Syllabus

Student Assistantship
Mayuri Vyas
4th YEAR
mayurivyas@rgnul.ac.in
+91 96360-57419

Projects

Case Laws

1. Facts of the Case

2. Law Point Involved
3. Issues Raised
4. Any International/ National Issues or Doctrine Involved
5. Judgement – Decision
6. Own View (Analysis)

LAW –
A rule
Custom
Code of Conduct

Civilized Society

Enforceable at Law – Justiciable, legal, Not Void, Sue, Legally Bound, legal object

OFFER (PROPOSAL) + ACCEPTANCE = PROMISE

PROMISE+ CONSIDERATION = AGREEMENT
AGREEMENT + ENFORCEABLE BY LAW = CONTRACT
EBC READER

AVATAR SINGH – BOOK

BARE ACT INDIAN CONTRACT ACT, 1872

lovepreetkaur@rgnul.ac.in

OFFER (PROPOSAL)

Whom the proposal is made - OFFEREE

Making the proposal – OFFEROR

VOID – NOT ENFORCEBLE

VOIDABLE – ONE OF THE PARTY CAN RESIND OR CONTINUE

ILLEGAL – SELING DRUGS, WAGERING, MINOR,

CLARITY OF TERMS,

AGREEMENT
“NEW LAW”
VOID CONTRACT

ESSENTIALS :-
1. Conduct of the person/ Intention
2. Circumstances of the case

Implied Contract – Implied by law

Not intended by the parties
“Otherwise, than the words” -

TACIT CONTRACT :-
Inferred from conduct of the parties/ LEGAL ACT
ATM, BIDDING, (LAW DOES NOT IMPOSE THIS)

QUASI CONTRACT
1. Neither by words spoken
2. Nor Written
3. Nor by Conduct of the parties

But created by the law

“LOSS GOOD”
Example
Principle –
Nobody will be allowed to become rich at the expenses of the other

VALID CONTRACT :-
1. ENFORCEABLE – Fulfill the requirements under law

VOID CONTRACT :-
CEASE TO BE ENFORCEABLE
WAGERING, Legal Proceedings, Mistake

MISTAKE OF LAW

VOIDABLE CONTRACT
Free Consent not, Misrepresentation

UNENFORCEABLE –
“DEFECT” ENFORCEABLE

IMMORAL
OPPOSED PUBLIC POLICY
ILLEGAL IN NATURE

EXECUTED

EXECUTORY
Yet to perform

PARTLY

GHERULAL PARAKH v. MAHADEODAS MAIYA

ESSENTIALS OF A VALID CONTRACT :-

1.
Legal Obligations – Actionable by Law

Social Agreement – No
Commercial Agreement - YES
Domestic – NO

CONSIDERATION
NOT – UNLAWFUL
IMMORAL
OPPOSED TO PUBLIC POLICY
CAPACITY – SECTION 11
PROVIDED –
1. Age of Majority (acc. to law)
2. Sound Mind
3. Not be Disqualified by law

person of unsound mind – enter into a contract (during his lucid intervals)

Disqualified by law :-
Criminals, aliens, convicts, foreign sovereigns, representatives of foreign state ,
enemies of the nation, insolvents

FREE CONSENT :-
GENUINE CONSENT – parties they have agreed upon something in the same sense
CONSENSUS-AD-IDEM

Lawful object
Object of Agreement Lawful and Legal
Criminal Act – No
- Forbidden – Law
- If permit, defeat the provision of law
- Fraudulent
- Against public policy

Possibility of performance

1. Terms of Agreement – Capable of performance

2. Impossible Acts – cannot be enforced

The terms of the agreements are certain or are capable of being made certain.

Clearly – “Sale of OIL”, Sale of Cloth, Quantity, quality

1. On this date
2. Sale of oil - kind, quantity,
3. Delivery
4. Consideration

Not to be declared Void

Capable and being enforced
VOID – ILLEGAL, UNLAWFUL, PUBLIC POLICY, MORALITY

Legal Formalities
1. Oral or Writing
2. Writing – must be registered
(Proper documentation, stamped, signed, dated, attestation)
3. if not completed- not enforceable

TIME BARRED DEBT – WRITING

PRIVITY OF CONTRACT -
A and B – Indebted
A and C – Certain Goods,

PROPOSAL AND ACCEPTANCE

Lalman Shukla’s Case

Servant working in A’s House
A’s Nephew
Rs. 500/- (Reward)
Servant took an action against A
Action Maintainable ?

