capacity of parties to contract

capacity of parties to contract

Competent Parties

As per Sec. 10 of the Indian Contract Act, “All agreements are contracts if they are made by the free consent of parties competent to contract”. Thus, Sec. 10 indicates that only those agreements can become contracts which are en-
tered into between the parties competent to contract.

Competence of parties to contract has been laid down in Sec. 11 of the Act. Sec. 11 of the Act states, Every person is competent to contract.

a.who is of the age of majority according to the
which he is subject;

b.who is of sound mind; and

c.who is not disqualified from contracting by any law to which he subject.

Thus, a contract is enforceable by law when it is
entered into between the persons who are major, of sound mind and not disqualified by any law in operation. The three conditions might be explained as under:

Major Persons

According to the Indian Majority Act, 1875, the ‘minors’ have been indirectly defined as, “Everyone domiciled in India shall be deemed to have attained the age of his majority when he completes his age of eighteen years and not before”.

But in the following cases, a minor attains majority at the age of 21 years:

(1)Where a guardian of a minor’s person or property has been appointed under the Guardians and Wards Act, 1890; or

2.Where a minor’s property is under the superintend-Frence of a Court of Wards.

Minor’s Competence to Contract. According to Sec. 11 of the Indian Contract Act, it is quite clear that a contract could be made only by a major person, hence a minor is not competent to enter into a contract. If any contract is made with a minor, it shall be void. Thus, being a minor, although might be a basis of incompetence for contract, it is certainly a matter of protection for his interests. Even morally, it is something good since the people of lower age don’t possess enough capacity of understanding everything.