Question

Legal Principle: A person is said to be of sound mind for the purpose of making a contract if, at the time when he makes it,he is capable of understanding it and of forming a rational judgement as to its effect upon his interests.

Factual Situation: Mr X who is usually of sound state of mind, but occasionally of unsound state of mind, enters into a contract with Mr Y, when he was of unsound state of mind. Mr Y having come to know about this fact afterwards, wants to file a suit against Mr X. Choose the correct option.

• A. Mr X cannot enter into a contract because he is of unsound state of mind when he entered into the contract
• B. Mr X can enter into a contract but the burden is on the other party to prove that he was of unsound state of mind at the time of the contract.
• C. Mr X can enter in to contract but the burden is on Mr X to prove that he was of sound state of mind at the time of the contract
• D. None of these

Answer 1

The correct option is A Mr X cannot enter into a contract because he is of unsound state of mind when he entered into the contract

Mr X can't enter into a contract as he was of unsound mind that time.

Section 12 of Indian contract act, tells that no individual can enter into a contract if he's of unsound mind. If he is of sound mind occasionally then he must enter when he is of sound mind. As it is the main essential of a valid contract. Here, Mr X can't enter as he is of unsound mind when he entered.

Hence, A is the correct option.