What you are selling ?

Amount
Terms and Conditions
Time – Ownership

OFFER -
INVITATION TO OFFER - OFFER
Grocery Stores, Price Tags, Tender, Job, Auction

OFFER end result Promise

Invitation to offer – OFFER (Accept-Decline)

SPECIFIC OFFER
Particular Person A and B
Group of People - Lalman Shukla’s Case
It can be accepted

GENERAL OFFER (Public in General)

- Accepted by anyone
- Terms and Conditions
- Communication?

Carlil v. Carbilic Smoke Ball Case (1893)

Company
Reward Pound 100 /-
Suffers Influenza after Medicine Smoke Ball

Carlil Suit for Recovery

Maintainable ? Yes

Accepted
Using Medicine as per directions
Entitled to Reward
CROSS OFFER
Two Parties
Exchanging Identical Offers
Ignorance
Terms and Conditions

Two Cross Offer – Contract ?

Acceptance

A to B, BMW – 10 Lakh,
B – BMW – 10 Lakh

COUNTER OFFER

1. Qualified Acceptance - Condition

Offeror – Offeree (Qualified Acceptance)
Accepted Condition
Subject to Modification – Variations in T&C

Rejection ? – Yes (Original Offer ends)

Legal Effects :-
1. Reject the Original Offer
2. New Offer (Counter Offer)

Standing, Open and Continuous Offer

Time Period
Offer – period of time

From to

Tender
Terms and Conditions
Amount – Rs.
Lapse/Revocation of an Offer

By communication of notice of revocation

Offeror - Offeree
Before
Acceptance

Offeror – makes an offer – Offeree

Offeree Can Accept/Reject
Acceptance - Inform to Offeror

Offeror – Revoke
Time for revocation
Till the time he was bound by offer (acceptance) Before acceptance
communicated to him

By lapse of time
Lapse – ends (particular time 15 days, a week, month)
Does not respond – time
Limitation –
Person who making the offer (Offeror) -

By failure to accept condition precedent

Pre-requisite - delivery time, consideration, etc..
ILLEGAL BACKGROUND
Before acceptance
Revoked

By the death or insanity of the offeror

This fact knowledge of offeree – before he/she makes acceptance
Ignorance – Fact
After Accepted – Valid (Legal Representatives) bound by it
If mentioned in terms legal heirs – valid
Death of offeree (after/before) – by law revoked
If mentioned in terms legal heirs – valid

By counter – offer by the offeree

By not accepting the offer, according to the prescribed or usual mode

Terms and Conditions

1. Legal Object
2. Considerations
3. Mode of Communication
4. Acceptance – via Mail/ Letter

REVOKED – OFFEROR

By rejection of offer by the offeree

First Reject Subsequently, No
New offer Offeror –

By change in law
Illegal – incapable – Revoked

ACCEPTANCE

Acceptance should be communicated

Is mere mental acceptance be called as acceptance ?
No Communication

General Offer – Communication

Acceptance should be absolute and unqualified
OFFER ACCEPTED AS IT IS MADE – Conditions, Alterations, Partial
ACCEPT THE ORIGINAL OFFER

Acceptance should be made in the prescribed manner or in some usual and

reasonable manner

1. Prescribed Manner – Terms and Conditions

2. Usual/ Reasonable – Prudent Man (writing, email, post)

Acceptance should be made while the offer is still subsisting (ongoing)

1. Specified Time – Accepted
2. Reasonable Time – Prudent Man

Acceptance of offer must be made by offeree

Communicated to Offeror

Mode of Acceptance of offer

1. Prescribed Manner – Terms and Conditions
2. Usual/ Reasonable

Mere silence is not acceptance of the offer (exceptions to it)

GENERAL RULE - Silence does not amount to Acceptance

EXCEPTIONS :-
1. Silence does amounts to acceptance if it is written in the terms – OFFEREE
AGREES TO THIS.

