Person of unsound mind in contracts

According to section 12 of 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 effects upon his interests”. The soundness of mind of a person depends on two facts:

1. Ability to understand the contract at the time of making.

2. Ability to form a rational judgment about the effect of the contract on his interest.

Unsoundness may arise from idiocy, lunacy, drunkenness, hypnotism, mental decay because of old age and delirium (high temperature), etc. A person who is usually of unsound mind and occasionally of sound mind can contract when he is of sound mind. A person who is usually of sound mind and occasionally of unsound mind cannot contract when he is of unsound mind. Thus, the burden of proof will lie upon the person who claims that he was not of sound mind at the time of making a contract.