LEGAL CAPACITY

OF PARTIES TO A
CONTRACT
LEGAL CAPACITY OF PARTIES TO A
CONTRACT
The factors that determine the question of legal
capacity of the contracting parties;
1. Contracting parties should have attained the age
of majority.
2. Contracting parties should be of sound mind.
3. Contracting parties are not disqualified from
contracting by any law.
 LEGAL CAPACITY OF
PARTIES TO A CONTRACT

1. Age of Majority:
A minor is a person who has not attained 18
years of age. It means a person is competent
to contract after attaining 18 years of age.
 LEGAL CAPACITY OF
PARTIES TO A CONTRACT
2. Sound Mind Person:
According to section 12 of Contract Act, A person
is said to be of sound mind for the purpose of
making a contract if, at the time when he makes it,
he is capable of understanding it and of forming a
rational judgement as to its effect upon his
interests.
LEGAL CAPACITY OF PARTIES
TO A CONTRACT
3. Parties Disqualified By Any Law
According to Section 11
a. Company:
A Company cannot enter into a contract outside the
powers given to the company by its Memorandum
of Association or by the provisions of the
Companies Act.
b. Alien Enemy
An alien means a citizen of foreign country, an alien
whose country is at war with Pakistan is an alien
enemy. A contract with an alien enemy is illegal.
 LEGAL CAPACITY OF
PARTIES TO A CONTRACT
C. Insolvent person:
An insolvent person cannot enter into a contract
with anyone regarding his property.
d. Convict:
A convict is a person who is declared guilty and
imprisoned by the court of law. A convict cannot
enter into a contract.