| Directions: Given below is a statement of legal principle, followed by a factual situation. Apply the principle to the facts and select the most appropriate answer among the alternatives. |
| 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 interests. |
| Facts Mr X, who is usually of sound state of mind, but occasionally of unsound state of mind, enters into a contract with Mr Y when he was of unsound state of mind Mr Y having come to know about this fact afterwards wants to file a suit against Mr X. |
A) Mr X cannot enter into contract because he is of unsound state of mind, when he entered into contract.
B) Mr X can enter into contract, but the burden is on the other party to prove that he was of unsound state of mind at the time of contract.
C) Mr X can enter into contract, but the burden is on Mr X to prove that he was of sound state of mind at the time of contract.
D) None of the above
Correct Answer: A
Solution :
Mr X cannot enter into contract because he is of unsound state of mind at the time he entered into contract.
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