1. To have full, unimpaired thought, memory, and cognitive understanding; able to think and understand for oneself. My grandfather may be in a wheel-chair at 94, but he's still of sound mind—sharper than a lot of people I know, actually!

2. law By extension, to be fully mentally competent and thus able to stand trial or be otherwise legally responsible. The state-appointed psychiatrist determined that the defendant was not of sound mind when signing the contract, and thus is not legally bound to honor the terms therein.