CAPACI

TYOFPARTI
ES
Part
iesenteri
ngint
ocontractsmustbecapable.Capacityofpar t
iesemphasi sest hatthe
part
iesenteri
ngi
ntoacontractshoul
dbecapableofunderstandi
ngi tandf or
mingar ati
onal
j
udgementast oit
seffectupont heiri
nter
est
s.Therefore,law r
equi r
est hatthepar t
ies
shouldhavesoundmind.Onl yaper sonwithasoundmi ndcanpr operl
yunder st
andt he
i
mpl i
cati
onsofacontr
act.Thel awdoesnotall
owcertai
nper sonsent erintoanagreement
i
npubl i
cinter
est
.

Secti
on11t heActprovidesthat,‘
Everyper
soniscompetenttocont
ractwhoi
softheageof
majori
tyaccordi
ngtot hel aw t
owhi chheissubjectandwhoi sofsoundmindandisnot
di
squali
fi
edf r
om contr
act i
ngbyanyl awtowhichheissubject
.’

I
NCAPACI
TYOFPARTI
ES

Minor Unsoundmind Di
squal
i
f i
ed by
Law(i
mmat
uremi
nd) (Def
ici
encyofmi
nd) (Stat
us)

I
diot Lunat
ic Dr
unkar
d

Al
i
enEnemy For
eignSov
erei
gn I
nsol
vent Conv
ict Mar
ri
ed
Woman

MI
NOR

Accordi
ngtotheIndianMajori
tyAct,1875,ami norisapersonwhohasnotcompl et
ed18
year
sofhis/herage.Howev er
,whenaguar di
anofami nor’
spersonorpropertyhasbeen
appoi
ntedundertheGuardi
ansandWar dsAct,1890,oraCour tofWardshast akencharge
ofminor’
sproper
ty,duri
nghis/herminori
ty,ami norwi
llatt
aintheageofmaj ori
tyafter21
year
sofage.

Posi
ti
onofami
nori
nIndi
aLaw

I
. Anagr eementwithorbyaminorsubj
ectt
ocert
ainexcept
ionsisabsol
utel
y
voi
dandi noper
ati
ve:Anagr
eementwithandbyami norisabsol
utel
yvoid
andinoperati
ve.

CaseLawMohr
iBi
biVsDhar
modasGhosh1903

I
I. Aminorcanbeapromiseorbenef
ici
ary
:Anagr
eementi
fitbenef
ici
alt
othe
mi
norcanbeenf
orcedagai
nsthi
m.

I
II
. Anagr
eementwit
haminor
,bei
ngabsolut
elyvoid,cannotber
ati
fi
edbyhi
m
onhi
sbecomingamaj
or:Aminorcannotrat
if
yacont r
act
,ot
herwi
sei
twil
l
 def
eatt
hev
eryobj
ect
iveofgr
ant
ingpr
otect
iont
othemi
nor
.

Casel
awRamaswamyVs.Chet
ti
ar1906

I
V. Aminorcannotbeaskedt
oret
urnanybenef
itenj
oyedbyhi
m ort
opayany
compensat
ionf
orit
.

V. A mi norcanalwaysplead i
nfancyorminori
ty:Ev
enwher eami norhas
misrepresent
edhisagei
.e.hehasdecl
aredtotheotherpar
tyt
hathewasa
major,heisnotl
i
able.

VI
. Ami norcanbeanagent:Ami norcanbeappointedasanagent
.Anagentis
onl
yaconnect i
ngli
nkbet weenthepri
ncipalandthethir
dpart
y.Theminor
agentisnotl
i
ableei
thert
ot hepri
nci
palorthet
hir
dparti
es.

VI
I. Ami nor’
sestateisl
iabl
efornecessari
essuppl
iedtohim ort
oanyper son
whom themi nori
sboundtosupport:I
nabsenceofsuchaprovi
sionminor’
s
l
ifewouldhav ebecomedi f
fi
cul
t.Itcover
sserv i
cesandbenefi
tssuchas
educati
on,r
easonabl
eexpenseset
c.

Thenecessar
iesshoul
dbeaccordingtothestandardofl
if
eoft heminorandhe
shoul
dbeinneedofthem bot
hatt
hetimeofcontr
actsaswel
lasdeli
ver
y.

CaseLawNashVs.I
nman1908

VI
II
. Ami norcannotbedecl
aredinsol
vent:Sinceami nori
sincapableofbi
ndi
ng
hi
mself,hecannotcontractdebts.Evenf ornecessar
iesofl i
feheisnot
per
sonall
yliabl
e,onl
yhi
spropert
yisli
able.

I
X. Ami norcannotbecomepar t
nerbutmaybeadmi ttedforthebenefi
tsofa
par
tnershi
pi fotherpartner
s agree:Ifallthe par
tner
s ofan exi sti
ng
par
tnershi
pagree,aminormaybeadmi t
tedt
othebenefi
tsofapartner
ship.

