I legal

Topic 1 Essentials of a VAUD contract

y TwoPARTIES A contract involve at least 2parties

one cannot contract with himself

oneparty will make an offer and the other party

Shall accept it
There must be an intention on part
of parties to create legal relation between them
There must be an intuition to create legalobligation

Social and domestic agreements dont carry legal

Obligation

SocialAgreement Example me x invited all his friends

at his birthdayparty at Taj via Email

All friends accepted his invitation by replying to mail

on the dayof party they did not turn up

can Max sue his friends f No

DomesticAgreement Example Father promises his son to pay

him sevenof E100000 if hepasses UA Exam in one shot

Sonachieves the feat but father refuses to pay him

I
can San sue father for this NE
Z Certainty of meaning
The agreement must be certain

Dt should not be vague

Agreements which are not certain or are not capable

of being made certain are void

Ea A agrees to B to sue hundred tons of oil

He
in this case there is nothing to show what kind of oil
was intended Theagreement is void for uncertainity

Ex 2 A agrees to B to sell 1000 tons of olive oil at

E 8001 litre
I
inthis case there is no uncertainty and therefore contract
is valid

Ex3 A who is dealer of coconut oil only

H
A agrees to B to sell hundred tons of oil
at market price
I
in this case nature of A's treacle gives an indication
to meaning of words
A has agreed to sell 100tonnes of coconut oil
Cet market price
Therefore it is a valid contract

TXU A agrees to sell B White horse for I 500 or 21000

I
In this case there is nothing to show which of priceis
to be given
14
The agreement is therefore void

I PossiBluey or performance of An AGREEMENT

1
Terms of agreement must be capable
of performance
 a Agreement to do an impossible Act

If an agreement to do a particular act is made

At time of making agreement it is certain
that such an act is impossible
The agreement is void

Ex A promises to B to discover treasure by magic

VOIDAGREEMENT

b Agreement to do an act which

subsequently becomes
impossible SUBSEQUENTORSUPERVENING Impossibility
I

If contract to do particular alt is made

At time of making such contract Act waspossible

But after contract is made act becomes impossible

Ex A enters into a contract with B to sell car for

taken Later on car meets an accident and gets
destroyed

The's agreement now is void and nthotbruforceauce

c Compensationfor loss through performance of

non an
act known to be impossible oreunlawful
Where one personpromises to do a particular Act
At time ofmaking such promise he knows that such an
act is impossible or unlawful
Thepersonto whom promise is made did not know such act
is impossible or unlawful
Then promiser must make compensation tosuch promisee
for anyloss which such promisee sustains through non
performance of promise
I offer 1 Acceptance or an agreement
Agreement is ferest Essential Element of a valid
contract

A contract is valid
if there is
to
proper offer properacceptance

6 free consent
2 re moree persons are said to consent when
they
I
to
gagoele
something in same sense

as
Consent would be considered free consent if it is
not caused by t
t t
i coercion 2 Fraudimisreepresentation 4 Undue Influence
3
I CAPAUTY OFPARTIES Capacity means legal Ability of person
to reenter into a contract

SECTION11
Of Andean Contract Act Specifies that

Every person

Mtajoreity sound mind

age of not otherwise
should be disqualified
person must be in his Example
18years or senses Alien Enemy
ofabove
 aesque
I
are competent to contract

LAWFUL CONSIDER Aron

There must a be a consideration

Consideration is referred to as quid pro quo ie
in return
something
consideration must be lawful

9 NOTEXPRESSEUf DECLARED VOID

Agreement must not be such which law declares to be

illegal on void
Example Agreements in restraint
of marriage
OTHER formalities to BE COMPHED WITH

There are certain contracts which require compliance of

formalities
contractsrelating
Lexi Insurance contract to immovable Property
H H
in writing requires
registration
coffeePT Noz OFFER1PROPOSAL
DtF

y signifies his

q
mEuingtmain
Yg msn.sn
hduing
Yithaview
ersofk
Ap
onePerson fssofubttaqimsu.cn
person
yterer

Ein

Analysis

SWAGGER 1
MS TITH
 Ext MR SWAGSTER TELLS TO MS 7174
9 desire to marry 202
by
IS IT A NAUD OFFER NO

The willingness must be with an intent to obtain assent of

other person

Ex2 MR SWAGSTER Tells TO Ms Tiedt

will YOU MARRY ME

IS IT A VAUD OFFER YES

Ex3 Mr swaaster's car met with an accident with Ms tithi'S

Activa
Swagger agrees to pay repair charges if Timi doesnt
Court go to
Q 1517 AVAUDOFFER yes
z
I
offer can be positive i.e to do an act or
negative
i e to abstain
fromdociy
any act

