Contract Exam Points

Question No. 1

What Protection is available to Minor under Law Of

Contracts? Give answer with leading cases.
 Section 11 of Contract Act

3 categories of persons are not competent to contract

1. One who is a minor

2. A person who is unsound mind

3. A person is disqualified by any law

 Who is a Minor?

Section 3 Of Indian Majority Act

A person attains the age of Majority

When he completed the age of 18 years.

 Nature of Minor’s Contract

A minor is not competent to contract

Whether the agreement with minor is void or Voidable?

The agreement by a minor is void.

 Mohori Bibee V Dharmnadas Ghose

Dharmadas Ghose was a minor

He mortgaged his property in favour of Brahmo datt

Brahmo datt was a Money Lender

Brahmo datt gave loan to Dharmadas Ghose

Later Brahmo datt died

His executors prosecuted Dharmadas Ghose

The court held that Dharmadas Ghose was a minor at the time of
contract

So that contract is void

 Ratification of Minors Contract

Minor’s contract is void ab initio

It is incapable being validated by ratification
The consideration given during minority is not a
consideration
Every contract needs a separate consideration
 Suraj Narain V Sukku Aheer

A person borrowed some money during his minority

He made a fresh promise after attaining majority
He admitted to pay the amount with interest
The court held that there was no consideration
So he need not pay the amount
A minor can be a promisee or beneficiary

M aged 17 years agreed to purchase a scooter

He gave 5000 rupees as advance
The next day the minor M came with money
But the seller changed his mind and ready to return the advance
The Seller can not avoid the contract with minor
 Renga Raju V M. Basappa

The court held that

if a minor happens to lend money on a promissory note

he can recover the amount from the promisor

 Minor’s Fraudulent Representation

Even if a minor fraudulently represents himself to be full of

age

And induced another to lend him loan

He can avoid liability to pay back

By pleading minority
 Example

S, a minor by fraudulently representing himself as to be full

age
induced L to lend him Rs. 1000/-.
he refused to repay it
L sued for money
the contract was absolutely void and S was not liable to
repay Rs. 1000/-
 Minor and Partnership

A minor can not enter in to a contract of

Partnership

He may be admitted to the benefits of

partnership
 A minor is liable for necessaries supplied to him

If a medical shop owner supplies some medicines to a minor

on credit

he is entitled to realise the money from the Minor’s property

A minor is not personally liable

Only property is liable

 What are the necessaries ?

Education

Medical Treatement

Legal service
 Parents of the Minors

Parents of the Minors are not liable

for the contracts entered by the minor

eventhogh the contract is for the supply of necessaries

 Question No. 2

What are the different modes of discharge of

contract?
 1. By Performance ( s.37,38)

When parties in a contract fulfill their obligations

eg. Deliver a Car for payment of money
he got payment. He delivered the car
it is known as actual performance
 2. Discharge By Agreement

A contract is created by Agreement

it can be destroyed by the consent of the parties

A thing may be destroyed in the same manner in which it is

constituted
 Novation

if the parties on the existing contract

Agrees to submit a new contract

in the place of the existing contract

it is known as novation
 Remission

Acceptance of a lesser sum

than the agreed amount

and discharging the debtor from further liability

 Waiver

Waiver is the intentional relinquishment of a claim

Eg, waiving an amount of rs. 5000/- due to the poor

condition of the debtor
 Accord and Satsfaction

Acceptance of any other satisfaction

than the performance originally agreed

Accord...new agreement

Satsifaction ... Consideration

 Pinnel’s Case

The defendant owed Pinnel 13 Pounds

he paid 5 pounds to Pinnel

Pinnel accepted it as full satisfaction of the amount

then Pinnel brought an action for 8 pounds

the court held that Pinnel is entitled to get the balance amount
 Pinnel’s Case In India

Not applicable in India

Section 63 clearly says that acceptance of lesser sum

by the promisee in satisfaction of his claim

will discharge the debtor from entire liability

 Merger

Two Rights

One Superior and One inferior

Inferior right vanishes in to superior right

eg. A holds a property under lease. Later he buys it. His right
of lease merges in to his right as owner.
 3. Discharge by Imposssibility of
Performance
Known as doctrine of frustration

Which is impossible of performances

By external causes

Eg. A marriage contract. One party becomes mad.

 legal maxim

Lex Non Cogit ad impossibillia

What is impossible does not create an obligation

 a) Destruction of Subject matter

When the subject matter is destroyed

without any fault of the parties

the contract is said to be discharged

 Tylor V Caldwell

the defendant agreed to let out a music hall

on a specified date for entertainment

the hall was destroyed by fire

the plaintiff sued damages for breach of contract

the court held defendant was not liable to pay damages

 B) Death or disablement of a party

when death or illness of one party

prevents him from fulfilling the promises

he should be absolved from promises

Because it is an act of God over which we have no

control
 Robinson V Davison

A pianist fell ill

He could not play at concert as promised

the court held the contract was discharged

Pianist excused from performance

 C) Subsequent Illegality

After the formation of contract

the law changes

and the performance is forbidden

the parties are free from Laibility

 Bally V Creaplgny

D leased some land to B

Agreed to erect a huge building

A railway company acquired the adjoining land

Built a railway station on it

the performance is impossible

 D) Declaration of War

A contract entered in to with an alien enemy

during the war is void ab initio

 4. Discharge By lapse of Time

Limitation Act

3 years
 5. Discharge By Operation Of Law

merger ... where a superior contract enters

By Insolvency ....Adjudged insovent

By unauthorised alteration... without the

consent of other party
6. Discharge By breach Of Contract

when the party not performs the contract

when the performance is defective

there is a breach of contract

 Actual breach Of Contract

at the time when the performance is due

or when actually performing the contract

Anticipatory Breach of Contract

Before the actual date of performance

 Hochatar V De La Tour

A entered a contract with B

For 3 months tour

before that date the tour operator dispensed from service

the other party can immediatly sue