• Legality of minor`s contract/nature of minor`s contract

• Agreement by a minor is void

• Sec 11 minor is not competent to make a contract

• Agreement with a minor has been held to be void ab initio

• Agreement of minor is nullity

• Who is MINOR

• An infant or minor is a person who is not a major.

• According to Indian Majority Act 1875, “A minor is one who has not completed his or her 18
years of age.”

• CONDITIONS WHEN AGE OF MAJORITY IS 21 yrs

• a) Where a guardian of a minor person has been appointed under the Guardians & Wards
Act’1890.

• b) Where the supretendence (caretaking) of a minor’s property is assumed by a Court of Wards.

• Mohori Bibee vs Dharmodas Ghose

• Mortgaged his property

• Dharmodas Ghose Brahmo Dutt

• Minor money lender

Give loan of Rs 20,000

Know about his minority

– The defendant (money lender) contended that

• Dharmodas Ghose was of full age

• He had fradulently misrepresented his age

• The privy council held that an act make it essential that all contracting parties should be
competent

• It was found that at the time of making a contract DG was a minor

• The money lender claimed to refund money it was disallowed by court

• Mortgage by minor being void

• Shiam Lal Vs Ram Piary

• A a minor sold his shop to B

• The amount paid by B to A

• But sale deed could not be registered as A was minor

• Suit by B

• It was held that the agreement was void ab initio and amount is not recovered

• Ratification

• No ratification of minor`s agreement

• Ratification means subsequent approval of an act already done

• Contract by minor is absolutely void, so he cannot ratify contracts after he become major

• Because contracts entered into by him during his minority

• Contract by a minor is viod and such contract is a dead letter cannot be revived and cannot
constitute a valid subsequetly

• The transaction entered into by a minor during minority cannot be ratified

• Old contract cannot be ratified

• But a minor can enter into a fresh contract after becoming major with fresh consideration

• Doctrine of Restitution

• Meaning of Restitution

• Restitution means to restore the benefit which a person has obtained

• Illustration

• Mr.Deepak entered into a contract with A `s factory

• for a purchase of 20 tonnes of wheat.

• Deepak paid an advance of Rs 50,000

• A factory closed and cancel the contract due to some financial loss

• the contract becomes void

• A factory must return the Rs. 50,000 to Mr.Deepak.

• Where a void or voidable agreement has been cancelled

• the court may require to restore such benefit as he has received

• where the other party was aware of his minority or had a mala fide intention while dealing with
the minor

• The Court will refrain from compelling a minor for any restitution

• If a minor has received a benefit under a void agreement, he cannot be asked to refund the
same.

• if a minor obtains some property by fraudulently misrepresenting his age, the court may direct
the minor to restore the property to the other party as long as it is traceable in his possession.

• This is equitable doctrine of restitution.

•  the minor has sold the goods or converted them, he cannot be made to repay the value of the
goods, because that would amount to enforcing a void agreement.

• the doctrine will not apply where the minor has obtained cash instead of goods.

• The first landmark judgement on this issue was in Leslie v. Sheill,

• an infant liable for breach of contract

• Restitution stopped where repayment began.

• Khan Gul v. Lakha Singh4, wherein Sir Shadi Lal CJ, observed:

• the property can be identified but cash cannot be traced.

• Cash taken by minor cannot be restore but property can as it is traceable

• Minor`s contract for necessary goods

• Indian Contract Act 1872 Minor’s Liability for Necessities

• If a person, incapable of entering into contract or

• to support, minor is supplied with necessities goods suited to his condition in life,

• the person who has furnished such supplies is entitled to the reimbursed from the property of
such minor

• the liability of the minor is not personal, it is only his property, which is liable for meeting the
liability for necessities supplied to him.

• minor’s property liable for necessities the following two conditions are required.
• 1. The contract must be for goods reasonably necessary for minor’s support in his life.

• 2. The minor must not have already a sufficient supply of these necessaries

• Contract Act does not define the term ‘Necessaries’ but understood upto food, clothing and
lodging

• The funds supplied to a minor for marriage of a female minor in the family are held necessaries
and the moneylender was directed to reimbursed from the property of a minor(Tikki Lal V.
Komal Chand(1940)

• 2. The expenses incurred for performing funeral of father of a minor(Bacchu Singh v. Baldeo

• 3. The money advanced to save minor’s property from sale in execution(kedar Nath V. Ajudhya
Singh)1883

• 4. Education, training for trade, medical care, legal service etc.(Chappel V. Cooper)1884

• 5. A wrist watch for an undergraduate student,an earring for a girl, at the time of her marriage,
etc(Ryder v. Wombwell)1868

•  Srikakulam Subrahmanyam v. Kurra Shubha Rao

• It was observed by the Court, Sec. 11 and Mohribibi case leave -- a minor cannot contract

• But, the contract being for the benefefit of the minor and within the power of the guardian was
held to be binding upon him.

• Exception to general rule , a minor`s agreement is absolutely void-------

• Sale in favour of minor enforced T P Act Sec 7

• Minor accept benefit

• Minor can act as promisee

• If prop transfer by sale to minor and he paid consideration it is not void

• Minor purchased immovable prop it was held that the minor was entitled to recover
possessioon of prop

• 2. contract of marriage

• 3. minor can be admitted as partner

• Sec 30 of the partnership Act 1930 a minor cannot be a partner but can be admitted into the
benefit of p`ship

• Profit
• 4 minor as member of company

• Can owned the share on name of gurdian

• 5.Minor in a contract of agency

• Some circustance minor can be appointed as an agent

• He can represent his principal

• Principal will be responsible to third parties fo the acts of the minor agent

• Principal cannot hold the minor agent personally responsible for any wrongful acts

• 6 Minor and insovancy

• Minor cannot be declared as inslovent

• 7 Insurance

• A contract of insurance by a guardian of minor by minor`s foods and prop. Is held valid

• For benefit of minor

• 8. Contract of apprenticeship

• Indian Apprentices Act 1850 service contracts to be entered into by the guradian of a minor for
the minor`s benefit is binding on minor

• Contract of service is void but apprencship is valid

• Insane person or unsound mind

• Absence of thought, unsoundness of mind

• Every mind is sound that can reason

• Cannot reason then it is unsound mind

• Sec 11 contract by sound mind

• Sec 12 a person is said to be of sound mind for the purpose of making a contract if at the time
when he makes it he is capable of understanding it and forming a rational judgment as to its
effect upon his interest

• A person who is usually of unsound mind but occasionally of sound mind may make contract
when he is of sound mind

• A patient of lunatic who is at intervals of sound mind may contract this intervals
• A person who is usually of sound mind but occasionally of unsound mind may not make
contract when he is unsound mind

• A man who is sane but due to fever or drunk that he cannot understand the terms of a contract
or form rational judgment as to its effect on his interest cannot contract when he was drunkness
or fever

• Sound means free from defect or good condition

• State of man`s mind which can understand make a judgment

• Unsoundness of min may arise due to old age

• Niacker vs srinivasa rao

• A man aged 70 gifted all properties to his daughter

• At that time he suffer from mental disease he think that he held prop in his name 1000 acre but
actually he hold prop only 15-20 acre

• Disqualified by law

• Foreign sovereign or ambasadors

• Alien Enemy carrying on business in the enemy`s country during war

• Convicts

• insolvant

• Free consent

• Consensus ad idem

• Parties should think about the same thing in the same sense at same time

• Sec 2 (j) an agreement which is enforceable by law at the option of one or more of parties
therto , but not at the option of the other is voidable contract.

