This document outlines the key elements of a valid contract according to Indian contract law. It discusses the definition of a contract, essential elements like offer and acceptance, capacity to contract, consent, and mistake. It provides definitions for key terms like proposal, agreement, consideration, free consent from coercion, undue influence and fraud. It also explains competence to contract and exceptions for minors, persons of unsound mind, disqualified persons, and more.
Indian Contract Act 1872 Competency Of The Parties to contract SnehaJChauhan
The document discusses the requirements for competency to contract under Indian contract law. It outlines that parties must be of the age of majority, of sound mind, and not disqualified by law. Those deemed incompetent include minors under 18, persons of unsound mind like idiots and lunatics, and those disqualified such as aliens, convicts, and corporations. The Indian Contract Act of 1872 establishes these rules for determining the validity and enforceability of contracts in India.
The document discusses key aspects of contracts under the Indian Contract Act of 1872 including:
1) The definition of a contract as an agreement that is enforceable by law, requiring elements such as offer, acceptance, lawful consideration and lawful object.
2) Essentials for a valid contract including free consent which cannot be caused by coercion, undue influence, fraud or mistake.
3) Exceptions to free consent such as coercion defined as threatening unlawful acts, and undue influence defined as improper use of influence in relationships involving trust.
Capacity of Parties to a contract - Essentials of a valid contractsairam16
The document discusses the capacity of parties to enter into a contract under Indian law. It outlines several types of individuals and their capacity:
1. Minors do not have contractual capacity and their agreements are void. However, they can benefit from agreements and are not liable to return benefits received.
2. Persons of unsound mind like idiots and lunatics generally cannot enter valid contracts, except occasionally for idiots and when a lunatic is of sound mind.
3. Certain individuals are disqualified by law, such as alien enemies during war, foreign sovereigns without government consent, convicts during imprisonment, and married women regarding their husband's property.
1. Capacity to contract under Indian law requires that parties are of the age of majority, sound mind, and not legally disqualified from entering contracts.
2. Any agreement with a minor is void, as a minor lacks capacity until age 18. While minors cannot be bound by contracts, they can receive partnership benefits and must return benefits received under a void contract.
3. To be of sound mind, one must understand the contract and rationally judge its effects on their interests, as defined in Section 12 of the Indian Contract Act. People who are occasionally unsound cannot contract during those periods.
The document discusses the capacity and competency of parties to enter into a contract under Indian law. It addresses several key points:
1) Only parties who are of sound mind and have attained the age of majority can enter into a valid contract. Minors and persons of unsound mind lack contractual capacity.
2) A minor's agreements are void ab initio. However, a minor can be a promisee or beneficiary in a contract. They are also liable for necessaries supplied to them like food and shelter.
3) A person is considered of unsound mind if they are unable to understand the contract or form a rational judgment on its effects. Their capacity depends on the mental state at the time
The document discusses the capacity to contract under Indian law. It defines who is competent to enter into a contract according to Section 11 of the Contract Act, including those of the age of majority and of sound mind. It then discusses those who are incompetent to contract, such as minors under 18 years old, those of unsound mind (lunatics, idiots, drunk/intoxicated), and those disqualified by law like alien enemies and convicts. The document provides further details on the rules for minors, those of unsound mind, and those disqualified contracting. It also discusses exceptions for necessaries supplied to minors and those of unsound mind.
This document outlines the key elements of a valid contract according to Indian contract law. It discusses the definition of a contract, essential elements like offer and acceptance, capacity to contract, consent, and mistake. It provides definitions for key terms like proposal, agreement, consideration, free consent from coercion, undue influence and fraud. It also explains competence to contract and exceptions for minors, persons of unsound mind, disqualified persons, and more.
Indian Contract Act 1872 Competency Of The Parties to contract SnehaJChauhan
The document discusses the requirements for competency to contract under Indian contract law. It outlines that parties must be of the age of majority, of sound mind, and not disqualified by law. Those deemed incompetent include minors under 18, persons of unsound mind like idiots and lunatics, and those disqualified such as aliens, convicts, and corporations. The Indian Contract Act of 1872 establishes these rules for determining the validity and enforceability of contracts in India.
The document discusses key aspects of contracts under the Indian Contract Act of 1872 including:
1) The definition of a contract as an agreement that is enforceable by law, requiring elements such as offer, acceptance, lawful consideration and lawful object.
