CERTIFICATE COURSE ON VALIDITY OF CONTRACTS IN

INDIA

ASSIGNMENT

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Validity of Contracts in India (ASSIGNMENT)

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ONE WORD/ONE LINER QUESTIONS 2 Marks Each
1. When can an unsound mind enter into a Contract?

Answer 1 :-

2. Mistake of one party as to the terms of the Contract renders the contract to be Valid, Void
or Voidable?

Answer 2 :-

3. If one minor contracts with another minor to give him Rs.500 if he burns his own house,
what kind of a Contract is this?

Answer 3 :-

4. The only exception as to a wagering contract being valid in India is?

Answer 4 :-

5. A made a contract with B to beat up C. Is this contract valid, voidable or void?

Answer 5 :-

SUBJECTIVE QUESTIONS [Within 100 Words]

5 Marks Each

1. Explain the difference between Fraud and Misrepresentation?

Answer 1 :- In misrepresentation the person making the false statement believes it to be true In fraud
the false statement is person who knows that it is false or he does not care to know whether it is true or
false.

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2.There is no intention to deceive the other party when there is misrepresentation of fact. The very
purpose of the fraud is to deceive the other party to the contract.

3.Misrepresentation renders the contract voidable at the option of the party whose consent was
obtained by misrepresentation. In the case of fraud, the contract is voidable It also gives rise to an
independent action in tort for damages

4.Misrepresentation is not an offence under Indian penal code and hence not punishable. Fraud, In
certain cases is a punishable offence under Indian penal code.

5.Generally, silence is not fraud except where there is a duty to speak or the relations between parties is
fiduciary. Under no circumstances can silence be considered as misrepresentation

.6The party complaining of misrepresentation can’t avoid the contract if he had the means to discover
the truth with ordinary deligance. But in the case of fraud, The party making a false statement cannot
say that the other party had the means to discover the truth with ordinary deligance.

2. Why is restraint of Marriage a ground for invalidity of a Contract?

Answer 2 :- According to Section 26 of the Indian Contract Act, all agreements in restraint of
marriage except that of a minor are void. The basis of making agreements in restraint of marriage
void is that marriage is a sacrament and nothing should interfere in the institution of marriage,
not even contracts. The idea behind this provision is to not snatch away the personal right of
every individual to marry someone of their own choice

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Illustrations-A person Susan agrees with John, in return for some consideration,
that she will not  marry a certain person Mark. This agreement is one in restraint
of marriage and is thereby void.

3. Explain in brief, Derry v. Peak?

Answer 3 :- In a company prospectus the defendant stated the company had the right to use
steam powered trams as oppose to horse powered trams. However, at the time the right to use
steam powered trams was subject of approval of the Board of Trade, which was later refused.
The claimant purchased shares in the company in reliance of the statement made and brought a
claim based on the alleged fraudulent representation of the defendant.

Held:The statement was not fraudulent but made in the honest belief that approval was
forthcoming.Lord Herschell defined fraudulent misrepresentation as a statement which is made
either:i) knowing it to be false,

ii) without belief in its truth, or

iii) recklessly, careless as to whether it be true or fals

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 4. Give 5 examples of Voidable Contracts.

Answer 4 :-

ANALYTICALQUESTIONS [Within 200 Words]

10 Marks Each

1. Even in today’s era, common people are reluctant to enter into a written contract in their
day to day dealings. What can be done to educate the mass about the importance of
written contracts?

Answer 1 :-

2. If you had the power to remove a provision from the Indian Contract Act 1872 which one
would it be and why?

Answer 2 :-

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