“CAPACITY TO CONTRACT”

BY

ROHIT KUMAR PANDEYTISHA MEHROTRA

SHIKHA THAKURSUMIT KUMARRICHA NEHRA

SIMRANJEETSTUTI JAIN

What is aVALID CONTRACT

ESSENTIALS OF A VALID CONTRACT1. Proposal and acceptance2. Consideration – lawful consideration with a lawful object3. Capacity of parties to contract – competent parties4. Free consent5. An agreement must not be expressly declared to be void.6. Writing and Registration if so required by law7. Legal relationship8. Certainty9. Possibility of performance10. Enforceable by law.

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CAPACITY ………means

The ability to enter into a contractNot all persons can enter into contracts

The law protects those who may lack the ability to appreciate the nature of their acts

Protects those who would not be in an equal bargaining position

WHO IS COMPETENT TO CONTRACT ? UNDER SECTION 11 :•Who is of the age of majority•Is of sound mind•Not forbidden under any Law

AGE OF MAJORITY

In India , the age of majority is regulated by the Indian Majority Act(Act IX OF 1875).Every person domiciled in India attains majority on the completion of 18 years of age and thus competent to enter into a contract under such jurisdiction.

POSITION OF A MINOR’s AGREEMENTAn Agreement entered into by a minor is

altogether void.Minor can be a beneficiary .He/ She can always plead minority .Ratification on attaining majority is not

“ALLOWED” .Contract under guardianship.Liabilty under necessaries .

CONTRACT BY A PERSON OF UNSOUND MIND

Idiots, lunatics and drunken persons are examples of those having an unsound mind.

A person of unsound mind is incapable of entering into a contract. An agreement by a person who is not of sound mind is void. However, such a person can enter into a valid contract during an interval of lucidity. Unsoundness of mind is one who is -

Similarly, a person who is unsound mind can make a contract when he turns sound mind. For example a patient in a lunatic asylum, who is at intervals of sound mind may contract during such intervals.

CONTRACT BY DISQUALIFIED PERSONDeclared by Provincial Legislation Devoid of suing in Indian court Statutory corporation too cannot enter into a

contract which is ultra vires its memorandum .

Alike above , Municipal bodies are devoid of entering into a contract which are not within their statutory powers .

CASE LAW

Mohribibee V Dharmodas Ghose Raghavachariah Vs. Srinivas