- CHAPTER 3
CAPACITY OF PARTIES
- CAPACITY OF
PARTIES
- FOR A VALID CONTRACT, THE PARTIES TO A CONTRACT MUST HAVE CAPACITY.
- EVERY PERSON IS PRESUMED TO CONTRACT MUST HAVE CAPACITY BUT THERE ARE
CERTAIN PERSONS WHO’S AGE, CONDITION OR STATUS RENDERS THEM INCAPABLE OF
BINDING THEMSELVES BY A CONTRACT.
- SECTION 10 ALL AGREEMENTS ARE CONTRACT IF THEY ARE MADE BY THE PARTIES
COMPETENT TO ENTER INTO CONTRACT
- SECTION 11 OF THE CONTRACT ACT DEALS WITH THE COMPETENCY OF PARTIES AND
PROVIDES THAT EVERY PERSON IS COMPETENT TO CONTRACT WHO IS THE AGE OF
MAJORITY ACCORDING TO THE LAW TO WHICH HE IS SUBJECT AND WHO IS OF SOUND
MIND AND IS NOT DISQUALIFIED FROM CONTRACTING BY ANY LAW TO WHICH HE IS
SUBJECT.
- FOLLOWING PERSONS ARE INCOMPETENT TO CONTRACT:-
- MINORS
- PERSON OF UNSOUND MIND
- PERSONS DISQUALIFIED BY ANY LAW TO WHICH THEY SUBJECT
- COMPETENT PERSON
- MINOR
- MINOR IS A
PERSON WHO IS NOT A MAJOR: - ACCORDING TO THE INDIAN MAJORITY ACT, 1875, A
MINOR IS ONE WHO HAS NOT COMPLETED HIS OR HER 18 TH YEAR OF AGE. ( SECTION 3 OF THE MAJORITY ACT)
- EXCEPTION : THE AGE OF MAJORITY SHALL BE CONSIDERED 21 YEARS IN THE
FOLLOWING SITUATIONS
- WHERE A GUARDIAN OF A MINOR’S PERSON OR PROPERTY HAS BEEN APPOINTED
UNDER THE GUARDIANS AND WARDS ACT,1890 OR
- WHERE THE SUPERINTENDENCE OF A MINOR’S PROPERTY IS ASSUMED BY A COURT
OF WARDS
- LOGIC OR WHY????
- A MINOR HAS AN IMMATURE MIND AND CANNOT THINK WHAT IS GOOD OR BAD FOR
HIM.
- AND SECONDLY LAW MUST NOT CAUSE UNNECESSARY HARDSHIP TO PERSONS WHO
DEAL WITH MINORS.
- EFFECT OF MINOR’S AGREEMENT
OR RULES - AN AGREEMENT WITH OR BY MINOR IS VOID: SECTION 10 SAYS THAT PARTY SHOUL
BE COMPETENT TO ENTER INTO CONTRACT. SECTION 11 SAYS THAT MINOR IS NOT
COMPETENT TO ENTER INTO CONTRACT.
