A contract is a legally binding agreement or relationship between two

or more parties to execute specified acts or refrain from doing so. A

contract is also described as a legally binding exchange of promises
between two or more parties that is enforceable by the law. To form a
contract, an offer must be backed by acceptance, and there must be a
consideration. Both parties must desire to establish a legal relationship
based on a legal matter that must be freely entered into and
performed.

An agreement is a type of cross-reference between distinct parties that

might be written, oral, or both, and is based on the parties' honour
rather than being legally enforced.
All contracts are agreements because they require two parties to agree
on something before they can form one. The terms and conditions of
an offer should be agreed upon and followed by all parties. The
following examples demonstrate how all contracts are agreements:

Definition of contract
According to section 2(h) of the Contract Act 1872:
” An agreement enforceable by law is a contract.”
A contract therefore, is an agreement the which creates a legal
obligation i.e., a duty enforceable by law.
From the above definition, we find that a contract essentially consists
of two elements:
(1) An agreement and (2) Legal obligation i.e., a duty enforceable by
law.

Example;
A promises to sell a horse to B for Rs.100,000, and B promises to buy
horse at that price.

All contracts are agreements:

 For a Contract to be there an agreement is essential; without an
agreement, there can be no contract. As the saying goes, “where there
is smoke, there is fire; for without fire, there can be no smoke”. It could
will be said, “where there is contract, there is agreement without an
agreement there can be no contract”. Just as a fire gives birth to smoke,
in the same way, an agreement gives birth to a contract.

What is agreement?
An agreement is a form of cross reference between different parties,
which may be written, oral and lies upon the honor of the parties for its
fulfillment rather than being in any way enforceable.

All agreements are not contracts

As previously stated, for an agreement to become a contract, it must
result in a legal obligation. If an agreement is unable to create a legally
enforceable obligation. It isn't a binding agreement. As a result, an
agreement has a longer duration than a contract.
Agreements of a moral, religious, or social nature, such as a promise to
have lunch together at a friend's house or to go for a walk together, are
not contracts because they are unlikely to create a legally enforceable
duty for the simple reason that the parties never intended for legal
consequences to apply.
Legal agreements, on the other hand, are contracts since they establish
legal connections between the parties.

EXAMPLE: a- A invites B to dinner. B accepts this invitation but does not

attend the dinner. A can not sue B for damages. It is social agreement
because it does not create legal obligation. So it is not a contract.

b- A promises to sell his car to B for one million. It is legal agreement

because it creates legal obligations between the parties. So it is a
contrac
According to section 10 of the contract act 1872,
 “All agreements are contracts if they are made by the free consent of
the parties, competent to contract, for a lawful consideration and with
a lawful object and not hereby declared to be void.”
Thus an agreement becomes a contract when at least the following
conditions are satisfied.
1-free consent
2-competency of the parties
3-lawful consideration
4- lawful object.

Conclusion:
In a nutshell, an agreement is the foundation for a contract, and the
contract is the building built on that foundation. An agreement begins
with an offer and concludes with consideration, however a contract
must meet another requirement: enforceability. As a result, a break of
an agreement gives the aggrieved party no legal recourse, whereas a
breach of contract gives the aggrieved party legal recourse against the
guilty party. As a result, all contracts are agreements, but not all
agreements are contracts.

22= What Is a Voidable Contract?

A voidable contract is a formal agreement between two parties that
may be rendered unenforceable for any number of legal reasons, which
may include:
Failure by one or both parties to disclose a material fact
A mistake, misrepresentation, or fraud
Undue influence or duress
One party's legal incapacity to enter a contract (e.g., a minor)
One or more terms that are unconscionable
A breach of contract

The legal right to void such a contract is known as disaffirmance.

KEY TAKEAWAYS
A voidable contract is one that can be canceled or altered for qualified
legal reasons.
Not all contracts are voidable; legal precedent must exist to absolve
responsibility.
Finding a defect in a contract is a common way to void that contract.
The simplest way to void a contract is for both parties to agree that
voiding is the best option.
How Voidable Contracts Work
A voidable contract is initially considered legal and enforceable but can
be rejected by one party if the contract is discovered to have defects. If
a party with the power to reject the contract chooses not to reject the
contract despite the defect, the contract remains valid and enforceable.

Most often, only one of the parties is adversely affected by agreeing to

a voidable contract in which that party fails to recognize the
misrepresentation or fraud made by the other party.

In contrast, a void contract is inherently unenforceable. A contract may

be deemed void should the terms require one or both parties to
participate in an illegal act, or if a party becomes incapable of meeting
the terms as set forth, such as in the event of one party’s death.

