contract law.doc

8/10/2019 Contract Law.doc

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Question No. 1: Who is competent to contract Discuss the law

relating to minors agreement in India, with help of decided

cases. Also brief about nglish !aw Indian law in this conte"t.

#$%inors agreements are &oid at'initio. In which case the abo&e

rule was established. Discuss in brief that case and also bring out

the e"ceptions to the abo&e rule.

#$

What do (ou understand b( ) capacit( to contract* What is

effect of %inors agreement and when can it enforced.

#$

)A minors bind others but is ne&er bound b( others.* "plainb( gi&ing illustrations.

#$

Discuss the nature and effects of %inors Agreement.

Answer + IN$#D-I#N:' All agreements are not contracts.

#nl( those agreements are contract which fulfil he conditions of

section 1/ and according to section 1/ for a contract parties

must be competent, the consent must be free. herefore thecompetenc( of the parties to a contract is most essentials

element of a contract.

According to section 11 of Indian contract Act 102

which pro&ided, )hat e&er( person is competent to contract

who is of the age of ma3orit( according to law to which is

sub3ect and who is sound mind and not dis4ualified from

contracting b( an( law to which he is sub3ect.* he following

persons are competent to contract '

i5 Who is ma3or.

ii5 Who is of sound mind.


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It is e&ident that minors and unsound mind person cannot

ma6e a contract. A %a3or person means who has attained the age

of 10 (ears. he age of ma3orit( has been decided b( Indian

ma3orit( act 107. In case of guardian appointed b( the court,the age shall be 21 (ears.

) An agreement made b( a minor is &oid.*, from the

abo&e statement we find that the minor is not competent to

contract. Indian contract act is silent about whether it will be

&oid or &oidable up to 18/9. ut it is decided b( the ourt that

these are &oid. Agreement b( a minor is &oid'ab'initio, such

contract cannot be enforced b( law. ;urther the minor cannot

authorise an( other person to do a contract.ase %ohiri ibi &s Dharamdass


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agreement was &oid. he law of estoppels as stand in section

117 of Indian &idence Act was not applicable to the present

case as the plaintiff was minor at the time of ma6ing agreement,

this fact was also 6nown to the agent of rahmo Dutt defendant.-nder >pecific $elief Act 10 >ection 90 and @1 applies

where part( had the 6nowledge of minorit( age gets restitute

degree.

A new concept of beneficial has come into e"istence

now. It has been held in &arious cases. A minor is bound for the

beneficial contract. he beneficial contract are those contracts

which are for the benefit of minor. he first case was

>.>ubraman(am &Bs >ubha $o('18@0 ' In this case transfer ofinherited propert( of

a minor affected b( his guardian to pa( off an in'herited debt

was binding on him for his benefit. Cere is a list of beneficial

contract

i5 ontract of Insurance >uch contracts are in the benefit of

minors.

ii5 ontract to purchase the immo&eable propert( >uch contractare &alid.

iii5 ontract of ser&ice ' hese are for the benefit for the monors

i&5 ontract of apprentice ship raining period of an( minor

who is ta6ing training from an( person, because of the training

minor will case his li&elihood. It is for his benefit and mono is

liable to compensate hat person.

&5 ontract of %arriage When guardian made an agreement for

the marriage of the minor then another part( cannot enforce it,

but minor can enforce it. If agreement is made 3ointl( b(

guardian and minor, it can be enforced again on ma3orit( age.

&i5 ontract of Necessities' -nder section ?0 of the ontract

Act'102, minor is also liable for necessaries. Necessaries


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means the basic things of the life. hese are mainl(, $#I +

A$A'A-$ %AAAN. If an( person supplied necessaries to

minor then the minor is liable o compensate the supplier. A case

happle &s ooper he court held that necessaries are notonl( food, shelter, clothes but also education or religious and

an( such things which are necessar( for life, comes under the

definition of necessaries. he following two conditions are

necessar( for liable

1. he suppl( must not be more than sufficient.

2. he suppl( must be according to the standard of minor.

ase $>> E> ;!%IN A


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;ilm will gi&e a role to Indrani. It was held &oid because no

consideration was therein. It this agreement is with the daughter

then it is &oid abs'intro. If it is with his father then it has no

&alue e&en to thin6 o&er it. D#$IN #; $>I-I#N

$estitution means if an agreement is declared &oid, benefit

should be returned. -nder section ?@ G ?7 of contract Act, that

section ?0 is applies onl( on &oidable agreements, >ection 7? is

applies on the agreement which were &alid at the time of

formation but due to some circumstances=as under sec.7?5 it

becomes &oid. -nder the e4uitable doctrine of restitution minor

has to restore bac6 the benefit so recei&ed b( him the e"actthings but it is applicable in case of goods and propert( not in

the case of mone(. $estitution stop where repa(ments begins.

A case of !eslie &s >heill' =181@5 ' It was held b( the court of

Appeal that the mone( could not be reco&ered. If there were

allowed that would amounts to enforcing the agreement to repa(

loan, which is &oid under Inflants $elief Act'10@.

>ection 98=95 specific $elief Act 10 If the court thin6s he ma(pass an order of restitution in an( case, now a 4uestion arises

whether he person did not 6now about the age of minor. If

minor is also not 6now his age. In this stage plaintiff does not

get compensation. If respondent misrepresent his age on this

point there are different &iew of court.

ase CA$ !ACAN >INpecific $elief Act should appl( whether the minor was the


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plaintiff or the defendant. he doctrine of restitution should

appl( whether the minor had ta6en the goods or mone(.

ase A3udhi(a arsad &s handan !al + 189Allahabad Cigh ourt refused to following, e"tended &iew of

restitution and held that a minor who had ta6en mone( b(

mortgaging his home was not bound to restore the mone(. Now

section 99=25=b5 added according to this section, when a plaintiff

wants to dissol&e the agreement and sa(s that at the time of

agreement he is minor than he can get bac6 all his profits.

D#$IN #; >#!>

According to rules contained in >ec.117 of Indian &idence Act102, if (ou ma6e a statement toda(, which misleads another

person, (ou are not allowed to den( the statement to'marrow

when the 4uestion of (our liabilit( arises. A 4uestion whether a

minor who has made a false representation about his age is

stopped from pleading his minorit(, was raised, but it was not

decided in this case of %ohiri ibi. ri&( ouncil held that

where the part( 6nows about the age of minor this principlecould not appl(. he 4uestion arises that whether minor can be

stopped b( false representation as to his age is now settled b(

this case.

A ase Nawab >adi4 Ali han &s ibi Hai ishori'

1820

It was held b( ri&( ouncil that if a minor ma6es a contract b(

fraudulentl( e"pressing his age more than actual then he cannot

be stopped as per the rules of estoppels that he was minor at the

time of contract.

INDIAN AND AN


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It is difficult to differentiate between both the law in respect of

contract b( minors but generall( the difference in both the law

is '

1. ontract b( minor under Indian law is &oid ab'initio.2. It is &oidable under nglish !aw, such contract can be

declared &oid on the will of minor.

If the contract is for the benefit or fulfilment of necessit( of

minor. hen it shall be binding.

Q. No 2:' >tate the difference between &oid agreement andillegal agreement

#$

All illegal agreements are &oid but all &oid agreement are not

illegal. omments

Ans' IN$#D-I#N -nder section 2=g5 of Indian ontract

Act 102, definition of &oid agreement has been gi&en andaccording to it , ) Agreement in not onl( enforceable b( law said

to be &oid.* ;or instance, an agreement b( a minor has been held

to be &oid. >ection 2@ to 9/ of the Indian ontract Act 102,

ma6e a specific mention of agreement which are &oid.


