Every person is competent to enter into a contract only if they are of the age of majority and sound mind under the law that governs them. Those who may be disqualified from contracting include minors, those deemed to be of unsound mind (including idiots, lunatics, and the drunken) and those disqualified by law.

3. “Every person is competent to contract
who is of the age of majority according to
law to which he is subject, and who is of
sound mind, and is not disqualified from
contracting by any law to which he is
subject. “

4. INCAPACITY OF PARTIES
INCAPACITY OF PARTY
DISQUALIFIED BY
MINOR UNSOUNDMIND LAW
IDIOT LUNATIC
DRUNKENED

5. An idiot, dolt, or
dullard is a
mentally deficient
person, or
someone who
acts in a self-
defeating or
significantly
counterproductive
way.

6. CASE STUDY ON AN IDIOT
 Mr/Mrs Rai died in a
road accident on 31st
august 2001 and there
daughter was left
alone. She was
suffering from mental
disorder and his
guardian came from
Toronto and applied in
the court for her
guardianship. The
court announced the
judgment on his behalf
because he proved
that he has a good
financial position and
can thus take care of
her nicely .

7. "Lunatic" is an
informal term
referring to
people who are
considered
mentally ill,
dangerous,
foolish or
unpredictable;
conditions once
called lunacy.

8. CASE STUDY ON LUNATIC PERSON
 Mr.Kapoor died on 5th July
2003 and his property was to
be distributed among his 2
sons and 1 daughter who is
mentally challenged. The
eldest brother wanted to take
the guardianship of his sister
so he appealed in the court
under his lawyer Mrs.Deepa
Mehra .She immediately
appealed the judge and the
decision was announced in
the favor of him because as
his lawyer mentioned in the
argument that he was well
known person in the society
and can easily take care of
his sister as compared to the
other brother

9. A drunken is a
person who is
under the
influence of
excessive
alcohol. He
stands on the
same footing of a
lunatic and
suffers from
temporary

10. CASE STUDY ON DRUNKEN PERSON
[ ASHOK GUPTA VS DEV RAJAK]
 This case was registered
under the section 338 IPC .A
drunken driver took a u turn
and there was 2 wheelers 1
was coming from front and
the other from the back of
the car .The arguments were
as follows :-
 The car driver was drunk and
he was driving in the wrong
side
 The arguments from the
defense was that the motor
cycle wa on the wrong side
and the other bike was
trying to overtake the car
 The decision was made that
both the parties have to
compensate 50% towards
the damage .

11. Capacity of party- >Every person is competent
to enter into a contract only if he is of majority
age and is also of sound mind.
Incapacity o parties are dived into 3 parts:-
1]. Minor
2]. Unsound mind
3]. Disqualified by law
Unsound Mind is further divided into 3
parts:-
1]. Idiot
2].Lunatic
3]. Drunken