In: Business and Management

Submitted By samhitha
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Pages 25
Capacity to contract

One of the essentials of a valid contract, mentioned in section 10, is that the parties to the contract should be competent to make the contract. According to section 11 :
“Every person is competent to contract who is of age of majority according to 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.”
It means that the following three categories of persons are not competent to contract. 1. A person who has not attained the age of majority, i.e., one who is minor. 2. A person who is of unsound mind 3. A person who has been disqualified from contracting by some law.

Although the above mentioned categories of persons are not competent to contract, yet they may sometimes be making some bargains, taking some loans, or be supplied with some goods by third parties, or be conferred with some benefits etc., the position of such person in such like situations is being discussed below.

Who is a minor ?
A person who has not attained the age of majority is a minor. Section 3 of the Indian Majority Act, 1875 provides about the age of majority. It states that a person is deemed to have attained the age of majority when he completes the age of 18 years, except in case of a person of whose person or property a guardian has been appointed by the Court in which case the age of majority is 21 years.

Nature of a minor’s agreement
As noted above a minor is not competent to contract. One question which arises in case of an agreement by a minor is, whether the agreement is void or voidable? The Indian contract Act does not have any provision to answer this question. In the absence of any statutory provision there had been controversy on this point. The controversy was set at rest by the decision of the Privy Council, in the case of…...

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