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Capacity and Free Consent

Capacity of Parties:

Sec.10 defines that parties to contract must be competent to contract.

Competency is defined by S.11 as, "Every person is competent to contract if heis of the age of majority according to the law to which he is subject, is of sound

mind and is not disqualified from contracting by any law to which he is

subject"

Thus, to be competent to contract one must be of:

Age of majority i.e. 18 years in Paistan

Sound mind

!ot dis"ua#ified from contracting by any #a$ to $hich he is subject

Minor: (Sec 3 of the Majority Act 1875)

A Person $ho has not attained the age of majority i.e.18 years is deemed to be a

minor. %nce he has comp#eted 18 years, he is of the age of majority.

&n fo##o$ing t$o cases the age of majority is '1 years:

A guardian of the minor(s person and property has been appointed by the

Court under the )uardians and *ards Act 18+0.

A minor is under the guardianship of court of $ards.

Position of Minor at La:

a$ protects minors as it is assumed that minor may not ha-e the re"uisite

eperience and may be unab#e to tae proper reasoned decisions for

themse#-es.

!at"re of Minor#s A$ree%ents:

1. Agreement imposing ob#igations on minors are -oid ab initio.

'. /inor may be a promisee or beneficiary as the #a$ does not regard a

minor as being incapab#e of accepting a benefit.

. /inor cannot become a partner nor can a ne$ partnership be started $ith

minor as a partner

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. /inor can be an agent. 2ut a minor agent is not #iab#e for neg#igence to

his principa#.

3. There can be no specific performance of an agreement made by a minor

un #ess it is for necessaries or substaintia##y for the benefit of the minor.

4. A minor can a#$ays p#ead minority.

5. A minor cannot be adjudged inso#-ent.

8. A minor is #iab#e for the necessaries supp#ied to him or to his dependents.

+. *here a minor enters into a contract for a #oan, guaranteed by an adu#t,

the guarantee is enforceab#e against the adu#t.

10. !orma##y restitution may not be a##o$ed by $here the minor himse#fbrings a suit for cance##ation if the agreement, the courts on the princip#e

of e"uity, compe# the minor to restore the money or property to the other

party. /ay a#so be app#ied $here a minor unjust#y, ac"uires goods under

an unenforceab#e contract, the court may order restitution.

*hat can be termed as 6necessary7

2asic essentia#s of norma# e-ery day #ife A!9 things suitab#e to the minorsposition in #ife.

!ash - &nman: 11 $aist coats ordered from a tai#or for a student studying at

Cambridge.

e#d: !ecessary gi-en the circumstances and position in #ife of the minor ; case

$ou#d be decided different#y todayrancesco - 2arnum. ;pg 80ather purchased a car from his son for =s.300,000 $hi#e the actua# price of

car $as =s.800,000. ater on son too the case to the court. The court annu#s

the contract on the basis of undue inf#uence used by father.

'. A, a sic o#d man is induced by his medica# attendant to pay him an

eorbitant month#y amount for his professiona# ser-ices. Such a contract is

deemed to be induced by undue inf#uence and is -oidab#e.

ffect of "nd"e inf&"ence:

A contract induced by undue inf#uence is -oidab#e at the option of the party

$hose consent $as caused by undue inf#uence. The party may upho#d the

contract or reject it.

Fra"d:

>raud under the contract act basica##y means @intentiona# misrepresentation@.

>raud is defined by Sec.15 as, B>raud means and inc#udes any of the fo##o$ing

acts committed by a party to a contract or $ith his conni-ance or by his agent,

1. The suggestion as to a matter of fact of that $hich is not true by one $ho

does not be#ie-e it to be true.

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'. The acti-e concea#ment of a fact by one ha-ing no$#edge or be#ief of

the fact.

. A promise made $ithout an intention of performing it.

. Any other act fitted to decei-e.

3. Any such act or omission as the #a$ specia##y dec#ares to be fraud#ent.@

&n other $ords Bfraud eists if it is sho$n that a fa#se representation has been

made:

1. Dno$ing#y

'. *ithout be#ief in its truth ; 9erry E Pee< ;188+