Indian Contract Act 1872 Competency Of The Parties to contract

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Indian Contract Act 1872 Competency Of The Parties to contract

  1. 1. BUSINESS LAW
  2. 3. Presented By:- <ul><li>Sumit Chatterjee </li></ul><ul><li>Sneha Chouhan </li></ul><ul><li>Pranjali Dangat </li></ul><ul><li>Sunny D’souza </li></ul><ul><li>Triveni Rao </li></ul>
  3. 4. Introduction <ul><li>Indian Contract Act 1872  is the main source of law regulating  contracts  in  Indian law , as subsequently amended. </li></ul><ul><li>It determines the circumstances in which promise made by the parties to a contract shall be legally binding on them. All of us enter into a number of contracts everyday knowingly or unknowingly. Each contract creates some right and duties upon the contracting parties. Indian contract deals with the enforcement of these rights and duties upon the parties. </li></ul><ul><li>The Indian Contract Act 1872 sections 1-75 came into force on 1 September  1872 . It applies to the whole of India except the state of Jammu and Kashmir. </li></ul>
  4. 5. <ul><li>Section 10 of the Contract Act requires that the parties must be competent to contract. </li></ul><ul><li>Section 11 of the Indian contract act states that every person is competent to contract, who is:- </li></ul>Competency of the parties competent to the contract . <ul><li>the age of majority, </li></ul><ul><li>who is of sound mind and </li></ul><ul><li>who is not disqualified from contracting by law. </li></ul>
  5. 6. MINORITY Idiot UNSOUND MIND lunatic DISQULIFIED BY LAW INCAPACITY : DRUNKED ALIEN ENEMY CONVICTS CORPORATION
  6. 7. Following persons are incapable of competing to a contract:- <ul><li>A minor , </li></ul><ul><li>person of unsound mind and </li></ul><ul><li>person Disqualified by law cannot enter into contract Any contract with any such party will be void Ab intio. </li></ul>
  7. 8. 1. MINORS
  8. 9. 1. MINORS <ul><li>A person who has not completed 18 years of age is called as minor.  </li></ul><ul><li>In case a guardian to the person or property of the minor is appointed by the court or the or the property of the minor is put under the charge of a court of wards, during the period of his minority. </li></ul>
  9. 10.   Agreement with minor is VOID decided case illustration <ul><li>In Mohiri Bibis case ,the minor had executed a mortgage for the sum of Rs.20,000 out of which the lender had paid the minor only about 8,000. The mortage filed a suit for the recovery of his mortgage money and for sale of recovery of his mortgage money and for sale of the property in case of default .The privy council held that an agreement by a minor was absolutely void as against him and therefore the mortage could not recover mortage money nor could he have the minors property sold under his mortgage </li></ul>
  10. 11. 2. Person of Unsound Mind
  11. 12. Person of Unsound Mind <ul><li>A person is said to be of sound mind for the purpose of making a contract if at the time when he makes it, he is capable of understanding it and of forming a rational judgment as to its effect upon his interests. A person who is usually of sound mind, but occasionally of unsound mind, may not make a contract when he is of unsound mind. </li></ul><ul><li>The idiot, lunatic and drunkards are the person of unsound mind. </li></ul>
  12. 13. Meaning of idiot, lunatic and drunkards and drunkards <ul><li>Idiot: A person who is devoid of any faculties of thinking or rational judgment is called an idiot . .all agreements other than those for necessaries of life, with idiots are absolutely void. </li></ul><ul><li>Lunatics: A person whose mental powers are deranged is called a lunatic. agreement made with lunatic ,except those made during lucid intervals (period in which he is in his senses ) </li></ul><ul><li>For necessaries supplied to lunatic are valid. and the property of lunatic can be taken. </li></ul><ul><li>Drunkards : A person under the influence of drink or drugs stands on the same footing as lunatic. an agreement with drunker is void. </li></ul>
  13. 14. <ul><li>(a) A patient in a lunatic asylum, who is at intervals of sound mind, may contract during those intervals. </li></ul><ul><li>(b) A sane man, who is delirious from fever or who is so drunk that he cannot understand the terms of a contract or form a rational judgment as to its effect on his interests, cannot contract whilst such delirium or drunkenness lasts . </li></ul>illustrations
  14. 15. 3. Disqualified by law to enter in contract
  15. 16. Following are the people disqualified by law <ul><li>Alien enemy : A person who is not a citizen of India is called an alien. </li></ul><ul><li>Convicts : convict is incapable of entering into contract .and the incapability ends when sentence expires or punishment  finish. </li></ul><ul><li>Corporation : A company is artificial person created by law. it can only contract through its board of directors. </li></ul>
  16. 17. <ul><li>Section 11 of The Indian Contract Act specifies that every person is competent to contract provided: </li></ul><ul><li>He should not be a minor i.e. an individual who has not attained the age of majority i.e. 18 years. </li></ul><ul><li>He should be of sound mind while making a contract. A person with unsound mind cannot make a contract. </li></ul><ul><li>He is not a person who has been personally disqualified by law. </li></ul>

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