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 Contracts With Person Disqualified By Law


Disqualification by Status:

Alien Enemy
An alien enemy is a person who is citizen of foreign country which is at war with India. Contracts with alien enemy can be:

Contracts made before the war: These contracts may either be suspended or void. All contracts which are of such a nature that may benefit the enemy in war shall stand discharged and will be void. Other contracts are merely suspended for the duration of the war and may be received after the war is over but only with the prior approval of central government of the country

Contracts made during the war: During the continuance of the war, an alien enemy can neither contract with an Indian citizen nor can be sue in an Indian court. He can sue only after receiving a license from the central government.

Foreign Sovereigns And Ambassadors
Foreign sovereigns and accredited representatives of foreign states cannot be sued unless they choose to submit themselves to the jurisdiction of our courts. They can enter into contracts and enforce those contracts in our courts, but they cannot be proceeded against in Indian courts without the sanction of the central government. This privilege to a sovereign continues even if he engages in trade. But an ek-king is not entitled to this privilege. However, if a foreign sovereign enters into a contract through an agent residing in India, that agent shall be held liable on the contract.


A company or a corporation is an artificial person created under law. It does not have any physical existence. It can sue or be sued only through an agent. The contractual capacity of a corporation is expressly defined by the status under which it is created. The contractual capacity of a company registered under companies Act is defined by the object clause of its memorandum of associated. Any act done in excess of the powers given by the statute or memorandum is ultra vires and void


When a person is adjudged insolvent, whole of his property stands vested in the official assignee appointed by the court. He cannot enter into contracts relating to his property and sue or be sued. However, he will have a right to make contracts which are necessary for his reasonable maintenance and that of his family. This disqualification does not operate after he is discharged.


A convicts is incapable of entering into a contract during the continuance of sentence of imprisonment. However, he can enter into a valid contract after the expiry of his term of imprisonment. A convict can also, enter into, or sue on, a contract when on parole or when he has been pardoned by the court.


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