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&5 Which do not create &alid =illegal5 liabilities between the

parties.

&i5 Which ha&e been declared as &oid b( the court etc.

All abo&e agreements are &oid because the( cannot be enforcedb( law.

I!!$AI#N An agreement ta6es place between the

citien of India and a6istan which was enforceable b( law at

the time agreement, but later on in the e&ent of war between

India G a6istan the agreement becomes un'enforceable


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whereas agreement to pa( mone( b( A to for illegal

intercourse is &oid ab'initio which cannot be enforced an( time.*

his shows the illegal agreements are alwa(s &oid whereas &oid

agreements are not alwa(s illegal.ii5 arties of illegal agreements can be punished whereas the

parties of &oid agreements cannot be punished.

I!!->$AI#N ' An agreement to encourage an( woman for

prostitution b( pa(ing her mone( is punishable but an agreement

b( minor or without consideration is not punishable. his also

pro&es the fact that e&er( illegal agreement is &oid but e&er(

&oid agreement is not illegal because illegal agreement is of

punishable nature whereas &oid agreement is not. Eoidagreement does not contain the element of illegal agreement

whereas illegal agreement contains the elements of &oid

agreement.

iii5 Eoid agreement cannot be enforced at an( time and illegal

agreement is also ne&er enforceable b( law. Cence illegal

agreement contains impliedl( the element of illegal agreement.

i&5 Illegal agreement are those which are mentioned in >ec. 29of contract act whereas &oid agreements included &arious other

t(pes of agreement, li6e agreement b( minor or unsound mind

persons, agreement without consideration etc.

&5 Eoid agreements include illegal agreements which are not

enforceable b( law, but illegal agreements need not contain all

t(pes of &oid agreement. his shows that all illegal agreements

are &oid but all &oid agreements are not illegal.

DI;;$N WN E#ID A


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1. All agreements are not &oid'ab'initio but become &oid later

due to circumstances

2 he reason of &oid agreement could be incompetenc( of

parties, lac6 of consideration etc.9 arties of &oid agreements are not be punished.

@ ollateral agreement to &oid agreements can be enforced.

7 he area of &oid agreement is e"tremel( &oid. It includes all

illegal agreement. 1 Illegal agreements are &oid +ab'initio.

2 he reasons of illegal agreement shall be those which are

mentioned in sec.29 of the ontract Act., li6e prohibited b( law.

Immoral against public policies, fraudulent etc.

9 arties of illegal agreement can be punished.@ ollateral agreement to the illegal agreement can also not be

enforced.

7 he area of illegal agreement is comparati&el( narrow. It does

not include all t(pes of &oid agreement.

Question No 9 : All contracts are agreements but all agreementsare not contractsJ

#$

Discuss the rule for the formation of a &alid contract when a

contract becomes completeJ

Introduction : '

i5 %-!!A :' &er( agreement or promise enforceable b( law

is a contract.

ii5 >A!%#ND :'ontract is an agreement creating defining

obligations between parties.

A contract is an agreement enforceable b( law. An agreement is

the prime stage of the contract. If agreement is enforceable b(

law or if agreement is recognised b( law then it will become a


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contract otherwise not. It is basicall( based upon ritish !aw

because the ontract Act was passed b( ritish Indian ection 2=(5 of contract Act

sa(s that, ) ontract is an agreement enforceable b( law.* All

agreement e.g. to see cinema is not contract, if offer is accepted

then it becomes promise. romise is followed b( consideration

then it becomes agreement and if an agreement is enforceable b(

law then it becomes #N$A, see below :'

i5 roposal K acceptance L $#%I>ii5 romise K consideration L AA!B#;;$ :' According to section 2=a5 when oneperson signifies to other his willingness to do or to abstain from

doing an(thing with a &iew of obtaining the assent of that offer

to such act or abstinence, he is said to ma6e a proposal.

AAN:' According to section 28=b5 of contract act

when the person to whom the proposal is made signifies his

assent there to the proposal then it is said to be accepted. A

proposal when accepted becomes promise.

#N>ID$AI#N :' >ection 2=d5 of contract act defines

consideration. >ection 2 sa(s that an agreement made without

consideration is &oid unless :'

a5 Natural lo&e and affection. >ec.27 of contract act, the parties

to the agreement must be standing in a near relationship to each


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other. he promise should be made b( one part( out of natural

lo&e and affection for the other. he promise should be in

writing and registered.

b5 ompensation for past &oluntar( ser&ices sec. 27=25 in case>indha &.Abrahim'1087 omba( : he promise to compensate

though without consideration is binding because of this

e"ception. he e"ception also co&ers a situation where the

promise is for doing something &oluntaril(*

c5 romise to pa( time barred debt: >ec.27=95: he promise must

be to pa( wholl( or in part a time barred debt i.e. a debt of

which the creditor might ha&e enforced pa(ment but for the law

for the limitation of suit. he promise must be in writing andsigned b( the person to be charged therewith. ase ar3u das'18/0, ection 11 sa(s, contract should be made

with person who must be ma3or and sound mind not dis4ualified

b( law.

2. ;ree onsent :' >ection 1@, sa(s that consent must be free,

when it is not caused b( coercion, undue influence under section

1?, fraud under section 1, misappropriation under section 10

and mista6e under section 2/.

9. !awful consideration G ob3ect :' According to section 29,

when agreements consideration or ob3ect are unlawful, the( are

&oid.


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@. Not e"pressl( declare as &oid:' he such agreements which

are made without consideration or e"pressl( declared to be &oid

as per section =275 are no contract, these are as under:'

i5 Agreement in restrain of marriage section'2?.ii5 Agreement in restrain of trade section'2.

iii5 Agreement in restrain of legal proceedings section '20.

i&5 Agreement which is ambitious and uncertain sec.28.

&5 Agreement b( wa( of wages section'9/.

&i5 Agreement to do an impossible act section'7?.

7.;#$%A!I> $;#$%D I; NDD F !AW:' he

person b( whom the contract must be performed time and place

and performance opportunit( of pa(ment. hus when theseconditions are fulfilled then an agreement is made contract

because these are enforceable b( law. ut some agreements are

not made contract because the( are not enforceable b( law.

hese are :'

1. >ocial Agreement :' When agreements based onl( social

relationship and parties, we cannot enforce these agreements b(

law, for e"ample:'A case Hones &Bs ada(

If M A gi&e in&itation of dinner to M M and M M accept this but

does not go to dinner then AM suffers damage after this. ut M A

M cannot file a sue against M M because it is >ocial Agreement

which is not enforceable b( law.

;A%I!F !AW:' ;amil( law are not made contract as in the case

of :

alfour &Bs alfour:' In this case the defendant who was

emplo(ed in


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husband failed to pa( this amount. he wife filed a suit against

her husband for this mone(. he court held that this agreement

is not enforceable b( law.

ase : Hones &Bs ada&llon :Where a girl left ser&ice to 3oin legal education on the promise

of her mother to stand the e"penses. It was held to be a famil(

matter and not a binding contract. hus we can sa( that all the

agreements are not contracts but all the contracts are not

agreements.

A ase !A!%AN EB>


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1. hree important points for wo important points

for

contract

Agreement: i5 acceptance are i5 agreement ii5enforcement

ii5 #ffer iii5 and consideration b( law.

