Capacity of Parties-2

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    Capacity of Parties.

    Sec.11.of ICA states that Every person iscompetent to contract who is of the age ofmajority according to the law to which he is a

    subject, and who is of sound mind, and notDisqualified from contracting by any law towhich he is a subject.

    (f) Married Women : A women married orsingle, in Indian law is under no disabilityas regards entering into contract.Only inEnglish law it was applicable.Since 1935

    this disability is not applicable.

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    (d) Insolvent : An un discharged insolventcannot be appointed as a magistrate, or electedto any office of local authority.

    Sec 274. Of Companies act 1956, a person whois un discharged insolvent is disqualified frombecoming a Director.

    (e) Foreign Sovereigns and Ambassadors:Foreign Sovereigns and Ambassador(accredited representatives of a foreign state)enjoy a special privilege in that they can not be

    sued in our courts, but they can, if they chooseto enter into a contract and then enforce thesecontracts in our courts.

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    Explanation to above.

    An Alien Enemy : An Alien ( the subject of

    foreign state)is a person who is not a subject of ofthe Republic India. He may be alien friend oralien enemy. Contract with alien enemy( An alienwhose state is at war with the Republic of India)

    During the continuance of war, an alien enemycan neither contract with an Indian subject norcan be sue in Indian court.

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    Contracts made before the war may either be

    suspended or dissolved.

    (b) Corporations and Joint Stock Companies:Acompany or corporation is a artificial personcreated by law and having a separate legal entity.It cannot enter into contracts which are personalin nature.E.g. it cannot enter into contract tomarry.

    ( C ) Convicts : A Convict is one who is foundguilty and is imprisoned, during the period ofimprisonment, a convict is incompetent.

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    Persons Incapable to Enter into ContractBy Status: Following categories of persons

    are included as Disqualified Persons :

    (a)Alien Enemy. (b) Corporations andJoint Stock Companies.

    (c) Convicts. (d) Insolvent.(e) Foreign Sovereigns and Ambassadors.(f) Married Women.

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    (d) Insolvent : An un discharged insolvent

    cannot be appointed as a magistrate, or electedto any office of local authority.

    Sec 274. Of Companies act 1956, a person whois un discharged insolvent is disqualified from

    becoming a Director.

    (e) Foreign Sovereigns and Ambassadors:Foreign Sovereigns and Ambassador (accreditedrepresentatives of a foreign state) enjoy a specialprivilege in that they can not be sued in ourcourts, but they can, if they choose to enter intoa contract and then enforce these contracts inour courts.

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    (f) Married Women : A women married orsingle, in Indian law is under no disability asregards entering into contract.Only in

    English law it was applicable.Since 1935 thisdisability is not applicable.

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    MINOR (INFANT)

    Sec.3. Of ICA, a Minor is one who has notcompleted his 18thyear of age.So a person

    becomes major after the completion of 18

    th

    year oflife.

    Exception to above rule: When a minorsproperty is taken over by court of wards for

    management.In either cases minority continues upto the completion of the 21st year.

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    The Rules Governing Minors Agreements: Whichare based on two principles:

    (1) Law protects minors against their owninexperience and against the possible improperdesigns of those more experienced.

    It has been rightly observed that the law protects

    minors and preserves their rights and estates,excuses their negligence or undue delay in enforcinga right such as to disentitle their counselors, the jurytheir servant and law is their guardian.

    (2) In pursuing the above object, the should notcause unnecessary hardship to persons who dealwith minor.

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    (5) Minor cannot asked to refund the benefit.

    (6) A minor can always plead minority.

    (7) Minors parents are not liable.

    (8) Minor cannot be adjudicated as Insolvent.

    (9) Minor cannot enter into contract of partnership.

    (10) Minors Estate is is liable for necessariessupped to him.

    (11) Minor can be a agent.

    (12) Minor cannot be the member of a company.

    (13) No specific performance of an agreemententered into by minor.

    (14) Surety for a minor.

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    EXPLANATION TO ABOVE RULES.

    (1) A minors contract is void ab-initio: Law acts as

    the guardian of minor and protects their rights, becausetheir mind is not matured enough to take the decision.

    The Privy council affirms this view in Mohiri bibi VsDharmodas Ghosh.( Minor mortgage property for Rs.

    20,000.-Received Rs.8000.

    It was held that the mortgage was void andrepayment of advance Rs.8000 not accepted, as he hasused that amount.

    (2) A minor can be a beneficiary or promisee:

    If a contract is beneficial to a minor it can beenforced by him.Thus a minor can purchase aimmovable property or can execute a promissory note.

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    (5) Minor cannot asked to refund to refund thebenefit: If the minor has obtained any benefit bytaking advantage of his minority, such as money on amortgage, he cannot be asked to refund, nor can hismortgaged property be made liable.

    (6) A minor can always plead minority.Law protectsminor from contracted liability. Even if a minor makes a

    fraudulent misrepresentation as to his age agreementswith him are void and a minor is not precluded fromsetting up the plea of minority as there cannot be anyestoppel against the statute..

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    (7) Minor parents are not liable: However he is

    acting as an agent of the guardian, guardian could beheld liable for his act. A contract with the guardian ofminor is valid and can be enforced by or againstguardian,but such agreement should be for the benefit

    of minor and should be within authority.(8) Minor cannot be adjudicated as Insolvent :

    Even for necessaries of life he is not personally heldresponsible, only his property is liable.He cannot be

    declared insolvent.

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    (9) Minor cannot enter into a contract of partnership:But under Sec.30.of Indian Partnership Act, minor can beadmitted to the benefits of partnership.

    (10) Minors estate is liable for Necessaries suppliedto him: (Sec.68)Necessaries are those things withoutwhich an individual can not reasonably exist. Thingssuited to the condition of the minor can be classified asNecessaries, which are as follows:

    (a) Wedding presents for a bride of a minor.

    (b) Debt incurred for performing funeral obligations ofthe father of a minor.

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    ( c) Funds supplied to a minor for the marriage of aminor female in the family.

    (d) Expenses reasonably incurred in defending

    litigation threatening minors property.(f) Loan to a minor to save his property from sale in

    execution of a decree.

    (g) Things without which an individual cannotreasonably exists

    (h) Articles required to maintain a particular personin the state and degree in life, in which he is living.