2) Essentials for a valid contract including free consent which cannot be caused by coercion, undue influence, fraud or mistake.
3) Exceptions to free consent such as coercion defined as threatening unlawful acts, and undue influence defined as improper use of influence in relationships involving trust.
Capacity of Parties to a contract - Essentials of a valid contractsairam16
The document discusses the capacity of parties to enter into a contract under Indian law. It outlines several types of individuals and their capacity:
1. Minors do not have contractual capacity and their agreements are void. However, they can benefit from agreements and are not liable to return benefits received.
2. Persons of unsound mind like idiots and lunatics generally cannot enter valid contracts, except occasionally for idiots and when a lunatic is of sound mind.
3. Certain individuals are disqualified by law, such as alien enemies during war, foreign sovereigns without government consent, convicts during imprisonment, and married women regarding their husband's property.
1. Capacity to contract under Indian law requires that parties are of the age of majority, sound mind, and not legally disqualified from entering contracts.
2. Any agreement with a minor is void, as a minor lacks capacity until age 18. While minors cannot be bound by contracts, they can receive partnership benefits and must return benefits received under a void contract.
3. To be of sound mind, one must understand the contract and rationally judge its effects on their interests, as defined in Section 12 of the Indian Contract Act. People who are occasionally unsound cannot contract during those periods.
The document discusses the capacity and competency of parties to enter into a contract under Indian law. It addresses several key points:
1) Only parties who are of sound mind and have attained the age of majority can enter into a valid contract. Minors and persons of unsound mind lack contractual capacity.
2) A minor's agreements are void ab initio. However, a minor can be a promisee or beneficiary in a contract. They are also liable for necessaries supplied to them like food and shelter.
3) A person is considered of unsound mind if they are unable to understand the contract or form a rational judgment on its effects. Their capacity depends on the mental state at the time
The document discusses the capacity to contract under Indian law. It defines who is competent to enter into a contract according to Section 11 of the Contract Act, including those of the age of majority and of sound mind. It then discusses those who are incompetent to contract, such as minors under 18 years old, those of unsound mind (lunatics, idiots, drunk/intoxicated), and those disqualified by law like alien enemies and convicts. The document provides further details on the rules for minors, those of unsound mind, and those disqualified contracting. It also discusses exceptions for necessaries supplied to minors and those of unsound mind.
The document discusses the competency of parties to form contracts under Indian law. It states that to be competent, one must be of age of majority, of sound mind, and not disqualified by any law. It then examines specific cases such as minors, persons of unsound mind, and those disqualified like insolvents or convicts. Contracts with minors are void, while those with persons of unsound mind may be void depending on mental state at time of agreement.
This document outlines the syllabus for a Business Regulatory Framework course for a 1st semester B.Com program. The syllabus covers 5 units:
1. The Indian Contract Act of 1872, including the definition of contracts, capacity of parties, consideration, and types of contracts.
2. Breach of contracts, remedies, and special contracts like bailment, pledge and agency.
3. The Indian Partnership Act of 1932 and the Negotiable Instruments Act of 1881 covering promissory notes, bills of exchange, and cheques.
4. The Consumer Protection Act of 1986 regarding consumer rights and grievance redressal.
5. The Foreign Exchange Management Act of 2000 and
This document outlines the syllabus for a Business Regulatory Framework course, covering topics like contract law, partnership law, negotiable instruments, consumer protection law, and foreign exchange management law. The course is divided into 5 units. Unit 1 covers Indian contract law concepts like offer/acceptance, capacity of parties, consent, and void agreements. Unit 2 discusses breach of contract and special contracts. Unit 3 covers partnership law, negotiable instruments, and types of cheque crossings. Unit 4 focuses on the Consumer Protection Act. Unit 5 examines foreign exchange management law and monopolistic/restrictive trade practices law.
The chapter discusses the capacity of parties to enter into a valid contract. It defines competent and incompetent persons. Minors under 18 years of age, persons of unsound mind, and certain disqualified persons like aliens and convicts are considered incompetent to contract. Agreements by minors are void except for beneficial contracts. Persons of unsound mind can benefit from agreements but cannot be held liable. The chapter outlines specific rules for minor's agreements, liability for necessaries, and the position of minors, persons of unsound mind, and disqualified persons in contracts.
This document discusses the key elements of a valid contract according to Indian contract law, including consideration, capacity to contract, consent, and lawful object. It provides details on:
- Consideration being an essential element of a contract and the characteristics of valid consideration.
