Persons of Unsound Mind

Understanding the Legal Provisions under the Indian Contract Act

Definition

In India, Section 12 of the Indian Contract Act (ICA) deals with the contractual liability of persons of unsound mind, including those who are intoxicated. According to this section, a person is considered to be of sound mind if they can understand the nature of the contract and form a rational judgment about its impact on their interests at the time of making the contract.

A person who is usually of unsound mind can enter into a contract when they are temporarily of sound mind. Conversely, a person who is generally of sound mind cannot enter into a contract when they are temporarily of unsound mind.

The crucial factor is whether the person was capable of understanding the contract and making a rational judgment about its benefits at the time of agreement.

Section 12 States:

"12. 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 forming a rational judgment as to its effect upon his interests.

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 not make a contract when he is of unsound mind."

Illustrations

Illustration (a):

A patient in a lunatic asylum, who is sometimes of sound mind, may enter into contracts during those intervals.

Illustration (b):

A person who is generally sane but becomes delirious due to fever or is so intoxicated that they cannot understand the terms of a contract or form a rational judgment about its effects, cannot make a contract during such delirium or intoxication.

Case Law

Inder Singh v. Parmeshwar Dhari Singh

It was clarified that the provisions of Section 12 apply to persons of unsound mind.

Rajinder Kaur v. Mangal Singh

The court emphasized that it is ultimately responsible for determining whether a person is a lunatic or of unsound mind. While expert opinions should be considered, the court must not abdicate its duty to make this decision.

Lingaraj v. Parvathi

The court noted the importance of distinguishing between mere weakness of intellect and actual lunacy.

Conclusion

The determination of a person's mental capacity at the time of contract formation is crucial in assessing the validity of a contract. While persons of unsound mind may not be held liable under a contract, exceptions exist during intervals of sound mind. The courts bear the responsibility of ensuring fairness and adherence to legal principles in such cases.