X. Noliabil
it
yofguardianfortheactsofminor
:TheGuardi
anofaminorisnot
l
iabl
ef ortheact
sofami nor.However
,whereaminori
sacti
ngasanagentof
t
heguar diancanli
ablef
ortheactsofaminor.

PERSONOFUNSOUNDMI
ND

Sect
ion12,‘Apersonissai dtobeofsoundmi ndforthepur poseofmakingacontract,ifat
theti
mewhenhemakesi t,heiscapableofunder standi
ngi tandoff or
mingar ational
j
udgementastoit
sef fectuponhiseff
ectuponhi sint
erests.Todecidewhet herapersoni s
ofsoundmindornotwehav etoseetwot hi
ngs:i.capacitytounderstandthecontract.ii
.
abi
li
tytof
rom ar
ationaljudgementastoit
seffectonaper son’sint
erest
.”

I
diot
s,Lunat
icsanddr
unkenper
sonshav
ebeenpl
acedi
nthi
scat
egor
y.

a.I
diot
:Ani
dioti
saper
sonwhoi
snat
uralf
oolorbor
nfool
:Hei
scompl
etel
ydev
oidof
 mentalcapaci
ty.Hecannotanswereventhemostsi
mplequest
ionsputt
ohi
m.Hi
s
i
nsanit
yispermanent
.Theref
ore,acontr
actwi
thani
dioti
svoi
d.

b.Lunati
c:Alunati
cisapersonwhosement alpowerhasder angedduet osomement al
str
ain.Hei
snotanat ur
alorbornfool
.Therefore,hisi
ncapaci
tyi
sonl ytemporar
yand
duri
ngluci
dinterv
alshei
salri
ghtandcanent erintoavali
dcontractduri
ngthatt
ime.

Thusi
ncaseofl
unacyi
nsani
tyi
stempor
aryori
nter
mit
tentwhi
l
eincaseofi
diocy
,it
i
spermanent
.

Si
mil
arl
y,aper
sonwhoisusuall
yofsoundmi nd,butoccasi
onal
l
yofunsoundmi
nd,
maynotmakeacont
ractwhenheisofunsoundmi nd.

c. Drunkar
dsorint
oxicat
edpersons:Adrunkar
disaper sonwhoisundert
hei
nfluence
ofdrinkorsomedur g.Whenhei sdrunkheisincapableofmakinganyrati
onal
j
udgement.Ther
efore,
hiscaseistr
eat
edatparwit
ht hatofal
unati
c.

I
diot
s,lunat
icsand drunken per
son areincapabl
e ofenter
ing i
nto cont
ract
sbutthei
r
pr
opert
iesareli
abl
ef ornecessar
iessuppl
i
edt othem orthei
rdependentswhom t
heyare
l
egal
lyboundtosupport
.

PERSONDI
SQUALI
FIEDBYLAW TOENTERI
NTOCONTRACTS

Personsareincl
udedwhohav ebeendi
squal
if
iedbylawt
oent
eri
ntocont
ract
sei
theri
nthe
publi
cint
erestorbecauseoft
hei
rspeci
alpr
ivi
l
eges.

1.Ali
enEnemy:Contr
actswit
hanalienenemyi saper
sonwhoseSov ereignorStatei
s
atwarwitht
heGovernmentofI
ndia.I
fthecontr
acti
sagai
nstpubl
i
ci nterestorpubl
i
c
pol
icy
,thensuchacontr
actwoul
dbedi ssol
ved.

2.ForeignSov erei
gnorst ate:Forei
gnsov erei
gnshavebeengi venhonourabl
est at
us
and, ther ef
ore, enj
oy some speci al pri
vil
eges. For
eign soverei
gns are the
representati
ves off or
eign states eg.Ambassador s,high commi ssi
oners,etc.
sovereignscannotbesuedunl esstheyvolunt
aril
ysubmitoragreetothejur
isdi
cti
on
ofthelocal cour
ts.

Thi
spr
ivi
l
egei
sav
ail
abl
eonl
ytot
hepr
esentsov
erei
gnandnott
otheex-
member
s.

3.Convi
ct:A convi
ctisaper sonwhohasbeeni mpri
sonedbyaCour toflaw.Ifa
convi
ctisunder
goingi
mprisonmenthei
sincapabl
eofenter
ingintocont
racts.Af
ter
the i
mprisonmentis ov
erorhe i s par
doned,he again becomes capable of
cont
racti
ng.

4.Insol
vent:Whenaper sonisdeclar
ed i
nsolv
enthi
spr opert
yvest
sinanof fi
cer
appoint
edbyt heCourt.Unl
esstheinsol
ventisdi
schargedheisnotcapabl
eof
enter
ingint
ocont
ract
s.

5.Mar
ri
edwoman:UnderEngl
ishLaw,however,unt
il1883pr
oper
tyofmar
ri
edpassed
t
othei
rhusbandsont
heirmarr
iage.UnderI
ndianLaw menandwomenhaveequal
cont
ract
ual
capaci
ty.