Criminal Law Principles (YOU YOURSELF RESCINDED YOUR RIGHTS YOU

CANNOT RE-CLAIM IT AGAIN)
Sleeping over your own rights.
2. CUSTOM – Trade

No conditions – “SUBJECT TO”

In case of acceptance by post

Acceptance = Offeree – Offeror
Offer = Offeror – Offeree

Communication = Offeree (as soon as letter of acceptance is posted)

Mere Posting – Not Sufficient
Addressed and Stamped

Delayed or no delivery of letter

Letter of Acceptance – Delay in transit
Validity of Acceptance ? –

Would that burden be placed on offeree who is ready to accept ?

No effect on validity
Offeror is bound to acceptance

Letter of Acceptance as soon as posted – Offeree

Revocation during Communication – post/letter

1. Acceptance be revoked by Offeree after letter posted

REVOCATION - Before acceptance reached to offeror

As soon as it reaches it ends

Resort to more faster means of communication

Open the letter
Open the email

OFFEROR – Bound
OFFEREE – Letter
Revoke

Acceptance by telephones telex or fax

Completes ? – Offeror received it

Difference
Received – Concludes
Hearing – immaterial

Time of Contract and Place

Where the letter is posted - OFFEREE
Post – Time of posting of letter

OTHER
Acceptance is received - Offeror
Offeror gets communication -

Communication of acceptance in case of an agent

Offer – through – agent
Communication ?
Completed ? – Agent or Principal

Offeree communicated it to Agent

Agent Fails to convey it to principal ?
Validity ?
Valid
Still Principal bound to accept it

Acceptance on Loudspeaker
Validity ?
NO

Age of majority
According to law – to which he/she is subject to

Position of Agreements by Minor

Validity –
Moharibibi v. Dharmodas Ghose

Partnership –
All the Partners – Agreed

Profit/Benefits – Loss

Minor is entitled to all the benefits/profits

Labour Law – Trade Union (15 Years) – Hazardous Work

Trade Union – Enjoy Rights

1 Guarantee for Minor

2. Guarantee by Minor -

In favour of minor – VALID

Minor cannot be a surety

Surety – If the person fails to pay then he is liable

Contract by Guardian - Benefit of Minor

1. Within the scope of his authority

(Court’s decision, Financial, Deed)
2. Benefit of minor

Contract for supply of Necessaries

Necessaries – Section 68
Food, Bed, Cloths, Shelter, Education, Medicines etc… (Basic Needs)

Liable – Minor’s estate

Personal Liability ? – No

A person who supply necessaries – Minor

Necessary of Life - depends

1. on the person
2. the situation (lifestyle)

Minor’s Estate (Property)

1. Necessaries
2. Services – Guardian, Custodian anyone else

TORT – Civil Wrong

Is minor liable for Tort – YES

English Law –
Person of UNSOUND MIND

Presumes Every person is of sound mind unless proven otherwise

Unsound Mind – VOID AB INITIO

IDIOT
- By Birth unsound mind
- Incapacity – Permanent
- Incapable to understand terms
VOID – Liability ? No Liable
Necessaries – Estate/ Property/ is not liable

Delirious persons
Health issues (fever, ill, not well)
So long this health issue it prevails
Recovered – Enter into a contract
Incapacity – Temporary

Hypnotized persons
Incapacity – Temporary
Artificially induced sleep

Consciousness

Mental decay
- Old Age
- Poor Health
- Memory Loss
- Depression
- Trauma
Lunatic is not permanently of unsound mind

Generally - Unsound Mind

Occasionally – Sound Mind
Capacity – Sound Mind

Generally - Sound Mind

Occasionally – Unsound Mind
Capacity – Sound Mind (Delirious Person, Hypnotized)

“AT THE TIME”

Alien enemy

Alien – Foreigner, not native

- Alien Friend – Peace – Valid
- Alien Enemy – Disturbance, situation of war –
Government – Permission
Parameters – Necessary

Capacity –

Foreign sovereigns, diplomatic staff, and representative of foreign staff

Capacity – Valid
Dispute – Indian Court (Permission of Government)

CONVICT - Guilty

Imprisoned – Not enter into contract

Sentence over – enter into contract
Incapacity – only during sentence
Parole

Body corporate or company or corporation

MOA – Object, aim, name of partners, director
Cloths
Contractual Capacity – Clothing
Exceed this – goods utensils
Validity – exceeding the power VOID
ULTRA-VIRES

