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 judgement as to its effect upon his interests, Facts: Mr X who is usually of sound mind, but occasionally of unsound mind, enters into a contract with Mr Y when he is of unsound mind. Y came to know about this fact afterwards and now wants to file a suit against Mr X.