- The capacity to contract, including who is competent (those of age and sound mind) and incompetent (minors, those of unsound mind, persons disqualified by law).
- Consent needing to be free and not caused by coercion, undue influence, fraud, or mistake.
- The object and consideration of a contract needing to be lawful and not forbidden, fraudulent, involving injury to others, immoral, or against
The document defines a contract and discusses those who lack capacity to enter into contracts according to Indian law. It notes that minors, those with mental incapacity, aliens, corporations, insolvents, convicts and others may be disqualified from contracting. It provides examples of cases involving contracts with minors. It also discusses contingent contracts, which depend on uncertain future events, and types of quasi-contracts such as claims for necessities provided or money paid for another.
This document provides an overview of key concepts in business law in India including definitions of law, the need for business laws, sources of business law, the Indian Contract Act of 1872, essential elements of a valid contract, and classifications of contracts. It defines law, discusses the objectives of business law and contract law, and provides examples to illustrate concepts like void, voidable, and valid contracts.
After midsem-slides-1224252673846877-9 niravniravjingar
This document provides an overview of key concepts in business law in India including definitions of law, the need for business laws, sources of business law, the Indian Contract Act of 1872, essential elements of a valid contract, and classifications of contracts. It defines law, discusses the objectives of business law and contract law, and outlines essential elements for a valid contract such as offer and acceptance, lawful consideration, capacity and consent of parties. It also classifies contracts based on validity, formation, and performance.
This document provides an overview of business law concepts including definitions of law, the need for knowledge of law in business, sources of business law, and classification of contracts. Specifically, it defines law as the body of principles recognized and applied by the state in administering justice. It notes that ignorance of law is not an excuse. The sources of business law are identified as English mercantile law, statute law, case law, common law, and customs/usages. Contracts are then classified based on their validity, formation, and performance. Key elements of a valid contract such as offer/acceptance, lawful consideration, and capacity of parties are also outlined.
1. The document discusses the capacity to contract under Indian law, specifically regarding competency of parties.
2. It outlines categories of people considered incompetent to contract, including minors, people of unsound mind, insolvents, convicts, corporations exceeding their powers, and alien enemies during times of war.
3. For minors, it examines the implications of their agreements being void ab initio, their liability for necessaries, and exceptions where they can receive benefits or act as agents without liability.
According to Indian contract law, a person must be of the age of majority, of sound mind, and not otherwise legally disqualified to have the capacity to enter into a valid and enforceable contract. A minor, defined as a person under 18 years of age, lacks such capacity and any agreements entered into by a minor are void ab initio. However, a minor can be held liable to pay for necessities provided to them, such as food, clothing, shelter, and services related to education or healthcare. A person of unsound mind, including idiots, lunatics, or those intoxicated, also lacks the capacity to contract if unable to understand the nature and effect of the agreement.
This document provides an overview of contract law in India. It defines key terms like offer, acceptance, consideration and agreement. It explains the essential elements of a valid contract including offer and acceptance, lawful consideration, capacity of parties, free consent, lawful object and possibility of performance. It distinguishes between different types of contracts and agreements, such as void, voidable, illegal and executory contracts. It also differentiates between contracts and agreements, bilateral and unilateral contracts, and void versus voidable and illegal agreements.
1. There are 9 essential elements for a valid contract: offer and acceptance, intention to create legal obligations, competent parties, lawful consideration, lawful object, possibility of performance, free consent, communication between parties, and agreements not expressly declared void.
2. Key elements include offer made by one party, acceptance of that offer by the other party, consideration or value exchanged, lawful and possible object, and meeting of the minds with free consent between competent parties.
3. Certain types of agreements like those that are impossible to perform, restrain trade unlawfully, lack consideration, or have an unlawful object are expressly declared void by law and cannot form valid contracts.
This document discusses the eligibility of parties to enter into a contract under Indian law. It states that minors (those under 18), persons of unsound mind, those disqualified by law such as alien enemies or insolvents, and convicts currently imprisoned may lack the capacity to contract. For minors, contracts are void ab initio and they cannot be compelled to pay benefits received nor can their guardians be held liable. Exceptions exist for minors' necessities or if they have a guardian appointed. The document provides an example case of a contract with a minor being voided.
