Question

LEGAL PRINCIPLE: 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 effect upon his interests.
FACTUAL SITUATION: Mr. X who is usually of sound state of mind, but occasionally of unsound state of mind, enters into a contract with Mr. Y when he was of unsound state of mind. Mr. Y having come to know about this fact afterward, wants to file a suit against Mr. X.

DECISION: 

Options

• Mr. X cannot enter into a contract because he is of unsound state of mind when he entered into contact.

• Mr. X can enter into a contract but the burden is on other parties to prove that he was of unsound state of mind at the time of contract.

• Mr. X can enter into a contract but the burden is on Mr. X to prove that he was of sound state of mind a the time of contract.

• A contract with a person of unsound mind is void.

Answer 1

Mr. X cannot enter into a contract because he is of unsound state of mind when he entered into contact.

Explanation:

According to Section 12 of the Indian Contract Act, a person is said to be of sound mind for the purpose of making a contract if at the time neighbor but presently he did not push Shyam on purpose, further he could not FORSEE that Shyam is carrying crackers which might explode. Thus Ram is not liable.

Option "Mr. X can enter into a contract but the burden is on other parties to prove that he was of unsound state of mind at the time of contract." is incorrect as there is no prohibition on carrying such a package in crowded places. So, this argument can't be taken in favor of Ram.

Option "Mr. X can enter into a contract but the burden is on  Mr. X to prove that he was of sound state of mind a  the time of contract."  is incorrect as Ram UNINTENTIONALLY pushed Shyam, further he was IGNORANT about the fact that Shyam is carrying crackers that might explode.

"Contract with a person of unsound mind is void" is not applicable.