2. An agreement could be legal or 2. Agreement in

contract to be law'

Illegal. ;ul and enforceable

b( law.

9. Agreement ma( or ma( not be 9. ontract is

enforceable b( law.nforceable b( law. @. Area of contract is

limited as

@. Area of agreement is &er( wide e&er( agreement

cant become

As it can be an( t(pe legal, moral contract.

tc. An( agreement e&en if not 7. In contract the &alid

liabilit( isnforceable b( law remains an created between the

parties.

Agreement.

7. he certain of &alid liabilit( is not ?. ontract re4uires

the

$e4uires in all agreement li6e, moral competenc( of parties,

free

$eligious etc. onsent, sufficient

consi'

?. &er( agreement does not re4uires duration etc.

ompetenc( of parties, free consent,

>ufficient consideration etc., because


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Agreement could be b( un'enforceable

!aw.

Q. No @ :' Discuss the meaning of considerationJ When theconsideration becomes unlawfulJ Cow does the ublic olic(

ffect he considerationJ #$

An Agreement without consideration is &oid.* Discuss with

"ceptions J #$

Define consideration, ast onsideration, ontract without

consideration and consideration b( a person un6nown to

contract with suitable e"amples. #$

"plain consideration. In what cases the consideration of anagreement are said to be unlawful under contract Act.J Illustrate

with suitable e"amples.

Answer : IN$#D-I#N : he consideration has important

place in contract. It is important part of ontract. A &alid

contract re4uires a consideration. Agreement without

consideration are &oid. he stud( of consideration in respect of

the sub3ect matter is re4uired.>ection 2 =d5 of the Indian ontract Act' 102

defines consideration. It sa(s, ) When at the desire of the

promisor, the promise or an( other person has done or abstained

from doing or does or abstains from doing or promises to do or

to abstain from doing'something, such act or abstinence or

promise is called a consideration for promise.*

In other words when a the desire of one person,

another person does sense act or abstains from doing, then it

consideration for the first person.

I!!->AI#N :' MA purposes M to bu( his c(cle for

Brs.1///.//. M agrees to bu( that c(cle for $s.1///B'. Cere

$s.1///B' is the consideration for c(cle.


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According to olloc6 :' ) A part( does or abstains from doing or

promise to do or abstain from doing something, is a price for

which the promise is bought, the promise thus gi&en for &alue is

enforceable.According to Auson :' ) onsideration is that which is to be

done abstain from doing, to be bear or promises to do or which

the promises abstains from doing in respect of promise or bears

it.*

!%N> #; #N>ID$AI#N :'

I5 onsideration to be at the desire of promisor.

II5 onsideration can be gi&en b( the promise or an( other

person.III5 onsideration ma( be past, future or present.

IE5 onsideration must be legall( ade4uate and &aluable.

E5 onsideration must be &alid.

A case : %irahul nterprises EBs %rs. Ei3a(a >ri&asta& AI$

2//9 :

Delhi Cigh ourt said that a &alid agreement re4uires the

consideration to be definite.In a ase :'Durga arsad &Bs alde& he laintiff constructed

certain shops in a mar6et at the instance of the ollector of that

place. >ubse4uentl( the defendants occupied one of the shops in

the mar6et. >ince the laintiff had spent mone( for the

construction of mar6et, the defendants in consideration thereof,

made a promise to pa( the plaintiff commission on the articles

sold through their =defendant5 agenc( in that mar6et. he

plaintiff failed to pa( the promised commission. In an action b(

the plaintiff to reco&er the commission, it was obser&ed that the

consideration for the promise to pa( the commission was the

construction of the mar6et b( the plaintiff. >uch construction

had not been done at the desire of the defendants, but on the


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order of the ollector. It was therefore held that since the

consideration did not mo&ed at the desire of the defendants

= romisors in this case5, this did not constitute &alid

consideration and therefore the defendants were not liable inrespect of the promise made b( them.

F> #; #N>ID$AI#N ' here are three t(pes of

consideration which are as under :'

i5 ast consideration.

ii5 resent consideration.

iii5 ;uture consideration.

resent consideration means such consideration which is paid to

the promissor( immediatel(. "ample : MA offers to M to sellhis &ehicle for $s.7/,///B', M pa(s to MA $s.7/,///B' at that

moment, and MA gi&es the possession of &ehicle to M. his is

present consideration.

ast consideration is the consideration for the ser&ice or promise

performed in past. "ample :' MA at the desire of M ta6es care

of the famil( of M. After three (ears M promises o MA that he

shall pa( him $s.1////B' for his ser&ices gi&en. Cere, theser&ices pro&ided b( A in the past to M shall be called past

consideration.

;uture consideration means such consideration which shall be

paid in future. "ample:' MA promises to sell his house for

$s.7,///B' to M on 7th.;eb 2//9, and both parties decide that

possession of house shall be deli&ered on 1st.Dec.2//9 and on

that da( he pa(ment of $s.77,///B' shall be made. his is

future consideration, because the contract had originated on

/7./2.2//9 but its consideration was to be paid on 1st

December, 2//9.

WCN C #N>ID$AI#N I>

I!!


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A &alid contract re4uires the consideration to be &alid or legal

contract with illegal consideration is not enforceable. >ec.29 of

ontract Act mentions those situations in which the

consideration shall be considered to be illegal. hese situationsare as under:'

i5 When it is prohibited b( law.

ii5 When it is of such nature that if followed would defeat the

pro&isions of law.

iii5 When it is fraudulent.

i&5 When it in&ol&es in3ur( to the person or propert( of another.

&5 he court regards it as immoral or opposed to public polic(.

onsideration forbidden b( !aw:'>uch agreements are &oid. Anagreement or act forbidden b( law is that which is not permitted

b( law to be followed or which is against the law. A case: $am

>ewa6 &Bs $amcharan : AI$ 1802 Allahabad. : he partners of a

partnership firm made an agreement for the concealment of

profit for the purpose of decei&ing ta". It was held illegal

consideration or an agreement forbidden b( law.

onsideration to defeat the pro&isions of !aw:' An agreementwith such consideration is also &oid, whose purpose is to defeat

the pro&isions of law. In other words, where an agreement is

done with such consideration that if applied would defeat the

pro&isions of law, then such consideration and agreement shall

be considered &oid.

I!!->$AI#N : MA and M agrees with the intention that

the( shall be able to ta6e an( dispute related to a particular

sub3ect to the court, e&en though the limitation for it has been

determined,. his agreement defeats the pro&isions of !imitation

Act, and is therefore &oid.

IN Nutan umar &Bs Additional District Hudge, anda =AI$

188@ Allahabad5: Allahabad Cigh ourt held that such an


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agreement between landowner and tenant which is inconsistent

to the pro&ision of $ent control Act shall be &oid. >uch

agreements cannot be enforced through court.

;raudulent onsideration: Agreement with such considerationwhich are fraudulent, are &oid. ;or e"ample: A, and agrees

for the partition among themsel&es of the profits obtained or to

be obtained b( fraud. Agreement is &oid because its ob3ect and

consideration is against law.

onsideration to cause in3ur( to od( or propert( of an( other

person:' >uch agreement is &oid whose ob3ect and consideration

are illegal owing to be causing in3ur( to bod( or propert( of an(

other person. A case : .Abdul OQader &Bs he lantationorporation of erla. AI$ 1809: erla Cigh ourt said that a

contract made with the ob3ect to cause in3ur( to bod( or propert(

of an( other person, is &oid and unenforceable.

