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 Contracts With Person Of Unsound Mind

Section 12 of Indian contract Act, 1872, says “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 effects upon his interests.” Further section 12 says:

  • A person, who is usually of unsound mind, but occasionally of sound mind, may make a contract when he is of sound mind.
  • A person, who is usually of sound mind, but occasionally of unsound mind, may makes a contract when he is of unsound mind.



A lunatics is a person who is mentally deranged due to some mental strain or other personal experience. He suffers from intermittent intervals of sanity and insanity. He can enter into a contract only during the period when he is of sound mind.


An idiot is a person who is permanently of unsound mind. He does not exhibit minor understanding of even minor objects or things. An idiot cannot enter into a contract.

Drunken/Intoxicated Persons

A person who takes any intoxicants like alcohol or drugs etc. he is temporarily incompetent of entering into a contract. However, ordinary or partial drunkenness is not sufficient to avoid a contract. One has to prove that at the time of entering into a contract he was so intoxicated that he was incapable of rational thinking. Thus so long as one remains under the influence of intoxicant or drug, he was no contractual capacity. Thus agreements made by such persons are void.

Exceptions To Contract With Persons Of Unsound Mind:

A contract with person of unsound mind is subject to the same exceptions as the contract with a minor. Thus, a person of unsound mind:

1. May enforce a contract for his benefit

2. His properties shall be liable, for supply of necessaries to him or to any of his dependents

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