Section 12 in the Indian Contract Act, 1872
12. What is a sound mind for the purposes of contracting.—A person is said to be of sound mind for the purpose of making a contract, if, at the time when he makes it, he is capable of understanding it and of forming a rational judgment as to its effect upon his interests. —A person is said to be of sound mind for the purpose of making a contract, if, at the time when he makes it, he is capable of understanding it and of forming a rational judgment as to its effect upon his interests." A person, who is usually of unsound mind, but occasionally of sound mind, may make a contract when he is of sound mind. A person, who is usually of sound mind, but occasionally of unsound mind, may not make a contract when he is of unsound mind. Illustrations
1- A patient in a lunatic asylum, who is, at intervals, of sound mind, may contract during those intervals. (a) A patient in a lunatic asylum, who is, at intervals, of sound mind, may contract during those intervals."
2- A sane man, who is delirious from fever, or who is so drunk that he cannot understand the terms of a contract, or form a rational judgment as to its effect on his interests, cannot contract whilst such delirium or drunkenness lasts. (b) A sane man, who is delirious from fever, or who is so drunk that he cannot understand the terms of a contract, or form a rational judgment as to its effect on his interests, cannot contract whilst such delirium or drunkenness lasts."
- When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal.
- Agreements the meaning of which is not certain or capable of being made certain are void.
- Mere silence as to facts likely to affect the willingness of a person to enter into a contract is not fraud, unless the circumstances of the case are such that regard being had to them it is the duty of the person keeping silence to speak or unless his silence is, in itself equivalent to speech.
- A condition to a contract can also be complied with after the happening of the event to which such a condition is attached.
FACT: Ramanuj telegrammed to the shyamsunder, writing “will you sell me your Rolls Royce Car? Telegram the lowest cast price”. Shyamsunder replied, too by telegram “lowest price for car is Rs. 20 lacs”. Ramanuj immediately sends his consent through telegraph stating, ‘I agree to buy the car for Rs. 20 lacks asked by you. Now shyamsunder refused to sell the car. .