress and returned it
asking for the money back. Is she legally entitled to the
money?
 Janice had been drinking all afternoon before she whet
into a used car lot. When signed a contract to purchase a
two year old car for as much as it would cost for the

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same model new. She sought to disaffirm the contract
based on intoxication. At the trial, she testified that, at
the time of purchase, she knew she was buying a car but
could not understand any of the terms of the contract.
Will the court hold her to the terms of the contract?
 While still a minor, Beach bought a stereo system on
credit from McReam’s Electonic Cloud for $500. Beach
paid $100 down and promised to pay $50 a month on the

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unpaid balance until the debt was paid. After making
four payments, two of which were made after he reached
the age of majority. Beach decided to disaffirm the
contract and return the equipment.