Insolvent
Bank holds the property papers
Incapacity – Temporary

THE SPECIFIC RELIEF ACT

1. NO provision on a particular case

NO JUDICIAL PRECEDENT - Already decided case on the same facts, circumstances

or situation
Act as an example in present case
NOT BINDING BUT ACT AS A GUIDING PRINCIPLE

- Inherent Power – Power with the Court

IPC, Cr.PC, CPC

3 Categories :-
INJUCTIONS – TOO STOP

INDIVIDUAL CIVIL RIGHTS AND NOT PENAL LAWS

Possession of Movable and Immovable Property (Section 5-8)

Person Entitled to the possession of immovable property

1. Lawful Owner

RECOVER IT

3 categories of Suits :-
1. Title of property by ownership
2. Possessory Title
3. Previous Possession – dispossessed – without consent

Otherwise then (Forcible dispossession) in due course of law (court order)

Section 6 – TO DISCOURAGE FORCIBLE DISPOSSESSION

ESSENTIALS :-

1. Lawful Possession at the time of dispossession

2. Without Consent and Otherwise then in due course of law
3. Suit must be filled within 6 months such dispossession
4. Immovable property
5. Dispossession must not be made by Government, but by any person
6. Decision of Court – Appeal ?
Order or decree – FINAL DECREE/ORDER – NO APPEAL
REVISION – High Court

ADVERSE POSSESSION
Difference Section 5 and 6

1. TITLE – POSSESSION

Limitation Period of 12 Years (Limitation Act)

Without Disturbance – No one challenging
Only possession – not owner
By operation of law – adverse possession
BETTER TITLE

How we calculate 6 months ? in Sec 6

From the date of dispossession

Movable property – every property which is not immovable is movable property

Thing itself

1. Capable of Ascertainment
2. Identification

Who can sue ?

Plaintiff –
Immediate possession

Trustee – Can file a suit

Beneficial Interest

Movable Property
1. Things on rent (Bike, Car)
Temporary Possession – Control, Possession,

Suit in CPC for recovery

SRA Act, 2018 – Ambit Section 6

Section 8

1. Person recover the possession – from the defendant (Not owner)

Cannot be compensated in terms of money

Special Remedy –

Essentials :-

1. Possession or control – Defendant

2. Article – Movable Property
3. Not the owner
4. Plaintiff is entitled immediate possession

Situations :-
1. Property is held by agent or trustee- Plaintiff
2. Compensation not adequate - P
3. Actual damage does not ascertain
4. Wrongfully transferred possession

“Make the loss good”

SPECIFIC RELIEFS
- Exact
- Ascertainable
- Particular
- Actual
- Fixed
- Determined

Not a general relief –

damages or compensation

Section 10 –

1. Court can enforce SP – any case

2. Subject to – Sec 11(2), 14, 16

Trustee – Either party

Manage the assets – on behalf of beneficiary

A, Beneficiary – Trustee B (look after property)

Deed Executed, some powers :-
1. Enter into a contract – in excess of powers

Till 10 lakh –
20 lakh – is it valid – Excess of powers
Authority is not there –

EQUITABLE RELIEF

OLD SEC 10 – Conditions (specifically enforce contract)

Discretionary

SRA, 2018 – take away all this discretion - now it is mandatory

“shall be enforced”

Object -
Strict enforcement of SPC

Amendment – uncertainty in performance

Section 11 – Performance of Trusts

Shall be specifically enforced

Creation of Trust – Beneficiary – Trustee

Trustee – manage assets

1. Beneficiary
Appointed
2. Trustee
Enter into contract
3. Stranger

Enforcement – all three (SPC)

Sec 11(2) – Contract which cannot be specifically enforced

Contract made by a trustee

1. In excess of his powers – beyond his competency
2. In Breach of trust – Violation of obligation

Section 12 (1) –
General Rule - Court shall not grant SP of part of contract

Sec 12 (2) to (4) – Exceptions

(2) Proportion, cannot be performed – small proportion

Unperformed part can be compensated adequately

Performed Part - SP
Unperformed Part – Compensation

100 Apples – Contract

Performed – 98 Apples - Specific P
Unperformed – 2 Apples - (Compensation)
(3) part of contract – cannot be performed – forms a considerable part of the
whole

