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Capacity to Contract in Nepal 2026 — Civil Code 2074
"Capacity to contract in Nepal is governed by Section 506 of the Muluki Civil Code 2074 (National Civil Code 2017) — Part 5 on Contracts. Section 506(1) bars three categories: minors (under 18), persons of unsound mind, and persons disqualified by law (insolvents, persons under court interdiction, certain office-holders barred by special statutes). Minors' contracts are VOID, not voidable, with limited exception under Section 640(1) where the guardian contracts for the minor's benefit. Section 506(3) permits a guardian to contract on behalf of an unsound-mind person for their benefit. The Civil Code 2074 omits 'consideration' as a defined essential, replacing the Contract Act 2056 framework that was repealed."