• A B

• Coercion

• It means forcing a person to enter into a contract by adopting unfair means

• A person may be forced to make an agreement by the use of fear of some kink of physical harm
or loss
 • . It means coercion in a consent if the some conditions are to be fulfilled192 . 1. It is committing
of any act forbidden by the Indian Penal Act, or 2. The threading to commit any act forbidden by
the Indian Penal code, or 3. It is unlawful detaining of any property to the prejudice of any
person, or 4. Threatening to detain any property wrongfully to the prejudice of any person. The
property may belong to the party of the contract or to any stranger. 5. With the intention of
causing any person to enter into an agreement. 6. It is not necessary that the act of coercion
must be committed at a place where the Indian penal code is in force.193

I. Committing any act forbidden by IPC-murder kidnap hurt rape

II. Threatening to commit any act forbidden by IPC

III. Case laws

IV. Unlawful detaining of any property

V. Threatening to detain any property unlawfully

VI. Case laws

• Act Forbidden by Indian Penal Code: -

• Indian Contract Act, 1872. For coercion, it is not necessary that the Indian Penal "Code should be
applicable at the place where the consent has been so caused

• IPC-murder kidnap hurt rape

• Threatening to commit any act forbidden by IPC

• In "Chikkan Amiraju v. Chikkam Seshama‖196 case A, a Hindu by a threat of suicide, induced is

wife. And son to a release deed in favour of his brother in respect of certain properties claimed
their own by the wife and son.

• The question before the court was whether. It was an act of coercion of act. The majority said
that the cut was forbidden by I.P.C. and also threat to kill oneself was out where a person acts to
his own prejudice and also to the prejudice of his wife and son

• and thus requirement of sec. 15 were satisfied.

• Ranganayakamma vs Alwar Setti 1889

• Widow 1s husband death

• Upto making of signature on adoption deed

• Chikkam ammiraju Vs chikkam seshamma 1918

• Threat to commit sucide to enter contract

• Threat to stricke is no cercion

• Workmen of Appin Tea Estate Vs industrial Tribunal 1966

• Statutory compulsion is not coercion

• Andhra sugar Ltd Vs State of Ap 1968

• Unlawful detaining of any property

• Muthiya Vs Muthu Karuppa

• a person hired an agent for the purpose of maintainging accounts of business later he wanted
to change the agent and previous agent dinot agreed to handoer the documents till he is
completely released from the liability

• Cercion

• Threatening to detain any property unlawfully

• Hansraj Vs Secretary of the state

• Son had to pay some fine govt fo India threatened the father of attaching his property and
scared father paid the fine

• Held that such action from govt was cercion

• Duress

• Only against person not against goods

• Againt person who is not pary

• Duress is wrongful pressure exerted upon a person in order to cerce that person into a contract
that he or she ordinarily wouldnot enter

• Duress is a similar term with cercion

• Duress is about committing or threatening to commit bodily violence

• Not about property

• Duress might cause violence

• Meaning

• Dominating by strong person to weak person

• Chruch sister executed a gift deed towards father of church of all property under influence
 • She left church and file suit against father

• Setting aside a gift deed

• 1. relation between the parties

• 2.religious superior dominate will of plff

• 3. without consideration property transfer

• 4. undue influence-voidable

• Sec 16 undue influence

16.“Undue influence” defined.—(1) A contract is said to be induced by “undue influence” where the
relations 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. 2, a person is
deemed to be in a position to dominate the will of another

• (a) where he holds a real or apparent authority over the other, or where he stands in a fiduciary
relation to the other; or

• (b) where he makes a contract with a person whose mental capacity is temporarily or
permanently affected by reason of age, illness, or mental or bodily distress.

• (3) Where a person who is in a position to dominate the will of another, enters into a contract
with him,

• and the transaction appears, on the face of it or on the evidence adduced, to be

unconscionable,

• the burden of proving that such contract was not induced by undue influence shall lie upon the
person in a position to dominate the will of the other.

• Illustrations

• (a) A having advanced money to his son, B, during his minority, upon B‟s coming of age obtains,
by misuse of parental influence, a bond from B for a greater amount than the sum due in
respect of the advance. A employs undue influence.

• (b) A, a man enfeebled by disease or age, is induced, by B‟s influence over him as his medical
attendant, to agree to pay B an unreasonable sum for his professional services. B employs
undue influence.

• Essential ingredient

• 1. the relation subsisting between the parties should be such that one of the parties must be in a
position to dominate the will of the other
Real/apparent minor-guardian,parent child fiduciary relation-confidence,trust-doctor patient advocate
and client religious guru and devotee

• 2. one of the party strong enough and the other depend upon that strong person due to age,
illness, mental infirmity.physical nurse and aged person

• 3. dominant party should obtain an unfair advantage over the other

• 4 use of dominant position to obtain that unfair advantage

• 5. the transiction is unconscionable

• Burden of proof

•  the burden shifts totally on the defendant to prove that undue influence did not occur.

• When a person is found to be in a position by which he can dominate the will of the other or a
transaction appears to be affected due to dominance,

• the burden of proof that no undue influence was exercised in the transaction lies on the party
who is in a position to dominate the will of others.

• In the case of Diala Ram Vs Sarga, the defendant was already indebted to the plaintiff, who was
village moneylender.

• He again took a fresh loan from a plaintiff and then executed a bond,

• he agreed to pay interest.

• The court held that the contract was unconscionable and

• therefore, the burden of proof was on the plaintiff to show that there was no undue influence in
this case. The burden of proving that the contract was not induced by undue influence is to lie
upon the person who was in the position to dominate the will of others if the transaction
appears to be unconscionable.

• Presumption of undue influence

• There are some cases in which the Honourable Courts of India presume the existence of undue
influence between the parties:

• Where one of the parties to a contract is in a position to dominate the will of the other and
contract is prima facie unconscionable i.e unfair, the court presumes the existence of undue
influence in such cases.

• Where one of the parties to a contract is a Pardanashin Woman, the contract is presumed to be
induced by undue influence. In relation to Pardanashin Woman,
• Table of Contents

• Who are Pardanashin Women?

• Pardanashin Women and the Indian Contract Law

• Case Laws

• Conclusion

• Pardanashin women are often confused with women who wear burkha. But this is a
misconception. Pardanashin women are women, who have almost zero contact with the outside
world. They live in their homes, they go from their father’s house to the house that they are
married into. However, they never interact with the outside world. They only have relations
with the men and women in their house, that too from behind a ‘purdah’ or ‘veil’.

• This is known as secluded living. A Pardanashin woman is one who observes complete reclusion
because of the custom of the particular community to which she belongs. [1]

• The practice of ‘parda’ was seen as a benchmark of status. Women belonging to the elite class
practised this custom in the 19th century in India. The practice of ‘parda’ was practised by many
women in the Hindu and Muslim community.

• Due to these customs over time, women practising this custom became completely dependable
on the males of the house.

• Because of this they:

• Do not have the privilege to develop their own world view.

• Remain inexperienced due to lack of interaction with other human beings.

• Don’t have an education and are illiterate.

• Cannot interact with anybody outside their household so they do not know what is going on in
the world outside their own house.

• Can be fooled easily as they cannot analyse a situation from many different angles: much like a
small child who is dependent on his/her parents.

• Because of the above-stated reasons, all affairs (legal or otherwise) of a pardanashin woman are
managed by her husband or her other family members.

• Understand the terms of the contract.

• Comprehending the consequences of the concerned contract.

• To understand personal stake/role in the said contract.

• A Pardanashin woman is incapable of understanding and interpreting the contract after fulfilling
the above three conditions.

• Why is it so?

• In the case- Ashok Kumar And Anr. vs Gaon Sabha, Ratauli And Ors. [4] it was observed as
under:

• It is not merely by reason of pardah itself that the law throws its protection around
a pardanashin lady but by reason of hoe disabilities to which the life of a section of people living
in seclusion gives rise to the disabilities and with which a pardanashin lady suffers.

• Because of her disabilities and inability to understand the terms of a contract

a pardanashin woman can be easily influenced by anybody. She can be persuaded to sign a
contract that is not in her favour and harms her. Anybody can use her disabilities against her for
their own benefit.

