Jurisprudence, Interpretation and General Laws · Contract Law

Capacity to Contract under Section 11 of the Indian Contract Act

Updated 11 October 2026 · Fact-checked

Under Section 11 of the Indian Contract Act, 1872, a person is competent to contract if he has reached the age of majority, is of sound mind and is not disqualified by any law. To solve a question, test each of the three conditions at the time the contract was made, then state the effect.

Understand Capacity to Contract (Section 11)

A contract is a legally binding agreement. Section 10 says an agreement becomes a contract only if it is made by the free consent of parties competent to contract, among other conditions. Section 11 tells you who is competent.

Section 11 sets three tests. The person must be of the age of majority according to the law to which he is subject. He must be of sound mind. And he must not be disqualified from contracting by any law to which he is subject. Fail any one test and the person is not competent.

The age of majority comes from the Indian Majority Act, 1875, as the footnote to Section 11 points out. Under that Act, a person generally attains majority at eighteen. If a guardian has been appointed by a court or the person's property is under a court of wards, majority is attained at twenty-one. A person below the age of majority is a minor.

Section 12 explains sound mind. A person is of sound mind if, at the time of making the contract, he can understand it and form a rational judgment about its effect on his interests. A person who is usually of unsound mind but occasionally of sound mind may contract when he is of sound mind. A person who is usually of sound mind but occasionally of unsound mind may not contract while of unsound mind. Illustration (b) covers a sane man who is delirious from fever or so drunk that he cannot understand the terms.

The Act does not state in Section 11 what happens to a minor's agreement. The settled rule, which the study material teaches from the Privy Council's decision in Mohori Bibee v. Dharmodas Ghose, is that a minor's agreement is void ab initio, meaning void from the start. The minor cannot be made liable on it, and it cannot be ratified after he becomes major. Other persons disqualified by law include, for example, an alien enemy, a foreign sovereign (who needs the consent of the Central Government to be sued), a convict and an insolvent, within the limits fixed by the relevant law. Cover these briefly and mark them as examples of legal disqualification.

Key rules to remember

Section 11: three tests of competence: Competent = age of majority + sound mind + not disqualified by any law to which he is subject; All three must be satisfied. The law applied is the law to which the person is subject.
Section 10: link to a valid contract: Valid contract = free consent + competent parties + lawful consideration + lawful object + not expressly declared void; Capacity is one of the essentials. Without it the agreement is not a contract.
Section 12: sound mind test: Sound mind = at the time of making the contract, capable of understanding it and forming a rational judgment as to its effect on his interests; The test is applied at the time of contracting, not before or after.
Section 12: intermittent unsoundness: Usually unsound, occasionally sound: may contract when sound. Usually sound, occasionally unsound: may not contract when unsound.; Illustration (a): a patient in a lunatic asylum may contract during lucid intervals.
Age of majority: 18 years (Indian Majority Act, 1875); 21 years if a court-appointed guardian or court of wards; Section 11 refers to this Act in its footnote. Majority is computed in full years.
Minor's agreement: Minor's agreement = void ab initio; Settled rule from Mohori Bibee v. Dharmodas Ghose. No estoppel against the minor and no ratification on attaining majority.

How to solve Capacity to Contract (Section 11) questions

Use this method for any problem or theory question on who may contract. It keeps your answer in the provision, facts, conclusion order that ICSI expects.

1State the provision: Section 11 says every person is competent to contract who is of the age of majority, of sound mind and not disqualified by any law to which he is subject.
2Link it to Section 10: competence is one essential of a valid contract.
3Test age first. Find the age on the date of the agreement and compare it with the age of majority under the Indian Majority Act, 1875.
4If the age is below majority, say the agreement is void ab initio and apply the consequences: no liability on the minor, no ratification, no estoppel.
5If the question mentions illness, drunkenness or mental disorder, apply Section 12: could he understand the contract and judge its effect at the time of making it? Check whether he was usually sound or usually unsound.
6Check for any other legal disqualification mentioned in the facts, such as a statutory bar.
7Apply the result to the other party: if the agreement is void, state what the other party can or cannot recover.
8Close with a one-line conclusion: the agreement is valid, or void, and why.

Quickest way: Three-gate check

When to use it: Use it for short-note questions and for problems where you have under ten minutes.

Gate 1, age: is the person eighteen or more (twenty-one if a court-appointed guardian)? If not, write void ab initio.
Gate 2, mind: at the moment of contracting could he understand the deal and its effect? If not, he cannot contract then.
Gate 3, law: does any law bar him? If yes, he is not competent.
Write the conclusion in one sentence naming Section 11 and, where mind is in issue, Section 12.

