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Capacity Unsound Mind

The document discusses the contractual capacity of various persons under Indian law. It states that to make a valid contract, one must be of sound mind and understands the nature and effect of the contract. It examines cases of unsound mind like idiocy and lunacy. It also discusses contractual capacity of aliens, foreign sovereigns, married women, insolvent persons, convicts and professionals.

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381 views13 pages

Capacity Unsound Mind

The document discusses the contractual capacity of various persons under Indian law. It states that to make a valid contract, one must be of sound mind and understands the nature and effect of the contract. It examines cases of unsound mind like idiocy and lunacy. It also discusses contractual capacity of aliens, foreign sovereigns, married women, insolvent persons, convicts and professionals.

Uploaded by

aditya
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Contracts 1

Unsound mind
PERSONS OF UNSOUND MIND:

• The party to a contract should have a


sound mind while entering into contracts.
According to Sec.12 of the Indian 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, be capable of
understanding it, and of forming a rational
judgment as to its effect upon his interests.”
• On the anology of the rule in Mohri bibi case
an agreement by a person of unsound mind is
void. During lucid intervals he can make a valid
contract. Sec 68 regarding supply of
necessaries applies to lunatics also.
• A person who is usually of unsound mind, but
occasionally of sound mind, may not make a contract
when he is unsound mind.
• A person who is usually of unsound mind, but
occasionally of sound mind, may make a contract when
he is of sound mind.
• A person who is usually of sound mind, but
occasionally of unsound mind, may make a contract
when he is of sound mind.
• A person who is usually of sound mind, but
occasionally of unsound mind, may not make a
contract when he is of unsound mind.
• Idiocy:
•
• Idiocy is a congenital defect caused by a lack of
development of brain. An idiot is a person who has lost his
mental ability completely. An agreement with an idiot is
void form the very beginning.
•
• Lunacy:
• Lunacy can sometimes be cured, but idiocy is
incurable. A lunatic is one whose mental powers are
deranged so that he cannot form a rational judgment on
any subject. However, he can make a valid contract during
the lucid intervals.
• Drunken Persons:
•
• A contract by a drunken person is void. Drunken persons are liable
for necessaries supplied.
• Drunkenness produces temporary incapacity. I
• llustration (6) to Sec.12 of the act reads as follows:
• ‘A sane man who is delirious from fever, or who is so drunk that he cannot
understand the terms of a contract or form a rational judgment as to its
effects on his interest cannot contract while such delirium or drunkenness
lasts’.

• Example
• If an agreement entered into by a person of unsound mind is for his
benefit, it can be enforced. [Jungal Kishore Vs.Cheddu (1903
•
Aliens:

• Aliens:
• An alien is a person who is a citizen of a foreign country.
An alien may be an alien-friend or an alien-enemy. While
contracts with an alien-friend subject to some restrictions
are valid, contracts with an alien-enemy (an alien whose
country is at war with India), become unenforceable.
• While the war continues, an alien-enemy can neither
contract with an Indian subject, nor can he sue in an Indian
court. Contracts made before the declaration of war may
either he suspended or dissolved.
• Those contracts, which are against the public policy and
which would benefit the enemy, stand dissolved.
Foreign Sovereigns.
• Foreign sovereigns and governments can
enter into contracts through agents residing in
India.
• In those cases, the agent becomes personally
responsible for the performance of contracts.
• Foreign sovereigns or governments cannot be
sued, unless they voluntarily submit to the
jurisdiction of the local court.
• Sec 86 of CPC Consent of the central govt
required to institute a case against foreign
soverigns
[Mighell Vs.Sultan of Johore (1894)]
• The sultan of Johore , a foreign soverign
residing in England as a private person made a
promise of marriage to a young woman.
• She sued for the breach of promise. Held
sultan enjoyed foreign immunity and
therefore not liable.
Statutory Corporations:

• A company cannot enter into a contract


which is against its Memorandum of
Association.
• A statutory corporation cannot go beyond
the objects mentioned in the act, passed by
the Parliament.
• Municipal Corporations are disqualified from
entering into contracts which are not within
its statutory powers.
Married Women:
• In India, there is no difference between men
and women as regards contractual capacity.
• A women, married or single, can enter into
contracts and deal with her properties in any
manner, provided she is a major does not suffer
from any disability like lunacy or idiocy.
• A married woman can bind her husband’s
properties for necessaries supplied to her.
• Married women in England, now, exercise the
same contractual capacity as men.
• Insolvent person:
•
• They are incompetent to contract until they obtain
a certificate of discharge.

• Convicts- When undergoing imprisonment, a convict


cannot enter into a valid contract.
• He can, however, enter into a contract if he is lawfully
under a license called ‘ticket of leave’.
• His incapacity to contract comes to an end when he is
pardoned, or his terms of imprisonment expires.
• Professionals:
•
• In England, barristers are prohibited by the etiquette of their
professin from suing for their fees.
• But, they can sue and be sued for all claims other than their professional
fees.
• In India, since the passing of the Bar Councils Act of 1927, a barrister who
is in the position of an advocate with liberty, both to act and plead, has a
right to contract, and sue for his fees.
• It has been held in Nihal Chand Vs.Dilwar Khan, that a barrister can sue
for his fees in India.
• Like barristers, members of the Royal College of Physicians are
prohibited in England from suing their patients for their fees.
• In India, however, there is no restriction on doctors as regards filing a
suit for recovery of their fees from their patients.

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