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Mercantile Laws-I Manpreet 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 Meaning of Consideration

3.3 Rules regarding Consideration
3.4 Unlawful Consideration and Object [Ss.23-24]
3.5 Agreements Declared Void [Ss.26-30]
3.5.1 Agreements against Public Policy (Ss.26-28)
3.5.2 Agreement in Restraint of Trade

3.5.3 Restraint of Legal Proceedings (S. 28)
3.5.4 Uncertain or Ambiguous Agreements (S. 29)
3.5.5 Wagering Agreements (S. 30)
3.6 Summary

3.7 Keywords
3.8 Self Assessment
3.9 Review Questions
3.10 Further Readings

Objectives

After studying this unit, you will be able to:
z Discuss capacity to contract
z Describe the meaning of consideration

z Discuss agreement declared void

Introduction

In last unit you have studied about offer, acceptance and consideration. 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

30 LOVELY PROFESSIONAL UNIVERSITY