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Understanding Capacity to Contract in India

1. The document discusses the capacity and incapacity to contract under Indian law. It defines who has the capacity to enter into valid contracts such as majors who are of sound mind and not disqualified by law. 2. Minors, defined as those under 18 years of age (21 in some cases), and those who are unsound of mind or disqualified by law are considered incapable of entering into valid contracts. Agreements with such persons are void. 3. The document outlines some key rules regarding minors and contracts, such as that agreements with minors are void ab initio, minors can be promisees in contracts, and minors cannot ratify agreements upon reaching majority.

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46 views8 pages

Understanding Capacity to Contract in India

1. The document discusses the capacity and incapacity to contract under Indian law. It defines who has the capacity to enter into valid contracts such as majors who are of sound mind and not disqualified by law. 2. Minors, defined as those under 18 years of age (21 in some cases), and those who are unsound of mind or disqualified by law are considered incapable of entering into valid contracts. Agreements with such persons are void. 3. The document outlines some key rules regarding minors and contracts, such as that agreements with minors are void ab initio, minors can be promisees in contracts, and minors cannot ratify agreements upon reaching majority.

Uploaded by

unknowngauravkumar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd

Business law

E.Chandra Naidu
lecturer in commerce
CAPACITY TO
CONTRCT
Capacity to contract
CAPACITY INCAPACITY
major minor
CAPACITY
sound mind unsound mind
major
Not disqualified by disqualified by law.
sound
law. mind Agreements with
Not disqualified
Agreements withby Persons
law.
Persons competent
incompetent to
to contract are
Valid agreement
contract are
Void agreement
Persons competent to contract
Not
major Sound mind disqualified
by law
Valid agreements
Persons incompetent to contract

UnSound Disqualified
minor mind by law

Void agreements
Minor – definition- indian majority act
1875 in general 18 years special case
- 21 years
According to Indian majority act 1875 sec(3)
minor is defined as any person under
the age of 18 years . In the following
cases a person is said to be minor if he
does not complete the age of 21 years
a) any person under the guardian & wards
act ,1890
b)any person which comes under
superintendence of law/legal
representative
Rules governing minors
agreement
Rule 1 : judges are counselors,
jury is the servant ,law is the
guardian .
Rule 2:in case minor entered
into a contract which is
unlawful , illegal , immoral he is
also prosecutable & punishable
under law relevant law.
Legal rules
An agreement with minor is void ab
initio
[Mohiri Bibi v. Dharmadas Ghase –
martigage house –loan not valid -cancelled]
Minor can be promisee
[Shrafat Ali v. Noor Mohd]- minor insured
goods – damaged – filed recovery- valid)
Minor cannot ratify his agreement on
attaining the age of majority
[Indra Ramaswamy v. Anthiappa Chettier
minor borrowd – later executed new bond to
old debt major not valid]
Minor as a shareholder ,
Minor as a partner,
Minor as a agent ,
Minor as a member of trade union ,
No estoppel against minor -
misrepresenting his age induced the other
party to enter contract no estoppel ,
He can plead his minority ,
He can enter into contract for his
necessary
[Robert v. Gray ]
On behalf of minor his parents , guardian
or any other person can enter into void
contract to acquire movable property.

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