Alien Enemies
According to the Indian Contract Act, “An alien enemy is a person who belongs to a country that is in a war situation with India.” In other words, those people who have citizenship in countries that don’t have good bilateral relationships with India or are in a geopolitical conflict with India are alien enemies. Any person signing a contract during a war situation is not accepted. There might also be a situation when the contract was entered during a peace situation; however, later one of the parties becomes an alien enemy. So in such cases, the contract will become void from the moment one of the parties becomes an alien enemy.
In case a contract was entered during a peace situation, it will be considered valid. Contracts that do not violate public policy are just barred from performing for the period of conflict and restored after the completion of the war and contracts that were made before the war are either dissolved or suspended. Hence, a person can neither enter into a contract with Indian citizens, nor he can file a suit regarding the contracts with Indians in an Indian court. The only exception to this case is when he possesses a license from the central government. Also in a case where a citizen of India who has a business in an enemy country, would be viewed as one of the alien enemies.
Disqualified Persons under Law: Meaning and Disqualifications
Understanding the concept of Capacity to Contract is important for all the parties to a contract to make informed decisions and protect themselves from any loss or damages due to the consequences that might occur by contracting with a party who is not in the capacity to enter a contract. To make a valid contract, the competency of parties to a contract is an important requirement and the contract will only be enforceable in a court of law if the parties to the contract are legally competent to enter a contract. In the business world, important considerations are given to understand the capacity aspect of parties while entering into a contract to safeguard their interests.
Geeky Takeaways:
- The competency of the parties is one of the most essential elements to make a valid contract.
- The capacity to contract is the legal ability of an individual to enter into a contract.
- The parties must be competent and fulfill the required criteria before signing a contract.
- Apart from contractual capacity, contracts must also include an offer, consideration, legality, lawful intent, and acceptance.
Table of Content
- Capacity to Contract
- Disqualified Persons under Law
- 1. Alien Enemies
- 2. Foreign Sovereigns and Ambassadors
- 3. Convict
- 4. Married Women
- 5. Insolvent
- 6. Joint Stock Company and Corporation Incorporated Under a Special Act
- Conclusion
- Frequently Asked Questions (FAQs)