TODICZ CLASSIFICATION OF OFFER

SPECIFIC
I person

qqq
SPECIFIC GROUP
Ofperson
 Ers

a Specific special when offeris made to specific person or

offer
specific groupofperson it is known as specific special offer

Ex A offers to sell B his car for El lakes

b General Offer

gaga Ga Ga

HEE g Ea Ga E
n
I
when
I
public at
offer is large
made to

it is said to be generaloffer

Anyone can accept the offer and do desired act untill such
offeris withdrawn

WAGELAWNO IF CARLILL VS CARBOLIC SMOKEBALL Co 18937

CARBOLIC NEWSPAPER
smoke smokebau AL
B
influenza anyone who contradict
immense after
using smoke balls
MY
 ing
any
FIYELYeai.me
A
Mrs capsule
I
used
Smokeball
Q can she recover suffered as per
1007 directions
f influenza
ofcompany
9T was held that she could
recover amount as by
using
Smokebaus She had accepted
tereogger

tufters
w
v
r

E carfor
Your
k
Iguacu
Ym
inignorance
www persons aueiaeueicae
offer of others
offer
the offers are calledCronoffers
id counter otter

earn
LL
you

f k
mu
car for to buy
Makes your
OFFEROR
car for

jailer OFFEREE

When offeror makes an offer to offeree

AND

Offered makes modification and variation in terms

oforiginal Offer
Is
to have made a counteroffer
Heine Offence is said

counter offer amounts to rejection of original offer

St is also called conditional acceptance

e Standing Offere An offer allowed to remainopenfor

certain period of time is standing or continuing or

open offer
Exi lenders
Topic3 Essential Elements of valid offers

1 Anoffer mustbe made with a view to obtain

assent ofotherparty

2 it must be capable ofcreating legalrelations

It offer doesnt intend to givewise to legal
consequences and createlegalrelation
it is not consideredas validoffer
Ex socialAgreement 1Domestic Agreement

3 St mustbe communicated to the offence i www

Anoffer to becomplete must be communicated

to person towhom it is made

unless anoffer can be communicated there

can be no acceptance of thesame

Acceptance of an offer in ignorance of agger

is not acceptance and doesnot giverights to
acceptor

WE
caseNoz LAMAN Suakin vs Gauri Dutt

A 0 A
L
GAurelDurr
wse
her
1h
inunan
nurse nephew my
2 asked me to 1
searchfornephew 4 Tracedtheboy
cignoraurof announcement
3 Announced
that anyone 5 subsequently
whotracedthe claimed
nephewwould reward
berewarded

teid tuat.ir Hewasnotentitledtoreward as he did not

knowabout the offer
 h St must be certain definite and not vague
5 St may beconditional Anoffer can besubject to terms
conditions by offeror

Theoffer must not contain a term noncompliance

MAYbe assumed to amount to acceptance
of which

A Hatch

Tum
I
m0S
g
MAEHAAN

One cannot say that if acceptance is not communicated with

certain time offer would be considered as accepted

I often may be specific or general Refer topic 2

E Anoffer must be distinguishedfrom an invitationtooffer

or mere declaration of intention

Topic4 INVITATION TO OFFER

 Agreement ITO 4 Offer Acceptance

The person making invitation to offer does not acotually

make an offer Mather he invites the other party to make
an offer

Example Already noted

The test to
distinguish offer from pnvitation to offer would be
to determine with What intention statement is made

If person making statement

isintended to bebound intendsto do any

Gunther act before
by it as soon as it is
accepted byothers he is boundby OE
t a
Dtiscalled an agger It is called an
invitation to offer

OFFER invication TOOFFER

St is Dnvitation to
final Expression of willingness offer is made
by offeror to be bound by offer with an intention to receive
I aggers
other party accepts it
Pf
Theperson to whom offer is made 7 Person invitation to offer
giving
Li e Offering would be ultimate will be the ultimate accepts
acceptor
2examples 2 examples
 ÉMYLAW NO3 HARVEY VS FACE

Theplaintiff Harvey telegrapheddefendant

Fye writing

1 will you sell telegraph

as the Bumper Hall me lowest
Pen it is name of cashprice

The defendant replied by telegram stating LowestPrice for Bumper

wall is 900

Plaintiff immediately sent a telegram stating We agreeto Buy Bumper

Hall Pen at 900 as asked by you
It was held that last telegram of plaintiff
was an offer to buy
which was never accepted by defendant and heure there was
no contract between them

concept3 Acceptance

Definition when the person towhomofferis made

signifies his assent thereto proposalis
said to be accepted

reunion BETWEEN An Offer And Acceptance

Acceptance to an offer is what a lightedmatchstick is

to a train of gun powder
implication

As soon as train of
gunpowder islighted it would
Explode
What acceptance triggers cannot be undone

