CONTRACTUAL CAPACITY:

TEMPORARY UNSOUNDNESS OF
MIND /

JITENDRA
KASTORE
1502083
PGDIM 22, SEC -

WHO ARE COMPETENT TO CONTRACT?

According to The Indian Contract Act, 1872 Every
person is competent to contract who is of age of majority according to the law to which he is
subject
of sound mind
is not disqualified from contracting by any law to which he
is subject

WHAT IS A SOUND MIND FOR THE PURPOSES OF

CONTRACTING?

According to The Indian Contract Act, 1872 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
Thus,
A person who is usually of unsound mind, but
occasionally of sound mind, may make a contract when
he is of sound mind.

WHAT IS A SOUND MIND FOR THE PURPOSES OF

CONTRACTING?
Illustrations
(a) A patient in a lunatic asylum, who is at intervals of
sound mind, may contract during those intervals.
(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.

CASE IN POINT: Lucy v. Zehmer (1954)

Defendant A. H. Zehmer and his wife, Ida S. Zehmer, owned a tract of
land of 471.6 acres, known as the Ferguson Farm
Plaintiff W. O. Lucy had previously expressed interest in purchasing the
farm.
Zehmer once had orally agreed to sell the farm to Lucy but later
reconsidered and declined to complete the sale
On December 20, 1952, Lucy entered the restaurant owned by Zehmer
with a bottle of whiskey in his hand. He and Zehmer consumed a
significant quantity of distilled spirits and discussed the possible sale
of the farm
Zehmer wrote on the back of the restaurant's receipt stating, "We
hereby agree to sell to W. O. Lucy the Ferguson Farm complete for

CASE IN POINT: Lucy v. Zehmer (1954)

The next day, Lucy spoke to his brother, J.C. Lucy, about the purchase,
and he hired an attorney to examine the title
After the attorney assured Lucy that the title was clear, she wrote a
letter to Zehmer asking when he intended to close the deal
In his reply, Zehmer insisted that he had never intended to sell the
farm and that the note signed by him and his wife was written in jest,
consistent with the jovial atmosphere and drunken camaraderie the
parties were sharing that evening
Zehmer claimed on the witness stand that the circumstances were
such that Lucy should have known he was too inebriated to agree to
the sale

CASE IN POINT: Lucy v. Zehmer (1954) - Decision

The judge wrote for the unanimous court holding that the record
suggested that Zehmer was not intoxicated to the point of being
unable to comprehend the nature
And consequences of the instrument he executed. The circumstances
surrounding the transaction were such that Lucy was justified in
believing that it was a serious business transaction, rather than a mere
jest.
Buchanan further held that specific performance was the proper
remedy for the plaintiff

Holding
A person cannot set up that he was merely jesting when his

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