A contract that is deemed voidable can be corrected through the

process of ratification. Contract ratification requires all involved parties
to agree to new terms that effectively remove the initial point of
contention that was present in the original contract.

If it was later discovered that one of the parties was not capable of
entering into a legally enforceable contract when the original was
approved, for example, that party can choose to ratify the contract
when they are deemed legally capable
Voidable vs. Void Contracts
A voidable contract occurs when one of the involved parties would not
have agreed to the contract originally if they had known the true nature
of all of the elements of the contract prior to original acceptance. With
the presentation of new knowledge, the aforementioned party has the
opportunity to reject the contract after the fact. Alternatively, a
contract is voidable when one or both parties were not legally capable
of entering into the agreement—for example, when one party is a
minor.

In contrast, a void contract is inherently unenforceable. A contract may

be deemed void should the terms require one or both parties to
participate in an illegal act, or if a party becomes incapable of meeting
the terms as set forth, such as in the event of one party’s death.

A contract that is deemed voidable can be corrected through the

process of ratification. Contract ratification requires all involved parties
to agree to new terms that effectively remove the initial point of
contention that was present in the original contract.

If it was later discovered that one of the parties was not capable of
entering into a legally enforceable contract when the original was
approved, for example, that party can choose to ratify the contract
when they are deemed legally capable.
3.
The Indian Contract Act outlines all of the terms and conditions that
must be followed in order for a contract to be fulfilled. It also includes
clauses that apply if either party breaches the contract. Let's take a
closer look at the many options for contract breach remedies.

Remedies for Breach of Contract

When a promise or agreement is broken by any of the parties we call it
a breach of contract. So when either of the parties does not keep their
end of the agreement or does not fulfil their obligation as per the terms
of the contract, it is a breach of contract. There are a few remedies for
breach of contract available to the wronged party. Let us take a look.

1] Recession of Contract
When one of the parties to a contract does not fulfil his obligations,
then the other party can rescind the contract and refuse the
performance of his obligations.

As per section 65 of the Indian Contract Act, the party that rescinds the
contract must restore any benefits he got under the said agreement.
And section 75 states that the party that rescinds the contract is
entitled to receive damages and/or compensation for such a recession.
Suit for rescission:
The term rescission may be defined as the cancellation of the contract.
In other words, putting an end to the contract. When a contract is
broken by one party, the other party may sue to treat the contract as
rescinded and refuse further performance. In such a case he is free
from obligations under the contract. But in case the aggrieved party is
interested to sue the guilty party for damages for breach of contract, he
has to file a suit for rescission of the contract.

When the court grants rescission, the aggrieved party is freed from all
his obligations under the contract, and becomes entitled to
compensation for any loss caused to him through non -fulfillment of the
contract. eg:, A promises to supply 100 bags of sugar to B on a certain
day and B promises to pay the price on delivery of sugar on the day
fixed for performance. A does not deliver the bags. B. can rescind the
contract and need not pay the price.

2] Sue for Damages

Section 73 clearly states that the party who has suffered, since the
other party has broken promises, can claim compensation for loss or
damages caused to them in the normal course of business.

Such damages will not be payable if the loss is abnormal in nature, i.e.
not in the ordinary course of business. There are two types of damages
according to the Act,

Liquidated Damages: Sometimes the parties to a contract will agree to

the amount payable in case of a breach. This is known as liquidated
damages.
Unliquidated Damages: Here the amount payable due to the breach of
contract is assessed by the courts or any appropriate authorities.
Damages are the monetary compensation for the loss sustained by the
injured party for the non-performance of the obligation by the other.
The party who is injured by breach of a contract may bring an action for
damages. An aggrieved party may suffer damages in more than one
way. Every breach of contract of sale by a businessman may involve loss
of goods, loss of profits, loss of reputation, etc. Theoretically the
consequences of breach may be endless, but there must be some end
to the liability of the guilty party. He can not be liable for all the results
of breach.

3] Sue for Specific Performance

This means the party in breach will actually have to carry out his duties
according to the contract. In certain cases, the courts may insist that
the party carry out the agreement.

So if any of the parties fails to perform the contract, the court may
order them to do so. This is a decree of specific performance and is
granted instead of damages.
For example, A decided to buy a parcel of land from B. B then refuses to
sell. The courts can order B to perform his duties under the contract
and sell the land to A.
When damages are not an adequate remedy, the court may direct the
party in breach to carry out
his promise according to the terms of the contract. This is called specific
performance of the contract. Specific performance of any contract may,
at the discretion of the court, be enforced in the following cases:

Where there is no standard for ascertaining the actual damage caused

by non-performance of the act agreed to be done.
Where compensation in money is not an adequate relief for non-
performance, specific performance may be enforced.
Where there is a sentimental value attached to the thing purchased.
However, specific performance will not be granted where:
Monetary compensation is considered as an adequate relief.
The contract is of personal nature, e.g., a contract to marry, and
Where it is not possible for the court to supervise the execution of the
contract e.g. a building contract.

