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.

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The Principle judges the mind only at the moment the contract is made, and the facts already tell you what that state was. Any option about burden of proof is adding a rule you were not given.
Updated On: Jul 17, 2026
  • Mr. X cannot enter into contract because he is of unsound state of mind when he entered into contract.
  • 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.
  • 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
  • None of these
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The Correct Option is A

Solution and Explanation

Step 1: Understanding the Question:
Mr. X is normally of sound mind but sometimes not. The facts tell us plainly that the contract with Mr. Y was made during one of the unsound spells. Mr. Y now wants to sue on that contract.

Step 2: Key Formula or Approach:
The Principle fixes soundness of mind at a single moment, and that moment is "at the time when he makes it". It asks two things of the person at that moment, that he can understand the contract, and that he can form a rational judgment about how it affects his own interests. A person's general condition on other days is irrelevant. So the whole test collapses into one question, what was his state of mind when he signed.

Step 3: Detailed Explanation:
The facts answer that question for us. They say the contract was entered into "when he was of unsound state of mind". This is not something Mr. Y has to establish, it is given to us as a fact.
Apply the Principle to that fact. At the moment of contracting Mr. X could not understand the contract and could not form a rational judgment about its effect on his interests. He therefore was not of sound mind for the purpose of making a contract.
A person who is not of sound mind for the purpose of making a contract cannot make one. The contract with Mr. Y is therefore not a good contract, and Mr. Y cannot sue on it.
Notice that the fact that Mr. X is usually of sound mind does not save the contract. The Principle never looks at what the person is usually like, it looks only at the moment of contracting.

Step 4: Checking the wrong options:
Options (B) and (C) both talk about who carries the burden of proof. The Principle says nothing whatever about burden of proof, and in any case there is nothing left to prove, since the facts already tell us he was of unsound mind at the relevant time. Both options import a rule that was not given.
Option (D) is not needed once option (A) fits.

Step 5: Final Answer:
Because Mr. X was of unsound state of mind at the very time he made the contract, he could not enter into it. That is option (A).
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