Under the general law of Contract all adult citizens are entitled to enter into Contract. However, certain categories of persons and corporations are liable to disabilities on certain grounds. Contracts made by minors are governed by the Minor’s Contracts Act, 1987. Any person below the age of 14 is a minor. The Infants Relief Act 1874 had invalidated certain contracts made by minors and prohibited actions to enforce contracts ratified after majority. This provision and the relevant provisions of the Betting and Loans (Infants) Act, 1892 has been repealed by the Minor’s Contracts Act, 1987. In case of minors, valid Contracts include executed contracts for necessaries and Contracts for the minor’s benefit. The Minor’s Contracts Act, 1987 provides that a guarantee by an adult of a minor’s transaction shall be enforceable against the guarantor even though the main contractual obligation is not enforceable against the minor. The common law governs the contract made by any person having mental disorder or under drunkenness. A Contract made by such a person who is incapable of understanding what he is doing, is considered as valid unless it is proved that he did not understand the nature of the Contract and that the party knew this to be the case. The powers and capabilities of statutory corporations are incorporated in the statute setting them up. Any act beyond such powers is ultra vires and void. The powers of the registered companies are determined by the objects clause of the memorandum of association and an act is of no effect if it is in excess of the powers granted under this clause.
