Contract Rules Nepal

Understanding Capacity to Contract in Nepal

The capacity to contract ensures that only competent individuals and entities can enter into legally binding agreements. In Nepal, the National Civil Code, 2017 identifies minors, persons of unsound mind, and legally disqualified persons as lacking capacity. While guardians may contract on behalf of minors or those mentally unfit, contracts directly entered by such individuals are void. Disqualifications also extend to individuals with criminal convictions or insolvency. These rules aim to protect vulnerable groups and uphold fairness and enforceability in legal and commercial transactions.