BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Competency of parties to contract is one of the most important requirements to make an agreement valid and enforceable in a court of law. A contract made by a person who does not possess the mental capacity to understand the nature and consequences of the contract is void ab initio.

Detailed explanation-2: -Section 11 of the Indian Contract Act, 1872, defines the capacity to contract of a person to be dependent on three aspects; attaining the age of majority, being of sound mind, and not disqualified from entering into a contract by any law that he is subject to.

Detailed explanation-3: -11. Who are competent to contract.-Every person is competent to contract who is of the age of majority according to the law to which he is subject, 1 and who is of sound mind and is not disqualified from contracting by any law to which he is subject.

Detailed explanation-4: -Capacity to contract means the competency to enter into a valid contract legally. The capacity to contract binds the parties of the contract with a promise to oblige by it. But only certain persons have the competency or the capacity to make a contract.

Detailed explanation-5: -Contracts are critical business tools. That means establishing a valid contract is crucial, as is ensuring all the terms and conditions are clear and that both parties are aware, competent, and able to enter into a legally binding agreement.