Legal Principle: 1. Parties to contract should be capable of entering into a contract, only then they can lay the foundation of a valid contract. 2. Every person is competent to contract who is of the age of majority. Factual Situation: A minor agreed with B to become a tenant of his house and to pay ` 1,000 for the furniture therein. He paid ` 800 in cash and gave a promissory note for the balance. A occupied the premises and used the furniture for some months and then brought an action for refund of consideration. In this case (AILET 2013)Decision:

Each question consists of legal principle(s) (hereinafter referred to as 'principle') and facts. Such proposition may or may not be true in the real and legal sense, yet you have to conclusively assume them to be true for the purposes of this section. You have to apply the principles to the given facts to arrive at the most reasonable conclusion. Only one of the alternatives, i.e., (A), (B), (C), or (D) is the most reasonable conclusion. Remember: you must not rely on any principle except the principles that are given for every question.