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Who is Competent Party Under the Indian Contract Act ? Discuss Minors Position in Contract.

Who is Competent Party Under the Indian Contract Act ? Discuss Minors Position in Contract.

Who are competent parties?
According to section 11 of the Indian Contract Act , 1872

Competent Parties –

Every Person who have attained

  • Age of Majority as per the Indian Majority Act, 1875
  • Who is of Sound mind and
  • Is not disqualified by law

 

  • Case :

Mohiribibi vs. Dharamdas Ghosh (1903)

In the case of Mohiribibi vs. Dharam das Ghosh It was decided that Agreement with or by a minor is void and in operative ab initio. (From the very beginning )

  • Positions Of Minor’s Agreement (Agreement with Minor is Void Ab Initio : Explain)
    • Minor’s Agreement is Void Ab intito
    • A minor can be a promise or a beneficiary
    • No Ratification on Age is Allowed
    • Minor as a partner
    • Minor as a Agent
    • Minor’s liability
    • Can be Enforceable by Guardian
    • Cannot be Enforceable by Law or Minor

 

  • Unsound Mind

According to section 12 of the Indian Contract Act ,

“A person is said to be of sound mind for the purpose of making a contact if ,at the time when he makes it, is capable of understanding it and of forming a rational judgment as to its effect upon his interests.

  • Test of Sound Mind
    • Capacity to understand the business concerned
    • Ability to form a rational judgment.
    • As to its effect on a person’s interest.
  • Contract in Lucid Interval
    • 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 min, but occasionally of unsound mind may not make a contract when he is of unsound min.

 Disqualified by Law / By Status

  • Aliens
  • Foreign Sovereign
  • Corporations
  • Married Women
  • Professional Incapacity
  • Insolvency
  • Felon or Convicts’

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