Question

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 judgment as to its effect upon his interests.
Facts: 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.

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

Answer 1

The correct option is C Mr. X can enter into contract but the burden is on Mr. X to prove that he was of sound state of mid at the time of contract

According to the Section $12$ of the Indian Contract Act defines that 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 judgment as its effect upon his interest.
A person who is usually of unsound but occasionally of sound mind may make contract when he is sound mind. Therefore, Mr. X can enter into contract but the burden is on Mr. X to prove that he was of sound state of mind at the time of contract.