PPT - Performance & Capacity of Contract | Business Law - B Com PDF Download

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Capacity to Contract
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Capacity to Contract
CAPACITY        TO        CONTRACT
[ COMPETENCY    OF   THE PARTIES ]
• The parties who enter in to contract must have 
capacity to do so.
• Capacity here means competency of the parties to 
enter in to contract. 
• According to Sec.10 an agreement becomes a 
contract, if it is entered in to between the parties 
who are competent to contract. 
• According to Sec.11 every person is competent to 
enter in to contract  who(a) is of the age of majority  
according to the law to which he is subject.(b) is of 
sound mind, and (c) is not disqualified from 
contracting by any law  to which he is subject.
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Capacity to Contract
CAPACITY        TO        CONTRACT
[ COMPETENCY    OF   THE PARTIES ]
• The parties who enter in to contract must have 
capacity to do so.
• Capacity here means competency of the parties to 
enter in to contract. 
• According to Sec.10 an agreement becomes a 
contract, if it is entered in to between the parties 
who are competent to contract. 
• According to Sec.11 every person is competent to 
enter in to contract  who(a) is of the age of majority  
according to the law to which he is subject.(b) is of 
sound mind, and (c) is not disqualified from 
contracting by any law  to which he is subject.
…..CAPACITY TO CONTRACT
[COMPETENCY OF THE PARTIES]
• Thus Section 11 declares the following 
persons to be incompetent to contract; 
• 1.Minor
• 2.Persons of unsound mind, and 
• 3. Persons disqualified by any law 
to which they are subject.
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Capacity to Contract
CAPACITY        TO        CONTRACT
[ COMPETENCY    OF   THE PARTIES ]
• The parties who enter in to contract must have 
capacity to do so.
• Capacity here means competency of the parties to 
enter in to contract. 
• According to Sec.10 an agreement becomes a 
contract, if it is entered in to between the parties 
who are competent to contract. 
• According to Sec.11 every person is competent to 
enter in to contract  who(a) is of the age of majority  
according to the law to which he is subject.(b) is of 
sound mind, and (c) is not disqualified from 
contracting by any law  to which he is subject.
…..CAPACITY TO CONTRACT
[COMPETENCY OF THE PARTIES]
• Thus Section 11 declares the following 
persons to be incompetent to contract; 
• 1.Minor
• 2.Persons of unsound mind, and 
• 3. Persons disqualified by any law 
to which they are subject.
1.Minors
• According to Indian Majority Act,1875, a 
minor is a person who has not completed 18 
years of age.In the following two cases , he 
attains majority after 21 years of age.
(1) Where a guardian of a minor ’s person 
or property  has been appointed under the 
Guardians and Wards Act,1890  or
(2)  Where the superintendence of a 
minor ’s  property is assumed by a Court of 
Wards.
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Capacity to Contract
CAPACITY        TO        CONTRACT
[ COMPETENCY    OF   THE PARTIES ]
• The parties who enter in to contract must have 
capacity to do so.
• Capacity here means competency of the parties to 
enter in to contract. 
• According to Sec.10 an agreement becomes a 
contract, if it is entered in to between the parties 
who are competent to contract. 
• According to Sec.11 every person is competent to 
enter in to contract  who(a) is of the age of majority  
according to the law to which he is subject.(b) is of 
sound mind, and (c) is not disqualified from 
contracting by any law  to which he is subject.
…..CAPACITY TO CONTRACT
[COMPETENCY OF THE PARTIES]
• Thus Section 11 declares the following 
persons to be incompetent to contract; 
• 1.Minor
• 2.Persons of unsound mind, and 
• 3. Persons disqualified by any law 
to which they are subject.
1.Minors
• According to Indian Majority Act,1875, a 
minor is a person who has not completed 18 
years of age.In the following two cases , he 
attains majority after 21 years of age.
(1) Where a guardian of a minor ’s person 
or property  has been appointed under the 
Guardians and Wards Act,1890  or
(2)  Where the superintendence of a 
minor ’s  property is assumed by a Court of 
Wards.
Minor ’s Agreements
• 1. An agreement with or by a  minor is void and 
inoperative  ab  initio.                                                                   
• In this case a minor mortgages his house in favor of a 
money lender to secure a loan of Rs.20,000 out of 
which the mortgagee (the money lender) paid the 
minor a sum of Rs.8,000. Subsequently   the minor 
sued for setting aside the mortgage, stating that he 
was under-age when he executed the mortgage.
• Held,  the mortgage  was  void  and,  therefore,  it was 
cancelled.  Further the money lender ’s request for the 
repayment of the amount  advanced  to the minor as part of the 
consideration  for the mortgage was also not accepted. 
[Mohiribibi  vs. Dharmodas  Ghose,(1903)  Calcutta High Court]