1st – Unperformed part – in terms of money

2nd – no compensation
PERFORMANCE

SUIT OF SP

1. Small Portion – BOTH

2. Large Portion – Not defaulting party but it is other party
- accept money
- not money

4.) – Part which not performed – separate and independent

Court –
1. Performance –
2. Ceased -

Sale of biscuit – legal – Performance

Sale of Alcohol – ceased illegal

Readiness and Willingness

Section 13 – Entering – no power to perform – later on acquire the power

Bound by contract
Sell or let immovable property

1. Seller has no title or imperfect title

2. Subsequently acquire
3. Purchaser – compel seller to perform
Make loss good

Natural Heir, Gift, Donations

Section 14

1. Substituted Performance
When party exercises his right to get substituted performance, he forfeits his right
to get specific performance of the contract
2. Continuous Duty –

3. Dependant on personal Qualifications

4. Determinable
Contract – X and Y Partnership

Which is terminable at the option of party –

Expert
1. Subject Matter
2. Property Dispute, Business Dispute

Sec 15 – General Rule - Parties

Exceptions (b) to (h)

1. Any Beneficiary
2. Representative

Section 16
1. Incapable
2. Violates the terms
3. Fraud
4. Wilfully act at variance
5. Subversion - the undermining of the power and authority of an established
system or institution
Readiness and Willingness

1. Continuous R and W –

P.R. Deb and Associates v. Sunanda Roy

1. From his conduct
2. Surrounding Circumstances

A and B – 5 LAKH
6 Months
B and C –

Amalgamation means merging

Section 20 –

1. Actual –

2. Substituted
SRA, 2018 (Amendment)
1. Party who have performed his part
2. Party has suffered breach

Substituted Performance
- Third Party
- Recover expenses – Party at Fault/Breach

1. Performed – Notice (Plaintiff) 30 Days

2. Breach (Defendant) – Refusal/ Failure

(3) –

Infrastructure Project –
Schedule
Dispute –
Injunction – TO STOP

20 B – Special Courts – infrastructure project

20 C – Time-Period, 12 Months,
Date of service of summon to defendant

Extension – 6 Months
Grounds :-
1. Submit reasons in writing
Court – Record

1. Parameters to Calculate Compensation ?

Circumstances
Degree of Breach
Loss Suffered

PLAINT – Plaintiff
Whole Story
Amendment of Plaint -

WRITTEN STATEMENT – Defendant

Compensation- Dismissed
Other Relief – File a suit

This SP of Chapter
Awards – AC act not apply
Rectification –
To rectify, correct, modify, amend

1. Consensus
Rectified

Object – To facilitate rectification

Doctrine of equity

Intent rather than form

Object of Section 26 –

When an Instrument can be RECTIFIED

PLEADING –
1. PLAINT
2. WRITTEN STATEMENT

Condition Precedent – Valid and Complete Contract

3. Meaning of the word “INSTRUMENT”

Indian Stamp Act, 1899

Document – any right, liability

4. Fraud

True intention of the parties not being expressed because of FRAUD or MUTUAL
MISTAKE
Mere silence

Exception

MUTUAL MISTAKE
Matter of fact – VOID

Real Intention of the parties

Essentials of Rectification :-
1. Writing
2. Fraud or Mutual Mistake
3. Real intention
4. From the date you discover Fraud or Mutual Mistake – 3 years

Who can seek/or apply for Rectification

EITHER PARTY
REPRESENTATIVE
INTEREST AFFECTED

Cannot - Stranger – Locus Standi

Burden of proof
One who seek rectification

Effect of Rectification.

Object real intention

Execute
RESCISSION

rescissio rescindere – to cut or tear open

Rescind – one party

Proposal – manner – Rescind

ICA Act, 1872 – 19 and 19A

Voidable
Rescinded
Continue

Section 53 – Reciprocal Promise

Section 55 – Time is essence

Itself does not comes to an end – Voidable
Other Party – Rescind
Section 66 – Proper Notice of Rescission

Section 64 – Effect of Rescission

1. Restore the benefit – Rescinding Contract
2. Need not perform part of contract - Other party

Restitution in integrum – Principle Section 65

1st benefit
Later on – agreement void

“becomes void” – Valid

Benefit – returned/ restored back
Compensation

BDW Trading Ltd v. JM Rowe Ltd (2011)

Feb – 18 lakhs
JULY - Due
Earnest Deposit within 6 days otherwise Right to Rescind
Continue the contract
November – Buyer give notice of rescission
Seller claimed – Right to rescind waived off

Court ?
Effective and Valid
Continued Working to achieve some conditions of contract
It “DID NOT AMOUNT TO A WAIVER OF RIGHT TO RESCIND”.

