CAPACITY TO

CONTRACT

The parties who enter into a contract must

have the capacity to do so.

COMPETENCE of the parties to enter into a

valid contract.

Every person is competent to contract who:

Is

of the age of majority.

Is of sound mind.
Is not disqualified by any law.

MINORS

A minor is a person who has not completed

18 years of age.

Law protects minors against their own

inexperience

Law should not cause unnecessary hardship

to persons who deal with minors.

LEGAL RULES AS TO MINORS

AGREEMENTS

An agreement with or by a minor is void ab

initio.
A

minor, entered into a contract for borrowing a sum

of Rs. 20,000 out of which the lender paid the minor a
sum of Rs. 8,000. The minor executed a mortgage of
property in favor of the lender. Subsequently, the
minor sued for setting aside the mortgage.

Held:

Mortgage was void and lender was not

entitled to repayment of money

He can be a beneficiary.
Law

does not regard him as incapable of accepting a

benefit.
Such contracts may be enforced at his option, but not
at the option of the other party.
M aged 17 agreed to purchase a second hand scooter
for Rs. 5000 from S. he paid Rs. 200 as advance and
agreed to pay the balance next day and collect the
scooter. When he came with the money next day S told
him that he has changed his mind. S cannot avoid the
contract now.
A

a minor, under a contract of sale delivered goods to

the buyer . Held he was entitled to maintain a suit for
recovery of price.

His agreement cannot be ratified by him on

attaining the age of majority.
Consideration

given during minority is no consideration

If it is necessary a new contract may be entered into
by minor on attaining majority provided it is supported
by a fresh consideration.
A,

is a minor who makes a promissory note in favor of

B. On attaining majority, he makes out a fresh
promissory note in lieu of the old one. Neither the
original, nor the fresh promissory note is valid.
K an infant speculated on stock exchange and became
liable to stock brokers. Subsequent to attaining his
majority he gave two bills in satisfaction of his original
debt. Held K was not liable on his bills.

If he has received any benefit under a void

agreement, he cannot be asked to compensate
for it.

a minor obtains a loan by mortgaging his property.

He is not liable to refund the loan. Not only this,
even his mortgaged property cannot be made liable
to pay the debt.

He can always plead minority.

Even

if he has by misrepresenting his age, induced

the other party to contract with him, he cannot be
sued.

S,

a minor, borrowed 400 from L, by fraudulently

misrepresenting that he was a major. On default by S,
L sued for return of 400. Held : L could not recover
400, and his claim for damages also failed.

It

is to be noted that if money could be traced then

the court would have, on equitable grounds, asked
the minor for restore the money.

Law

gives protection to minors, it does not have give

them liberty to cheat.

He cannot enter into a contract of partnership

Minor is liable in tort( a civil wrong)
His parents/ guardians are not liable for contract
entered into by him.
Minors liability for necessaries.
A

minor is liable to pay out of his property for

necessaries.
Necessaries include:

Necessary goods
Services rendered
Education
Training etc

I a minor bought eleven fancy waist coats

from N. He was at that time adequately
provided with clothes. Held waist coats were
not necessity and I was not liable to pay.

G a minor entered into a contract with R , a

billiards player, to pay him a certain amount
to learn the game. Held G was liable to pay.

Loans incurred to obtain necessaries is also

binding on the minors property.

PERSONS OF UNSOUND MIND

A person is said to be of sound mind If

he is able to understand
If he is able to make a rationale decision
A

person who is of 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 mind but
occasionally of unsound mind may not make a
contract when he is of unsound mind.

Lunatics
Idiots
Drunken or intoxicated