Principle A person is said to be of sound mind for the purpose of making a contract if at the time n...........

Indian Contract Act (ICA)1872 Capacity of Contract

Principle: 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 interest.

Facts: X who is usually of sound mind, but occasionally of unsound mind enters into a contract with Y when he (X) is of unsound mind. Y came to know about this fact afterwards and now wants to file a suit against X.

X cannot enter into contract because he is of unsound mind when he entered into contract.

X can enter into contract but the burden is on the other party to prove that he was of unsound mind at the time of contract.

X can enter into contract but the burden is on X to prove that he was of sound mind at the time of contract.

None of these.

Explanation:

The principle and facts are insufficient to conclusively reach an answer. The principle only states who is aperson of unsound mind but is silent upon the repercussions of the agreement entered into by a person of unsound mind. So, Legal knowledge had to be applied in this case. Option "1" and "4" are equally possible answers. But most appropriate answer should be as it is in equation with the principal.