There is a choice with the person who had the

train to remove it before match is applied
i e offer can be revoked just before it is accepted
 e offer can be revoked j before accept
Acceptance converts An offer into promise and then
it becomes too late to revoke it

offer in itself cannot create legal relationship

but it is the acceptance which binds the parties
Onceofferis accepted it becomes a promise and
cannotbe withdrawn

Essentials of A VAUD Acceptances

1 Acceptance
in case ofspecialoffer in case of
A generalagger
I
canbegivenonly
a can be
by person to whom
accepted by
offeris made
any person
having
knowledge
oyogger

CASELAWNO4 Boulton vs Jones

nu

or

ftp.ThfJ earners
contract
D8
µ a
Offerwas notmadeto
Seller Buyer
Bolton
Brocklehurst Bolton Therecannot be
any contractbetween
Bolton Jones
q
Brockie
hewes
4Mt
 altars
O
JOIN

2 Acceptance must beabsolute and unqualified

Acceptance must be absolute and unqualified

Otmust be Expressed inusual and reasonable manner

If proposalspecifies manner in which it must be

accepted it must be accepted accordingly

Acceptance must be communicated

To conclude a contract acceptance mustbecommunicated

Theoffence must have knowledge of offer 96he doesnt
have knowledge there can be no acceptance
Acceptance must relate to offer made
Acceptancewith varying terms and conditions is not an
acceptance This is in
facta eounten offer whichhas to
be accepted by proposerfor a contract to materialise

Acceptance must be in prescribed mode

When mode is prescribed in proposal
of acceptance
it must be accepted in that manner

E Time
Acceptancemust be given within specified time limitlifany

98 no time is specified acceptance must be given

within reasonable time and beforeoffer lapses

Meme silence is not acceptance

 Acceptance cannot beimplied from silenceof opera or
his failureto answer

Acceptance by conduct 9mplied Acceptance

The performance of conditions of proposal

or
Acceptance of any consideration for reciprocal
promise
He
constitute an acceptance1proposal

ceaselawn05 BROGDEN vs meetropournn railwayco co denotes

company

O o L
d Railway
draftagreement w
BROGDEN forsupplyof
Csuppuer coal I

Armored
Sdk
a
kept
Mgr indrawer
Q is 17 AVAUD contract NE
H
Sincethere is no communication of
acceptance

CASE
LAWNO 6 NEAVE VS MERRET

Offered to seu his land

a a
for 280
n
MMM MRN
A PtKA
But Enclosed 80CHEQUE
 di
200 in monthly
installment of f so each

Q can Mr N Enforce contract

Ng
Otis aconditionalacceptance or a counter
offer

CASELAW NOT union of India vs Balneal

E.ie M
g
At
him
m

at 80000

Eisnavaramaj subsefuently
Changes his mind
He
agreestopurchase
at 100000

E CAN MR B Enforce the contract

It is treated as counter offer and it is for MA to
decide whether to accept the same or not
CASE
LAW
NIT FELT HOUSE VS BINDLEY

B
M
HORIE

go to buy nephew's
agg horse for 30
newest
Lasseigne
MRF
una
aneÉ repay
for
JD My
I curve

4 Bymistake
I by
sold horse

can uncle sue nephew If

I He
Asthere was no communicationofacceptance
to uncle

Mfg
CASE LILLYWHITE VS MANNUSWAMY

hint
It Mannu
k
aqp
ingase ofloss

Lutinea to isa game quota

 ed of of
ya ya

suit filed
µ
It was held terms were unreasonable
Teresa
entitled to recover
full amount

LAWn8 OLLEY US MALBOROUGH COURT ND

case 10

x found notice mix

Magnus
hiredhotel hanging on Mrs x
wall luggage
H stolen
iowneris no

I
liable for
Con by theft
of articles
Mmxis Entitled
to recover
damages
as terms were
revealed after
accepting contract

case ANNIE
POWELL VS LEE
School advertised fore Mra was
filing a vacancy for the
post of Headmaster
I selected in
interview
Mra beetdecision
gave was not
the communicated
interview
Ine
of myA's
Later friend
committee from
 Dream
changed selection
its committee
decision informed
A that he
was selected