Contracts are legally binding agreements between two or more competent parties that usually involve employment, sale or lease of property, or tenancy. The key elements of a valid contract are offer, acceptance, consideration, intention to create legal relations, capacity to contract, certainty of terms, and free consent. Minors and mentally impaired individuals generally lack the capacity to enter into contracts. For a contract to be enforceable, it requires an offer, acceptance of that offer, and consideration or valuable benefit exchanged between the parties.
This document provides information about law and contracts in India. It defines key terms related to contracts such as offer, acceptance, consideration, agreement and contract. It outlines the essential elements for a valid contract including offer and acceptance, lawful consideration, capacity of parties, free consent, lawful object, possibility of performance, certainty and legality. It also discusses different types of contracts such as void, voidable, illegal and quasi contracts. The document compares agreements and contracts, and describes different types of contracts based on their creation, validity, execution and liability.
This document discusses the essential elements of consideration for forming a valid contract. It defines consideration as the price for which a party's promise is made. Consideration must be real and not illusory, move at the desire of the promisor, and be valuable in the eyes of the law. The document outlines different types of consideration including present, past, future, unlawful, and illusory consideration. It also discusses capacity and consent requirements for valid contracts.
The document discusses key concepts from the Indian Contract Act 1872 such as offer, acceptance, agreement, and contract. It explains that a contract requires an agreement plus legal enforceability. The essential elements of a valid contract are discussed as offer and acceptance, lawful object, lawful consideration, capacity of parties, and free consent. Remedies for breach of contract include damages, specific performance, and injunction. Previous years questions from various competitive exams covering concepts of contract law are also provided.
The document discusses key concepts related to Indian contract law. It defines a contract according to Indian law as an agreement that is enforceable by law. It outlines the essential elements of a valid contract including offer and acceptance, intention to create legal relations, consensus ad idem, consideration, capacity to contract, lawful object, certainty and possibility of performance, and enforceability by law. It also discusses different types of contracts based on validity, formation and performance.
The document discusses key concepts related to Indian contract law. It defines a contract according to Indian law as an agreement that is enforceable by law. It outlines the essential elements of a valid contract including offer and acceptance, intention to create legal relations, consensus ad idem, consideration, capacity to contract, lawful object, certainty and possibility of performance, and enforceability by law. It also discusses different types of contracts based on validity, formation and performance.
The document discusses the competency of parties to form contracts under Indian law. It states that to be competent, one must be of age of majority, of sound mind, and not disqualified by any law. It then examines specific cases such as minors, persons of unsound mind, and those disqualified like insolvents or convicts. Contracts with minors are void, while those with persons of unsound mind may be void depending on mental state at time of agreement.
This document outlines the syllabus for a Business Regulatory Framework course for a 1st semester B.Com program. The syllabus covers 5 units:
1. The Indian Contract Act of 1872, including the definition of contracts, capacity of parties, consideration, and types of contracts.
2. Breach of contracts, remedies, and special contracts like bailment, pledge and agency.
3. The Indian Partnership Act of 1932 and the Negotiable Instruments Act of 1881 covering promissory notes, bills of exchange, and cheques.
4. The Consumer Protection Act of 1986 regarding consumer rights and grievance redressal.
5. The Foreign Exchange Management Act of 2000 and
This document outlines the syllabus for a Business Regulatory Framework course, covering topics like contract law, partnership law, negotiable instruments, consumer protection law, and foreign exchange management law. The course is divided into 5 units. Unit 1 covers Indian contract law concepts like offer/acceptance, capacity of parties, consent, and void agreements. Unit 2 discusses breach of contract and special contracts. Unit 3 covers partnership law, negotiable instruments, and types of cheque crossings. Unit 4 focuses on the Consumer Protection Act. Unit 5 examines foreign exchange management law and monopolistic/restrictive trade practices law.
The chapter discusses the capacity of parties to enter into a valid contract. It defines competent and incompetent persons. Minors under 18 years of age, persons of unsound mind, and certain disqualified persons like aliens and convicts are considered incompetent to contract. Agreements by minors are void except for beneficial contracts. Persons of unsound mind can benefit from agreements but cannot be held liable. The chapter outlines specific rules for minor's agreements, liability for necessaries, and the position of minors, persons of unsound mind, and disqualified persons in contracts.
This document discusses the key elements of a valid contract according to Indian contract law, including consideration, capacity to contract, consent, and lawful object. It provides details on:
- Consideration being an essential element of a contract and the characteristics of valid consideration.
- The capacity to contract, including who is competent (those of age and sound mind) and incompetent (minors, those of unsound mind, persons disqualified by law).
