Module 9

Capacity to Contract
By
Dr Alice Mani
Two Types

1.Incapacity Arising from the Status

of an Individual, and
2.Incapacity Arising from Mental
Deficiency of the Person
Contracting
1.Incapacity Arising from The Status of an
Individual

1.1 Political or Civil Status

1.2 Alien Enemy
1.3 Convicts
1.4 Bankrupts
1.Incapacity Arising from The Status of an
Individual

1.5 Professional Status,

Barrister
1.6 Artificial Person or
Corporation
2.Incapacity Arising from Mental Deficiency of the Person
Contracting

2.1 Minor
2.2 Insane Person
2.3 Idiot
2.4 Drunken Person
First Point

Incapacity Arising from the

Status of an Individual
1.1 Political or Civil Status

● Section 86 of the Indian Civil

Procedure Code
● In Order to Sue Foreign Rulers or
Ambassadors
● Prior Approval of Central Government
is Mandatory
 1.2 Alien Enemy

● A Person not an Indian is an Alien

● Declaration of War
● During the Continuance of War
● Contracts Entered into Before War Will
be Suspended During the Continuance of
the War
Continued—

● If an Indian Resides in an Enemy

Country During War
● He or She is Treated as an Alien Enemy
● Permitting Trade will be Helping the
Enemy Country
1.3 Convicts

● Prison/ Imprisonment
● Capacity to Contract will
Regain on Bail or When Out
of Prison
1.4 Bankrupts

● Official Receiver will Deal

with Insolvent’s office
1.5 Professional Status

● Barrister in U.K
● Specialist Legal Advisers and
Courtroom Advocates
● Barristers are Called to Provide
Specialist Advice
1.6 Artificial Person or Corporation

● Special act of Parliament or State Legislature

● No Physical Existence
● Human Beings Acts as Agents
● Contracts Entered Under Seal
● Articles and Memorandum of Association
● Ultra Vires
Second Point

Incapacity Arising from Mental

Deficiency of the Person
Contracting
2. 1 Minor or Infants

● Eighteen Years of Age in India

● If Guardian is Appointed by
the Court
● Twenty One Years of Age
 2.2 Persons of Unsound Mind

● A Person of Unsound Mind Cannot

Make a Rational Judgement
● A Person of Unsound Mind can
Enter Into a Contract When He is
of Sound Mind
 2.2 Persons of Unsound Mind

● A Person of Sound Mind, But

Occasionally of Unsound Mind,
May Not Make a Contract When
He is of Unsound Mind
2.3 Idiots

● An Idiot is a Person Who

Lost His Mental Powers
● Idiocy is Permanent
● Lunacy is Periodical
2.4 Drunk or Intoxicated Persons

● Temporary Incapacity in an
Intoxicated State
● Not Capable of Taking
Rational Decision