It was held that there was no contract between parulis

as there was no authorised communication made by
SchoolAuthority
Theperson who informed MRA about appointment was
not authorised to performSuchAct
Thus it didnot result in valid contract

concept4 communication

topics Communication OFOFFER

UNIT2
I
CONSIDERATION

Definition

When atdesiree
of promises
promisee 0M Any other PERSON has

c
done Orff hasabstained
something fromdoingsomething
Hi
such an actorabstinence iscalled
consideration forpromise
 Topics
Essential EllenEatsdeanerules for VAUD CONSIDERATION

Consideration mustmove at desireof promisor

caselaw No DURGA PRASAD vsBaboo

FacesorCASE

MrDspentsomemoney for renovation of market onrequestof

collector

Ashopkeeper MrBaldedof market promised to pay commission

to D on sale affected by him

Later MmBaldeofailed to performpromise

Question Msis sued MrB for recoveryofmoney Thequestion

before Court was whether MsD can recover moneyfromMiB

DEUSION ofcourse

a washeldthat there was noconsideration between myD and

MMB

Themoneyspent
by plaintiff forrenovationof market was
not atmeguestof defendants but at instanceof thereat
party via the Collector
1 Therefore contractwas not having a legal effect Ii e void

2 Consideration may move other person

frompaeomesee onany

cteinnayavsrammn.ie
cafsefnwno
Facesofcease

Anold lady made contract with RChere

daughter that
whole property shall be gifted to R if R agreesto
of
pay annuity to c
Ragreedto pay theannuities i.e forlivingexpenses

Ondeathof lady R refused to pay annuity too

ongreound that nothing was received fromc as
consideration
for agreement between C R
 fore agreement between
Question whether the contention of R is valid8
Decisionof course at wasneed that consideration neednot
necessarily move from promisee
Thedefinition
of consideration under 9ndianContract
Act1872 makes this proposition clear
ENDING
Therecanbe Stavanger to consideration but there cannot
be a stranger to contract
Thus it was need that contention
of R was not valid

3 Consideration must be different from promisee's

Exsisting obligation
CASEanw Ramchandra Chintamani vs Kalweagie
mmmm
a
Lawyer I
client
i client promisedto pay additional amount to his lawyer
if he wins
He
2 suit was successful
He

3 Lawyerasked for additional amount

Question Whether lawyer is entitled to additional amount
forwinning suit

Decision gt was held that promise was void because

lawyer was under PruExsisting Obligation
to render best of his services under original
contract

4 EXITED Executory consideration

Example 5000Pay
A B
to
deliverphone
Onthis case A pays the amount consideration hereis
barcutedconsideration
 White B merely promisesto deliver considerationhere
phone
is executory
consideration
textAirlines
5 Consideration may be past present or future travelsRailway
travel
Ex Gotoshop pay to
shopkeeper takegoods

G Consideration need not be adequate

consideration need not be
of Equal value with the
promise for which it is Exchanged
St must be something which law would
regard as having
some value
note An agreement to which consent of promisor is freely
given is notvoid merely because consideration is
inadequate
FREEconsent
Example I to
promise
A sell house B aDea

1a
f mu 2 20KR
in Flock

In
The adequacy shall not render
the transaction void
of price in itself

Consideration must BEREALAnd not

illusory
tox A promiseto B
discover This is illusory
treasure bymagic consideration

8 CONSIDERATION must not BE UNLAWFUL IMMORALOR

OPPOSED To pursue poncy
Consideration must be lawful
9 cannot be unlawful immoral 08
something
opposed to public
policy
Topic3 Exceptions to Rule no consideration nocontract

GeneralRule without any consideration isvoid

Agreement
In every valid contract consideration isvery important

exceptions The 9ndiancontract act contains certain

Exceptions to the general mule
ie 9Nfollowing cases agreement made without
consideration will be Valid and Enforceable

Natural Love and Affection Anagreement fulfilling

following conditions
Dtinvestbe made out love and affection
between parties
of natural

Partiesmuststand in near relationship to eachother

Stmustbe in
writing
Dtmust be registered underthe law

CASEnawno RAJhuntlyDev vs BH00T

NATH
u

it Q 40357
fl
DO
fiancees
qf
00
HUSBAND WIFE
I
Dueto frequentquarrelsbetween husband
wife husbandbecamefedup agreedto pay
some money to wife
Hi
Agreementwas made INWRITING comd
DulyREGISTERED

Q whether theagreement is valid 3

St was held that slicer agreement is void as there is
no love and affection
Example2 An elder brother out of natural love and
affection promised to pay duets of his younger brother
The agreement was in writing and
duly Megistered
The agreement was valid