Common mistakes in Capacity to Contract (Section 11)

Writing that a minor's agreement is voidable.
Students confuse it with contracts under coercion or fraud, which are voidable at the option of the affected party.
Fix: Write void ab initio. A minor has no option to affirm it, and it cannot be ratified on attaining majority.
Saying a minor can ratify the agreement after turning eighteen.
Students apply the general idea of ratification from agency.
Fix: Ratification needs a valid original agreement. Since the agreement was void from the start, a fresh agreement with fresh consideration is required.
Treating a person of unsound mind as incompetent at all times.
Students stop reading after the word 'unsound'.
Fix: Apply Section 12. The test is at the time of making the contract, and lucid intervals count.
Applying eighteen years in every case.
Students remember only the general rule.
Fix: Add that majority is twenty-one where a court has appointed a guardian or the property is under a court of wards, as the Indian Majority Act, 1875 provides.
Forgetting that drunkenness or delirium can also destroy capacity.
Students link Section 12 only with mental illness.
Fix: Quote Illustration (b): a person so drunk or delirious that he cannot understand the terms or judge their effect cannot contract while that lasts.
Saying Section 11 states the effect of a minor's agreement.
Students assume the section declares the consequence.
Fix: Section 11 only fixes who is competent. Say that the effect, void ab initio, comes from the settled case law, not from the text of Section 11.

Worked examples

Example 1

Aarav, aged seventeen, agrees to buy a motorcycle from Rohan for ₹80,000 and signs a promissory note for the price. After turning eighteen, Aarav says he will honour the agreement. Rohan sues Aarav on the note. Advise whether Rohan can succeed.

Show the solution

Provision: Section 11 of the Indian Contract Act, 1872 requires a person to be of the age of majority to be competent to contract. Under the Indian Majority Act, 1875, majority is generally at eighteen.
Facts: Aarav was seventeen when he made the agreement, so he was a minor. Nothing suggests a court-appointed guardian, so the age of majority is eighteen.
Effect: A minor is not competent to contract. The agreement is void ab initio, as settled in Mohori Bibee v. Dharmodas Ghose.
Ratification: Because the agreement was void from the start, Aarav's later promise at eighteen does not validate it. A fresh promise would need fresh consideration.
Conclusion: Rohan cannot enforce the agreement or the note against Aarav.

Answer: Rohan cannot succeed. Aarav was a minor at the time, so the agreement was void ab initio and cannot be ratified on attaining majority.

Example 2

Meera is usually of sound mind but has bouts of delirium during fever. On a day when she was delirious she agreed to sell her flat in Pune to Sanjay. On another day, when she was well, she agreed to sell her car to Kabir. Examine the validity of both agreements.

Show the solution

Provision: Section 11 requires a person to be of sound mind. Section 12 says a person is of sound mind if, at the time of contracting, she can understand the contract and form a rational judgment as to its effect on her interests.
Rule on intermittent unsoundness: Section 12 says a person usually of sound mind but occasionally of unsound mind may not make a contract when she is of unsound mind.
Flat sale to Sanjay: Meera was delirious and could not understand the contract or judge its effect. Illustration (b) to Section 12 treats a person delirious from fever as unable to contract while the delirium lasts. She was not competent, so this agreement is not a valid contract.
Car sale to Kabir: She was well and capable of understanding the transaction. Occasional unsoundness on other days does not affect it. She was competent, and the other conditions of Section 10 are assumed to be met.
Conclusion: the flat agreement is not valid; the car agreement is valid.

Answer: The agreement with Sanjay is not a valid contract because Meera lacked sound mind when making it. The agreement with Kabir is valid because she was of sound mind at that time.

Exam tips

Always quote Section 11 first, then Section 12 if the facts mention illness, delirium or drunkenness. Examiners look for the provision before the analysis.
In problems, write the age at the date of the agreement and compare it with eighteen, noting the twenty-one-year exception where relevant.
For the minor, write void ab initio and name Mohori Bibee v. Dharmodas Ghose as the source of the rule. Do not attribute it to the wording of Section 11.
Compare minor and person of unsound mind if asked for differences: age against mental capacity, the fixed rule for minors against the time-of-contract test of Section 12.
End every problem with a clear one-line conclusion on validity.

Practice questions from Contract Law

Capacity to Contract (Section 11) in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Capacity to Contract (Section 11): frequently asked questions

Who is competent to contract under Section 11?

A person who is of the age of majority under the law to which he is subject, is of sound mind and is not disqualified from contracting by any law. All three conditions must be met.

Is a minor's agreement void or voidable?

It is void ab initio, which is the settled position from Mohori Bibee v. Dharmodas Ghose. A minor cannot be made liable on it, and it cannot be ratified after he becomes major.

Can a person of unsound mind ever make a valid contract?

Yes. Under Section 12, a person who is usually of unsound mind but occasionally of sound mind may contract when he is of sound mind. The test is his capacity at the time of making the contract.

What is the difference between a minor's contract and a contract with a person of unsound mind?

A minor's agreement is void ab initio on the basis of age alone. For a person of unsound mind, the question is whether he could understand the contract and judge its effect when he made it. If he could, the contract is valid.