1. Capacity to Contract
Sec.10 – 12 of ICA,1872

2. Parties to the contract must be competent to contract
Section 10
Parties to the contract must be competent to contract

3. Who are competent to contract:
Section 11:
Age of majority
Sound mind
Not disqualified from contracting by any law to which he is subject

4. INCAPACITY Disqualified by law (Status) Minority (immature mind)
Unsound mind
Idiot
Lunatic
Drunkard
Political
Status:
Alien Enemy
Alien Friend
Foreign Sovereigns &
Ambassadors
Corporate
Status:
Company
Statutory
Corporations
Marital
Status:
Married
Women
Legal
Status:
Insolvent
person

5. Sec. 3, of Indian Majority Act,1875
MINORITY
Sec. 3, of Indian Majority Act,1875

6. Minors contracts
A contract with or by a minor is void & a minor therefore can-not bind himself by a contract.1
A minor can be a promisee or a beneficiary
A minors agreement can-not be ratified by the minor on his attaining majority2

7. If a minor has received any benefit under a void contract,he can-not be asked to refund the same3
A minor is always allowed to plead minority4
A minor can-not be a partner in a partnership firm
A minor’s state is liable to a person who supplies necessaries of life to a minor5
A minor can act as a agent

8. Minor’s parents/guardians are not liable to a minor’s creditor for the breach of contract by the minor

9. Sec.12 : Test of soundness of mind
Mental Incompetence
Sec.12 : Test of soundness of mind
Soundness of mind of a person depends on two
Facts :
His capacity to understand the terms of the
contract &
ii) His ability to form a rational judgement as
to its effect upon his interest