- IT IS NULL AND VOID AB INITIO
- CONSIDERED AS NULLITY AND NON EXISTING FROM THE VERY BEGINNING
- CASE MOHRI BIBI V DHARMODAS
- CASE MOHRI BIBI V DHARMODAS
- CASE
- AN AGREEMENT WITH OR BY MINOR IS
VOID
- ON BEHALF OF THE MINOR IF A GUARDIAN ENTERS INTO AGREEMENT FOR THE
BENEFIT OF THE MINOR IT IS ENFORCEABLE
- SRIKAKULAM SUBRA MANAYAN VS KURTA SUBHA RAO
- IN ORDER TO PAY OFF THE PROMISSORY NOTE AND MORTGAGE DEBT OF HIS FATHER
- MINOR SON AND MOTHER SOLD A PIECE OF LAND TO THE HOLDERS OF THE
PROMISSORY NOTE FOR THE SATISFACTION OF DEBT
- LATER THE MINOR BROUGHT THE CASE IT IS VOID
- BUT COURT HELD SALE WAS DONE BY THE MOTHER FOR HIS SON AND ON HIS
BEHALF. IT WAS VALID
- CONTRACT BENEFICIAL TO THE MINOR : WHILE NO
LIABILITY CAN BE INCURRED BUT HE IS NOT DEBARRED FROM ACCEPTING THE
BENEFIT
- IF THE MINOR HAS ADVANCED MORTGAGE MONEY ON MORTGAGE IN FAVOUR OF
MINOR,HE CAN ENFORCE THE CONTRACT
- NO RATIFICATION
- AN AGREEMENT WITH MINOR IS COMPLETELY VOID
- MINOR CAN NOT RATIFY THE AGREEMENT ON ATTAINING THE MAJORITY
- VOID AGREEMENT CAN NOT BE RATIFIED
- ARUMUGAN V DURAISINGA
- MINOR BORROWED A SUM OF EXECUTING A SIMPLE BOND FOR AND AFTER ATTAINING THE MAJORITY
EXECUTED A SECOND BOND IN RESPECT OF THE ORIGINAL LOAN
- DECLARED VOID
- BUT IF ON BECOMING MAJOR MINOR MAKES A NEW PROMISE FOR FRESH CONSIDERATION NEW PROMISE BINDING
- MINOR CAN BE A PROMISEE OR BENEFICIARY
- IF CONTRACT IS BENEFICIAL TO A MINOR IT CAN BE ENFORCED BY HIM
- MINOR IS CAPABLE OF PURCHASING A PROPERTY AND HE MAY SUE TO RECOVER THE
POSSESSION OF PROPERTY ON THE TENDER OF THE PURCHASE OF MONEY
- MINOR CAN BE A PROMISE OR BENEFICIARY
- THE GENERAL AMERICAN INSURANCE COMPANY LIMITED V MADAN LAL SONU
- X A MINOR INSURED HIS GOODS WITH INSURANCE COMPANY
- GOOD DAMAGED
- X FILED A SUIT FOR CLAIM
- THE INSURANCE COMPANY TOOK THE PLEA THAT PERSON ON WHOSE BEHALF THE
GOODS WERE INSURED WAS MINOR
- BUT COURT REJECTED THE PLEA AND MINOR WAS ABLE TO RECOVER THE INSURANCE
MONEY
- NO ESTOPPEL AGAINST A MINOR
- WHERE A MINOR BY MISREPRESENTING
HIS AGE HAS INDUCED THE OTHER PARTY TO ENTER INTO A CONTRACT WITH HIM
- HE CAN NOT BE MADE LIABLE ON CONTRACT
- NO ESTOPPEL AGAINST THE MINOR
- MEANS HE IS NOT ESTOPPED FROM HOLDING HIS INFANCY IN ORDER TO AVOID
CONTRACT
- COURT MAY DIRECT THE MINOR TO
RESTORE THE BENEFIT
- NO DOUBT MINOR HAS GOT PROTECTION BUT HE IS NOT LIBERTY TO CHEAT OTHER
- NO ESTOPPEL AGAINST A MINOR
- ACCORDING TO SECTION 33 OF THE SPECIFIC RELIEF ACT,1963 COURT WILL ORDER ON EQUITABLE CONSIDERATION FOR RESTITUTION IF THE
MINOR IS STILL IN POSSESSION OF THE MONEY OR THINGS PURCHASED OUT OF IT
- NO SPECIFIC PERFORMANCE EXCEPT IN CERTAIN CASES
- THE COURT WILL NEVER DIRECT
SPECIFIC PERFORMANCE OF AN AGREEMENT BY MINOR
- BUT A CONTRACT ENTERED INTO BY THE GUARDIAN OR MANAGER ON MINOR’S
BEHALF CAN BE SPECIFICALLY ENFORCED :
- THE CONTRACT IS WITH IN THE AUTHORITY OF THE GUARDIAN OR MANAGER
