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Question
The question consists of legal propositions/principles (hereinafter referred to as 'principle') and facts. These principles have to be applied to the given facts to arrive at the most reasonable conclusion. Such principles may or may not be true in the real sense, yet you have to conclusively assume them to be true. In other words, in answering the following question, you must not rely on any principles except the principle that is given hereinbelow for the question. Further, you must not assume any facts other than those stated in the question. The objective of this section is to test your interest in the study of law, research aptitude, and problem-solving ability.
Principle: 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 interest.
Facts: X, who is usually of sound mind but occasionally of unsound mind enters into a contract with Y when he (X) is of unsound mind. Y came to know about this fact afterward and now wants to file a suit against X.
Options
X cannot enter into a contract because he is of unsound mind when he entered into a contract
X can enter into a contract but the burden is on the other party to prove that he was of unsound mind at the time of contract
X can either into a contract but the burden is on X to prove that he was of sound mind at the time of contract
None of the above
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Solution
X cannot enter into a contract because he is of unsound mind when he entered into a contract
Explanation:
According to the principle, a person is said to be of sound mind for the purpose of making a contract, if he is capable of understanding it and of forming a rational judgment, in this case, X is usually of sound mind but occasionally of unsound mind enters into a contract with Y when he (X) is of unsound mind. So, according to the principle X is not competent to enter into a contract with Y, because of unsoundness of mind.
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