• The legislature understood this problem and detected a need to protect pardanashin women.

They did this by protecting them under Contract law

• A pardanashin woman is susceptible to undue influence and therefore, the law throws around
her a “Special cloak of protection” i.e. Where such a woman signs a sale, mortgage, gift or
release, the person obtaining her signatures has to prove that the transaction was not only
explained to her but also that she had understood the transaction and that there was no undue
influence

• The case of a pardanashin woman is considered exceptional and the other party has to prove
that the pardanashin woman was not influenced and she fully understood the situation she was
getting herself into just like any other reasonable person would.

• Apart from other considerations applicable, if the document executed is not in the mother
tongue of the executant, the law requires further that she understood the document and not
merely heard its contents. 

• pardanashin term has been given a definite legal meaning. The only conditions when a woman
can claim to be pardanashin are when:

• She is illiterate;

• She is ignorant as she has never set a foot in the outside world.

•  Laxmi Narain & Another v. Hubraja: [11]

• Rules regarding transactions by a Pardanashin lady are equally applicable to an illiterate and

ignorant woman, though she…may not be a Pardanashin. It is not by reason of the Pardah itself
 that the law throws its protection around a Pardanashin lady but by reason of those disabilities
which a life of seclusion lived…

• In order to prove the other party has to establish that:

• The terms of the contract were fully explained to her.

• She fully understood the terms of the contract explained- just like any other reasonable person
would.

• She understood the pros and cons arising out of the contract and her role in it.

• Her consent was free.

• Sec 17 FRAUD

1) Meaning

2) Defi

3) Essential ingredient

4) Mere silence is no fraud

5) When silence is fraud

a. Duty to speak

b. Silence is deceptive

c. Change of circumstances

d. Half truth

• (a) A sells, by auction, to B, a horse which A knows to be unsound. A says nothing to B about the
horse’s unsoundness. This is not fraud in A.

• (b) B is A’s daughter and has just come of age. Here the relation between the parties would
make it A’s duty to tell B if the horse is unsound.

• (c) 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.

• Defination

• 17. ‘Fraud’ defined.—‘Fraud’ means and includes any of the following acts committed by a party
to a contract, or with his connivance, or by his agent, with intent to deceive another

• Fraud’ means and includes any of the following acts

• (1)  as a fact, not true, by one who does not believe it to be true;

• (2) the active concealment of a fact by one having knowledge or belief of the fact;

• (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

• Essential ingredient

• 1. assertion of fact without belief in truth

• Fraud means

• Knowingly

• Without belief in the truth

• Recklessly carelessly whether it be true or false

• Derry vs peek

• A co. prospectus contained a representation that the com. Had been authorised by a special act
of parliament to run trams by mechanical power

• To use mechanical power co. has to take approval from board of trade

• The board refused consent

• Consequently the com. Was wound up

• The plff had bought some shares

• Sued against director for fraud

• Not guilty for fraud

• Director honestly believed that once parliament given the permission then board also gives the
permition

• Intention misrepresentation is necessary for fraud

• 2. active concealment

• Of material fact is fraud

• Seller of property did not disclose to the buyer pending litigation about the property
• The buyer was allowed to refund of his money with 6 % interest

• A husband taken sign of his illiterate wife on documents telling her that he is taking loan by
mortgaged 2 lands belonging to her to secure loan

• In fact he mortgaged 4 lands belonging to her

• 3. promise made without intention of performing

• A purchase of goods without any intention of paying the price is a fraud

• A builder entered into a large number of booking and collected money

• Sc held that to be a fraud

• He should have known that he would nto be able to perform

• He liable to pay interest with money

• The court held that there was fraud causing induce for booking by the purchasers

• 4. any other acts

• All kinds of intentional cheating would be covered

• 5. any act or omission specially declared to by fraudulent

• Mere silence is no fraud

• Active concealment of material fact

• Trick or language used by fraudulent people and they think that they can escape from the
transiction

• A contracting party under no obligation to disclose the whole truth to the other party

• Or to give him whole information about subjectmatter

• Under this principle trader may keep silent about change in prices

• Krishna vs kurukshestra uni

• A candidate who had full knowledge of the fact that he was short of attendance

• Did not mention this fact in his exam form

• This was held to be no fraud

• It being the duty of uni. To scrutinized forms

 • A house was let out for three years without disclosing to the tenant that house is dangerous to
occupy

• Landlord has knowledge

• Arguing by tennat to set aside that the land lord should have disclosed the real stat of the house

• The court did not allow the releif

• There was no obligation on the owner to say anything about the stat of the house

• Mere silence is fraud

• Silence may become deceptive

• 1. duty to speak

• Person who is keeping silence is under duty to speak

• Duty to speak aisles where on contracting party is in trust with other

• A father selling a horse to his son must tell him if the horse is unsound as the son is likely to rely
upon his father

• Duty to speak arises where one parties is no means of discovering the truth and to depen on the
other party

• A contract of insurance is contract of absolute good faith Uberrima fides

• False answers about the health in a proposal for life insurance

• Policy was held to be voidable

• Silence is deceptive

• A person who keeps silent knowing that his silece is going to deceptive

• 3. change of circumstance

• Change of circumstance ought to have communicated

• A com`s prospectus represented that certain person would be the directors of the co

This was true but before this allotment of shares there were changes in the director

It is good reason to avoid the contract

• 4. half truth

• Where a person no duty to disclose a fact

• He may guilty of fraud by non disclosure if he voluntarily disclose something and then stops half

• An error in consent

• When a person positively states that a fact is true when his information does not warrant it to
be so

• When there is a breach of duty by a person without intention to deceive which brings an
advantage to him and loss to the other

• When a party causes the other party to the agreement to make a mistake as to the subject
matter

• Positive assertion unwarranted statement

• he believe to be true but not true

• without intention to deceive

• 2. breach of duty

• 3.other party make a mistake as to the subject matter

• House, car second hand

• 4. suppression of vital facts

• Co paying regularly devidends stated in prospectus created the impression that co making huge
profit

• Truth co is in loss

• Dividend is paying from wartime accumulated profit

• Positive assertion means a stament that you believe that it is true

• Unwarranted statement

• Positive assertion not warranted by information which is not true

• The person making statement when he receives the information from a trustworthy source

• Statement not heresay

• B told the plff that one C would be the director of a Co

• B obtained the information not from C but from anotherr L person

• The information proved true

• Due to representation contract arises betn the parties

• Representation turns untrue

• The disadvantage party not only aviod the contract but also sue for damages

• Breach of duty

• Any breach of duty which bring ab advantage to the person committing and by misleading the
other to loss

• Doctor duty towards patient about consequence of operation

• damages

• Essential

• There must be a representation made by one party

• Representation about material fact

• Representation must be untrue

• Due to representation causing the consent

• Representation with innocent intention

• Consequences

• Affirmation or lapse of time

• Rescind the contract

Mistake of Law(Section 21)

2) Mistake of Fact(Section 20 &22)

• Introduction

• Definition of Mistake

• Types of Mistake

– Mistake of Law

• Grant v. Borg

– Mistake of Fact
 • Bilateral Mistake

– What facts are essential in Bilateral Mistake?

» Mistake as to the existence of subject matter

» Mistake as to the quantity of subject matter

» Mistake as to the quality of subject matter

» Mistake as to the price of subject matter

» Matter as to the identity of subject matter

» Matter as to the possibility of subject matter

• Unilateral Mistake

– Cases in which Unilateral Mistake makes a contract void and voidable

» Unilateral Mistake makes a contract voidable

» Unilateral Mistake makes a contract void

• Common Mistake

• Conclusion

• Referenc

• ‘Mistake’ is not defined in the Indian Contract Act. Section 20, 21 and 22 deals with the concept
related to mistake. ‘Mistake’ can be defined as any action, decision or judgement that produced
an unwanted and unintentional result. A Mistake is said to have occurred where parties
intending to do one thing by error do something else. 