- IT IS FOR THE BENEFIT OF THE MINOR
- NO SPECIFIC PERFORMANCE EXCEPT IN CERTAIN CASES
- LAL CHAND V NARHAR
- BOND EXECUTED WAS EXECUTED BY WIDOW ACTING AS GUARDIAN OF HER MINOR SON
FOR THE PAYMENT OF HER DECEASED HUSBAND’S DEBTS
- THE MINOR’S ESTATE CAN BE HELD LIABLE FOR THE PAYMENT AS PER THE BOND
- NO RESTITUTION
- WHEN A CONTRACT BECOMES VOID IT
IS NOT PERFORMED BY EITHER PARTY
- BUT IF ANY BENEFIT IS RECEIVED UNDER SUCH A CONTRACT THEN BENEFIT WILL
BE RESTORED
- MINOR IS NOT LIABLE TO REPAY ANY MONEY OR COMPENSATION FOR ANY BENEFITS
- IN CERTAIN CASES SECTION 33 OF THE
SPECIFIC RELIEF ACT
- MINOR CAN NOT BE DECLARED INSOLVENT: EVEN FOR NECESSARIES FOR LIFE. ONLY HIS PROPERTY IS LIABLE EVEN FOR
NECESSARIES OF LIFE AND HE PERSONALLY IS NOT LIABLE
- MINOR AS PARTNER : CAN NOT BE PARTNER BUT HE CAN BE ADMITTED TO THE
BENEFITS OF PARTNERSHIP ( SECTION 30)
- MINOR CAN BE AN AGENT: BUT HE WILL
NOT LIABLE TO THE PRINCIPAL FOR HIS ACTS. MINOR CAN DRAW,DELIVER AND ENDORSE
NEGOTIABLE INSTRUMENT WITHOUT HIMSELF BEING LIABLE
- EFFECT OF MINOR’S AGREEMENT
OR RULES - MINOR CAN NOT BIND PARENT OR GUARDIAN:
IN THE ABSENCE OF AUTHORITY EXPRESS OR IMPLIED. PARENTS WILL BE LIABLE
ONLY WHEN CHILD ACTING AS AGENT
- MINOR CAN NOT BE SHAREHOLDER OR
MEMBER OF THE COMPANY
- SURETY FOR MINOR : MINOR CAN NOT
BE SURETY AS HE IS NOT LIABLE TO PAY UNDER CONTRACT
- CONTRACT BY MINOR AND ADULT
JOINTLY THEN ADULT ONLY WILL BE LIABLE
- LIABILITY FOR TORTS: TORT IS CIVIL
WRONG. A MINOR IS HELD LIABLE FOR TORT
- WHERE A MINOR BORROWED A HORSE FOR RIDING AND HE IS LIABLE WHEN HE LENT
THE HORSE TO ONE OF HIS FRIEND AND INJURED AND KILLED THE HORSE
- LIABILITIES FOR NECESSARIES
·
THE TERM NECESSARIES INCLUDE ARTICLES REQUIRED TO MAINTAIN A PARTICULAR
PERSON IN THE STATE DEGREE AND STATUS IN LIFE IN WHICH HE IS INDIA FOOD
,CLOTHING, SHELTER AND EDUCATION HAVE BEEN HELD TO BE NECESSARIES. THE WHOLE
QUESTION TURNS UPON THE MINOR’S STATUS IN LIFE,UTILITY RATHER ORNAMENTATION
·
MINOR IS NOT PERSONALLY LIABLE
·
HIS ESTATE IS LIABLE
·
TWO CONDITIONS :
- CONTRACT MUST BE FOR THE GOODS REASONABLY NECESSARY FOR HIS SUPPORT
- MUST NOT HAVE SUFFICIENT SUPPLY OF THESE NECESSARIES
- LIABILITIES FOR NECESSARIES
·
NASH VS INMAN : INMAN AN INFANT UNDERGRADUATE IN CMABRIDE
BOUGHT ELEVEN FANCY WAIST COAT FROM NASH
·
HE WAS ADEQUATELY PROVIDED WITH CLOTHING
·
SO THEY WERE NOT NECESSARY AND THE PRICE COULD NOT BE RECOVERED
- THE FOLLOWING HAVE BEEN TREATED NECESSARIES:-
- HOUSE GIVEN TO MINOR ON RENT
- HORSE WHEN DOCTOR ORDERS RIDING EXERCISE
- A RACING BICYCLE
- BUT THESE ARE NOT HELD TO BE NECESSARIES:-
- GOODS SUPPLIED FOR THE PURPOSE OF TRADING
- A SILVER GIFT GOBLET
- CIGARS AND TOBACCO
- REFRESHMENT TO AN UNDERGRADUATE FOR ENTERTAINING
- PERSON OF UNSOUND MIND
- AS PER SEC 11 OF CONTRACT ACT FOR A VALID CONTRACT EACH PARTY TO
CONTRACT MUST HAVE A SOUND MIND. CONTRACT MADE BY THE PERSONS OF UNSOUND
PERSONS.
