Which of the following statements is true?
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A contract with a minor is voidable at the option of the minor.
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An agreement with a minor can be ratified after he attains majority.
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A person of an unsound mind cannot enter into contract even when he is of a sound mind.
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A person of a sound mind cannot enter into contract when he is of unsound mind.
A person of sound mind cannot enter into contract when they are of unsound mind - this is the correct statement. Under Section 12 of the Indian Contract Act, a person is competent to contract only if they are of sound mind at the time of contract formation. Option A is wrong because contracts with minors are void, not voidable (they cannot be ratified). Option B is wrong because minors cannot ratify agreements upon attaining majority. Option C is wrong because a person of unsound mind CAN contract during lucid intervals when they understand the contract.