Capacity of the parties — MCQs

All questions with answers and explanations

Read the full set here, or use the practice card above to test yourself one question at a time.

1. Under Section 11 of the Indian Contract Act, 1872, a person is competent to contract if they are of the age of majority, of sound mind, and:

   • Registered as a taxpayer
   • Not disqualified from contracting by any law to which they are subject (correct answer)
   • Literate in the language of the contract
   • A citizen of India

   Explanation. Section 11 lays down exactly three tests: age of majority, sound mind, and not being disqualified from contracting by any law to which the person is subject.

2. As per the Indian Majority Act, 1875, the general age of majority in India is:

   • 16 years
   • 18 years (correct answer)
   • 21 years
   • 19 years

   Explanation. Section 3 of the Indian Majority Act, 1875 fixes the general age of majority at 18 years, raised to 21 years only where a court-appointed guardian or the Court of Wards is involved before the person turns 18.

3. A person of unsound mind who is usually insane but has occasional lucid intervals:

   • Can never validly contract
   • Can validly contract only during a lucid interval (correct answer)
   • Can validly contract at any time, regardless of mental state
   • Needs court permission for every contract

   Explanation. Section 12's second paragraph allows a person who is usually of unsound mind, but occasionally of sound mind, to make a contract when they are of sound mind — that is, during a lucid interval.

4. Which of the following is NOT one of Section 11's three tests of competence?

   • Age of majority
   • Sound mind
   • Financial solvency (correct answer)
   • Not disqualified by any applicable law

   Explanation. Financial solvency is not one of Section 11's tests, though insolvency can separately fall under the 'disqualified by law' ground in specific circumstances — it isn't a general precondition for everyone.

5. Soundness of mind under Section 12 is assessed:

   • As a permanent, lifelong label once determined
   • At the exact moment the contract is made (correct answer)
   • Only through a medical certificate
   • By the person's educational qualification

   Explanation. Section 12 is explicit that soundness of mind is judged at the time the contract is made, not as a fixed status — this is why lucid intervals and temporary unsoundness both matter.