4] Injunction
An injunction is basically like a decree for specific performance but for a
negative contract. An injunction is a court order restraining a person
from doing a particular act.

So a court may grant an injunction to stop a party of a contract from

doing something he promised not to do. In a prohibitory injunction, the
court stops the commission of an act and in a mandatory injunction, it
will stop the continuance of an act that is unlawful.
‘Injunction’ is a negative order of the court directing the party to refrain
from doing something. This is given in cases where a party is guilty of
breach of a negative term of the contract. This remedy may be used as
a means of enforcing an express negative stipulation in a contract, or a
simple promise to forbear. It is the discretion of the court to grant
injunction. It is usually, issued in cases where the compensation in
terms of money is not an adequate relief.

5] Quantum Meruit
Quantum meruit literally translates to “as much is earned”. At times
when one party of the contract is prevented from finishing his
performance of the contract by the other party, he can claim quantum
meruit.
So he must be paid a reasonable remuneration for the part of the
contract he has already performed. This could be the remuneration of
the services he has provided or the value of the work he has already
done
Quantum meruit means reasonable value of the work done. Where a
party has in the performance of his contract done some work or
rendered some service and further performance has been made useless
by the other party, he may recover reasonable compensation only for
the work done or service rendered. A claim for quantum meruit arise in
the following cases :

Where the work is done, or

Services are rendered by one person for another.

4 INTRODUCTION
According to section 30[1], “Agreement by way of wager are void; and
no suit shall be brought for recovering anything alleged to be won for
any wager, or entrusted to any person to abide by the result of any
game or other uncertain event on which any wager is made.

This section represents the whole law of wagering agreement or

contract now in forced in India, supplemented in Bombay State by the
Act for Avoiding Wagers (Amendments) Act, 1865 which amended the
Act for Avoiding Wager, 1848. Before the Act of 1848, the law relating
to wagers in force in British India was the Common Law of England.

By that law an action might be maintained on a wager, if it was not

against the interest of feelings of third persons, did not lead to indecent
evidence, and was not contrary to public policy.[2] The nature of
gambling is inherently vicious and pernicious.[3]
Gambling activities which have been condemned in India from ancient
appear to have been equally discouraged and looked upon with
disfavour in Scotland, the United States of America and Australia.[4]
Gambling is now legalised in English law subject to the provisions of the
Gambling Act, 2005 in force in England, Wales and Scotland.

The Hindu Law relating to gambling has not been introduced in the law
of contract in India.[5] Gambling is not trade and commerce, but res
extra commercium and therefore is not protected within Art. 19(1) or
Art.301.[6] Under the Indian Constitution, the state legislatures have
been entrusted with power to frame state specific laws on ‘Betting and
Gambling’.[7]

The Public Gambling Act, 1867, is the central enactment on the subject,
which has been adopted by the certain states of India. The other states
in India have enacted their own legislation to regulate gambling
activities within its territory (Gambling Legislations). The gambling
legislations regulate casinos in India.

The Gambling Legislations of Goa, Daman & Diu[8]and Sikkim[9] allow

gambling to a limited extent, under a license, in five star hostels. In
Goa, the law also permits casinos on board an offshore vessel.

Section 30 only says that “agreement by way of wager is void”. The

section does not define “wager”. SUBBA RAO J in a case[10] said: Sir
William Anson’ s definition of “wager” As a promise to give money or
money’s worth upon the determination or ascertainment of an
uncertain event, brings out the concept of wager declared void by
section 30 of the contract act.

There is no technical objection of the validity of a wagering contract or

wagernig agreement.[11] It is an agreement by mutual promises, each
of them conditional on the happening or not happening of an unknown
event. So far as that goes, promises of this form will support each other
as well as any other reciprocal promises.

In Alamai v. Positive Government Security Life Assurance Co.[12] A

case of life insurance, the judge said “ what is the meaning of the
phrase ‘agreements by the way of wager’ in Section 30 of the Contract
Act ?”

In of the case[13], the judge said that the essence of gaming and
wagering was the party to win and the other was to lose upon a future
event; which at the time of the contract of an uncertain nature; but he
also pointed out that there were some transaction in which the parties
might lose and gain according to the happening of a event which did
not fall within the phrase such transactions, of course, are common
enough including the majority of forward purchase and sales. If any
agreement does not involve loss to either of the party, it is not a wager.