2 compensationfor pastvoluntaryservices

A promise to compensate a person who has voluntarily

done something for promisor is Enforceable

following are the essentialfactors8

Service should have been Mladered Voluntarily

Services must be rendered

for the promised
Promiser mustbe in Easistence when services
are rendered

Promises must have intended tocompensatepromisee

Example A saves B from drowning in river

I
B promises A to E 2 lakh
give

3 promise topayeimeBARREDDEBT

Where a promise inwriting signed by personmaking it

is made topay a debt barred bylimitation is valid
without consideration

Selfnote Limitation Actspecifies time limit for

filing
suit in moneylendingcases which is 3years
recovery
the debt is due
fromdate
Example BowesA I livaker but debt is barred by
AmitAmonAct B signs written promise to pay A
2 8lakh on account settlement
of
This is valid contract
 Consideration is not necessary for

GivingEffect CREATING COMPLETED

to acontract An AGENCY Gires

of BAILMENT

charity If promisee undertakes liability on thepromise

ofperson to contribute to charity
Thecontractisvalid

topic4 privacy of contract

Meaning Thegeneralreeveis only parties tocontractmay

sue Stimplies person who is not a party
tocontract cannot sue

CASEDAW My
No DUNLOP PNEUMATIC TYRE Co
vs
SELFRIDGE AND co

DUNLOP p I
s
Therewas µ
an agreement

incasetypeswere
soldbelowlisted
prices would
berepairedto
paydamagesto
D
Question Whether Dean institute suit against Sf
Decision It was held that Dunlop was third party to contact
 as Eld l Dun l turd to con act
party
between retailers and distributor therefore there could be
noEnforcementbyD
Suit maintainable
by D istherefore not
 INDIAN CONTRA a Act

Unis
OTHER Essential Elements

10 Essential bleements
I
AUKAAD

po capacity

a not
MAjmsmunbjoyeqwnuse.es
ao

QUID PRO QUO

contract

PROMISE
a
4a Jie k

a RIGHT
f t
Rewrite

OBUaAte
c0B46AM0N

2
FEINORI unsound
MIND
 UN 3 OTHER Essential Elements
Of A Contract

contepez CAPACITY OF PARTIES

MAJOR Sound
mind other
DISQUALIFIED
yaw

Topics majority

In India majority isregulated Indian Majority

Act1875
ageof by

Every person shall attain ageof majority on completion

Of 18years ofAge
LAW RELATINGTO MINOR'S AGREEMENT I Position Of minor

Minoris not competent to contract and any agreement

with a minor is void from beginning i e void ab initio
iii iii
aw no MOHor Bibi DHARMO Das Anos E
vs

Facts of case

executed a mortgage in hisfavour

2 He became
major few months later
3 Hefiled suit declaring mortgage Executed by him
during minority was void and should becancelled
Judgement It was held mortgage by minor was void
and PB was not Entitled to repayment money
of
IV noratification AFTER ATTAINING MAJOR
ley
A Minori cannot Matefy agreement on attaining Majority
as original agreement in itself is void Obinitio
And void agreement cannot be ratified

MINOR CAN BE BEn UARy OR can TAKE Benefit out of contract

Though a minor is not competent to contract nothing in

contract Act prevents him from making other party
bound to minor
A minor cannot become partner in partnershipfiens however
he can with consent all partners be admitted to benefits
of
of partnership

Minori can always plead minority1 Rule of estoppel doesntapplytominor

Ruleof estoppel cannot be applied against minor

Menon can always plea minority in defence A minor is not

stoppedto plead his minority Even if he has Entered into contract
that he was
by falsely representing major
LIABILITY FOR NECESSARIES
SECTION 68 OF INDIAN ContractAct
Minor Shall be liable for necessities suppliedto him
conditions
Liability is onlyfor necessities ofLife depending on
social statusof Melrose
Genius
Minori is not already inpossession
necessities
of such
Minor shall notbepersonallyliable i e Only his
propertytestate is liable
ESTATE
 CONTRACT BY GUARDIAN

ii
Guardian shall not be liable for act of men or
2 The contract made
by guardian on
behalf of
mirror shall be valid if
Contract is for Guardian has
benefit of authority to
minor Entere into
such agreement

No specific PERFORMANCE A minor's agreement

being absolutely void g there can be no question
such agreement
of specific performance of
NO Insolvency A minor cannot be declared As an
insolvent as he is incapable of contracting any
Obligation

MINOR CANBE Aught A minor can act as

agent
Hewill not be liablefor his acts.to principal OR Any
THIRD party

SURETY for minor In contract of guarantee

when an adult stands as
then he is liable to third suretyas if there is
a direct contract between
party and
third
surety
party