- A VALID CONTRACT REQUIRES ASSENT OF TWO MINDS BUT A PERSON OF UNSOUND
MIND HAS NOTHING WHICH THE LAW RECOGNIZES AS A MIND.
- UNSOUND MIND DOES NOT MEAN WEAKNESS OF MIND OR LOSS OF MEMORY. BUT LACK
OF CAPACITY TO UNDERSTAND THE TERMS AND IT’S ALSO EFFECT.
- WHAT IS SOUND
MIND
- SECTION 12 :
- 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 THE TERMS OF IT
- AND ALSO MAKE RATIONAL JUDGMENTS
- 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 SOUND MIND BUT OCCASIONALLY OF UNSOUND MIND IS
NOT CONSIDERED COMPETENT TO MAKE A CONTRACT WHEN HE IS OF UNSOUND MIND.
- SANE MAN WHO IS SO DRUNK THAT HE CAN NOT UNDERSTAND THE TERMS OF THE
CONTRACT OR FORMS A RATIONAL JUDGEMENT
- SO HE IS INCOMPETENT TO MAKE A
CONTRACT WHILE SUCH DRUKENNESS LAST
- LAW PERSUMES THAT EVERY PERSON IS OF SOUND MIND UNLESS OTHERWISE IT IS
PROVED BEFORE COURT
- UNSOUND MIND MAY ARISE FROM:-
- IDIOCY
- LUNACY
- DRUNKENNESS
- HYPNOTISM
- MENTAL DECAY
- UNSOUND MIND
- IDIOT : IS A PERSON
- DEVOID OF ANY FACULTITIES OF
THINKING OR RATIONAL JUDGEMENTS
- UNSOUND MIND BY BIRTH
- HE IS INCAPABLE OF UNDERSTANDING AND MAKING RATIONAL JUDGEMENTS
- HIS MENTAL POWERS OF UNDERSTNADING EVEN ORDINARY MATTERS ARE ABSENT
BECAUSE OF LACK OF DEVELOPED BRAIN
- EFFECT
- THE AGREEMENT OF AN IDIOT IS ABSOLUTELY VOID-AB-INITO
- ALL AGREEMENTS OTHER THAN THOSE FOR NECESSARIES OF LIFE WITH IDIOT ARE
ABSOLUTELY VOID
- HE IS NOT PERSONALLY LIABLE EVEN FOR THE PAYMENT OF NECESSARIES OF LIFE
TO HIM BUT HIS PPROPERTY CAN BE USED TO PAY SUCH DEBTS ( SECTION 68)
- UNSOUND MIND CASE
·
INDERSINGH V PARMESHWARDHARI SINGH
·
PROPERTY WORTH RS 25,000 WAS AGREED TO BE SOLD BY A PERSON FOR RS 7000
·
HIS MOTHER PROVED THAT HE WAS CONGENTIAL IDIOT.
