Question

Which of the following statements are correct? A person is competent to contract, only if: - (i) The person is of the age of majority according to the law to which they are subject. (ii) The person is of sound mind. (iii) The person is not disqualified from contracting by any law to which they are subject. (iv) The person is an Indian citizen.

• A. Only (i), (ii), and (iv)
• B. Only (ii), (iii), and (iv)
• C. Only (i), (iii), and (iv)
• D. Only (i), (ii), and (iii)

Hint:

Citizenship is never a criteria for contract competency under Section 11.
Foreigners, corporations (juristic persons), and residents can all contract in India as long as they meet the other three conditions.

Answer 1

The Correct Option is D

Step 1: Understanding the Question:
The question asks to identify the correct criteria for determining a person's competency to enter into a contract under Indian law.

Step 2: Key Legal Principles and Approach:
Competence to contract is defined in Section 11 of the Indian Contract Act, 1872.
We must match the provided statements with the literal requirements of this section.

Step 3: Detailed Explanation:

• Section 11 Text: Section 11 of the Act states: "Every person is competent to contract who is of the age of majority according to the law to which he is subject, and who is of sound mind, and is not disqualified from contracting by any law to which he is subject."

• Evaluating the Statements:

• (i) Age of majority: Correct. Under the Indian Majority Act, 1875, this is generally 18 years.

• (ii) Sound mind: Correct. As defined in Section 12, the person must be capable of understanding and making rational judgments.

• (iii) Not disqualified by law: Correct. Examples include foreign sovereigns, alien enemies, insolvents, and convicts.

• (iv) Indian citizenship: Incorrect. Indian law does not restrict the capacity to contract to Indian citizens only. Foreigners (who are not alien enemies) can validly contract within India.

• Since statements (i), (ii), and (iii) are the only valid legal requirements, the correct combination is "Only (i), (ii), and (iii)".

• This corresponds to Option (D).

Step 4: Final Answer:
Competency to contract under Section 11 requires majority, sound mind, and lack of disqualification, but not Indian citizenship, making Option (D) the correct answer.