I Misc Points WRT minor

Minor being incompetent 10 contract cannot
be shareholder of company
Liabilityfor torts A tort is civil
A minor is liable in tort unless wrong
in
reality it is a breach contractof
 Cotnteract by disqualified person

my 5sEogn
A d
EXSISTING NEW EXISTING NEW
CONTRACT Contract contract contract

WI suspendedthe
suspended
till war conviction is
is over over
n
Fmr p
can be sued with Ccr Central
Government
approval

consent is not free when caused

by

coercion Undue
Thisreep
freaud
mistake

Influence

AphetAENA RARE COMPLETE

INFORMATION
1 Coercion 3 fraud
4 misrepresentation
2 undue Dnfluence 5 mistake
 concept2

consent i 20M more persons are said to consent when they

agreeto something in same sense

FREEconsent8 When one person gives his approval by his

own willingness without influence from other party
and after having complete informations about transaction
he is said to have made free consent

consent is said to be free when not caused

by t
t t t t
MISTAKE
COERUON UNDUE FRAUD MISREPRESENTATION
influence

TOPIC2 COERUON

t I
4
Under Indian Penal Unlawful
code Detention of
property

as
Actually committing Threateningto Actually threatening
an offence under commitoffence detaining to detain
Indian PenalCode Under IPC property theproperty
copper

with an intention to cause other

to enter into an agreement
party

NOTE It is immaterial whether Indian Penal code is or is

not inforce at place where coercion is employed

note2 IndianPenal code punishes an attempt to commit suicide

 TOPIC 2 UNDUE INFRUENCE

A contract is said to be induced

by undue Enfluence
When a superior authority in contract is in a position to take
advantage inferior person to control lionfueence his
of
decision in prejudicial manner

Essential Elements

I There has to be a near relation between 2

parties

2 One party must be in a position to dominate well

of other

KReal and fiduciary Mental

apparentauthority Relationship distress
I 14 unfair
Hex DoctorAnd Patient Tex's Husbandand
bargain
Ex Masterand servant
wife a
Tex old
La's solicitorand puiterate
Client man
3 The object intent
1 to take undue advantage
4 Burden the burden of proof will lie on
of proof party
who is in position to dominate will Of there

topic3
 FRAUD Fraud means any acr committed by
party tocontract
or his with an intent to deceive another
agent
enter Pnm contract party to
It includes following acts
I

l Representation of fact which is not true

2 Active concealmentof fact by one

the fact having knowledgeof
3 Any preomise made without any intention to perform it
4
Any Other Act felted to deceive
5
Any such actor omission as law declared to be fraudulent

TOPIC3 l SILENCE ASFRAUD

Is

µJ not fraud
Which is
likely toaffect
willingness ofparty
Iis
µ
EXCEPTIONS

SILENCE

FIDUCIARYRELATION ISEQUIVALENT
TOSPEECM Partial
Relation involving trueston disclosure
Other party and party Sfparties of truth
remains silent when have reasonable deceiving
he was required to means to discover other
Speak about matters the truth lot win party
affecting contract not amount to
fraud
A Broker was asked to
Ex Bsays toA
buyshares for client
H If you dontdeny it
hesold his own shares 9 Shall assure
without disclosing horse to be sound
 I

without g horse 0 be seeing

the fact
He A says nothing
Thisamounted to lb
fraud Silence amount to
fucked
y
Y
Specialcontract

Mammiage Contracts of contractof

family settlement 9nsurance
marine fire
and lifeinsurance

TOPKU MISREPRESENTATION

AMAN
Misrepresentation when one party makes a representation
t
Therepresentation is false
1
Misrepresentation was made innocently and
not to deceive other
party
Gouri
Theother
party acted as per contract
unknown of the misrepresentation

TOPIC5 Coercion UNDUEinfluence MISREPYFRAUD CONSEQUENCES

CONSEQUENCES

y UNDUE
INFLUENCE MISREPRESENTATION FRAUD
 L U
t l l
l l
t l l
l l
Iconseq t it 1
iconsef 2conseg 3consequence

name Dame i innate 9 Yo oaBae

2 same y 2 PARTY MAY
Insist THAT
HEis put 70
SAMEPOSITION
WHICHHEWOULD
HAVE BEEN IN
1A FALSE REPRESENTATION
WAS no MADE
3 DAMAGES CLAIM

A Contract are not voidable in caseof fraud misreeph if

1
Party had reasonable means 2 Party is not
of discovering the truth misled
with ordinary
by such
diligence fraudl misrepresentation

concept of RESTITUTION As a consequence rescission of

ofcontract has
voidable contract if party rescinding the
received any benefit he shall restore the Same
Thevice versa also
applies
Topic6 Differences Ca Coercion vs undue influence

coercion UNDUE influence

1 Governing SECTION15 Section16

section

f Meaning Damage to person or taking advantage

property or threat to of superiorpositionto
damagepersonalpropertydisadvantage of
inferior