Immoral and #pposed to ublic olic(:' Agreement with

consideration being immoral and opposed to public polic( are

&oid and unenforceable. >e&eral decisions of court in his

respect ha&e been made. >e&eral 3udicial decisions ha&econsidered following ob3ect and consideration to be immoral

and opposed to public polic( :'

a5 Agreement to lent house on rent for prostitution.

b5 Agreement to lent &ehicle to be used for prostitution.

c5 Agreement to pro&ide mone( to ha&e cohabitation with the

wife of an( other person.

d5 onsideration of earlier cohabitation.

e5 Agreement to gi&e consideration for future illegal

cohabitation.

A case of >ubhash handra &Bs Narbada ai =AI$' 1802 of

%5 A man made agreement for maintenance with a woman. It

was the result of an earlier cohabitation with a woman with that


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man. ourt held it to be &oid and unenforceable. Agreement

with consideration being opposed to public polic( are also &oid.

he public polic( does not ha&e an( uni&ersal definition, but

se&eral 3udicial decisions ha&e considered following things to beagainst public polic( :'

I5 Insurance conscience.

II5 #bstruction in freedom.

III5 lements creating restrain to trade or natural or legal rights.

IE5 Against good conduct etc.

he following agreements ha&e been considered to be against

public polic( :

a5 Agreement to cause in3ur( to public ser&ice.b5 ransfer of decree for the purpose of a&oiding the effect of

decree to other creditors.

c5 Agreement to pa( mone( in return of marriage.

d5 Agreement to bribe for adoption etc..

A case : >I &Bs Adit(a ;inance and !easing co. + 1888 Delhi5

It was held that the land spotted or embar6ed for residential

purposes is used for commercial purposes b( an agreementwhich shall be &oid b( being against public polic(. hus the

agreement with such consideration that ad&ersel( effect o&er the

interest of common people or which are not proper in respect of

public shall unenforceable b( being &oid.

AID$AI#N A$ E#ID

As we ha&e seen abo&e that onsideration is essential for a &alid

contract. Agreement without consideration cannot be imagined.

>ection 27 of Indian ontract Act'102 clearl( pro&ides that )

Agreement without consideration is &oid.*

I!!->>$$AI#N :' MA promises M to pa( him $s.2///B'

without an( consideration. his is &oid agreement.


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"ceptions :' ut the abo&e rule ha&e some e"ceptions also i.e.

an agreement without consideration in following situation is

&alid and enforceable :'

1. Agreement -nder Natural !o&e and Affection:' Agreementwithout consideration due to Natural !o&e and Affection are

&alid and enforceable pro&ided that the( are written and

registered.

I!->$AI#N : MA promise to pa( his son M a sum of $s.

7///.// under the Natural !o&e and Affection. A writes his

promise toward and gets it registered. his is contract. Natural

lo&e and affection includes relation between father'son husband'

wife, brothers etc. >uch relations do not re4uire considerationfor a &alid agreement. A case : %anali >inghal EBs $a&i

>inghal'1888'Delhi5, It was said b( Delhi Cigh ourt that where

an( famil( agreement in relation to the amount of maintenance

has been made for lo&e and affection, famil( peace, harmon(

and satisfaction there consideration shall not be re4uired. >uch

agreement shall be enforceable b( ourt.

2. Agreement to pa( compensation for past ser&ice Where an(person without the 6nowledge of promisor or otherwise than his

pra(er, does an( ser&ice or has done ser&ice and the promisor

promise to compensate him, there consideration shall not be

re4uired, with the following thing which are necessar( :'

i5 An act has been &oluntaril( done alread( for the promisor

ii5 At the time of commission of that act, promisor was

competent to contract.

I!!->$AI#N MA at the desire of M does ser&ice for the

relati&es of M. !ater M agrees to pa( $s.1///B' to MA for the

ser&ice. his agreement been result of earlier ser&ice is &alid and

enforceable. >uch consideration is also called past

consideration.


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9.Agreement for pa(ment of ime arred Debt. >uch an

agreement for pa(ment of a debt barred b( time under limitation

act, is considered to be lawful because a time barred debt is also

a good consideration as the debt remains e&er after thecompletion of time of reco&er(. A case: ulsiram &Bs >ame(

>ingh AI$'1801 Delhi Delhi Cigh ourt held that an agreement

for the pa(ment of a time barred debt can be made under

>e.27=95 but it re4uires that the agreement shall mention that

consent has been gi&en for the pa(ment of time barred debt.

-NI + IIIQuestion No. 7. Discuss contingent contract. laborate with

suitable illustrations. Cow are such contract is different from

AgreementsJ

Answer :' IN$#D-I#N : ontingent contract is special

t(pes of contract.


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hus the contingent contract depends upon the happening of a

uncertain e&ent. If the e&ent is of certain nature, then it shall not

be contingent contract.

!%N> #; #NINuch e&ent shall be of uncertain nature i.e. it ma( or ma( not

be happen.

9. >uch e&ent is not the part of mutual promises of parties.

@. Cappening or non happening of the e&ent does not depend on

the will of the parties.7. he future uncertain e&en is collateral to the main contract.

In case : $anchoddas EBs Nathmal Cirachand and compan(

1871 =omba(5

In this case the court decided and did not accepted the

contention and said that reaching of cloth to India was a method

of deli&er(. his cannot be said contingent contract.

NA-$ #; #NINection 92 . ontingent contract to do or not to

do be an(thing if an uncertain e&ent happens cannot be enforced

b( law unless and until that e&ent has happened. If the e&ent

becomes impossible such contract becomes &oid.

I!!->$AI#N :' A contract to pa( a sum of mone( when

marries . dies without being married to . he contract

becomes &oid.

ii5 >ection 99 sa(s : contingent contract to do or not to do

an(thing, if an -ncertain future e&en does not happens can be


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enforced b( law when the happening of that e&ent becomes

impossible.

I!!->$AI#N :' A agrees to pa( to a sum mone( if a

certain ship does not return. he ship is sun6. he contract canbe enforced when the ship sin6s.

iii5 >ection 9@ sa(s : that if future e&ent on which a contract is

contingent is the wa( in which a person will act at an

unspecified time, the e&ent shall be considered to become

impossible when such person does an(thing which renders it

impossible that he should so act within an( definite time, or

otherwise than under further contingencies.

I!!->$AI#N :' A agrees to pa( a sum of mone( if marries . marries D. he marriage of to must now be

considered impossible, though it is possible that D ma( die, and

that ma( afterwards marr( .

i&5 >ection 97 sa(s that :' contingent contacts to do or not to do

an(thing if a special uncertain e&ent happens within as fi"ed

time become &oid if, the e"piration of the time fi"ed, such e&ent

has snot happened, or if, before the time fi"ed, such becomesimpossible.

I!!->$AI#N :' A promises to to pa( a sum of mone( if a

certain ship returns within a (ear. he contract ma( be enforced

if the ship returns within a (ear, and becomes &oid if the ship is

burnt within the (ear.

&5 >ection 9? sa(s that : contingent contract to do or not to do

an(thing if an impossible e&ent happens, are &oid, whether the

impossibilit( of the e&ent is 6nown or not to the parties to the

agreements at the time when it is made.

I!!->$AI#N: ' A agrees to , a sum or $s.1///.//, if two

straight lines should on close a space. he agreement is &oid.


