1. Capacity to contract Contracts by Minors Contracts by unsound persons
Contracts by disqualified person

2. Capacity to contract
Every person is competent to contract who is of age of majority according to the Law to which he is subject, who is of sound mind and not is disqualified from contracting by any Law to which he is subject. Art.108 civil code Although human beings are subject to rights and duties from the moment of birth, to death some may not be entitled to exercise such rights and duties. Still others may exercise only some of their rights. Minors and judicially interdicted persons cannot enter into a contract. However; when a legally interdicted person enters into a contract which he was prohibited from such is not limited to incapacity but also extends to illegality

3. Parties unable to enter into contract
minor
0-7 years- infant: void-ab-initio . Art.109
8-18 years: 3 situation art.110
a person of unsound mind
a person disqualified by law

4. Age of majority
every person completes age of 18 years and legally allowed receive his/her property to administer. Art.111

5. Position of Agreements by Minor
The general rule: - An agreement with a minor is void-ab-initio
If a minor has received any benefit under a void contract, he cannot be asked to return the same.
a minor can enter into contracts of Apprenticeship, Services, Education, etc:
A minor can enter into contract of apprenticeship, or for training or instruction in a special art, education, etc.
These are allowed because it generates benefits to the Minor.

6. Exception
EXCEPTION 1. Contract for the benefit of a minor Contract by Guardian Benefit of a minor by his guardian or manager of his estate.
within the scope of the authority of the guardian.
Is for the benefit of the minor

7. Person of Unsound Mind
A person who is usually of unsound mind, but occasionally of sound mind can make a contract when he is of sound mind. Similarly, a person who is usually of sound mind, but occasionally of unsound mind, may not make a contract when he is of unsound mind. At time of entering into a contract, a person must be sound mind.

8. An idiot
An idiot is a person who is congenital (by birth) unsound mind. His incapacity is permanent and therefore he can never understand contract and make a rational judgment as to its effects upon his interest. Consequently, the agreement of an idiot is absolutely void ab-initio.

9. Delirious persons
A person delirious from fever is also not capable of understanding the nature and implications of an agreement. Therefore, he cannot enter into a contract so long as delirium lasts

10. Hypnotized persons
Hypnotism produces temporary incapacity till a person is under the effect of artificial induced sleep.

11. Mental decay
There may be mental decay or senile mind the too old age or poor health. When such person is not capable of understanding the contract and its effect upon his interest, he cannot enter into contract.

12. Person Disqualified by law
Insolvent/ bankrupt:
When any person is declared as an insolvent, his property vests in receiver and therefore, he can’t enter into contract relating to his property. Again he becomes capable to enter into contract when he is discharged by court.
Body corporate or company or corporation Contractual capacity of company is determined by object clause of its memorandum of association. Any act done in excess of power given is ultra – virus and hence void.

13. Person Disqualified by law
Convict can’t enter into a contract while he is undergoing imprisonment. But he can enter into a contract with permission of central government while undergoing imprisonment. After the imprisonment is over, be becomes capable of entering into contract. Thus the incapacity is only during the period of sentence.

14. Questions???
Comments!!!