8 Intention Intention to enter into intention to take

a contract advantage

PUNISHMENT Civil 1 criminal CIVIL Just

therightto claim
damages

superior
f PARTIES 3rd Party can Onlyaparty to
do coercion contract Cando
undue 9noweence

8Reunion No relation between Relation between

parties is necessary parties is must

7 LEGAL VOIDABLE contanet VOIDABLE

Effect contract

8 ConceptOf
1 t
Applicable
RESTITUTION Applicable
 b FRAUDVS MISREPRESENTATION

FRAUD MISREPRESENTATION

1 INTENTION TOdeceive other There is no such intention

party to deceive other party

2 KNOWLEDGE The person making the person making

of Tracy feepresentation representation believes
believes statement statement to be true
as untrue
although it is not true

3 CLAIMFOR The injured The injured party

DAMAGES can
party
claim damages cannot claim damages

4 A sold B a horse N sold B a horse

Example
B inquired Walther B inquired Walther
horse is healthy horse is healthy
A stated that horse A stated that horse
is
is
healthy whereas in healthy whereas
it was
in
reality it was reality
not A had no knowledge
not A hard knowledge
offacet of fact
1
I
St would amountto St would amountto
fraud misrepn

5 Governing SECTION17 Section18

Section

TOPIC7 MISTAKE

self understanding
HARRAL
 REPRESENTATION
ACT
BETA161information
1
RIGHT WRONG 1
Is WRONG RIGHT
4 I
MISTAKE Ur

intentionally unintentionally
He
fraud misrepresentation

MISTAKE

MISTAKE of fACT MISTAKE OF

LAW

unilateral Bilateral
mistake mistake mistake
mistake
offoreign
is f et
Indian
daw
waw
14
treated
NOTVOIDABLE VOID
it as
NOT mistake
VOIDABRE of
fact

sina.um
nsiz.us

E.is
aourimimeuiaTe
Ei
company'sperformance
 O

toad

OMG
Rid
white
BEF To fotrbeeco

I a
Waite
Black

mis7nuE w

9ndiggulaw
a fqgg.gr
Not
 VOIDABLE

i in

foreign
law

Bilateraimj
te t
Effie I

6ia
if 304

THEPEopae.ie JSmpsons

concepts NAWfue CONSIDERATION

The consideration is said tobe unlawful in following cases

c Consideration or objectis forbidden by law Actsforbidden by law

are those which are punishable under any laeolstatute
as well as prohibited under
any regulation
2 When consideration or objectdefeats the provisions law
of
2f intention ofparties is to defeat provisions of law court will
not Enforce it

3 When it isfraudulent 8 Agreements bartered to promote

fraud
 sfraudulent o GMlements buttered to promote fraud
are void

4 Where consideration defeats any allele time being in

for
force in India
1 When consideration involves injury to person onproperty
of Another
6 When consideration is immoral
a
7 When consideration is opposed to
public policy

topic 2 CONSIDERATION OPPOSED TO Pursue poncy i

A contract against the good for community is restricted
by law
Some agreements held opposed to public
policy are
loyalty
Treading with enemy 8 Any treacle with person allegiance
to government at war with India is void
STIFLING
2 STIFLING PROSECUTION 3 An agreement to present
proceedings already instituted from Manning their
normal course using force is abuse ofjustice
such an offence is voir t KUEGAL
3 Maintenance and THAMPERTY
b to
an agreement an agreement in which
in which person person agrees to assist
promises to maintain another in litigation
suit in which he in promise to hand
has no interest over proceeds of action

Maintenance and champerty is valid unless

Dt is unreasonable 00 It is made by
 D s unreas ab by
to other any malicious
party motive
ex Gambling in
litigation

4 TRAFFIC RELATINGTO PUBLIC OFFICES An Agreement to

traffic in publicoffices is opposed to publicpolicy as it
interferes with appointment of person best qualified
for service ofpublic
5 Agreement tending to create monopolies Agreements
creating monopolies are opposed to public policy
and therefore void

6 Marriage
Brokerage Agreements An agreement to
negotiate marriage for reward which is known
as
marriage brokerage contract is void as it is
opposedto public policy

71 Interference with course Any agreement

of justice
whose object is to induce any judicial officer of
state to act is void
partially
Interest against obligation
Ex MrA a manager of firm agrees to pass contract
to Mr X Pf MX pays I 2 lakes
This agreement is void
privately
 concepts voir AGreeements

