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CMA Foundation · Fundamentals of Business Laws and Business Communication · Capacity of Parties, Free Consent

Under Section 11 of the Indian Contract Act, 1872, which of the following is stated as a requirement for a person to be competent to contract?

A person is competent to contract if he has attained the age of majority under the law applicable to him, is of sound mind, and is not disqualified from contracting by any law. Citizenship, PAN, property or literacy are not requirements under Section 11.

  1. ABeing of the age of majority according to the law to which he is subject, being of sound mind and not being disqualified by any lawCorrect
  2. BBeing a citizen of India and holding a valid PAN
  3. CHaving at least some property of his own to pay damages
  4. DBeing literate enough to read the written agreement

Explanation

Section 11 says every person is competent to contract who is of the age of majority under the law to which he is subject, is of sound mind and is not disqualified by any law. Citizenship, property and literacy are not conditions in the section, so those options are wrong.

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