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ontingenc( dependent on the beha&iour of the parties. It is

important that if the performance of the promise depends on the

mere will and pleasure of the promisor, it is no promise at all but

promise to pa( what a third part( decide is &alid promise. DI;;$N WN #NIN


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#$

2. What are the factors which &itiate consent and ma6e the

Agreement

Eoid or &oidableJ#$

9. What is consentJ When is consent said to be free under Indian

ontract ActJ

#$

Distinguish between coercion and undue influence.

Answer : IN$#D-I#N :'

An agreement becomes contract if it fulfils the conditions ofBsection 1/. According to sec. 1/ for an agreement becomes

contract with law full ob3ect and consideration. It means free

consent is not free then the contract is in&alid. ut it is &oidable

not &oid. Eoidable means a contract which can be declared &oid

b( the court at the option of other part(.

under sec.2=15. >ection 180, 1/=a5 also deines the term &oidable.

>ection 19 : onsent : According to Indian ontract Act 102:'

) wo or more persons are said to consent when the( agree

upon something in the same sense.*

In the abo&e definition it shows that =i5 At least two persons are

must =ii5 for the same thing and same sense.

I!!->$AI#N : At least two persons are must:' A agrees to

sell his house to for $s.7/,///B' accepts this proposal.

;or same thing and same sense:' M A ha&e two cars one %aruti

and the other is ;iat. Ce agree to sell to . A might be thin6ingto sell %aruti car while might be thin6ing to purchase fiat car.

In this e"ample A G do not agree upon the same thing in the

same sense, hence there is snot contract in this case.


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A ;ree onsent :' under sec.1@ onsent: is said to be free when

it not caused b( : i5 oercion >ec. 7.17 =ii5 -ndue influence

sec..1? =iii5 ;raud sec..1 =i&5 %isrepresentation .10 =&5

%ista6e 7.2/.In other words consent is free if it is not affected b( coercion,

undue influence, fraud and misrepresentation. In case of

consent ta6en b( mista6e the consent shall be &oid.

1. #$I#N = 7.175 :

oercion means b( force or compulsion. oercion is a method

of doing consent. his method is against the law. When an(

person b( doing an illegal act gets the consent of an( other

person on an agreement it is called coercion. It means:"planation : It is immaterial whether the I'10?/ is or is not

in force in the place where the coercion is emplo(ed.

=a5 hreading to commit an( act forbidden b( I: If consent

obtained b( threat of committing act forbidden b( > it called is

coercion. "ample : A 6idnapped a son of , A sa(s (ou gi&e me

(our scooter in $s.7/B' then I will gi&e (ou (our child. agreed,

it is a coercion. ase : %as3idi &Bs Ashi(a 100/: It was held thatit cannot be simple upon these facts that the consent of such

person was caused b( coercion.

ase:' $agana(aswami EBs Al(ar >ette A %adrasi man died

lea&ing behind a widow. he relati&e of the dead threaded the

widow to adopt a bo( otherwise the( will not allow her to

remo&e the dead bod( of her husband. he widow adopted the

bo( and subse4uentl( applied to cancel the adoption. he court

held the adoption is not &alid.

%uthiah hettiar EBs arupan hettiar

A was an agent of . A at the end of his ser&ices denied to gi&e

account to other agent. Ce said to to release him from


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liabilities otherwise he shall not gi&e the account boo6. It held

b( coercion.

=b5 hreat to commit suicide: It comes under sec.17.

ase: Ammira3a EBs >eshammaA person held out a threat to commit suicide to his son and wife,

if the( refused to e"ecute a release deed in his fa&our. he(

e"ecuted the deed in his fa&our. It was held b( the court that this

coercion. According to old filled H threat to commit suicide no

bod( can be punishable under I, and suicide itself not a crime

under I, because after suicide no bod( can be punished. #nl(

attempt to commit suicide is punishable.

=c5 -n lawful detaining of an( propert( : According to sec.17coercion could also be caused b( unlawful detaining or

threatening to detain an( propert( to the pre3udice of an( person

whatsoe&er with the intention of causing an( person to enter into

an agreement. ropert( ma( be mo&eable or immo&able. If one

person detains unlawfull(, it is coercion.

=d5 o re3udice of a person : oercion ma( be against a part( as

well as against an( person.=e5 !egal hreatening not coercion:' A commits accident with .

sa(s (ou gi&e me $s.7// otherwise I shall sue against (ou. It

is not coercion.

=f5 lace of coercion: coercion ma( be committed at an( place. It

ma( also be committed e&en outside India.

=g5 urden of proof on laintiff:

=h5 $emedies: Eoidable or restitution.0

Andhra >ugar !td. &Bs >tate of Andhra radesh + 18?0 : It was

held that the agreement cannot be said to be b( lac6 of free

consent.

2. -ND- IN;!-N : >.= 1?5


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-ndue influence means unreasonable influence or improper or

not right influence. When consent is ta6en b( wa( of

unreasonable influence or improper wa( then it is not free. he

consent can be declared &oid on this ground. >ection 1? sa(sthat when an( person has such position o&er the other person as

to dominate his will, the person who dominates the will of the

other must ha&e superiorit( o&er the other. his is done under

the following conditions.

1. $elationship superior or inferior ma( be real or apparent

relationship as

=a5 %one( lender or borrower.

=b5 Income a" #fficer and shop6eeper.=c5 Income a" #fficer and assessee.

=d5 olice and thief.

ase :' H.$.hatt &Bs >tate of -.. t. Was emplo(ed in the court

of -. Ce wants a lea&e. $egistrar said lea&e can be granted on

the condition if (ou will not come in ser&ice after the end of

lea&e. Ce wrote it. It was held b( ser&ant under undue reference

influence.=5 ;iduciar( $elationship :' 1. Ad&ocate G lient. 2. %aster G

>er&ant. 9. ingh &Bs -madat

ande( : An old Cindu woman gifted the whole propert( to her

religious guru to get peace in hea&en. It held undue influence .

arda'Nashin women : contract with parda'nashin women is

presumed to ha&e been induced b( undue influence. >he can

a&oid the contract unless he other part( can show that it was her

intelligent and &oluntar( act, A case : Ismiel &Bs Amir ibi

18/2 : It was held that the women does not become parda'nashin

women.


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%ental sic6ness:'If one part( is not in position to thin6 his

interest due to mental sic6ness. ase : $ani Annpurna &Bs >wami

Nath. A widow who did not ha&e an( mental fitness went to

creditor, she got $s.17//B' or 1//P interest. It was held&oidable because she was not in a position to gi&e free consent.

he art( attempted to influence the will of other part(. A state

of mental fear is not undue influence. If a part( is in a position

to influence others will it is not undue influence whether other

part( gets damaged.

2. $eal Damage :' If no damage is done to the t. hen it will

not be undue influence. $emedies : 1. Eoidable uBs 18.2.

$estitution uBs ?@ 9.damages uBs 9. he court under section 18can declare the whole agreement as &oid or the court ma( be

declared it &oid on reasonable condition.

urden of roof. : t. Will ha&e to pro&e that the def. Was in a

position to dominate the will of the pt. hus if such relationship

is pro&ed b( the pt. he court will presume the undue influence.

Now burden to dispro&e this presumption comes on defendant,

that there was no undue influence. Ce should pro&e that he didnot tr( to dominate other will.

Ce paid sufficient consideration to aggrie&ed.

hat the plaintiff had opportunit( to ta6e free ad&ice.

ffect of -ndue Influence:' >ection 18A sa(s when consent to

an agreement is caused b( undue influence, the agreement is a

contract, &oidable at the option of the part( whose consent was

so caused.