- Consent needing to be free and not caused by coercion, undue influence, fraud, or mistake.
- The object and consideration of a contract needing to be lawful and not forbidden, fraudulent, involving injury to others, immoral, or against
The document defines a contract and discusses those who lack capacity to enter into contracts according to Indian law. It notes that minors, those with mental incapacity, aliens, corporations, insolvents, convicts and others may be disqualified from contracting. It provides examples of cases involving contracts with minors. It also discusses contingent contracts, which depend on uncertain future events, and types of quasi-contracts such as claims for necessities provided or money paid for another.
This document provides an overview of key concepts in business law in India including definitions of law, the need for business laws, sources of business law, the Indian Contract Act of 1872, essential elements of a valid contract, and classifications of contracts. It defines law, discusses the objectives of business law and contract law, and provides examples to illustrate concepts like void, voidable, and valid contracts.
After midsem-slides-1224252673846877-9 niravniravjingar
This document provides an overview of key concepts in business law in India including definitions of law, the need for business laws, sources of business law, the Indian Contract Act of 1872, essential elements of a valid contract, and classifications of contracts. It defines law, discusses the objectives of business law and contract law, and outlines essential elements for a valid contract such as offer and acceptance, lawful consideration, capacity and consent of parties. It also classifies contracts based on validity, formation, and performance.
This document provides an overview of business law concepts including definitions of law, the need for knowledge of law in business, sources of business law, and classification of contracts. Specifically, it defines law as the body of principles recognized and applied by the state in administering justice. It notes that ignorance of law is not an excuse. The sources of business law are identified as English mercantile law, statute law, case law, common law, and customs/usages. Contracts are then classified based on their validity, formation, and performance. Key elements of a valid contract such as offer/acceptance, lawful consideration, and capacity of parties are also outlined.
1. The document discusses the capacity to contract under Indian law, specifically regarding competency of parties.
2. It outlines categories of people considered incompetent to contract, including minors, people of unsound mind, insolvents, convicts, corporations exceeding their powers, and alien enemies during times of war.
3. For minors, it examines the implications of their agreements being void ab initio, their liability for necessaries, and exceptions where they can receive benefits or act as agents without liability.
According to Indian contract law, a person must be of the age of majority, of sound mind, and not otherwise legally disqualified to have the capacity to enter into a valid and enforceable contract. A minor, defined as a person under 18 years of age, lacks such capacity and any agreements entered into by a minor are void ab initio. However, a minor can be held liable to pay for necessities provided to them, such as food, clothing, shelter, and services related to education or healthcare. A person of unsound mind, including idiots, lunatics, or those intoxicated, also lacks the capacity to contract if unable to understand the nature and effect of the agreement.
This document provides an overview of contract law in India. It defines key terms like offer, acceptance, consideration and agreement. It explains the essential elements of a valid contract including offer and acceptance, lawful consideration, capacity of parties, free consent, lawful object and possibility of performance. It distinguishes between different types of contracts and agreements, such as void, voidable, illegal and executory contracts. It also differentiates between contracts and agreements, bilateral and unilateral contracts, and void versus voidable and illegal agreements.
1. There are 9 essential elements for a valid contract: offer and acceptance, intention to create legal obligations, competent parties, lawful consideration, lawful object, possibility of performance, free consent, communication between parties, and agreements not expressly declared void.
2. Key elements include offer made by one party, acceptance of that offer by the other party, consideration or value exchanged, lawful and possible object, and meeting of the minds with free consent between competent parties.
3. Certain types of agreements like those that are impossible to perform, restrain trade unlawfully, lack consideration, or have an unlawful object are expressly declared void by law and cannot form valid contracts.
This document discusses the eligibility of parties to enter into a contract under Indian law. It states that minors (those under 18), persons of unsound mind, those disqualified by law such as alien enemies or insolvents, and convicts currently imprisoned may lack the capacity to contract. For minors, contracts are void ab initio and they cannot be compelled to pay benefits received nor can their guardians be held liable. Exceptions exist for minors' necessities or if they have a guardian appointed. The document provides an example case of a contract with a minor being voided.
Contracts are legally binding agreements between two or more competent parties that usually involve employment, sale or lease of property, or tenancy. The key elements of a valid contract are offer, acceptance, consideration, intention to create legal relations, capacity to contract, certainty of terms, and free consent. Minors and mentally impaired individuals generally lack the capacity to enter into contracts. For a contract to be enforceable, it requires an offer, acceptance of that offer, and consideration or valuable benefit exchanged between the parties.