• Phillips v. Brooks Ltd is an English contract law case concerning mistake. It was held in this case
that a person is deemed to contract with the person in front of them unless they can
substantially prove that they instead of them intended to deal with another person.

• Types of Mistake

• A mistake is of two types:

• Mistake of Law,

• Mistake of Fact.

• Mistake of Law
• Mistake of Law means any contract which is performed by parties without knowing the law (or
by ignoring the law), which is essential for that contract. Section 21 of the Indian Contract Act
deals with ‘effect of mistake as to law’.

• Grant v. Borg

• In this case, the person was not knowing the clauses of the Immigration Act 1971, for staying
beyond the time limit by the leave. Here, he cannot apply for defence under the mistake of law.

• Mistake of Law can be of two types:

• Mistake of Indian Law: “Ignorantia Juris non excusat” is a Latin maxim which means “Ignorance
of the law is not excused”. If a person takes part in a contract without knowing any specific
provisions of Indian Law (which is essential for that contract),

• then Contract is not voidable because everyone is supposed to know the law of his country.

• For example: According to the provisions of Indian law, we have to recover the amount of loan
within 3 months from the due date, after that time-barred debt is imposed. Now if we do not
show any interest in the recovery of loan amount during these 3 months because of not
knowing the law (mistake of law), then we can not take it up as an excuse or defence.

• A murdered B, A cannot apply for the defence of mistake of law that is; he was not aware of law
related to the murder.

• Mistake of Foreign Law:- If a person takes part in a Contract without knowing any specific
provisions of Foreign Law (which is essential for that contract), then that mistake is treated as a
mistake of fact i.e, the contract is void if both the parties under a mistake as to a foreign law
because one can not be expected to know the law of other foreign countries.

•  existence of subject matter.

•  identity of subject matter.

•  quantity of subject matter.

•  quality of subject matter.

•  price of subject matter.

• performance

• Bilateral mistake

• A agrees to buy from B a horse. It turns out that a horse was dead at the time of bargain

• Though neither party was aware of the fact. The agreement is void
• Mistake by both

• Mistake about essential to the agreement

• Mistake as to subject matter

• 1.existence

• The agreement is void when both the parties are underr a mistake as to the existence of the
subject matter

• A agreed to sell B a goods by ship from England to Bombay

• Before the contract the goods is damaged and was discharged on the way

• The parties were not aware about it

• void

• Identity

• Mutual mistake as to identity of subject matter

• When the seller intend to sell one thing and the purchaser intends to buy different thing

• A agreed to buy from B 125 bales of cotton to arrive ex-peerless from bombay arriving oct and
dec

• A meant earlier and B meant dec

• void

• Title

• Buyer of house is already owner of house

• He cannot purchase a house

• Cooper vs phibbs

• A agreed to take a fishery on lease from B bothe of them believed that B was the owner but
later it was discovered that the fishery belonged to A

• void

• Price

• A offered B to sell his prop. And by mistake rs 1250 instead of rs 2250. the buyer being aware of
mistake accepted the offer . void
• Sec 23 void agreement

• It is forbidden by law

• If permitted it would defeat the provision of any law

• Fraudulent

• Involves or implies injury to person or prop.

• Immoral or against public policy

• Opposed to public policy

• something done contrary to public policy

1. Trading with alien enemy

2. Agreement stifling the prosecution

• Agreement to prevent the guility person by taking money opposed to public policy and void

• 3. agreement which is interfering with justice

• Agreement to influence the judge or officer of court

• 4.Agreement to conceal the crime

• Agreement not to disclose misconduct is void

• 5. maintenance and champerty

• When a person agrees to help another by money in litigation in which he is not himself
interested is maintenance

• When a person helps another in litigation in exchange for a romis to handover portion of suit if
he win

• A & B suit in court about house prop

• X ready to advance 1 lakh but take promise from A if he win gives house to X

• 6.Marriage brokage agreement

• Agreement to interfer the marital life

• Agreement to pay dowry

• Agreeement in restraint of major marriage

• Agreement affecting freedom

• Taken debt do slavary

• 7. traffic of public office

• A promise to obtain employment for B and B promise to pay 1 lakh to A

• Unlawful/void agreement

• There are some agreement which have been declared void by contract Act 1872 as

1. Agreement which the consideration or object is not lawful in part sec 24

2. Agreement without consideration sec 25

3. Agreement in restraint of marriage sec 26

4. Agreement in restraint of trade sec 27

5. Agreement in restraint of legal proceeding sec 28

6. Agreement which is uncertain sec 29

7. Agreement by way of wager sec 30

• If any part of a single consideration for one or more onjects or any one or any part of any one of
several consideration for a single onject is unlawful the agreement is void

• Illu.

• A promises to superinten on behalf of B a legal manufacture of Indigo and illegal traffic in other
articles. B promises to pay to A a salary of 10000 rs a year. The agreement is void the object of A
promise and consideration for B promise being unlawful in part

• A municipal corporation granted licence to contractor

• To collect the fee from piligrims and vehicles and animals

• No power to collect fees from pilligrims

• The whole transaction void

• Legal part severable from illegal then former would be enforced

• Poonoo Bibi Vs Fyaz

• A muslim husband agreed by a registered deed to handover to his wife total earning and no to
do anything without her permission if he did so , she would be liberty to divorce him
• The later part of agreement was unlawful

• But husband bound to give only maintenance not all earning

• 1. Gopalrao v. Kallappa (1901) 3 Bom LR 164 – In this case a person was granted licence for the
sale of opium and ganja with this restriction that without the permission of the collector he
would not take any partner in the opium-ganja business. Later on, he admitted a partner
without the permission of the collector after receiving a fixed sum as his share of capital from
him. The new partner filed a case for the dissolution and refund of his money due to differences
arose between them but his claim was not allowed and the court held that it is impossible to
separate the contract.

• 3. Alice Mary Hill v William Clark (1905) 27 All 266 – In this case, A promises to pay a fixed sum
of money on a monthly basis to a married woman for living in adultery with the promisor, which
is unlawful, and for keeping his house, which is lawful, the whole agreement was declared void
as it was impossible to apportion the single lump sum between the lawful object and the
unlawful one.

• Conclusion

• An agreement may consist of promises which are legal and illegal.

• If the legal promise can be separated from the illegal one, the legal promise can be enforced. In
such a case the illegal part will be void.

• Where the legal promise cannot be separated from the illegal one, the whole of it would be
void.

• Where there is a single consideration for one or more unlawful objects, the agreement is void.

• Hence, when an agreement contains several distinct promises to do things legal and also other
things illegal, and the legal part cannot be separated from the illegal part (i.e., the consideration
for different promises is a single sum of money), the whole agreement is illegal and void.

• Moreover, if transaction which arises out of an unlawful act is such that if they are separated
from the illegal part, then they would count as a valid agreement, then those transactions hold
value in the eyes of law irrespective of the illegality of the agreement.

• Sec 26 in restraint of marriage

• Marriage and married status being the right of individual any agreement which prevents a
preson from marring is void

• all agreements in restraint, either partial or full, of a marriage except that with a minor, would
be void
• if Ria’s father provides Amit with some incentives only to prevent him from marrying his
daughter, then such an agreement would stand void in the eyes of the law, 

• Restraint of trade

• This is dealt with under Section 27 of the Act. The freedom to practice any form of trade and
occupation is a fundamental right guaranteed by the Constitution of India under Article 19(1).
Hence, any agreement in restraint of trade and occupation would be deemed as void. 