Topics Agreements Expresseus Declared voirs

in Agreement inrestraint marriage

of
Everyagreement in restraint of marriage of
anyperson exceptminor is void
Agreements in restraintoftreacle8
Anyagreementby which anyperson is restrained
from Exercising a lawfulprofession treacle or xcemions
business
of any kind is void

i
cIsorefertop.cz Ofthis concept
3 Agreement in restraint 1 Arbitration
of legalproceeding
a contract
bywhich
Agreement
by which any party is restricted partiesagree that
absolutely from Enforcing his rights under
a contract through Court is void legaldispute between
them
4 Agreement
meaning of which is uncertain Shall be referred to
is void ReferUnieD arbitration
5 Agreement without consideration Refer unit 2
6 Agreement whose consideration is 2 Jurisdiction
unlawful
referconcept3 Express
agreement
7 Agreement under bilateral mistake btwparties to
offact
est jurisdiction to
8 Agreement to do impossible Act Refer unit 1 refer a disputeto
specified count is
a Wagering Agreement Refertopic 3 of this concely valid

topic2 Exception to rent Agreement in restraint

Trade is void
of

when a person sells goodwill business and

of
refrains with buyer to carry on similar business
within specified local limits so long as buyer or
his successor carries on like business is valid

an
2
If outgoing partner makes agreement with
continuing partners that he will not carry on
any business Similar to that of firm within specified
period or within local limit
specified
 period or when Decefeed local
Is
such an agreement in restraint of
trade is valid

3 An
agreement of service by which an Employee
binds himself during term of his agreement
not to compete with Employer is not in restraint
oftrade dis therefore valid
qa B a physician and surgeon employs A as an
assistant for seers Aagrees not to practiceas surgeon
physician during those 3years
1
Thisagreement is valid

Betting
Topic3 Wlagereing Agreement i Void
Anagreement involvingPaymentOf Sum of money upon determination
of an uncertain event an agreement byway ofwages Ps void
Following are essential Elements of wager
1 There must be apromise topay money or money's worth
2 Promise must be conditional on an Event or
not happening
happening
3 There must be uncertainty of an event
4 There must be 2 parties each
party must stand to win or
loose
5 There mustbe intention to bet at time
such agreement
common of making
6 Partiesshould have no interest in eevent Except for
stake
Transactions SIMILAR to WAGER

i dozeEky Transaction Lottery is gameof chance and not of any

skill or knowledge
where the primemotive of participant is gambling thetransaction
is
wager
Thelotteries sanctioned Govtof India is also a wagering
by
transaction Theonly difference is that person responsible
forrunning lottery is not punished under endian Penal
Code

Iii Crossword Puzzle and Competitions

case Law Stateof Bombay vs R M D Chamarebangwald
creosswored Puzzles in which
prizes depend upon correspondence
of the participant's solution with previously prepared
solution kept with the editorof newspaper 19lottery and
therefore a wagering transaction

However crossword puzzle picture competition and athletic

competition where
prizes are awarded on basis of skill
and intelligence are games skill and hence such
of
competitions are valid
ASDer Prize CompetitionAct 1955 prize competitions in
games of skin are notwager provided prize moneydoesnt
baceed 21000

Iii Horse Race Transactions Horse Race competition

in which prize payable to winner is less than
500 is wager

Transactions RESEMBLING WAGER But NOT CD

t Inane market
chit transactions
Fund
contralt
Gameof 8 Insurance
Skill I
And Athletic not
 competition actually
a wagering
ASper Agreement
prize
competition I
Aet 9955 They
prizemoney are contingent
would not contract
Exceed 21000 d therefore
valid

contract Of ins WAGERINGAGREEMENT

1 A contract to indemnify Promise to pay money

Meaning
loss ormoney's worth
0hhappening or non
an event
happening of

CONSIDERATION There is mutual consideration There is noconsideration

and it involves only
gambling of money

3 Interest Party has an interest in The party has

so no interest in Event
life or property in
insured wagering agreement

4 Enforceability VAUD1 VO'D unenforcEABAE

Enforceable

5 Premiums calculation of no logic involved

premium while
is n scientific arriving
wager amount
basis

6 welfare
1st
is beneficial to
Tpheficoewyfarqgainst
society
 VOID VOIDABLE
e
Meaning contract not Enforceable Contract Enforceable
by law is void contract at option of one
but not at
party other
option of
party is voidable

2 STATUS cannot be Laecuted can be I cannot be

executed

sr.ms

i
i iimoan
n

Le Reason coercion undue

Illegal Impossibility
influence
Refer conceptabove misrepry
Fraud
mistake

No
Damages damages
Dayak
claimed

aqggwwt FBindsfyevi.ee
3

REVISION