Who are Treated as Persons of Unsound Mind? State the Legal Positions of Contracts with Such Persons
Introduction
Under the Indian Contract Act, 1872, a valid contract must be entered into by persons who are competent to contract. One of the conditions for competency is that the person must be of sound mind at the time of entering into the agreement. Therefore, it is crucial to understand who is considered a person of unsound mind and what the law says about contracts made with such persons.
Who is a Person of Unsound Mind?
According to Section 12 of the Indian Contract Act, 1872, a person is said to be of sound mind if, at the time of making the contract, he:
- Is capable of understanding it
- Can form a rational judgment about its effects upon his interests
Therefore, a person who cannot understand the nature and consequences of the contract due to mental illness, intoxication, or other similar reasons is considered to be of unsound mind.
Categories of Persons of Unsound Mind
- Lunatics: These are persons who suffer from temporary or permanent mental disorders. If a lunatic is in a lucid interval (a period when the person is mentally stable), they may enter into a valid contract.
- Idiots: An idiot is someone who has a permanent mental deficiency since birth. They cannot form any valid contract at any time as they are permanently incapable of understanding it.
- Drunken or Intoxicated Persons: A person under the influence of alcohol or drugs may be considered of unsound mind if they are unable to understand the terms of the contract or its impact on their interests.
Legal Position of Contracts with Persons of Unsound Mind
The law provides certain clear rules about contracts made with persons who are not of sound mind:
1. Void Contracts
If a person is of unsound mind at the time of entering into a contract, the contract is void. This means it has no legal effect.
2. Burden of Proof
The burden of proving that a person was of unsound mind at the time of contract lies on the person who is claiming so. This must be supported by medical records or witnesses.
3. Contracts During Lucid Intervals
If a lunatic enters into a contract during a period of mental clarity (lucid interval), the contract is valid.
4. Contracts for Necessaries
According to Section 68 of the Indian Contract Act, a person of unsound mind is liable to pay for “necessaries” supplied to them or to anyone whom they are legally bound to support. These include food, clothing, shelter, and medicine. However, this liability is not based on a contract, but on the principles of equity and justice.
Case Law: Inder Singh v. Parmeshwardhari Singh
In this case, it was held that a person of unsound mind could not enter into a valid contract. However, if it was proven that the person was of sound mind at the time of entering the contract, it could be considered valid.
Important Points
- A person must be of sound mind at the time of signing the contract.
- If the mind is unsound, the contract is void.
- Contracts for necessaries are recoverable from the property of the unsound person.
- Legal guardians can enter into contracts on behalf of persons of unsound mind under certain legal procedures.
Conclusion
The Indian Contract Act ensures protection for individuals who are not mentally fit to understand or make legal agreements. Contracts made with such individuals are void to prevent misuse or exploitation. However, the law also ensures that their basic needs are met through special provisions. It is always important to evaluate the mental capacity of a person before entering into any legal agreement with them.