Business law competency of parties , consideration and object - for B COM, MCOM, CA, CMA.CS, MBA COMMERE STUDENT, BUSINESS MAN,ENTPENURE. Competency of persons Major ( Indian majority Act-1875- 18 Yrs other law may be 21 yrs – Guardians and Wards Act,1890 Mohiri bibi V Dharmodas Ghosh Raj Rani V Prem Adibm ( Film Producer) Sound Mind- Idiot-Lunatic- Drunkard Persons disqualified by Law Not to be declared to be insolvent by any law within the subject matter of law, alien enemy, Convict

1. Competency of Persons

2. I M POSSIBLE
2
I M POSSIBLE
Bibek Prajapati
(FCMA, CS , MBA, M COM, ).
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3. Validity of Contracts
 Competency of persons
 Major ( Indian majority Act-1875- 18 Yrs other law
may be 21 yrs – Guardians and Wards Act,1890
Mohiri bibi V Dharmodas Ghosh
Raj Rani V Prem Adibm ( Film Producer)
 Sound Mind- Idiot-Lunatic- Drunkard
 Persons disqualified by Law
Not to be declared to be insolvent by any law within
the subject matter of law, alien enemy, Convict

4. Effects of Minors Contracts
 Void abinitio
 No Estoppel (The Indian Evidence Act, 1872)
 Application of Doctrine of Restitution
(Principle of Traceability)
 No Ratification
 No Liability for contracts as well as torts
 Beneficial contract ----Minor liable
 Marriage Contract
 Contract of service and apprenticeship
( Apprenticeship Act 1850)
 Parents and Guardian liable only if the minor acts as
an agent Continued………

5.  Surety ( Liable)
 Minor as an agent ( Not liable) but can bind the
others ( principal)
 Specific performance of Contract
 Can make other’s liable for the negotiable
instrument (can endorse, draw, deliver,
negotiate)
 Cannot be declared insolvent
 Cannot be shareholder of a company
 Cannot enter as a partner under the Partnership
Act,1932

6. Persons of Unsound Mind
 Can be permanent and temporary
 Idiot –Lunatics ( permanent) Void
But can make contract during the lucid intervals
 Drunkard ( voidable)

7. Disqualification Under the Law
 Alien enemy
 Convict
 Insolvency- inability to discharge his liabiltiy
 Applies to the court either by himself or by his
creditors
 Can enter into contract if the “ Order of
discharge” has been made by the court

8. Consideration
 Ex nudo pacto non oritur actio
(An agreement made without consideration is void)
 Consideration is price paid for a promise
 Consideration can be :
Past
Present ( Executed)
Future (Executory)

9. Exceptions to the Rule
 Love and affection (Rajlukhy V Bhootnath)
 Voluntary Services (Upton Rural District council
case)
 Time barred debt (Tulsi Ram case)
 Gift
 Agency
 Charitable subscriptions

10. Unlawful object and Consideration
 Sec 23- talks about the illegality of object and
consideration
 Forbidden by law
 Defeats the provisions of law
 Object and consideration are fraudulent
 Injurious to any person or property
 Immoral

11.  Against Public Policy-
What is public policy?
1.Interference with the court of justice,
2.Agreement in restraint of prosecution,
3.Agreement of Maintenance and champerty
(Valid in India except – when it is unreasonable or unjust
to other party- or when it is made with a malicious
intention)
4.Marriage brokerage contract
5.Unfair and unreasonable dealings
(Unfair contracts like Employer -employee, teacher-
pupil etc)

12. I M POSSIBLE
12
I M POSSIBLE
Bibek Prajapati
(FCMA, CS , MBA, M COM, ).
My kind request for you Please like , subscribe ,comment and don’t forget to share
Pray to God for the success in Life
Thank You