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

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 interests.

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

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

Mr. 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.

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

none of the above.

Explanation:

The contract can be entered into but since he is usually of sound mind, the presumption will be that the contract was entered into when he was of sound disposition. As such the contract canonly be avoided if he proves that the circumstances would be other way round.