This document provides information about law and contracts in India. It defines key terms related to contracts such as offer, acceptance, consideration, agreement and contract. It outlines the essential elements for a valid contract including offer and acceptance, lawful consideration, capacity of parties, free consent, lawful object, possibility of performance, certainty and legality. It also discusses different types of contracts such as void, voidable, illegal and quasi contracts. The document compares agreements and contracts, and describes different types of contracts based on their creation, validity, execution and liability.
This document discusses the essential elements of consideration for forming a valid contract. It defines consideration as the price for which a party's promise is made. Consideration must be real and not illusory, move at the desire of the promisor, and be valuable in the eyes of the law. The document outlines different types of consideration including present, past, future, unlawful, and illusory consideration. It also discusses capacity and consent requirements for valid contracts.
The document discusses key concepts from the Indian Contract Act 1872 such as offer, acceptance, agreement, and contract. It explains that a contract requires an agreement plus legal enforceability. The essential elements of a valid contract are discussed as offer and acceptance, lawful object, lawful consideration, capacity of parties, and free consent. Remedies for breach of contract include damages, specific performance, and injunction. Previous years questions from various competitive exams covering concepts of contract law are also provided.
The document discusses key concepts related to Indian contract law. It defines a contract according to Indian law as an agreement that is enforceable by law. It outlines the essential elements of a valid contract including offer and acceptance, intention to create legal relations, consensus ad idem, consideration, capacity to contract, lawful object, certainty and possibility of performance, and enforceability by law. It also discusses different types of contracts based on validity, formation and performance.
The document discusses key concepts related to Indian contract law. It defines a contract according to Indian law as an agreement that is enforceable by law. It outlines the essential elements of a valid contract including offer and acceptance, intention to create legal relations, consensus ad idem, consideration, capacity to contract, lawful object, certainty and possibility of performance, and enforceability by law. It also discusses different types of contracts based on validity, formation and performance.
The presentation deals with the concept of Right to Default Bail laid down under Section 167 of the Code of Criminal Procedure 1973 and Section 187 of Bharatiya Nagarik Suraksha Sanhita 2023.
सुप्रीम कोर्ट ने यह भी माना था कि मजिस्ट्रेट का यह कर्तव्य है कि वह सुनिश्चित करे कि अधिकारी पीएमएलए के तहत निर्धारित प्रक्रिया के साथ-साथ संवैधानिक सुरक्षा उपायों का भी उचित रूप से पालन करें।
Business law for the students of undergraduate level. The presentation contains the summary of all the chapters under the syllabus of State University, Contract Act, Sale of Goods Act, Negotiable Instrument Act, Partnership Act, Limited Liability Act, Consumer Protection Act.
Indonesian Manpower Regulation on Severance Pay for Retiring Private Sector E...AHRP Law Firm
Law Number 13 of 2003 on Manpower has been partially revoked and amended several times, with the latest amendment made through Law Number 6 of 2023. Attention is drawn to a specific part of the Manpower Law concerning severance pay. This aspect is undoubtedly one of the most crucial parts regulated by the Manpower Law. It is essential for both employers and employees to abide by the law, fulfill their obligations, and retain their rights regarding this matter.
1. Capacity to contract
Introduction :-
Section 10 of the Indian Contract Act, 1872
Provides That “All Agreements Are Contract If They Are Made By The
Parties Competent To Contract” Therefore Capacity To Contract Is An Essential
Element Of A Valid Contract. The Term Capacity To Contract Means And Includes
The Legal Capacity Of The Parties To Enter Into A Contract. In Other Word, It Is
Capacity Of Parties To Enter Into A Legal Binding Contract.
2. Competency To Enter Into Contract :-
Section 11 of the Indian contract Act, 1872:
Provides That Every Person Is Competent To Contract Who Is
The Age Of Majority According To The Law To Which He Is Subject, And Who
Is Of Sound Mind And Is Not Otherwise Disqualified From Contracting By
Any Law To Which He Is Subject.
Thus, the section declares that a person is incompetent to contract under the
following circumstances:
1) Minority : if he is a minor, according to the law to which he is
subject
2) mental incompetence: if he is unsound mind
3) status: if he is disqualified from contracting by any law to which he is
subject
3. MINOR: -
A person who is not a major person (above 18 years) is an infant or a minor.