Essentials of Cancellation

1. Written instrument in question – void or voidable

2. Serious injury if left outstanding
3. Court – is it reasonable and proper to end it
To administer protective and preventive justice asked for

Relief :-
1. Adjudging the instrument void or voidable
2. Ordering it to be cancelled

Who can seek cancellation

1. person against whom Written instrument in question – void or voidable

How an instrument can be cancelled

1. In Part – easily separated

2. Wholly – cannot be separated
DECLARATORY DECREES

Declare – Officially announce, to state, legal announcement

PLANTIFF
Legal character
Property
DEFENDANT – Deny, Imperfect Title, Defective Title
Defendant is challenging the title of Plaintiff

Valid Title,
EQUITABLE RELIEF
Already Existing Right

LEGAL CHARACTER
Legal status
Position is recognized by law
Should have been conferred by the law

PERSON ENTITLED TO A RIGHT TO ANY PROPERTY

Seek remedy – ‘MUST’ Have a right to property

COULD UPON TITLE

Dispute – Legal character or right over property

TO PREVENT MULTIPLICITY OF SUITS

OBJECT
1. To avoid any adverse attacks on the title of the property or legal character
2. To prevent multiplicity of suits

CAN DECLARATORY DECREE BE CLAIMED AS A MATTER OF RIGHT ?

Discretion
Maharaja Benares v. Ramji Khan
Exercise its discretion
JUDICIAL DISCRETION
Principle of Natural Justice
Equal opportunity of being heard
NO Bias
Notice

Reasoning/ Explanation/ Justification

A suit for a negative declaration (relationship)

A is not Plaintiff’s wife
He is not his son
I am not owner of property

Jagatram vs. Basanti

Title deeds
Seeing who is true owner
Title deeds not in your name
Affidavit –
REGISTRATION ACT – Register - whose name is entered in that

INJUNCTION – To stop
Seeking
Suit for bare injunction – To stop, for getting the title declared

Effect of declaration - Section 35

(a) Declaratory decree binds who
1. Parties to the suit
2. Person claiming through parties
3. Trustees
4. Beneficiary, Agent, Legal Representative, Guardian
(b) Declaratory decree is “in personam” or “in rem”

Right enforced against individual/person – in personam

Right enforced against whole world – in rem

Could upon title – One person (defendant)

In personam – binding parties

Ram Lal Mookerjee v. The Secretary of State for India in Council and Ors. (Privy
Council)

Judgement is binding only upon the parties to the suit

PREVENTIVE RELIEF
To prevent
To Stop

DISCRETION – court

REASONS

Temporary – Interim, Short period, Fixed Time, any stage, Code of Civil Procedure,
1908 (CPC) – Order XXXIX of CPC – DURING THE PENDENCY OF THE SUIT

Perpetual – Last Forever, Permanent, Specific Relief Act

FINAL DECISION

Perpetual Injunction – Decree

1. Plaintiff – To prevent any breach of obligation existing in his favour

TOO MUCH LOSS -

SMALL LOSS

COURT
Comparison of English and Indian Law

Nature of discretion
Governing Law

Damages in substitution of injunctions

1. Breach to plaintiff’s legal rights is very small
2. Estimate in money
3. Compensate injury with money

3. Situations where defendant invades or threatens to invade

Plaintiff’s rights to enjoyment of property

1. Trustee
2. Cannot estimate in money
3. Money cannot be considered as adequate relief
4. Multiplicity of judicial proceedings

MANDATORY INJUNCTION
Beach of Obligation
Party complaining – has to prove it is important obligation

STOP BREACH
ENFORCE THE PERFORMANCE
Capable of Enforcing

STAGE ?

