Page 35 - DCOM103_COMMERCIAL_LAW

Commercial Law Sukhpreet Kaur, Lovely Professional University

Notes Unit 3: Capacity to Contract

CONTENTS

Objectives
Introduction
3.1 Capacity to Contract (Ss. 10-12)
3.1.1 Persons who are Competent to Contract

3.1.2 Capacity of a minor to enter into a Contract
3.1.3 Mental Incompetence Prohibits a Valid Contract
3.1.4 Alien Enemy (Political Status)
3.1.5 Foreign Sovereigns and Ambassadors (Political Status)
3.2 Summary
3.3 Keywords

3.4 Self Assessment
3.5 Review Questions
3.6 Further Readings

Objectives

After studying this unit, you will be able to:

Discuss capacity to contract
Describe the meaning of consideration
Discuss agreement declared void

Introduction

In last unit you have studied about offer and acceptance. The offer made to the public at large is
a general offer. A general offer may be accepted by any one by complying with the terms of the
offer. As you all know that acceptance is the act of giving consent to the proposal. The offeree is
deemed to have given his acceptance when he gives his assent to the proposal. The acceptance
of an offer may be express or implied. It is express when the acceptance has been signifi ed either
in writing or by words of mouth or by performance of some required act of the offeree. This unit
provides you a brief description of capacity to contract.

3.1 Capacity to Contract (Ss. 10-12)

3.1.1 Persons who are Competent to Contract

Any one cannot enter into a contract; he must be competent to contract according to the law.
Every person is competent to contract if he (i) is of the age of majority, (ii) is of sound mind, and

(iii) is not disqualified from contracting by any law to which he is subject (s.11). Thus, there may

be a flaw in the capacity of parties to the contract. The flaw in capacity may be due to minority,
lunacy, idiocy, drunkenness, drug addiction or status. If a party to a contract suffers from any of

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