Legal Llama

  THE POSITION OF A PERSON OF UNSOUND MIND It has already been noted according to Section 11, only a person of sound mind is competent to contract. It means that if a person is of unsound mind, he is incompetent to contract just like a minor. He is not capable of transferring any property by a deed of gift, etc., and a transfer by him would be void ab initio (Section 12, para 2). What is a sound mind for the purpose of making a valid contract has been defined by Section 12 as under: "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 judgment as to its effect upon his interests." Soundness of mind is required only at the time of making a contract. It is possible that a person who is usually of unsound mind, but occasionally of sound mind, may make a contract when he is of sound mind. It means that even a person who is usually of unsound mind can make a ...

POSITION OF A MINOR IN PARTNERSHIP According to Section 4, Indian Partnership Act, 1932, Partnership arises out of a contract. It is, therefore, necessary that the parties to the contract of partnership should be competent to contract. A minor being incompetent to contract cannot become a partner. If a minor is made a full-fledged partner along with other major persons, the agreement would be void and the deed containing their contract would be unenforceable even as between the other major partners. (Dharam Vir v. Jagan Nath, A.L.R. 1968 Punj. 84) Apart from that any person who is of the age of majority, a who is of sound mind, can employ an agent (Section 183). A minor therefore, become a principal. In a partnership, every partner deemed to be a principal (apart from being an agent as well), but since a minor cannot be a principal, he cannot become a partner for that reason also. and cannot become a partner for that reason also. A minor is not competent to enter into a contract....

  CAPACITY TO CONTRACT   Section 11 of the Indian Contract Act clearly states as to who shall be competent to contract. It provides that every person is competent to contract (i)                  who is of the age of majority according to the law to which he is subject, (ii)          who is of sound mind, and (ii)               who is not disqualified from contracting by any law to which he is subject. Thus, a person to be competent to contract should not be i)        a minor, or ii)      of an unsound mind, or iii)    disqualified from contracting Let us now consider each of the aforesaid elements of competency to contract. 3.1 POSITION OF A MINOR 3.1.1 Who is a Minor? According to Section 3 of the Indian Majority Act, ...