• Madhub Chander v. Raj Coomar, where the defendant had proposed to pay the plaintiff a
certain amount of money if the latter agreed to shut down his shop in a particular locality.
However, upon shutting down his shop, the plaintiff was denied payment by the defendant. The
court here, ruled that the defendant did not own any money to the plaintiff since the agreement
was void (as it was in restraint of trade), even though it imposed partial restraint i.e. extended
to only a particular locality.

• General principle in India and England similar?

• The general principles in India and England regarding void agreements is more or less the same
which is basically that all restraints on trade, whether partial or whole, are void. The only point
of difference arises in the fact that in England, the decision on validity of restriction is taken on
the basis of reasonableness while in India restrictions would be valid only if they fall within the
category 

• Exceptions to Section 27

• These statutory and judicial exceptions are discussed below.

• Statutory exceptions

• Sale of Goodwill

• a person who buys the business goodwill of another person is thereby privileged to impose
certain restrictions on the business activities of the latter.

• The restrictions include preventing the seller from carrying out similar business within local
limits only. This is done to protect the rights of the purchaser. However, the restraint should be
reasonable according to the nature of the business under consideration.

• In the case of Chandra v. Parsullah , the plaintiff and defendant both had the business of running
buses between Pune and Mahabaleswar. To avoid competition, the plaintiff bought the
defendant’s business along with its goodwill and made a contract whereby the defendant would
not be allowed to carry on business in the same locality. However, there was a breach of
contract on the part of the defendant. When brought to the court, the court ruled in favor of the
plaintiff since the agreement was valid under Section 27.
• Partnership Act

• There are three provisions of the partnership act that provide for restriction of business. They
are [8]:

• Section 11, which states that none of the partners would carry on any business till the continuity
of the business.

• Section 36, which provides the remaining partners to prevent the outgoing partner from
opening any business similar to theirs’ in the same locality subject to certain restrictions.

• Section 54, which prevents all the partners from engaging in any business of similar kind after
dissolution of the firm/business.

• Under judicial interpretation

• Trade combinations

• Trade Combination basically refers to the agreements that a set of homogenous traders come
up with to keep a check on the market. For example, if there is a group of sugar sellers in a
locality, then they might come up with specific agreements regarding fixed prices, quality of
goods, controlling dealers, etc. in the name of market regulation of the locality and to avoid
unhealthy competition. Such agreements have been declared void by the courts since there is a
deprivation of trade liberty. 

• The Allahabad High Court, in the case of SB Fraser & Co. v. Bombay Ice Manufacturing Co. Ltd.,
observed the following, “The rules of an association of traders that members shall not deal with
outsiders, the penalty for breach being fine and expulsion. The legality of the association was
attacked on the ground that its object and methods were unlawful as it aimed at the creation of
a monopoly by shutting out all competition

• Solus or exclusively dealing agreements

• This refers to trading agreements whereby the manufacturer strikes a deal with the consumer
that he/she would purchase items only from him for a fixed period of time.

• Generation to generation

• Restraint on employees

• Restraint during employment: While an employee is engaged in a business, he/she is not

allowed to work for any other business which is in direct competition with his employer. This is
done for the protection of trade secrets, customer details, plans, etc. This was established
in Charlesworth v. Macdonald.

• Restraint after termination of employment: An agreement to restrain a servant from competing

with his employer after the termination of employment may not be allowed by the courts.
•  Brahmaputra Tea Co v E. Scarth, where an attempt was made to restrain a servant from
competing for five years after the period of service.

• Sec 28

• Agreement in restraint of legal proceeding

• Parties is restricted from enforcing his rights under any contract by usual legal proceeding

• Restrict not to use legal right of party

• Discharge any party from any liability

• Making a contract with restriction after expiry of specified period from enforcing his right

• All such types of contract is void

• Bennett vs Bennett

• Wife petitioned for divorce and also for maintenance for herself and her son

• Decree of divorce obtained

• Husband agreed to make annyal payment to her and her son and condition that she would not
proceed with the petition of maintenance

• The husband failed to make the payment and

• Wife file a suit

• It was held that the agreement by wife not to apply to the court for maintenance was contrary
to pubic policy and sec 28 void

• But civil cases court has jurisdiction

• Person resident He can file suit

• Person business at any place

• Cause of action

• Valid contract

• Exception

• Two or more person agree that any dispute which may arise between them shall be referred to
arbitration
• Two or more person agree that any question which already arisen between them shall be
referred to arbitration

• It was held that the contract that difference should be referred to arbitration of the Bengal
Chamber of Commerce was valid and enfoceable

• Sec 29

• Meaning is not certain

• A agrees to sell to B hundred tons of oil

• There is nothing to show what kind of oil was intended

• The agreement is void

• Uncertainty of agreement may be as to price, time or place or terms

• A purchase a horse if it is lucky to him

• Sec 30

• Wagering agreements

• It is an agreement to pay money or money`s worth on the happening or non happening of a

specified uncertain event

• The essence of this agreement one party is to win and other to lose

• For future event

• Two person have opposite views

• Game.cricket match, wrestlling

• A tells B that no 2 wrestler will win

• B says No no. 5 wrestler will win

• then both challenge and bet over the match if no.2 win A will pay to B and if no. 5 win B will pay
to A

• Lottery ticket

• Essential of wagering

• There must be a promise to pay money or money`s worth

• It depend upon happening or not happening of event

• The event must be uncertain and the event must be future

• Eg election, height of mountain

• Two parties one win other lose

• None of the parties have control over event

• Exception

• Contribution, subscription, sum of value 500 Rs or upward to the winner of any horse race

• The agreement not unlawful

• Gove permitted Lotteries are protected as it is game of chance

• Chit fund

• Game of skill-cross word puzzles.competition

• Shares

• Teji-mandi

• Contingent Contract sec 31 to 36

• Not absolute contract but

• it is condition of uncertain event

• A contract to B to pay 1 lakh if B`s house burnt

• Insurance claim depend upon happening or not happening future uncertain event

• A contract to buy a land which is under dispute case is pending before court

• The performance of contract is depend upon winning of case----contingent contract

• Section 31 of the Contract Act defines a contingent contracts as

• “ A contract to do or not to do something, if some event, collateral to such contract does or

does not happening

• Brahma promises to pay 5 lakh to Vishnu

• If x ship does not return

• This is contingent contract

• RULES REGARDING CONTINGENT CONTRACT

•

• Performance of contract
sec 37 to 50

• Obligation—legal obligation --sec 37

• Offer –acceptance refused ---sec 38

• Performance refused—sec 39

• By whom performance ---sec 40/41

• Joint liability/rights --sec 42-45

• Time/place of performance --sec 46-50

• Obligation of the parties sec 37

• Tender

• Promisor has made an offer of prformance to the promisee

• Offer not accepted the promisor not responsible

• The tender is not complete unless it is accepted

• Promisee refuse to accept the offer of performance (tender) promisee is discharge his
responsibility

• Tender when rejected then the person who tender he bring suit for breach of contract

• Sec 38 promisor has made tender to the promisee and offer of performance not accepted by
promisee then promisor is not responsible

• Essential of offer of performance

• It should be unconditional exactly as per term of contract

• It should be in full

• It must be made at proper time and place

• The def bought from the plff 10 tones of oil to be delivered with in 14 days of the month. The
plff offer of performance in 14 days at 9`o clock The deft refused to accept . He was held liable
for breach of contract . Def has time to weight before midnight

• Offer to deliver anything to promisee then promisee must have the reasonable opportunity
given the thing is similar

• A contract to deliver to B at his warehouse on the first March , 100 bales of cotton of a particular
quality

• Offer of performance means A bring cotton to B`s warehouse on same contract date

• B may have reasonable opportunity

• Tender must be to promisee

• Tenderr must be made of agreed quantity and quality

• By whom tender performed sec 40/41

• Promisor, agent, third party, legal representatives

• Time , Manner, place for performace

sec 46 to 50

• Time for performace of promise

• A contract impose obligation on the parties to perform their promise

• Time and place determined by the parties in the contract

• 46. no Time--reasonable time.

