Capacity to Contract

What is Capacity of Parties?

Indian Contract Act, 1872 is a central law, and it validates the Contracts or Agreements between various parties. Contract Act regulates and oversees all the business in case of any deal or an agreement. The Indian Contract Act, 1872 defines the term “Contract” under its Section 2(h) as “An agreement enforceable by law”. Hence, a Contract is anything that is an agreement and enforceable by the law of the land....

What Agreements are Contracts?

According to the provisions of Section 10 of the Indian Contract Act, 1872, an Agreement must satisfy the following conditions to be a valid contract:...

Capacity to Contract

According to Section 11 of the Indian Contract Act, 1872 “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.”...

Legal Requirements for a Person Entering into a Contract

1. Attaining the Age of Majority...

Conclusion

Thus, one of the most essential elements of a valid contract is to understand the competence of the parties to make a contract. Indian Contract Act, 1872 has specified three classes of persons who shall be considered incompetent to enter into a contract such as a person who is yet to attain the age of majority, a person of unsound mind, and a person who is disqualified from entering into a contract by any law that he is subjected to. A contract with a minor will be considered as void-ab-initio, validity of a contract with a person of unsound mind depends upon the condition in which he has made the contract. A convicted or insolvent person can enter into a contract once he is removed from such disqualification....

Capacity of Parties – FAQs

What are the requirements for a contract to be valid apart from the basic requirements?...