Capacity to Contract Essay

691 Words Apr 22nd, 2012 3 Pages
Capacity to Contract:

The Indian Contract Act vide Section 10 stipulates that the parties to a contract must be competent to contract. Section 11 of the said Act determines persons who are competent to contract. It states "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 disqualified from contracting by any law to which he is subject."

It can thus be determined that the following persons are incompetent to enter into any agreement:-- * any minor * any person of unsound mind * any person disqualified by law to which he is subject.
The age of majority has been determined by the Indian Majority Act, 1875 which states "Every
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18 years.
2. He should be of sound mind while making a contract. A person with unsound mind cannot make a contract.
3. He is not a person who has been personally disqualified by law.

Free Consent
According to Section 14, " two or more persons are said to be consented when they agree upon the same thing in the same sense (Consensus-ad-idem).
A consent is said to be free when it not caused by coercion or undue influence or fraud or misrepresentation or mistake.
Elements Vitiating free Consent
1. Coercion (Section 15): "Coercion" is the committing, or threatening to commit, any act forbidden by the Indian Penal Code under(45,1860), or the unlawful detaining, or threatening to detain, any property, to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement.
2. Undue influence (Section 16): "Where a person who is in a position to dominate the will of another enters into a contract with him and the transaction appears on the face of it, or on the evidence, to be unconscionable, the burden of proving that such contract was not induced by undue influence shall lie upon the person in the position to dominate the will of the other."
3. Fraud (Section 17): "Fraud" means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto of his agent, or to induce him to

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