• 47-time is specified--a certain day

• 48-duty of promisee to fixed proper place and usual hours of busi

• 49 no place-reasonable place

• 50 manner—same manner as promisee prescribes

• Time sec 46 no date specified

• I) Sec 46 where no application or no time specified

• Promisor is to perform without application of promisee

• With in a reasonable time

• Question of fact,nature of contract, circumstance

• Seller is bound to deliver t he goods but o time for sending them is fixed the seller is bound to
send them with in a resonable time

• Sec 47 Date/place is specified

• Sec 47 perform such day as fixed in contract and usual hours

• A promise to deliver foods at B`s warehouse on 1st feb . On same day usual working hours A
deliver the goods to B

• If day mentioned but hours not mentioned then as per day of contract and usual hours

• Place --sec 48/49

• Place fixed then at same place sec 48

• Sec 49 No place is mentioned the promisor must ask the promisee where they would performed

• No place is fixed it is duty of promisor to ask the promisee to appoint reasonable place

• It was mentioned in the contract that goods would be dellivered at any place in Bengal

• It is the duty of promisor to ask promisee a reasonable place for delivery of goods

• Manner sec 50

• The promisee may prescribe the manner/time of performance

• The promisor may perform in that manner ane at that

• time

• Cheque,cash

• Performance by joint promisor

sec 42-45

• Two joint promisor-joint and several

• Each party right and libility

• Equal

• Joint promisor means two or more person right/liability

• Sec 42-performance by all promisors

• Sec 43- performance by one promisor-- joint liability

• Sec 44-Effect of release of one joint promisor

• Sec 45-Devolution of joint rights

• Sec 42-performance by all promisors

• When two or more persons have made a joint promise then all such persons during their joint
lives and after the death his representative jointly with the survivor

• After the death of the last survivor the representative of all jointly must fullfill the promise

• Sec 43- performance by one promisor

compel the others and receive

• 1) Jointly promise to pay

• ABC D

• To pay 3000 each (1000)

• 2) C pay full 3000 and A is inslovent asset only 500. C is entitled to receive 500 from A and 1250
from B (A-500+B-1250+C-1250)

• 3) C is unable to pay B & C 1500 + 1500

• 4) A & B paid whole amount then the recover from C .

• Sec 44

• Effect of release of one joint promisor

• Release of joint promisor by promisee does not discharge/release the other joint promisor

• A & B to pay D 1000 Rs

• If D release A then also B is still liable to pay D

• Sec 45

• Devolution of joint rights

• One person (promisor) made promise to two or more joint promisee

• A promisor B C D promisee

• BCD pay 3000 to A

• Joint right to claim and if they dies their representatives

• Discharge of contract
• Discharge of a contract means termination of the contractual relations between the parties to
the contract.

• Impossibility

• Impossibility impossibility

• At the time of agreement subsequent

• known to both parties

• Put life into the dead wife

• Unknown to the one parties

• Goods perished

• Impossibility

• Initial impossibility [S.56]

• Section 56 of The Indian Contracts Act, 1872  

• “an agreement to do an act impossible in itself is void”.

• For instance, an agreement to discover treasure by magic, because of its impossibility of

performance, is void.

• An agreement to do an act that is impossible from the very beginning whether the parties were
aware of such impossibility or not the agreement will be void. 

• Subsequent impossibility [S.56]

• What if the parties enter into a contract and at that time of entering it was possible to perform
the contract

• but due to some supervening reason or factors beyond the control of either of the parties the
performance of the contract becomes impossible or unlawful.

• Agreements of such a nature are frustrated and hence void.

• For example, A agrees to sell a land to B but owing to some Governmental policy this of land has
been taken by the government for some official purpose.

• The agreement stands frustrated

• B cannot sue A for non-performance of his obligation as the performance of A’s duty has
become impossible.

•
Doctrine of Frustration
physical and legal impossibility

• In the well known case of Taylor v. Caldwell, the defendants agreed to allow the plaintiffs to use
their music hall to conduct a concert for a few days. But before the performance of the concert
the hall was destroyed by fire without the fault of either party.

• The plaintiffs sued for their loss.

• The court quashed their argument stating that the performance of the contract has become
physically impossible because of the destruction of the subject-matter that is the music hall in
this case. 

• Commercial hardship

• Sometime there may be alterations to situations where performance is not practically more
difficult or costly.

• Such cases do not fall under the scope of Section 56

•  Sachindra Nath v. Gopal Chandra. In the case, the plaintiffs rented out certain premises to the
defendants for a restaurant at a rate higher than usual. The defendants agreed to pay a higher
price expecting huge profits as the British soldiers were stationed in the town. 

• But due to the passing of a government order, the British soldiers were prohibited from
entering the area. Because of this, no profit was materialised as expected.

• The defendants pleaded frustration and did not want to pay the rent.

• mere unprofitability cannot render the contract to be frustrated.

• Goods not delivered due to strike not apply frustration

• due to closing or destruction of a mill one way is cut off, the party is still bound to perform by
the other way of procuring goods from some other mill.

•
Specific grounds for frustration

•  there are few well-established situations recognised by the courts where the doctrine of
frustration applies

• Death or incapacity of party

 • Government, legislative and administrative interventions

• Non-occurrence of contemplated event

• Change of circumstances

• Destruction of subject-matter

• Death or incapacity of party

• A party to a contract can be excused from performance if performance depends on the

existence of that person or if the party becomes so ill that they will be unable to perform their
obligations. Therefore, where a contract requires personal performance by the promisor, his
death or incapacity will put an end to the contract. 

Robinson v. Davison where there was a contract between the plaintiff and the defendant who agreed to
perform piano at a concert of the plaintiff on a stipulated date. But due to sudden illness she was
unable to perform at the concert and this was informed to the plaintiffs on the morning of the date of
performance.

caused losses to the plaintiff. 

• The plaintiffs filed for breach of contract. The court quashed their claim and said that the

• contract was frustrated as she became ill without there being any mistake or negligence on her
part. The nature of the contract was such that the terms required personal performance and
incapacity by the means of illness put the contract to an end.

• 2.Government, legislative and administrative interventions

• at the time of entering, performance was possible or lawful but after entering into contract due
to some Legislative or Administrative intervention the contract has become impossible or
unlawful.

• when a owner of a land ceases to be the owner anymore due to some policy of the government.
The contract of sale of a piece of land now owned by the government is frustrated due to the
impossibility of performance.

• In the case of Man Singh v. Khazan Singh, where certain parties agreed to the sale of trees of a
certain forest and

• the Government of Rajasthan passed an order which forbade the cutting of the trees in that
area.
• The contract was held frustrated as it became unlawful subsequent to entering into a contract
owing to governmental order. 

Non-occurrence of contemplated event

• Sometimes the performance of a contract is entirely possible but due to the non-occurrence of
the event which forms the heart of the contract the contract becomes frustrated. In Krell v
Henry,  a room was hired specifically to view the king’s coronation procession but the contract
was held frustrated as the coronation was postponed.

• Change of circumstances

• Due to change of circumstances the contract frustrated

• Unanticipated change

• Destruction of subject-matter

• When the subject matter of a contract after making a contract destroyed without fault of the
parties

• A agrees to sell his car to B for rs 2,00000. before the sell take place the car met with an
accident and car completely destroyed

• Taylor vs Cadwell

• Music hall was let out for series of concerts on certain days. The hall was accidently burnt down
before the date of the concert. The contract was held to be void

• Due to war

• War declared the contract frustrated

• To do contract at time of war would have involved a dealing with alien enemies due to outbreak
of war

• Effect of frustration

• Self induced impossibility

• Where the impossibility is due to the fault of the contracting party

• He cannot avoid the contract

• A is a lorry owner agreed to hire his lorry to B after renewal of the licence
• But fails to allpy for the renewal of the licence

• He cannot avoid the contract on the ground that his lorry has no licence as impossibility is self
induced

• Sec 65 when an agreement is discovered to be void or when contract becomes void any person
who has received any advantage under such agreement or contract is bound to restore it or
make compensation for it to the person from whne he received

• A pays B 1000 rs in consideration of B`s promising to marry C

• A`s daughter C is dead the agreement is void

• B must repay A the 1000Rs

• Person should perform his obligations under it or fully or partially but fails to perform such
obligations.

