Contractual capacity

Sec. 11: Every person is competent to contract who is of the age of majority acc. To law to which

he is subject, and who is of sound mind, and is not disqualified by any law to which he is subject

Minor• 18 years of age• 21 years if Where a guardian of the minor person’s property has been appointed

under the Guardian’s and Ward’s act Where the superintendence od minor’s property is assumed by a court of

wards.• Mohri Bibee vs. Dharamdas (1903)• In this case, the minor had rxecuted amortgage for a sum of Rs. 20,000 out

of whichthe lender had paid the minor only Rs. 8000. The minor then filed a suit for setting aside the mortgage.. It was contended that as the contract was voidable and the minor was now repudiating it, the amount of Rs. 8000 actually paid to the minor must be refunded under section 65 of the Indian Contract Act. The primary council pointed out that as the minor’s contract was absolutely void, no question of refunding money can arise in these circumstances Minor’s agreemant is absolutely void and devoid of any consequences

Minor’s agreement• An agreement with a minor is void ab- initio• The rule of estoppel does not apply to minor• No restitution except in certain cases• Minor’s liability for necessaries• Minor’s liability in tort• No specific performance• No ratification• A minor can be a beneficiary• Partnership by minor• A minor can be an agent• Minor can be shareholder• A minor can not be declared insolvent• Minor can not be a surety• Position of minor’s parents• Contracts of apprenticeship and service

Persons of unsound mind• Sec 12: A person is said to be of sound mind for the purpose

of making a contract if, at the time when he makes it is capable of understanding it and forming a rational judgment as to its effects upon his interests

• Idiot-congenital lack of dev. of brain-incapable of entering into a contract

• Lunatic-mental faculties of thinking are deranged. Lucid intervals when he is perfectly sane’ If contract done at that time, it is binding.

• Drunken or delirious person-temporary incapacity. Under the effects of intoxication can not enter into a contract

• Mental decay or senile mind-contract if done voidAgreement by unsound mind- Absolutely void and inoperative against him but he can derive benefits under it.

Persons unqualified by law

• Alien enemies• Foreign sovereigns and ambassadors• Convicts• Insolvents• Married women• Professional persons• Corporations and companies