According to section 3 of Indian contract Act, 1875, a person domiciled in
India, who is under 18 years of age, is a minor. Accordingly every person who
has completed the age of 18 is years become a major. But minors of whose
person or property or both a guardian is appointed by a court of wards, attain
age of 21 years.
DETERMINATION OF MINORITY: -
Section 11 expressly provides that the age of majority of a person is to be
determined “according to the law to which he is subject”.
4. RULES RELATED TO MINORS AGREEMENT:-
LAW ALWAYS PROTECTS THE MINOR’S
1) Agreement Entered Into By A Minor Is Altogether Void:
EX:- ‘A’ a minor borrowed a sum of 35000/- from ‘B’ and as a security for the
same executed a mortgage in his favour. He become major few months later and failed
a suit for declaration that mortgage executed by him during his minority was void and
should be cancelled. It was held that a martgage by a minor was void ‘B’ was not
entitled to repayment of money.
2) MINOR CAN BE BENEFICIARY:
EX:- ‘A’ (major) executed promissory note in favour of ‘B’ (minor). The minor can
enforce the promissory note.
3) NO ESTOPPEL AGAINST A MINOR:-
EX:- where a minor b misrepresentig his age has include the other party to
enter into a contract with him, he cannot make liable on the contract since there can
be no estoppel against a minor.
5. 4) RATIFICATION ON ATTAINING MAJORITY IS NOT ALLOWED
[SECTION 68]:-
EX:- a minor borrowed a sum of money executed a simple bond for it and
after attaining majority executed a second bond in respect of original loan
and interest. It was held that suit upon second bond is not maintainable.
5) LIABILITY FOR NECESSARUES:- Under Section 68 Any Person Would Be
Entitled To Reimbursement Out Of The Minor’s Estate, For Necessaries Supplied To
Him Or To His Family. Necessaries is also include goods and service.
6) minor and insolvency [section 68] :- a minor cannot be adjudicated as an
insolvent, for he is incable of contracting debts. Even for necessaries supplies to him,
he is not personally liable, only his property is liable.
7):- minor partner
8) :- Minor Agent [Section 184]
9):- Contract by minor and adult jointly
10):- Position of minor’s parents
11):- Minor shareholder
6. Person of unsound mind
Section 12 of the Indian contract Act, 1872 lays down a test of soundness of mind it
defines the term ‘sound mind’ as follows: “ A person is said to be of sound mind for
the purpose of making a contract, and of forming a rational judgment as to its effects
upon his interest”.
According to this section, therefore, the person entering into the contract must be a
person who can understand what he is doing and is able to form a rational judgment
as to whether he is about to do is to his interest or not.
UNSOUNDNESS OF MIND MAY ARISE FROM:-
1) Idiocy: it is god given and permanent, with no intervals of saneness. The mental powers of an
idiot are completely absent because of lack of development of the brain.
2) Lunacy or insanity: it is a disease of the brain. Of course he may have lucid intervals of sanity.
3) Drunkenness: it produces temporary incapacity, till the drunkard is under the effect of
intoxication.
4) Hypnotism: It is also produces temporary incapacity, till the person is under the impact of
artificially induced sleep
5) Mental Decay: on account of old age, etc.
7. Disqualified persons by law
1) Alien enemies: An Alien living in india can enter into a contract with citizens of
India during peace time only. “Alien friend can contract but an alien enemy cannot
contract”
2) Foreign sovereigns and Ambassadors: one has to be cautious while entering into a
contract with foreign sovereigns and ambassadors, because whereas they can sue
others to enforce the contract entered upon with them, they cannot be sued
without obtaining the prior sanction of the central government.
3) convict: a convict is one who is found guilty and is imprisoned. During the period
of imprisonment, a convict is incompetent:
i) to enter into contracts and
ii) to sue on contracts made before conviction.
4)Insolvent: an adjudged insolvent(before an order of discharge) is competent to enter
into certain types of contract, i.e., he can incurred debts, purchase property or be an
employee but he cannot sell his property which vsts in the official receiver.
8. 6)Pardanashin women:
A pardanashin women is one who lives in seclusion
having no commission except from behind the parda or screen with any male
person except a few privileged relations. She can not much interaction with
the outside world.
7) Married Women:
A women is competent to enter into a contract. Marriage
does not affect the contractual capability of a women. A married women may
sue or be sued in her own name in respect of her separate property.