Prof. Ravindra T.

Jadhav, Advocate, High Court

History

Law of King,
Eye for Eye
British Rule
Court Formed
Privy Council Court
Law was based on Condition Precedent
Law was not codified
Government of India act 1935
Drafting was formed to prepare the Constitution of India
Constitution of India came into force from 26.11.1949

Constitution of India – 395 Articles and 12 Schedule

Ignoratia juris non excusal

Legal System in India

Codified, Statutory

A. Civil Law
1. Civil Procedure Code
2. Property Law
3.Company Law
4. Intelectual Property Law
5. Commercial Law
a. Sale of Goods Act
b. Partnership Act
6.Consumer Protection Act
B. Criminal Law
1. Criminal Procedure Code
2.IPC
3 MCOC

Difference in Civil & Criminal Law

1. Suit & Complaint
2. Parivate party & State or Prosecution agency
3. Compensation & Punishment
4. Appearance by Advocate & Personal Appearance

Court System in India :-

Apex Court Supreme Court

High Court
City Civil & Sessions Court

Indian Evidence Act

 LAW OF CONTRACT

1. Importance
Came in to force from 1.9.1872. Appicable to whole India except J&K
Use in daily life
Business based on LOC
Codified from Section 1 to 238
Section between 75-124 is repealed.

A. Proposal S. 2a
“When one Person signifies to another his willingness to do or to abstain
from doing anything, with a view to obtaining the assent of that other, to
such act or abstinence, he is said to make a proposal .”

Main Ingrediant of Proposal

1. Offer
2. Communication of Offer
Powell V Lee ( Head Master Post Appointment)
3. Invitation to Offer ( Examples :Mall , Shop)
a. Difference that Offer
b. Auction, Tender Notice, List of Bokseller, Menu in Hotel

Acceptance S 2b
When the person to whom the proposal is made signifies his assent thereto
the proposal is said to be accepted

1. Absolute
2. Expressed in usual manner
3. Acceptance must be in the way prescribed by Offeror

Henderson Vs Stevenson ( Luggage loss case)

Har Bhajan Lal V/s Harcharan Lal AIR 1925 All 539 ( Boys ran away
Case)

Lalman V/s Gauri Dutt (1913) ( Munim circulate Handbill case)

 Promise, Promisor & Promisee

When a proposal is accepted , it becames a promise. The person making

the proposal is then called the promisor and the person to whom it is
made is called the promise.

1. Express
2. Implied
3. Reciprocal
4. Alternative

Consideration S 2d

“ When at the desire of the promisor the promisee or any other person has
done or abstained from doing or does or abstains from doing or promises to
do or abstain from doing something such act abstinence or promise is called
a consideration for the promise.”

At the desire of promisor ( Durga Prasad V/s Baldeo 1881 Case)

The promisee or any other person Can a stranger to the consideration sue

Bewick V/s Bewick ( widow Claim)

Chinnaya V/s Ramaya ( Daughtor refused pay)
Babu Ram V/s Dhan Sing AIR 1957

Agreements & Contract

Under S.2 e - promise and and set of promises forming the consideration
for each other is an agreement.

S 2 g - An Agreement not enforceable by law is said to be Void.

Valid Agreement
Voidable Agreement
 Unenforceable Agreement
Void Agreement
Illegal Agreements

Contract
S2h defines – Contract is an agreement enforceable by law

Under Section 10 all agreements are contracts if they are made :

1. by the free consent
2. of parties competent to contract
3. for a lawful consideration and lawful object , and
4. are not expressly declared to be void

Contract required to be in writing

Sec 14
Consent is said to be free when it is not caused by :
1. Coercion
2. Undue influence
3. Fraud
4. Misrepresentation
5. Mistake

S 11 lay down that a party competent to contract i.e.if

1. he is of the age of Majority
2. he is of sound mind
3. he is not disqualified from contracting by any law to which he is
subject.

According to Indian Majority Act a minor is one who has not completed 18
years of the age.

MOHIRI BIBI V/s DHARMODAS GHOS (1903)

Contract by guardian – A valid contract can however be made by a guardian

on behalf of minor , if the following two condition are satisfied –
1. the guardian is competent to do so and
 2. the contract is for the minors benefit or for the minors legal
necessaries.

Contract by Unsound Mind Person

Contract by Drunkards
Contract by insolvent

Contract by corporation
Contract by Govt. ( Art. 299)

Cundy V Lindsay (1878)

Coercion Sec.15
1.the committing of any act forbidden by the IPC
2.the threatening to commit any act forbidden by IPC
3.the unlawful detaining of any property to the prejudice of any
person whatsoever ; or
4.the unlawful threatening to detaining any property to the
prejudice of any person whatever
With the intention of causing any person to enter into an
agreement.