;$A-D -ND$ >I#N =15:'

>ection 1 defines that ) ;raud ) includes an( of the following

act committed b( a part( to a contract or with his conni&ance or

b( his agent with intent to decei&e another part( there or his

agent or to include him, to enter into the contract= whene&er a


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person obtains an( material ad&antage from another b( unfair

and wrongful means. It is said that he has committed fraud.

;raud is the wilful representation made b( a part( to contract

with the intent to decei&e the other part( or to induce such part(to enter into a contract.

>>NIA!> #; ;$A-D :' =15 o gi&e a suggestion that a fact

is true, while it not true: =false suggestion5 such suggestion,

which is not true.

ase : %ithu !al &Bs !I of India :' In this case the court held

that De&lata committed fraud.

i5 Acti&e concealment of a fact which is in the 6nowledge of the

person: &er( bod( has the dut( to disclose the defects in thematerial or the propert( while entering to the contract, if it is not

done then the agreement is based on fraud.

"ample :' MA agrees to transfer his land to but the land is

alread( mortgaged to , A does not disclose this fact. It is a

fraud.

ii5 o do such promise without intention of perform=false

promise 5iii5 An( other act fitted to decei&e.

i&5 An( act which is declared b( law as fraudulent : such as in

sla&er( act for companies it has been specified that certain t(pe

of transfer of propert( is fraud.

&5 ;raud committed b( partner or agent of the firm: such as

$i&er sil&er mining &Bs >mith AI$ 10?8: he court held that this

act was done b( the Agent of compan( uBs liabe.

&i5 here must be a false representation i.e. A shop6eeper tells

that these goods are fresh. It is A option to re3ect it. It will not

be fraud.


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&ii5 $epresentation must ha&e been made b( the art( or b( his

agent: he representation must ha&e been made 6nowing that it

is false without 6nowing its truth. In both cases it will be fraud.

&iii5 he representati&e must ha&e been an intention to decei&e.i"5 %ere silence is no fraud: under sec.1: A contracting part( is

not obliged to disclose each and e&er(thing to the other part(.

%erel( because a person does not disclose the defects in the

goods sold b( him, there is no fraud. >hri rishan &Bs

uru6shetra -ni&ersit(' 18? : It was held that there was no

fraud b( the candidate and the -ni&ersit( has no power to

withdraw the candidature of the candidate on that account.

"5 here are two e"ceptional cases where mere silence ma(amount to fraud :'

1. Dut( to spea6 : when the circumstances of the case are such

that, regard being had to them, it is the dut( of the person

6eeping silence to spea6. eeping silence in such case amounts

to fraud.

ase : >rini&asa illai &Bs !I of India, AI$'18 : It was held

that the claim is not maintainable against the insuredcorporation.

2. Dut( to disclose changes :' If a statement is true when made,

but subse4uentl( becomes false b( the change of circumstances,

there is dut( to disclose the change before the other part( acts

upon it.

"i5 $atification : When e&en after the 6nowledge committing

fraud part( ratifies agreement now he cannot repudiate. Damage,

$estitution.

rof of ;raud

;raud is essentiall( a 4uestion of fact and has to be pro&ed b(

the person who alleges that the fraud was done on him.


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%I>$$>NAI#N =-ND$ >. 105

When a false statement is made with the 6nowledge that it is

false and also with the intention to decei&e the other part( and

ma6e him enter into a contract on that basis, it is 6nown as;raud,

ut when the person ma6ing a false statement

belie&e the statement to be true and does not intend to mislead

the other part( to the contract, it is 6nown as

)%isrepresentation* it is somewhat different from fraud.

e"ample : MA while selling his watch tells M that his watch is

made in >witerland, A does not 6now that the watch is notmade in >witerland. It is fraud because the watch is made in

India. A is guilt( of misrepresentation.

It includes :' 15 he positi&e assertion, in a manner

not warranted b( the information of the person ma6ing it of that

which is not true, though he belie&es it to be true. 2. An( breach

of dut( which without an intention to decei&e gains an

ad&antages to the person committing it.

>>NIA!>

1. he positi&e assertion of material fact: When one part(

belie&es that his statement is true but it is not true, it is called

misrepresentation. ase: he #cean steam Na&igation comp. &Bs

>underdas Dharmsa(: MA sold ship telling it is of 20 tons but it

was of less tons. MA did not 6now about it. It held

misrepresentation.

2. An( reach of dut( : When on art( without intention ofcommitting fraud breaches dut( and if he also ta6es benefit from

the agreement it will be misrepresentation. ase : amarsi Dass

&Bs New India Assurance : Actuall( one liabilit( of part(

released in that deed held misrepresentation. here was the dut(


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of the part( to disclose the fact of deed. could not read it but

he did not. It means he trusted on A and it is his false statement,

which held then it is %isrepresentation.

9. Innocent %isrepresentation: When false statement is madeinnocentl( then it is %isrepresentation. >mith &Bs !and G

Couse ropert( orp.: A sold a hotel and said that all rent

holders are gentleman. Actuall( the( it all were defaulters. It

held misrepresentation. ase : Derr( &Bs ee6=10085 it was held

that the management of the compan( was guilt( of

misrepresentation, and not for fraud. Another ase : Noor'ud'

din &Bs -merao ibi 1880: A sale deed was challenged on this

ground that it was e"ecuted under fraud and misrepresentationseller was a blind person. Ce was also not paid sufficient

consideration. he possession of propert( was also transferred to

the bu(er, court declared such sale deed to be set'aside.

DI;;$N WN ;$A-D G

%I>$$>NAI#N

;$A-D

%I>$$>NAI#N1. ;raud contains the intention It does not contain an( such

intention.

o decei&e.

2. he facts are altered with the No such thing in

misrepresentation. An(

Intention to decei&e the other is presented as such presented as

such

erson. Whereas it does not came out

to be true

9. he guilt( person has the he guilt( person has no

6nowledge of

nowledge of truth. ruth.


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@. ;raud is a t(pe of tort and It does not come under tort.

>o punishable.

7. ontract b( fraud can be ontract b(

misrepresentation can onl($escinded to demand be rescinded not demand

compensation

ompensation.

?. he guilt( person can not >uch defence could be

a&ailed.

a6e the defence that the

Eictim person as plaintiff

ould ha&e find out theruth.

%I>A =>ection: 2/'225

he fifth element defecting the consent is %I>A, contract

b( mista6e are either &oid or &oidable. It is not a free consent.

#ne or both of the parties ma( be wor6ing under same.

%ista6e is of three 6inds :'

1. %ista6e in the mind of the parties is such that there is nogenuine agreement at all. here is no meeting of minds or

consensus ad idem.

2. here ma( be mista6e as to a matter of fact relating to that

agreement.

9. he mista6e essential to the agreement as to the sub3ect

matter.

F> #; %I>A :'

%ista6e when there is no consensus ad idem: According to

sec.19: two or more persons are said to consent when the( agree

upon the same thing in same sense. If there is no meeting of


37/50

minds or consensus ad idem, there arises no contract which

could be enforced.

>ection 2/ re4uires that:' %ista6e of both the parties : he

agreement is &oid if there is mista6e on the part of both theparties. A case A(e6am Angahal >ingh &Bs -nion an6 #f India,

AI$' 18/: It was held that since the mista6e was unilateral, the

contract was not affected thereb( and the same could not be

a&oided.