• In the case of Food corporation v. J.P Kesharwani , 1994 Supp (1) SCC 531, where one party
making unilateral alterations without any intimation to the other and then cancelling the
contract, this amounted to breach (repudiation).

• any kind of contract may be as broken once a party refuses to perform under the contract as
promised,.

•  “A” contracts to sell crops to “B” within a due date, however before the due date he gives a
written application to “B” saying, “ I’ll not deliver the crops as promised”-direct BOC

• If the contract is for the sale of property, repudiation occurs when one party transfers (or makes
a deal to transfer) the property to a third party.

• A breach of contract maybe of two types, viz, (1) Anticipatory breach of contract, at a date even
before that date of performance

• (2) Present breach.

• The failure to perform the obligations may take place at the time of performance

• A.B.C.

• It means failure or refusal by one party to perform the obligation under the contract

• In advance breach of contract before stipulated time of contract

• Immediate breach before that date

• Wait for future stipulated time

• Destruction of contract before due date/premature destruction of contract

• A agree to marry B before a certain date, but before the agreed date. A marries C the contract
has been repudiated by A before the date of performance

• A agrees to supply certain goods to B on 15 th Jan before the date he informed B that he is not
going to supply the goods. The A.B.C

• A a singer enters into a contract with B the manager of a theatre to sing at his theatre two
nights to every week for two month.

• B agrees to pay 1000 Rs per night for performance

• On the 6th night A willfully absents from the theatre.

• B is at liberty to put an end of contract

• If B put an end then he entitled for damages/specific performance

• If B want to continue then he get only damages for 6 th night

• It depend upon the promisee

• If ‘A’ enters into a contract to sell 200mtrs of cloth to an ‘XYZ’ garment manufacturing firm, on
say, May 15th and eventually on April 17th ‘A’ corresponds saying he has changed his mind and
declines his services, and thereby his contract breach.

• Anticipatory breach of contract is a declaration made by one of the contracting parties of his
intention not to fulfill the contract. And proclaim that he will no longer remain bound by it.  

• The anticipatory renunciation or repudiation that has affected and gave away immediate rights
of action upon the contracting parties thereto, was recognized as early as 1853

• in the case of Hochester v. De La Tour (1853)

•  where in April, De La Tour engaged Hochester as his courier for three months from 1st June
1852 onwards, and was told to accompany him to a tour around the European Continent.

• However on the 11th of May of that year, (De La Tour) the defendant had written to say that the
plaintiff’s services were no longer required.

• Thus on May 22nd Hochester sued. The defendant’ s counsel very powerfully argued that
Hochester was still under an obligation to stay ready and willing to perform till the day when the
performance was due and there could commence no action before. But Lord Campbell CJ ruled
out the objection, and allowing the claim 

•  the case in Frost v Knight

•  The defendant promised to marry the plaintiff on the event of the death of his father. The
father was then still living and the defendant proclaimed his intention that he would not fulfill
his promise

• The plaintiff did not wait for the death of the father, but immediately brought an action for the
breach of contract.

• the case falls within the principle of Hochester v. De La Tour,

• hence the option is with the aggrieved party to sue immediately or wait for the performance.

• By agreement

• Meaning of Novation

• Substitution by mutual agreement

• Substitution of existing contract to new one

• Unit 4

• Remedies for breach of contract

• Kinds of damages

• Remoteness of damages

• Ascertainment of damages

• Quasi contract

• Remedies to Breach of Contract

• What is breach

• Promisor delivery on 10-02-21 of 10 bags of sugar to promisee. If promisor not performed

• Promisee have remedies

1. Rescission of contract

2. Suit for damages sec 73/74

3. Suit for quantum meruit

4. Suit for specific performance

5. Suit for injunction

• Suit for recission of contract

• When there is breach of contract by one party the other party may sue to cancel the contract

• When the court grant the recission the aggrieved party is free from all his obligation under the
contract

• --------------

• Ex of recission

• X promises to deliver a law book on 5th Jan and pay its price on receipt of the book X fails to
deliver the Law book for no reason

• Y may treat the contract repudiated and not to pay price of book

• 2. suit for damages

• Remedy by way of damages

• To injured party

• When the contract is breached the injured party is entitled to file a suit for damages

• Damages are in monetary compensation

• The object of awarding damages fro breach of contract is to put the injured party in the same
financial position.

• 3. Suit for quantum meruit

• As much as is merited or as much as earned

• It means payment in proportion to the amount of work done

• the claim for quantum meruit areises in the followng cases

1. Contract is void

2. When something has been done without any intention to do so gratitously

3. Where the contract is divisible

4. One party refuses to perform the contract

• Contract is void

• P was employed as managing director in a co. After he rendered services for three month, it
was found that the directors were not qualified to appoint him. It was held that P could recover
remuneration for the services rendered for three month—quantum meriut
• 4.Suit for specific performance

• Compensation in money is not an adequate relief

• Cannot ascertained the actual damages

• It is discretionary remedy power the specific performance granted or not

• 5. suit for injunction

• It is a preventive relief

• Court restraint a person from doing a particular act

• Injunction may be temporary or permanent

• Suit for damages

• Compensation for loss or damages caused by breach of contract-sec 73

• When a contract has been broken the party who suffers by such a breach is entitled to receive
from the party who has broken the contract

• Compensation for any loss or damage caused to him thereby which naturally arose in the usual
course of thing from such breach or which the parties knew when they make the contract to be
likely to result from the breach of it

• Section 73 of the Act provides that "When a contract has been broken, the party who suffers by
such breach is entitled to receive, from the party who has broken the contract, compensation for
any loss or damage caused to him thereby, which naturally arose in the usual course of things
from such breach

• Such compensation is not to be given for any remote and indirect loss of damage sustained by
reason of the breach.

• Such compensation is not to be given for any remote and indirect loss or damage sustained by
reason of breach

• Compensation for failure to discharge obligation .defaulter to given compensation to aggrived

party

• Special damage can be claim only on previous notice. Party suffering from the breach is bound
to take reasonable steps to minimize the loss

• `general damages

• When the contract is broken the injred party can recover from the guilty party general or
ordinary damages
 • General damages are which arise naturally is the ordinary course of events from the breach of
contract

• The actual amount of loss

• Direct loss suffered by the injured party

• Hadley vs Baxendale

• The plff was the owner of mill

• A crankshaft broke in the mill which working stop for five days

• The shaft had to be sent to repairs

• Delay in repaired

• Plff sued the defendant for breach of contract

• Loss of payment of damages for the all those days stopped the work of mill

• The def was liable for general damages

• Def was not liable for special damages that is loss of profit because it was the fault of the plff

• Plff not inform the real circumstance that ther is no spare shaft

• The rule in Hadley vs Baxendale two important points by Lord Wright

• 1.the breaach of contract damages can be recovered as fairly and reasonably be arsie naturally
ie usual course of thing by such breach

• 2. if the special circumstance under which the contract was made were communicated by the
plff to the def.