·
SALE WAS HELD TO BE VOID
·
LUNATIC OR INSANITY :
- DISEASE OF BRAIN
- LOSES THE USE OF HIS REASON TO SOME MENTAL STRAIN OR DISEASE
- LUCID INTERVAL-PERIOD IN WHICH HE IS TO HIS SENSES
- HE CAN ENTER INTO CONTRACT DURING THAT PERIOD WHEN HE IS OF SOUND MIND
- EFFECT LUNATIC
·
DRUNKARD : IS APERSON WHO IS UNDER THE INFLUENCE OF
ALCOHOL OR INTOXCATING SUBSTANCE AND HE STANDS THE SAME FOOTING AS LUNATIC
·
HOWEVER ORDINARY OR PARTIAL DRUNKEN IS NOT SUFFICIENT
·
HE HAS TO PROVE THAT HE WAS SO INTOXICATED THAT HE WAS NOT ABLE TO
UNDERSTAND THE CONTRACT
·
VOID
·
HYPNOTISM: TEMPORARY INCAPACITY TILL A PERSON IS UNDER THE EFFECT OF
ARTIFICAL INDUCED SLEEP. SAME FOOTING AS OF DRUNKARD
·
MENTAL DECAY :ON ACCOUNT OF OLD AGE
- UNSOUND MIND EFFECT
·
SIMILAR TO MINOR
·
THE POSITION OF CONTRACT WITH UNSOUND MIND IS :
- HE MAY ENFORCE THE CONTRACT FOR HIS BENEFIT
- HIS ESTATE IS LIABLE FOR THE NECESSARIES SUPPLIED TO HIM AND HIS
DEPENDENT
- DISQUALIFIED OF PERSONS
·
CERTAIN TYPES OF PERSONS ARE SPECIFICALLY DISQUALIFIED BY LAW
- ALIEN ENEMIES
- FOREIGN SOVEREIGNS
- INSOLVENTS
- CONVICTS
- CORPORATIONS AND COMPANY
- DISQUALIFIED OF PERSONS
·
ALIEN ENEMY :
ALIEN IS A
PERSON WHO IS NO INDIAN CITIZEN
·
ALIEN IS COMPETENT TO ENTER INTO CONTRACT WITH CITIZEN OF INDIA LIVING IN
INDIA AND HE CAN MAINTAIN AN ACTION ON A CONTRACT ENTERED INTO BY HIM DURING
PEACE. CONTRACT ENTERED BEFORE THE DECLARATION OF WAR ARE TERMINATED DURING THE
WAR ARE UNEFORCEABLE
·
FOREIGN SOVERIGNS,THEIR DIPLOMATIC STAFF AND ACCREDITED
REPRESENTATIVE OF FOREIGN STATES :
·
FOREIGN SOVERIGNS,THEIR DIPLOMATIC STAFF AND
ACCREDITED REPRESENTATIVE OF FOREIGN STATES :
- CAN ENTER INTO VALID CONTRACT
- FOREIGN SOVERIGNS AND ACCREDITED REPRSENTATIVES OF FOREIGN STATES –AMBASSDORS
AND HIGH COMMISSIONERS ENJOY A SPECIAL PRIVILEDGE AND THEY CAN NOT BE
TRIED IN INDIAN COURTS UNLESS THEY VOLUNTARILY SUBMIT
- THEY CAN ENFORCE THE CONTRACT IN OUR CONTRACTS BUT AN INDIAN CITIZEN
HAS TO OBTAIN PRIOR SANCTION OF CG
- CAN ENTER CONTRACT THROUGH AGENT AND AGENTS ARE PERSONALLY LIABLE
·
IN CASE OF COMPANY : THE CONTRACTUAL CAPACITY IS DETERMINED BY THE OBJECT CLASUE OF THE MOA
·
IN CASE OF STATUTORY CORPORATION : DETERMINED BY THE STATUTE
·
ACT DONE IN EXCESS OF THE POWER GIVEN IS ULTRA VIRES
·
CORPORTATIONS ARE ARTIFICAL PERSON AND THEY CAN NOT ENTER INTO THE CONTRACT
OF PERSONAL NATURE
·
CONVICT : A CONVICT WHILE UNDERGOING IMPRSIONMENT IS
INCAPABLE OF ENTERING INTO CONTRACT BUT THIS DISABILITY COMES TO AN END ON THE
EXPIRY OF THE SENTENCE
- DISQUALIFIED OF PERSONS
- AN INSOLVENT CAN NOT ENTER INTO
CONTRACT AS HIS PROPERTY IS WITH OFFICIAL RECIEVER OR OFFCIAL ASSIGNEE
- THE DISQUALFICATION OF INSOLVENT COMES TO END WHEN HE IS DISCHARGED
- LINK FOR CONSIDERATION TOPIC :
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