Amiraju V/s Seshamma ( 1912) ( threatening of suicide for signing

release deed by Husband)

Undue influence Section 16

“ Where the relation subsisting between the parties are such that
one of the parties is in a position to dominate the will of the other
and uses that position to obtain an unfair advantage over the
other.”

Illustration :-
1. Father & son
2. Patient & Doctor
3. Banker & borrower
4. Property gifted to Spiritual Advisor
Fraud Section 17

Fraud means and includes any of the following act committed by

part to contract or with his connivance or by his agent with intent
to deceive another party thereto or his agent or to induce his to
enter into the contract
1. the suggestion as to a fact of that which is not true or which
he does not believe to be true. ( Suggestion Falsi)
2. the active concealment of fact by one having knowledge or
belief of the fact ( Suppresion Veri)
3. a promise made without any intention of performing it,
4. any other act fitted to deceive
5. any such act or omission as the law specially declares to be
fraudulent.

Example :

Company issuing debentures fraudulently.

A sells horse to B being knowing the horse is unsound . But A said

nothing.

B says to A “ if you do not deny it I shall assume that the horse is

sound.” A says nothing. Here A’s silence is equivalent to speech.

Misrepresentation
Section 18
Misrepresentation means and includes –
a. the positive assertion in a manner ot warranted by the
information of the person making it of that which is not
true through he believes it to be true. ( Example :- A
learns from X that B would be a director of Company
 about to be formed. A Informed this to M And induced
him to purchase shares. Information is hearsay.)
b. Any breach of duty which , without an intent to deceive
gain an advantage to the person committing it or any
one claiming under him , by misleading another to his
prejudice or to the prejudice of any one claiming under
him.
c. Causing however innocently a party to an agreement to
make a mistake as to substance of the thing which is the
subject of the agreement.

John V/s Crew ( 1874) ( Bridge for delivery boiler)

A horse belonging to A . B visited A’s stable for examination. A

assured that horse is sound . B Purchased horse in Auction . Before
delivery it was proved that horse is unsound.

Mistake Sec 20 & 22

Where both the parties to an agreement are under a mistake as to a
matter of fact essential to the agreement, the agreement is void.

Illustration :-
a. Agrees to sell to B a specific cargo of goods supposed to be
on it’s way from England to Bombay . Meanwhile actually
ship damaged in journey and goods lost . Neither party was
aware of the facts. The agreement is void.
b. A agrees to buy from B a certain horse . But before bargain
horse dead. Neither party was aware of the fact. The
agreement is void.
c. A being entitled to an estate for the life of B agrees to sell C.
But before execution agreement B expired . Both parties
ignorant of fact. The agreement is Void.
Mistake of Law S.21
As to mistake of law S.21 provided that a contract is not
violable because it was caused by a mistake as to any law
in force in India but a mistake as to a law not in force in
India has the same effect as mistake of fact.

Ram Ruton V/s Municipal Committee AIR 1939 ( Agreed

between the parties that Judgement Debtor would not file
a Appeal and Decree holder will not claim Cost of the
suit)

U/s 23
Lawful Consideration & Lawful Object
The Consideration or object of an agreement is lawful
unless :-
i) it is forbidden by law ;or ( Agreement to earn by
fraud )( Agreement to divide earning from Robbery)
ii) is of such a nature that if permitted it would defeat
the provision of any law;or ( recovery to amt of
Surety) ( Com. Law Prov.)
iii) is fraudulent ;or
iv) involves or implies injury to the person or property
of another ; or ( defamatory article)
v) the Court regard it as immoral , or opposed to public
policy.
Contract may be for Partly Lawful Consideration.
Example :- 1. Sevant for adultory, 2. Pleader & Client

Following Contract are against the Public Policy : -

1. Contract amounting to trading with an enemy
2. Contract for stifling prosecution
3. contract for encourage litigation
4. Marriage broakerage
5. Contract interfaring with course of justice
6. Countract tending to create interest against duty
7. Contract as regard the sale of public offices
8. Contract tending to create monopolies
9. Contract between Pleader & Clients

Agreements without Consideration

1. Made love & affection
2. writing & registered
3. Promise to compensate to a person who
has already voluntarily done something
4. Time barred debt.