According to >ec.21 of the ontract Act which la(s that mista6e

of law of countr( is not e"cusable i.e. an( contract is done under

a mista6e of law being followed in India then such contract shall

not be &oidable, but if contract is under a mista6e of foreign lawthat i shall be &oid, i.e. %ista6e of ;oreign !aw and %ista6e as

to indi&idual rights. ase : ooper &Bs hibbs'10?: he court

held that the mista6e related to general ownership shall the same

effect what the mista6e of fact would ha&e. %ista6e of fact is

not e"cusable.

I!!->$AI#N :' MA agrees to bu( horse from M at the time

of agreement, the horse had alread( died but both the parties hadno 6nowledge of it such, agreement is &oid.

he following points are important in respect of %ista6e of

;act :'

1. %ista6e must be mutual. ase: ourturier &Bs Castie: 107?: It

was held that the agreement was &oid because of the mutual

mista6e as to e"istence of the sub3ect matter.

2. %ista6e must relate o an( substanti&e fact, li6e mista6e as to

identit( of the parties, identit( of sub3ect matter identit( of

nature of transaction etc.

9. %ista6e must relate to present or e"isting fact.


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ase : $affles &Bs Wichellehaus + 10?@ : It was held that owing

to mista6e as to the identit( of sub3ect matter of contract, such

contract was &oid.

@. %ista6e as to romise:' If a mista6e because of which thepromise does not reflect the real intention which was there in the

proposed agreement, such an agreement would be &oid. ase

:Cartog &Bs olinsG >hields: 1898 It was held that there had

arisen no contract in this case because the bu(er could ha&e

noticed the mista6e.

Q.No. :' "plain the law relating to agreement in restraint oftrade with reference to Indian !aw along'with e"ceptions.

Answer :'IN$#D-I#N : >ection 27 to 9/ of the Indian

ontract Act'102 mentions that those agreement which are

&oid. Eoid agreement are defined in sec. 2=g5 of the act.

According to it :' )An agreement not enforceable b( law is said

to be &oid.* hus sec.27 to 9/ of the act mentions following

agreements to be &oid :' A$AIN #; $AD

>ection 2 of the act mentions that all such agreements shall be

&oid which creates restraint or partial restraint in an( t(pe of

occupation, trade or business of a person. In simple language,

agreements creating restraint in lawful trade, occupation or

business are &oid.

Indian constitution pro&ides e&er( person the freedom to trade,

occupation or business. his freedom cannot be interferede"cept in certain situation. ;reedom of trade, occupation or

business is in accordance to public polic(. his is the reason that

this pro&ision has been mentioned in sec.2 of the act. ut it is

important that a reasonable restraint on trade, occupation or


39/50

business shall not ma6e an agreement &oid. he re4uirement is

that restraint shall be reasonable.

ase : Northernfelt &Bs %.N.;elt .De( ;orments Industrial !td &Bs $a&indera Nath>.amath 1888: It was held that where an( person is appointed

in a compan( as an ad&isor( and a condition is laid that he shall

not act an(where during his ser&ice, there such an agreement

shall not be &oid.

he abo&e rules does ha&e few e"ceptions which are under :'

1. >ale of


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the time of e"istence of contract. If the( are applied e&en after

the termination of contract, then i shall be &oid.

2. artnership Agreements : Where there is an agreement

between partners at the time of formation of firm that an(partners shall not carr( a similar or otherwise an( trade during

the e"istence of partnership, then such an agreement is not

considered to be creating restraint.

9. Dissolution of artnership :' If an( agreement is made

between the partners at the time dissolution of partnership or a

partner shall not carr( a business similar to that of firm for a

specific time, then such agreement shall not be &oid pro&ided

that it is reasonable.

Question No.0 : What do (ou understand b( MQuasi'contractJ

>tate its essential features. #$

Quasi'ontract are in law but not in fact. "plain. #$

Quasi' contract is not the product of an agreement entered into

parties but a creation of law on the basis of e4uitable principles.*Discuss the abo&e statement and state the 4uasi contract

relations recognised b( the India in ontract Act.J #$

What do (ou understand b( Quasi'contractsJ "plain some

relations which are resembling to those created b( contracts as

incorporated under the Indian ontract Act 102.

Answer :' IN$#D-I#N: ;or a &alid contract there must be

offer, acceptance and consideration with some otherre4uirements. ut sometime the position comes when there is

neither offer not acceptance still there is contract. >uch position

is put under the categor( of ) Quasi' ontract* or relation

resembling to those contract.


41/50

he term Quasi ontract generall( means half or Msemi. It

means Quasi contract is half or semi contract. ut this meaning

does not fulfil our aim. It is a confusing term. Cowe&er we can

sa( that M4uasi contract means the contract, which is e4ual tothat of a &alid contract. hapter 7 of the Indian ontract Act

deals with such situations under the heading of certain relations

resembling to those created b( contract. he chapter a&oids the

word M4uasi'contract.


42/50

demands that one should not get un3ust profit at the cost of

another un3ust loss. his order has been laid down in the case

of :' %#>> &Bs %A;$!AN : >uch action lies for mone(

paid b( mista6e or upon a consideration which happens to fail orfor mone( got through imposition or e"tortion or oppression or

for an undue 6nowledge ta6en of the pts situation. ountr( to

the law made for protection of persons under those

circumstances of the case. It is obliged b( lies of natural 3ustice

and e4uit( o refund the mone(.

-nder section ?0 to 2 It has been recognised b( Indian

ontract act under the heading of , ertain relations resembling

to those contracts.

CA$A$B>C> #; Q-A>I'#N$A>

1. hese agreement are ne&er made b( parties but imposed b(

law.

2. #ne part( is bound to pa( mone( to other part(.

9. >uch contract gi&es right to one part(. Again the other part( in

not against world.

@. #nl( mone( can be obtained not the li4uidated damages.

IND>B>>NIA! #; Q-A>I'#N$A

1. Necessaries supplied to a person of contracting: >ec. ?0 sa(s

that if a person who is incapable to enter into a contract is

supplied necessaries, then he is bound to compensate the

suppler. Incapable means, who are not capable under sec. 11 and

12, %inor is insane or dis4ualif( b( law. If basic necessities aresupplied to this, it will be deemed 4uasi contract and its price

can be reco&ered through medical aid, clothes, food, marriage of

minors sister etc., that is depending upon him. %inors


43/50

marriage is not a basic necessit(. he ingredients of sec.? are as

under :

i5 Necessaries supplied to a person not competent to ma6e

contracts.ii5 hese goods must be for the basic needs.

iii5 he goods must be according to the status of minor.

i&5 he supplier can reco&er the price against the propert( of

minor. It is not personal liabilit(.

ase : happle &Bs ooper: 10@@: It was held the things for

necessities shall be considered those without which it is not

possible to li&e. he food, clothing, shelter, medicine etc., are

the necessaries to minor or lunatic. ut it must not be more thansufficient.

2. AF%N F AN IN$>D $>#N : >ection ?8 of

act is pro&ides that a person who is interested in the pa(ment of

mone( which another is bound b( law to pa(, and who therefore

pa(s it, is entitled to be reimbursed b( other.