• Kinds of damages

1. General or ordinary damages

Rule in Hadley vs Baxendale

2. Special damages

3. Vindicive or exemplary damages (feeling of the party)

4. Nominal damages-small amount

5. Liquidated/unliquidated damages

6. Liquidated damages and penalty

• Penalty and liquidated damages sec 74

• Liquidated damages-estimated and right damages

• The party to a contract may determine beforehand compensation payable in the evet of breach

• If the sum fixed is probable damages that is likely to result from the breach it is a liquidated
damages

• Liquidated damages is recoverable

• The sum amount mentioned in contract then that amount to be paid in case of such breach

• If the penalty then the complaining of the breach is entitled to reasonable compensation not
exceeding the amount mentioned in contract

• If contract contain the penalty then it is the power of court to reduce specified amount

• Dunlop pnematic tyre co Ltd vs New garage & motor co Ltd

• A manufacturer tyers suppiled a quantity of tyres to a dealer on the condition that they would
not be sold below the list prices and if he sold for more or less list price then it is breach of
contract and dealer will pay $ 5 per tyer

• The issue is $5 per tyer is penalty or liquidated damages

• The court held it to be liquidated damages

• For motor co. vs Armstrong

• The deft a retailer received from the plff supplies of cars and parts and agreed not to sell any
item below the listed price

• A sum of $250 payable for every breach as agreed damage in contract

• The court held that sum fixed was a penalty

• A contract for the delivery and erection of a certain machinery

• If contractor would be default the he have to pay $20 each day

• The contractor delayed in completion of work by thirty week

• According to the contract his liability was $600 but the factory owner demand actual loss $ 5850
because of delay

• They were held entitled to claim only $600 not $5850

• Sec 75
 • Party rightfully rescinding contract entitled to compensation

• A person who rightfully rescinds a contract is entitled to compensation for any damage which he
has sustained through non-fulfillment of the contract

A a singer contract with B the manager of theatre

To sing at his theatre for two nights in every week for next tow months

B to pay 100 Rs for each night

On the 6th night A willfully absent from the theatre

B rescinds the contract

B is entitled to claim compensation for the damage which he has sustained through the non
fulfillment of the contract.

• Quasi-contract Sec 68 to 72

• Sec 68-payment for necessaries supplied to a person who is incapable of contract

• Sec 69-Payment by interested person

• Sec 70-Payment for non-gratuitous acts

• Sec 71-Right and responsibility of finder of lost goods

• Sec 72-Things delivered by mistake or coercion

• Sec 68 supply of necessaries

• 1. if a person incapable fo entering into a contract to support to him supllied necessaries goods
suited to his condition in life the person who has furnished such supplies is entitled to to be
reimbursed from the prop.

• Eg A supplies goods to B who is lunatic

• A is entitled to be reimbursed form B`s prop.

• Sec 69 payment by interested person

• 2.reimbursement of a person paying money due by another which he is paid by interest

• A person who is by law to pay

• But interested person paid amount

• He take back money

• B holds land in Bengal on a lease granted & the revenue payable by A

• The revenue from so many year not paid by A then Govt advertise to sale the land belong to A

• B pays the govt the sum due from A

• A is bound to make good to B .

• Sec 70 liability to pay for non-gratuitous acts

• One person do an act with intention to return the payment

• Doing service for something in return

• Obligation of person enjoying benefit he is bound to pay

• Person do something lawfully then he is able to return something

• Eg of coolie

• A a treadsman leaves goods at B`s house by mistake

• B treat the goods as his own

• He is bound to pay A

• Sec 71 finder of goods

• Responsibility of finder of goods

• A person who finds the goods belonging to another and takes them into his custody

• Sec 72 liability of a person to whom mooney is paid or thing delivered by mistake

• A person to whom the money has been paid or anything delivered by mistake or coercion must
repay or return it

• A and B jointly owe 100 rs to C. A alone pay 100 Rs to C

• B not knowing this fact once again pay 100 Rs to C

• C is bound to repay amount to them

• Specific Relief Act 1963

• specific relief is related to providing relief for the infringed civil rights of the individual.

• Recovering the possession

• The recovery of possession of this Act is provided under two heads:

• 1. recovery of the immovable property and

• 2. recovery of the movable property.

• The law of Specific Relief Act,1963 works on a basic principle that “Possession is itself a prima
facie evidence of the ownership”. 

• Recovery of the possession of immovable property 

• Section 5 explains the remedies available to a person when he is disposed from his property.

1. If a person has been removed through of possession or

2. wants to recover what lawfully is his property,

3. then that person can do so

4. by the Code of Civil Procedure, 1908 and

5. in which the person will prove that the title belongs to him. 

• Section 6 of this Act details that if a person has been dispossessed from the property against the
law,

• then that person can file a suit for recovery of possession.

• There are certain essential requirements for fulfilment of recovery under this section that are as
follows:

• The person suing for dispossession must be in possession of that property.

• The person must be dispossessed from the property must be unlawfully done

• The dispossession must be without the consent of the person.

• Section 6 sub-clause (2) explains that no suit can be bought by a person after the expiry of 6
months from the date of dispossession. 

• Section 6 sub-clause (2) also explains that no suit by a person can be brought against the
government.

• Recovery of the possession of movable property

• Section 7 explains that when a person wants to recover the possession of the movable property,
they can follow the procedure expressed by the Code of Civil Procedure,1908.

• a trustee may file suit against the beneficial interest

• Essentials of section 7 are as follows: 

• There must be a presence of movable property which is capable of being delivered or disposed
of. 

• The person suing must have the possession of the property .

• There may be an existence of a temporary right on the property.

• Section 8 of the Specific Relief Act,1963 explains that when a person is in the possession of the
article to which is he is not the owner, shall be compelled to deliver such article to the person
who will have its immediate possession in following cases:

• When the article is held by the defendant as the trustee of a person who has the immediate
possession.

• When compensation in money is not an adequate relief.

• When it is difficult to ascertain actual damage caused to the person.

• When the possession of the article has been wrongfully transferred from the person so entitled.

• Sec 10

• Specific performance

• Execution of contract

• Actual performance of a contract by the party

• Specific performance is the performance of a contract exactly

• Relief given by court

• Court compelled to do acts who is failure to do

• Specific relief act (amendment) 2018

• Specific performance of contract

• Sec 11(2),14 & 16-matter not specifically performed

• The court shall bound to enforce specifically performance

• 1. when there exists no standard for ascertaining actual damages caused by non performance

• Goods unusal or rare goods,unique articles, rare painting

• 2. compensation in money is inadequate relief

• Company shares,share in prop by partition,pen singned by sachin tendulkar,

• 3.The court presumed that breach of contract to transfer immovable prop. Compensation in
money is inadequate

• Construction of house

• 4.breach of contract to transfer of movable prop.

• A) where the prop is not an ordinary article or specific value to plff, or goods which are not
easily obtainable in the market

• B)where goods of plff held by deft as trustee or agent of plff

• Sec 14

• When contract cannot be specifically enforced

• 1 when compensation in money is adequate

• Contract relating to the delivery of goods cannot specifically enforced as goods is ordinary

• A contract to sell to B to buy 40 chest of indigo for Rs. 1000 the contract cannot specifically be
enforced as compensation is good remedy

• The prop, goods easily available and saleable in the market will not be specifically enforced

• 2. contracts involving personal services

• Minutes and detail contract

• Contract depend upon personal qualification

• Eg-

• The court cannot order the specific performance of a contract to build or repair the building
because it involves minutes and numerous details which require prolonged watching over the
construction or repair work

• A contract for painting or writing a book cannot be specifically enforced by the court

• 3. contract in its nature determinable

• Come to an end automatically,

• There is contract for a p`ship for which no limit duration is fixed. Such a p`ship may be dissolved
at any moment. It is not compel to partner for specific performance

• 4. contract involving continuous supervision of the court

• Sec 15 who may obtain specific performance

• Party thereto

• The representative in interest

• Where contract is a settlement on marriage or compromise rights between members of same

family-any beneficiary

• Contract for tenant for life-remainder man

• Reversioner

• Company entered into contract and amalgated into another company then new company

• Where the promoters of a company contract for company