Agreements in restraint of Marriage (S.26)

Every agreement in restraint of the marriage of
any person other that a minor is void.
Agreement in restraint of trade (S.27)
Exception :
The Indian Partnership act:-
1.If the partner agrees with his other parner that
as long as the parner remains a parner he shall
not carry on any other business
2.on ceasing to be a partner he will not carry on
any business.

Agreement in restraint of Legal proceedings (S

28)
Exception : Arbitration

Agreements which are uncertain ( S 29)

Agreements by way of wager ( s. 30)

Void agreements –
section 2(g)
An agreement not enforceable by law is said to be void.

Following are void agreements –

Both parties under mistake of fact (section 20)
Unlawful object or consideration (section 24)
Agreement without consideration (section 25)
Agreement in restraint of marriage (section 26)
Agreement in restraint of trade (section 27)
Agreement in restraint of legal proceedings (section 28)
Uncertain agreement (section 29)
Wagering agreement (section 29)
Agreement to do an impossible Act (section 56).

Contingent Contracts ( S 31-36)

A contingent Contract is a contract to do or not to do
something , if some event collateral to such contract does or
does not happens.
Illustration : - A contract to pay Rs. 10,000/- if B’s house is
burnt. This is contingent contract.

1. A makes a contract with B to sell a horse to B at a

specified price if C , to whom the horse has been
offered refused to buy .
2. A agree to pay B A sum of money if a certain ship
dosed not return. The ship is sunk. The Contract can be
enforced when the ship sunk
3. A agrees to pay B Rs. 1000/- if two straight line should
enclose a space. The agreement is void.
The Performance of Contracts
A. Who must perform the promises
The parties to a contract must perform or offer to perform
their respective promises unless such performance is
dispensed with or excused under the provision of this Act or
any other law.

Thus a party is released from performance his part of

contract by law e.g. an insolvent from paying his debt.
Illustration : - A promises to deliver the goods to B on a
certain day on payment of Rs. 1,000/- .A dies before
delivering the goods. A’s representative is bound to delivery
the goods to B.

B. Tender ( Offer ) of Performance

( Effect of refusal to accept Tender of Performance)

C. Anticipatory Breach of Contract

Meaning – breach of contract is its breach or repudiation
before the time fixed for performance has arrived.
It can be caused by 1. Anticipatory breach by repudiation
and 2. by impossibility of performance brought about by the
act of one of the parties.
Example : X agrees to sell certain goods to Y , delivery to be
given at the end of the month. The very next day, X writes to
Y and says that he will not deliver the goods . Y replies that
he does not accepts X ‘s wrongful repudiation of the
contract. At the end of the month , X delivery the goods to Y
who refuses to accept it. X sue Y for breach of contract.
( X will succeed notwithstanding his previous repudiation.)

Discharge of Contract :-
1. By performance
2. where performance is dispensed with or excused
3. by refusing tender of performance
4. by one party refusing to perform
5. by the act becoming impossible or unlawful
6. by novation resiccion or alteration of contract
7. by waiver
8. by accord and satisfaction
9. by rescission of voidable contract
10. by the promise failing to afford facilities for
performance
11. by operation of law.

Quasi Contracts ( S. 68-73)

Certain Relations resembling those, created by contract.
1. Claim for necessaries supplied to person incapable of
contracting, or on his account
2. Reimbursement of person paying money due by
another in the payment of which he is interested
3. Obligation of person enjoying benefit of a non –
gratuitous act
4. Right and liabilities of finder of goods
5. Liabilities of person to whom money is paid or thing
delivered by mistake or under coercion
Breach of Contract
1. Damages for the loss sustained
2. Decree for specific performance
3. injunction

Indemnity and Guarantee

1. A contract of Indemnity is a contract by which one party
promises to save the other from the loss caused to him
by the conduct of the promise or any other person. A
contract of guarantee is a contract to perform the
promise or discharge the liability of a third person in
case of his default.
2. In contract of indemnity there are two parties. But in
contract of Guarantee there are three parties.
3. A contract of indemnity is for reimbursement of loss. A
contract of guarantee s security of the creditors.

Contract of Bailment
A bailment is the delivery of gods by one person to another
for some purpose upon a contract that they shall when the
purpose is accomplished, be returned or otherwise disposed
of according to the direction of the person delivering them.

Lien & Pledge

Lien gives a right to possession until the claim is satisfied.
Pledge is a bailment of goods as security for a debt or for the
performance of a promise.
Agent
An Agent is person employed to do any act for another or to
represent another in dealing with third persons. The person
for whom such act is done or who is so represented is call
the principal.
1.Special Agent
2. General Agent
3.Sub-agent
4. Co-agent