What agreements are contracts
According to Section 10 of the Indian Contract Act 1872, All agreements are contracts if they are made by the free
consent of parties competent to contract, for a lawful consideration to
and with a lawful object, and are not hereby expressly declared to be
void. Nothing herein contained shall affect any law in force in india,
and not hereby expressly replaced, by which any contract is required to
be made in writing or in the presence of witnesses, or any law relating
to the registration of documents.
Essential Elements to Constitute a Contract
A) competent parties
B) Free consent
C) lawful consideration
D) lawful object
E) not declared to be void.
Who are competent to contract
According to Section 11 of the Indian Contract Act, Every person is competent to contract who is of the age of
majority according to the law to which he is subject, and who is of
sound mind, and is not dis qualified from contracting by any law to
which he is subject.
following persons are incompetent to contract :----
1) Minor
2) Unsound mind
\ 3) person disqualified by law
Minor
1)
age of majority :---
Generally it is eighteen year (According to The
Indian Minority Act 1875, section 3, but if guardian is appointed by
court then it is 21 years.
2) Nature Of Agreement :---.
The agreement, if any party is minor is void an initio. This is decided in Mohri Bibi Vs Dharmodas Ghosh, 1903, 30 IA 144.
Effect of Minor's Agreement --
A) Estoppel --- If a minor makes a false representation about his age and contracts, he shall not be liable for his act :
B) No liability in tort arising out of contract, but he is liable for tort.
C) Restitution is proper in a Minor's contract.
Claim for necessaries supplied to person incapable of contracting or on his account (Section 68) ---
If a person, incapable of entering into a contract, or anyone whom
he is legally bound to support, is supplied by another person with
necessaries suited to his condition in life, the person who has
furnished such supplies is entitled to be reimbursed from the property
of such incapable person.
Unsound mind --- An agreement of Unsound mind is void .
What is sound mind for the purpose of contracting (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 it and forming a rational judgement as to its effect upon
his interests.
A person who is usually of unsound mind, but occasionally of sound mind may not 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.
Examples ---
1) A patient in a lunatic asylum who is, at intervals of sound mind may contract during those intervals.
2) A sane person, who is delirious from fever, or who is so drunk,
that he cannot understand the terms of a contract, or form a rational
judgement as to its effect on his interests, cannot contract whilst such
delirium or drunkenness lasts.
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