bFor a valid contract, it is necessary that each party to the contract must have sound mind. (Sec.11)
Sound Mind
Section 12 defines, “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 his 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.
It means that a person must be able to understand the nature of contract. He should be able to make a rational judgment that whether the contract is profitable or not. A person who is temporarily of unsound mind cannot make a contract during such period. However, he can make a contract when he becomes of sound mind. A person may become of unsound mind due to idiocy, insanity, drunkenness, hypnotism and old age, etc.
Examples
A, a sane man who becomes temporary insane due to drug overdose, sells his scooter to B. the agreement is void.
S agreed to sell property worth Rs. 25,000 for Rs. 7,000 only. His mother proved that he was an idiot by birth. The sale was held to be void. (Inder Singh vs. Parmeshwardhari Singh).
Effect on Agreement
An agreement by a person of unsound mind is void but he can get benefit under it. However, the person who supplies necessaries to a person of unsound mind or any one whom he is legally bound to support, can recover reasonable value of those necessaries from the property of such person. If the person of unsound mind owns no property, then the supplier cannot recover. (Sec 68).
Buren of Proof
When a person is usually of sound mind, the burden of proving that he was of unsound mind at the time of contract; lies on the person who challenges the validity of contract.
When a person is usually of unsound mind, the burden of proving that he was of sound mind at the time of contract; lies on the person who affirms it.