WHAT IS A WAGERING AGREEMENT?

Agreements entered into between parties under the condition that
money is payable by the first party to the second party on the
happening of a future uncertain event, and the second party to the first
party when the event does not happen, are called Wagering
Agreements or Wager.

WAGERING AGREEMENT MEANING AND FEATURES

A wagering agreement or contract is one by which two persons
professing to hold opposite views touching the issue of a future certain
event, mutually agree that, dependent on the detrimentation of that
event, one shall pay or handover to him, a sum of money or other
stake;

neither of the contracting parties having any other interest in that

contract than the sum or stake he will so even win or lose, there being
no other real consideration for the making of such contract by either of
the parties.

It is essential to a wagering agreement that each party may under it

either win or lose, whether he will win or lose being dependant on the
issue of the event, and therefore, remaining uncertain until that issue is
known. If either of the parties may win but cannot lose, it is not a
wagering agreement. This statement has the merit of bringing out all
the essential features that make a transaction a wager

c.. A contract is said to be complete when there is an offer and

acceptance of that offer, and there are other basic requirements which
need to be fulfilled such as free consent, lawful consideration and
competency. Consensus ad idem meaning meeting of minds for the
formation of contract is also a necessary element. But, there are certain
important intermediary elements in between which are essential and
can result in the change in course of events. The contract can terminate
before attaining the finality between promisor and promise. This
termination would take place in case certain stipulations were fulfilled.
This is called revocation.

A proposal may be revoked at any time before the communication of its

acceptance is complete as against the proposer, but not afterwards. An
acceptance may be revoked at any time before the communication of
the acceptance is complete as against the acceptor, but not afterwards.

Revocation means act of annulment. Section 5 of the Indian Contract

Act, 1872 lays down the rules of Revocation of Proposal. Section 5 says
that a Contract can be revoked any time before the communication of
acceptance is made to the proposer and not afterwards. Once the
communication of acceptance is made then the contract cannot be
revoked.
Section 6 of the Indian Contract Act, 1872 lays down the methods by
which a revocation of proposal is made. This article deals with the
methodologies that are prescribed by the Indian Contract Act, 1872 by
which revocation can be put to practice.

How and On what Grounds can Offer be Revoked?

By notice of revocation: ...
By lapse of time: ...
By non fulfillment of a condition precedent to acceptance: ...
By death or insanity of the proposer: ...
By Counter Offer: ...
By acceptance not being accepted in the mode prescribed: ...
By rejection of the offer by offeree:

5
in contract law, rescission has been defined as the unmaking of a
contract between parties. Rescission is the unwinding of a transaction.
This is done to bring the parties, as far as possible, back to the position
in which they were before they entered into a contract (the status quo
ante.

The word rescind means an express cancellation of the contract by one

party. The recession must be communicated in the same manner as to
offer. It is available where consent is caused by fraud,
misrepresentation, coercion and undue influence. The right to rescind
the contract in the case of undue influence is given under Section 19A
of The Indian Contract, 1872.

Grounds for Rescission

Although there are a plethora of reasons that warrant the cancellation
of a contract, not all of them can be rescinded. Grounds for rescission
include

undue influence
fraud
misrepresentation
The right to rescind must be executed immediately or within some
reasonable length of time once the facts which authorize the right have
been discovered. A reasonable length of time is determined by the
circumstances surrounding a particular case.

use and Effects of Contract Rescission

Contract rescission mandates the contracting parties to return all
benefits received while the contract was in force and reverse all actions
and status to the states they were in before they entered into the
contract. No damages are awarded to either party during a contract
rescission, and once in effect, a rescission renders all parties incapable
of taking future actions concerning the voided contract. A notice of
cancellation or rescission is provided by the rescinding party and all
benefits or monies received are returned by the party.

Conditions for Rescission

Rescissions can only be granted in cases of a fully formed contract. If
either party lacked intent or understanding of the implications of the
contract, the contract is not legally binding, and as such, a rescission is
unnecessary and not possible.

Mutual Consent
Contracting parties can mutually consent to have a contract rescinded.
If this is the case, both parties must separately tender their intent and
consent in written form.
In cases where only one party wants to rescind, a written notice
containing the grounds for the rescission request must be presented to
the other party. It is then left for the court to decide if the grounds for
cancellation are valid. Parties to an incomplete or executory contract
can rescind at any time if they mutually agree to it, even if there is a
contrary provision within the contract itself.