Discuss the contractual capacity of:Persons of unsound mind

• If a person who is of unsound mind enters into a contract such a contract is voidable at his option by establishing that
o He was too insane to understand the nature or effects of his acts.
o The other party was aware of his mental condition
• By proving these facts the party escapes liability. As was the case in Imperial Loan Co. LtdV. Stone where the defendant escaped from liability on the ground of insanity.
• Under the Sale of Goods Act if a person of unsound mind is supplied with necessaries he is liable to pay a reasonable price



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