![]() The positions of various such persons who are declared ‘incapable of contracting’ is discussed at length in this article. ![]() So, individuals with mental disorders or significant psychological impairments are typically deemed incapable of acting on behalf of others or even for themselves. This capability is also linked to individuals’ health conditions and mental stability at the time of signing. For this reason, only certain persons have been granted the competency or the capacity to make a contract. But on failure to fulfil such promise, the defaulting party can be made legally liable and be sued in a court of law. Simply put, such capacity has the effect of binding the parties to the contract with a promise to abide by it. This is why contractual capacity has limits. The capacity to sign contracts, is moreover, a delicate responsibility, since it requires an individual to legally commit himself or herself to several conditions that might have financial or personal ramifications. This is done because of their immaturity and lack of understanding of contractual transactions, and to protect them from exploiters. For instance, children have a restricted legal capacity to contract, meaning that they can only engage in legal transactions in particular situations, which often involves the presence of a parent or legal guardian. Capacity is established by whether or not a person has achieved the age of majority and whether or not they are mentally competent of comprehending the terms and conditions of the contract. In general, it delves into the question as to ‘ who can enter into a contract and who cannot’. The phrase ‘Capacity to contract’ or ‘Contractual capacity’ refers to the legal competency of parties to enter into a valid contract. The condition may be of a temporary or a permanent nature. It implies persons who may be lunatics, insane, imbecile, intoxicated etc. ![]() It implies that persons, who are unable to understand the nature of a contract and its consequences while making the contract, would be deemed as of unsound mind. It states, “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 of forming a rational judgment as to its effect upon his interests”. Sound mind – Section 12 of the Indian Contract Act, 1872 defines “sound mind for the purposes of contract”. Age of Majority – Section 3(1) of the Indian Majority Act, 1875 defines age of majority as the age from eighteen years onwards.
0 Comments
Leave a Reply. |