The document discusses the capacity to contract under Indian law. It states that according to Section 10 and 11 of the Indian Contract Act, an agreement becomes a contract if entered into by parties who are competent to contract, meaning they are of the age of majority, sound mind, and not otherwise disqualified from contracting. A minor is considered anyone under 18 years of age, or under 21 if a guardian has been appointed. A minor's agreements are void, though they can benefit from contracts. Persons of unsound mind like lunatics or intoxicated individuals are also generally not competent to contract unless of sound mind.

1. CAPACITY TO CONTRACT
PreparedbyDr.SeemaH.Kadam,Associate
Prof.,TMES-MBA,GTU

2. 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.
 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.
PreparedbyDr.SeemaH.Kadam,Associate
Prof.,TMES-MBA,GTU

3. MINOR
 Minor is a person who has not completed 18 years
of age.
 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.
PreparedbyDr.SeemaH.Kadam,Associate
Prof.,TMES-MBA,GTU

4. MINOR’S AGREEMENT
 His agreement is altogether void and inoperative.
 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.
PreparedbyDr.SeemaH.Kadam,Associate
Prof.,TMES-MBA,GTU

5. CONTD.
 He cannot be partner but he can be beneficiary of
existing partnership.
 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.
PreparedbyDr.SeemaH.Kadam,Associate
Prof.,TMES-MBA,GTU

6. PERSONS OF UNSOUND MIND
 Lunatics- a lunatic can enter into a contract when
he is of sound mind.
 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.
PreparedbyDr.SeemaH.Kadam,Associate
Prof.,TMES-MBA,GTU

7. 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 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.
PreparedbyDr.SeemaH.Kadam,Associate
Prof.,TMES-MBA,GTU

8.  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 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?
PreparedbyDr.SeemaH.Kadam,Associate
Prof.,TMES-MBA,GTU

9.  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 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?
PreparedbyDr.SeemaH.Kadam,Associate
Prof.,TMES-MBA,GTU

10.  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 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.
PreparedbyDr.SeemaH.Kadam,Associate
Prof.,TMES-MBA,GTU