Q1- Explain the term “Contractual capacity” who is competent to make a contract
“Every person is not competent to make a contract”. Discuss.
Discuss the capacities of parties to contract.
What persons are competent to make a valid contract and who are not?
PERSON COMPTENT TO CONTRACT
For the validity of the contract, it is necessary that all the contracting parties must be competent to contract. According to Section 11, the following persons are competent to make a valid contract.
- A person who has attained the age of majority.
- A person who is of sound mind.
- Person not disqualified by law
1- AGE OF MAJORITY
Every person must have attainted the age of majority to enter into a binding contract. According to the Majority Act, the age of majority is 18 years but according to English law it is attainted at the complete of 21 years.
2- SOUND MIND
All the contracting parties must be sound mind. According to Contract Act, a person is said to be of sound mind for the purpose of making a contract if, at the time when he make it, he is capable of understanding it and of forming rational judgment as to its affect upon his interest.
A person who is usually of sound mind but occasionally of unsound mind may not make a contract when he is of unsound mind.
3- PERSONS NOT DISQUALIFIED
The third condition is that, any law must not disqualify every person who enters into a binding contract, which is enforceable inPakistan. Certain classes of persons may be disqualified under certain laws from entering into contracts. Some persons cannot enter into a contract due to their political or legal status.