Site navigation

A is usually of unsound mind. While entering into an agreement with B, A understands the transaction and can form a rational judgment about its effect on A’s interests. Assume all other contract…

Question and options

A is usually of unsound mind. While entering into an agreement with B, A understands the transaction and can form a rational judgment about its effect on A’s interests. Assume all other contract requirements are met. What is the legal effect?

  1. The contract is valid when made.

  2. The contract is void when made.

  3. The contract is voidable at A’s option.

  4. The contract takes effect only upon later ratification.

Answer and explanation

Correct answer: A - The contract is valid when made.

Section 12 of the Indian Contract Act, 1872 assesses soundness of mind when the contract is made. A person usually of unsound mind can contract during an interval when the statutory test is met.

Practice for these exams

Related question papers

Related exam syllabi

More solved explanations in Capacity to contract