I!!->$AI#N : M holds land in engal, on a lease granted

b( A, who is a amidar. he re&enue pa(able b( A to thego&ernment being in Wlaw, the conse4uences of such sale will

be the annulment of s lease. pre&ent the sale and

conse4uent annulments of his own lease, pa(s to the go&ernment

the sum due from A. A is bound to ma6e goods to the amount

so paid.

i5 erson is legall( bound to pa( mone(.

ii5 he person pa(ing has the interest in such pa(men.

iii5 a(ment is t o be made to another person.

ase : tate of Cimachal

: Where %ahara3a, ha&ing sold mills without pa(ing the o&erdue

municipal ta"es was sued b( the bu(er, who had to pa( to sa&e

the propert( from being old. he ri&( ouncil held that he was


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bound b( law to pa( without the meaning of the sec. Where a

person is onl( morall( bound and is not legall( compellable to

pa( he will not bound to pa(.

9. !IAI!IF # AF ;#$ N#N' A: 'When an( person lawfull( does an( act for another person not

gratuitousl( and the other person has en3o(ed the benefit of that

act then he is bound to compensate him.

I!!->$AI#N:' MA is a trade man lea&es goods at s house

b( mista6e. treats the goods as him own. Ce is bound to pa(

MA for them. A ase : >ubraman(am &Bs haippa 18?1: A

contractor did more build more that what was re4uired b( the

contract and did not intended act gratuitousl(. ourt held thatthe contractor was entitled to compensation for e"tra wor6.

ssential conditions of section /:'

i5 #ne person legall( wor6s for other

ii5 he act is done &oluntaril(.

iii5 Ce gets some benefit for this wor6.

i&5 o whom it is done ta6es benefit of that act.

&5 Act has been done not gratuitousl(.A case : anhi(a !al &Bs Inder chand: he court held that section

?0 does not appl( because she was a minor at sec./ also does

not appl( because she did not get an( benefit. ecause it was not

a 4uasi'contract as his friend ha&ing no interest in this pa(ment.

@. $esponsibilit( of ;inder of ection 2 of the act sa(s that, )

when an(thing is deli&ered b( wa( of mista6e then it is the dut(


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of the person to return that things to the concern person or to

compensate him.*

A case :' >ales a" #fficer anaras &Bs anha((a !al : In this

case it was held that the transactions is to be ultra'wires. hefirm was allowed to reco&er bac6 the ta" which he had paid.

>imilarl( if an( person ta6es an( thing from another person b(

coercion i.e. b( wa( of force under this petition also the person

is bound to return the goods to the concerned person under

4uasi'contract obligation.

;or e"ample :' A at the point of pistol ta6es some gold rings

from M. Cere MA is bound to return the gold rings to M under

4uasi contract obligation. he word coercion is same as definedin sec.17 and the word mista6e is same as defined under sec.2/.

here are the pro&isions with regard to 4uasi'contract.

#N!->I#N

hus, in all abo&e matters there is no agreement between the

parties but the conduct and actions of parties show that an

agreement has originated between them and get binding in

similar wa( as li6e a contract. his is called Quasi'ontract.

-NI'III

Question No.8:' "plain the term MAnticipator( reach of

ontract and discuss the conse4uences of such a breach.

#$

Discuss the conse4uences of breach of contract with rele&ant

case.#$

Who must perform the ontractJ Who can demand for the

performance of ontractJ


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Answer: IN$#D-I#N ontracts are important when the(

are performed. here are two main 4uestions in this respect :'

i5 Who shall perform the contract,

ii5 Who can enforce the performance of the contract.i5 Who shall erform a ontract :' >ection @/ of the Act

mentions that generall( the contract shall be performed b( the

promisor itself if the parties has such intentions. #therwise the

promisor can emplo( an( other person for the performance of

contract.


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onl( up to that limit to which the legal $epresentati&e had the

interest in the propert( of deceased.

e. ( hird erson:' Where promises accepts the performance

from a third person, there such promise can be performed b( thatthird person. In such mattes, promise cannot enforce

performance from promisor under section @1 of the Indian

ontract Act.

$;#$%AN #; H#IN $#%I>>

here are pro&isions in the Indian ontract Act in this respect:'

i5 -nder section @2 of the act when two or more persons ha&e

made a 3oint promise, all such persons must 3ointl( fulfil the

promise.ii5 When an( one of 3oint promisor dies, his legal representati&es

shall perform the promise.

iii5 -nder section @9 of the act when two or more persons ma6e

a 3oint promise, the promise ma( compel an( of such 3oint

promisors to perform the whole promise.

i&5 >ection @@ of the act sa(s that where two or more persons

ha&e made a 3oint promise, a release of one of such 3ointpromisor, b( the promisee does not discharge the other promisor

of 3oint promisors neither does it free the 3oint promisor so

released from responsibilit( to the other 3oint promisor or 3oint

promisors.

WC# AN D%AND ;#$ C $;#$%AN #;

#N$A.

he following persons can demand for the performance of the

contract :'

a5 he first right for the performance of contract is with the

promisee. Ce can demand for the performance of contract.


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b5 If the contract is not of personal nature then on the death of

promisee his legal representati&e or representati&es can demand

the performance.

c5 Where there is 3oint promise, there all the 3oint promisors can3ointl( demand.

d5 Where an( one of the 3oint promisee dies, then the legal

representati&e of such deceased shall demand for the

performance.

e5 Where are promisee dies, then their legal representati&es can

demand the performance.

ANIIA#$F $AC #; #N$A:

>ection 98 of the Act pro&ides for the Anticipator reach ofontract which means :'

) hat before the performance of the contract, an( part( to

contract refuse to perform the promise or contract or ma6es

itself disable for performance is breach of contract.

I!!->$AI#N :' A singer enters into a contract with the

manager of theatre to sing at his theatre for two nights in e&er(

wee6 during the ne"t two months and agrees to pa( her$s.1///B' for each nights performance. #n the si"th night A

wilfull( absents herself from the theatre. is at libert( to put an

end to the contract. In such cases promisee can cancel the

contract.

he base of section 98 is ) when a part( to a contract has refused

to perform or disable himself from performing his promise in its

entiret(, the promisee ma( put an end to the contract, unless he

has signified b( words or contract his ac4uiescence in its

continuance.

$%DI> :

he following remedies are a&ailable against the anticipator(

breach of contract :'


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1. he promisee can file a suit for the breach of contract

considering it to be actual breach.

2. he promisee shall wait till the actual date of performance

and then file the suit.9. >pecific performance and In3uction : sometimes a part( to the

contract instead of reco&ering damages for the breach of

contract ma( ha&e protection to the alternati&e remed( of

specific performance of the contract.

@. Damages : $emed( b( wa( of damages is the most common

remed( a&ailable to the in3ured part(. his entitles the in3ured

part( to reco&er compensation for the part( who causes the

breach. >ec.9 to 7 incorporate the pro&isions in this regard. Acase : Cadle( EBs a"endale'107@: It was held that the special

circumstances were not communicated b( the plaintiffs to the

defendants. he plaintiffs were therefore not entitled to reco&er

the loss.

Eictoria !oundr( !td. &Bs Newman Industries !td. 18@8.

It was held that the defendant had the 6nowledge of the fact. he

case was referred to official $eferee to determine the damagespa(able in this case.

7. Quantum %eruit:' When the in3ured part( has performed a

part of his obligation under the contract before the breach of

contract has occurred, he is entitled to reco&er the &alue of what

he has done under this remed(.

?. %easure of Damages :' hat after certain result of the breach

of contract in nearest time is to be compensated. Damages are

therefore, to fi" amount of that basis if a part( ta6es securit(

deposit from the other for the due performance of the contract.

A case : >tate of erla EBs .has6aran 1807.


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It was held that generall( 1/P profit is ta6en as an element in

the estimation of the contract and the contractor was entitled to

claim compensation on that basis.

contract law.doc

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