Individuals with disabilities and sound minds
The parties to a contract must be of sound mind in accordance with Section 11 of the Indian Deal Act; else, the contract will be deemed void. In Section 12 of the Indian Contract Act, people with "unsound" minds are referred to in a roundabout way. "A person is considered to be of sound mind for the purpose of making a contract, if at the time he forms it, is capable of understanding it and of forming a logical judgement as to its effect upon his interests," the statute states. As a result, a person's capacity to understand the contract and his capacity to make an informed decision about how it would affect his own interests determine if they are of sound mind.
The following categories could be used to group people who are mentally unsound:
i) Lunatics. There are certain people who occasionally exhibit sound mind but who generally exhibit unsound mind. When such people are of sound mind, they are able to enter into legal contracts. However, in this situation, it is the person who made the contract's responsibility to demonstrate that he was of sound mind and had the capacity to grasp its terms.
These people fall under the lunatics category. They could become mentally unbalanced as a result of psychological issues or other individual factors. If a person is declared "lunatic" by a court pursuant to the Indian Lunacy Act, then any contracts they entered into while they were mentally ill are also void and unenforceable until further orders of the court are issued.
A person in a mental institution who occasionally regains mental clarity may contract at those times. But the other party must prove that the person in question was of sound mind when he entered into the contract with him.
ii) People who are inebriated or drunk. A person who is typically of sound mind but occasionally of unsound mind is not permitted to enter into a valid contract at that time. A sane individual who is in a delirious state due to a fever or another illness, or who is so inebriated that he cannot understand the logic or terms of the deal, cannot enter into a contract as long as the delirium or drunken state persists. If this person wants to have the contract declared invalid, it is up to him or her to demonstrate that due to delirium or intoxication, they were unable to comprehend the reasoning behind the agreement.
iii) Dupes, An idiot is someone who has completely lost their mental faculties and is completely unable to comprehend how the contract will affect them personally. A deal made with a moron is invalid and unenforceable under the law. Even though a contract with or made by a person who lacks capacity is void, they are nonetheless responsible for any necessities given to them or any minor dependents. Even in these situations, only the estate of the incompetent individual is responsible; no personal liability is placed on them.
