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Competency to Contract Explained

(i) To be competent to contract, one must be of the age of majority (18 years old), of sound mind, and not otherwise disqualified. (ii) A minor is anyone under 18 years old, or under 21 if a guardian has been appointed for them or if a court assumes control over their property. Contracts made by minors are void from the beginning and minors cannot be held liable even if they received benefits. (iii) Those of unsound mind, like idiots, can only contract when of sound mind temporarily. Their contracts are otherwise void from the beginning like a minor's.

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Abhishek pathange
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33 views6 pages

Competency to Contract Explained

(i) To be competent to contract, one must be of the age of majority (18 years old), of sound mind, and not otherwise disqualified. (ii) A minor is anyone under 18 years old, or under 21 if a guardian has been appointed for them or if a court assumes control over their property. Contracts made by minors are void from the beginning and minors cannot be held liable even if they received benefits. (iii) Those of unsound mind, like idiots, can only contract when of sound mind temporarily. Their contracts are otherwise void from the beginning like a minor's.

Uploaded by

Abhishek pathange
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd

Who are competent to Contract?

Every person, who is

(i) of the age of majority (i.e. not being a minor)

(ii) of sound mind (i.e. not mentally incompetent) and

(iii) not disqualified from contracting [Section 11]


Who is a Minor?

A person is a Minor, who has:

Not completed 18 years of age, or

21 years of age

(i) Where a guardian of minor’s person or property is


appointed under the Guardians and Wards Act,
1890, Or

(i) Where a Court of Wards assumes superintendence


of minor’s property
Contract with or by a minor is void, ab initio
(not just voidable)

Minor may not return or refund any benefits,


received even under a void contract

A minor can be a promisee or a beneficiary

The minor, even on his attaining the majority,


cannot ratify his old agreement

A minor can always take the plea of being a minor


A minor cannot become a partner in any
partnership firm. However, he may be admitted to
the benefits of an already existing firm

Minor’s estate is liable to a person who supplies the


necessaries of life to him

Guardians and parents of a minor are not liable to


the creditor(s) of a minor, for any breach of contract
by the minor, even for the supply of the necessaries,
or otherwise

A minor can act as an agent, and bind the principal,


but not himself.
Position of contracts by the persons of
mental incompetence
Person who is usually of unsound mind, but occasionally of
sound mind, may make a contract when of sound mind
[Section 12]

Conversely speaking
A person who is usually of sound mind, but occasionally of
unsound mind, may not make a contract when of
unsound mind

Contracts by an idiot, (who is considered to be of an


unsound mind, permanently), is void, ab initio (like the
contract by a minor)

Liability for supplying the necessaries of life to a person


of unsound mind (i.e. lunatic, drunk person, or a person in
delirium, and an idiot), is the same as in the case of a minor
[Section 68]
Position of contracts by the persons of
mental incompetence

Like a minor, the person of unsound mind can be entitled


to the benefits, if any, under the contract

Incompetence through Status like:


1.     From political status
like alien enemies (and not alien friends)
2.     From corporate status
(i.e. ultra vires the Company’s Memorandum of
Association)
3. From legal status
(i.e. the persons, declared insolvents) till a certificate of
discharge (from insolvency) is issued

A married woman is competent to enter into a valid contract

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