Who Is Competent to Contract?

Competent to Contract (Section 11)

“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.”

Not Competent to Contract

• Not Attained the age of minority• Not of sound mind• Disqualified from contracting from any law.

Law relating to Minor’s Agreement

• A minor’s agreement is Void ab Initio• A minor can be a Promisee or beneficiary• A minor’s Property is liable for Necessaries• No Estoppel Against a statue and a minor• No subsequent ratification of a minor’s agreement• No specific performance of a minor’s agreement

• No Solvency for a minor• A minor can be admitted to the Benefits of a

Partnership• A minor cannot be a member of a registered

Company• A minor can act as an Agent• Contract by parent or guardian for the benefits of a

minor• Liability of a person standing as a surety for a minor• Liability of a person making a promisee with a

minor in favor of another person• A minor’s right to hold Property and interests

therein.

Agreement byDISQUALIFIED PERSONS

• Agreements with Alien Enemies

• Agreements with ForeignSovereigns

• Contracts by Corporations

• Contracts by Insolvents

• Contracts by Convicts

• Define Alien??

• An alien may be• An alien friend• An alien enemy

• Contracts made before war with alien enemy

• Agreements with Alien Enemies

• Agreements with ForeignSovereigns

• Contracts by Corporations

• Contracts by Insolvents

• Contracts by Convicts

• Foreign Sovereign (staff & representatives) enjoy certain privileges

• Cannot be sued

• Allowed to make contracts & enforce those contract in our law court

• Prior permission

• Agreements with Alien Enemies

• Agreements with ForeignSovereigns

• Contracts by Corporations

• Contracts by Insolvents

• Contracts by Convicts

• Corporation “an artificial person, created by law, having legal existence apart from its members and capable of suing & of being sued”

• Enter Contracts through its agent, under its seal

• Corporation formed under a Special Act of Legislature, its contractual powers are limited by the Statute governing it.

• Agreements with Alien Enemies

• Agreements with ForeignSovereigns

• Contracts by Corporations

• Contracts by Insolvents

• Contracts by Convicts

• Who is Insolvent??

• Does not have the power to deal with the property

• Receiver or Official assignee is competent to sue or be sued on behalf of insolvent

• disqualification removed when court issues an order of discharge.

• Agreements with Alien Enemies

• Agreements with ForeignSovereigns

• Contracts by Corporations

• Contracts by Insolvents

• Contracts by Convicts • When a convict undergoes imprisonment he is incompetent to enter into a valid contract

• “Ticket of leave”

• incapacity to contract is gone with expiration of the period of sentence

CASE STUDY

Mohori Bibee V. Dharmodas Ghose in 1903

Mohori Bibee V. Dharmodas Ghose in 1903

• Dharmodas Ghose - a minor - mortgaged his property

• Brahmo Dutt – moneylender

• Dharmodas Ghose order to cancel of the mortgage

• Dharmodas Ghose had fraudulently misrepresented his

age

• Dharmodas Ghose should be asked to repay the money

advanced to him.

• There can be no estoppel

• Dharmodas Ghose himself order to cancel of the mortgage

• Agreement made by a minor is void ab Initio

• a minor is not capable of taking a rational decision.

• Therefore the mortgagee could not recover the

mortgage money nor could he have the minor's

property sold under his mortgage.