During the pendency of suit as well as at the hearing at any stage

Special Circumstances :-
1. To prevent Breach of obligation
2. To compel performance of certain acts
3. Capable of enforcing
Relief in plaint

In addition
Instead/ lieu of

Damages and Compensation

Amend – Add

A file injunction

Clause e Section 41

Affirmative – SP not possible

Negative –

DAMAGES

Discharge of Contract

Termination
End of contractual relation
Rights and Obligations – Extinguished

By Performance
ACTUAL –
ATTEMPTED – Attempts to it but failed

Section 37: Obligation of the parties to contract

Section 38: Effect of refusal of accept offer of performance

Section 55: When time is essential

1. Essential
Fails to perform it on a specified period
VOIDABLE -
2. Not Essential –
Does not means fulfill any obligation
VOIDABLE- NO

ESSENTIALS :-
1. Made Time is essence or not
2. Delay – injury
3. Nature of contract

By Mutual Agreement –

1. Novation – Sec 62
New Agreement/ Contract
Substitution of a new contract in place of the original contract

1. Between Same parties – Terms AND Conditions Change

2. Between Different Parties - Terms AND Conditions Same

Essentials :-

1. Agreed
2. Novation – Before breach of original contract
3. New Contract – Valid and enforceable

Rescission – Cancellation – TO END

By not fulfilling the obligations

Alteration – Sec 62
Changes, Amend, Alter it’s the Terms
1. Consesus ad Idem, Mutual Consent
VOIDABLE –
A accepts delivery of half of the goods
Can A sue B ?

Remission – Sec 63

To accept lesser
Consideration – 10,000
8000 –
1. Dispense with – part of it
2. Accept lesser amount of consideration
Accept any other consideration that is agreed

WAIVER
Relinquishment, you yourself ended
Terms and Conditions –
Waived off his right in contract –
damages of Rs. 3000/-

Merger
To Combine, Mix,
Changing the rights

Inferior Rights
Superior Rights
(Inferior rights ended) –

A and B – Lessee. (INFERIOR RIGHT)

A purchase the property from B – Owner (SUPERIOR RIGHTS)
Inferior rights merged into superior rights
Death

Skill, Knowledge, Talent, Personal Qualifications

Insolvency
Later on,

Unauthorized alteration
Give rights to other party to end the contract

By Lapse of time
a) Time for fulfilment of terms
b) Performance -
c) Time for filling a suit – Limitation Act 3 Years (rights accrues to you)
d) Parties they themselves decide the time limit

Conflict ?
Contract
Law – Limitation Act – will prevail

By Breach of Contract (Section 39) – not fulfilling the obligations

1. Refused to perform -
2. Disabled himself from performing
- contract ends

- Actual Breach –
Remedies – party who is not at fault (file a suit)
- Anticipatory Breach – to know before hand, expect
(a) Express Repudiation – words, (On 15th, that I am not going to deliver goods
on 30th of this month)
(b) Disabled himself from performing – implied by conduct
By Impossibility of Performance / Doctrine of Frustration
(Section 56) – 3 Parts

1). Initial Impossibility

2). Subsequent Impossibility
3). Impossibility or lawlessness known to the promisor only

1. At the very beginning contract is void – Sale of illegal object

2. Subsequent impossibility – new law passed, horse died later on
3.

A. One person promised to do something

b. which he knew
c. or reasonable diligence, might have known
d. Promisee did not know (impossible or unlawful)
e. Promisee is entitled to compensation – for any loss

Subsequent Impossibility and Doctrine of Frustration

1. Destruction of Subject Matter

2. Change of Circumstances – COVID-19, New Law, War Situations, Natural
Disasters
3. Non-occurrence of a contemplated event

Krell v. Henry
Hire a flat for two particular days – coronation procession
Rent was also paid in advanced
King’s illness
Defendant refuses pay rest of rent

Foundation of Contract – CORONATION PROCESSION

Frustrated – non happening
Plaintiff was not entitled to recover rent
4. Death or incapacity of a party
TALENT, PERSONAL SKILLS OR QUALIFIACTIONS

5. Government or legislative intervention

Emergency, NEW Law, Lockdown
Maybe Temporary or permanent

6. Intervention by war
Contract stands frustrated

Effects of Frustration :-
1. Frustration shall not be self-induced

2. Frustration operates automatically

No link Intention of parties – frustration

3. Adjustment of rights (restitution) - Section 65

Discovered to be void

1. INTIAL IMPOSSIBLE
But parties discovered it to be void at a later stage
Discovered implies that already their pre-existence of fact but it is now
discovered.

Reason of law
Reason of fact
Pari delicto - Equally at fault

- Onkarmal v. Banwarilal AIR 1962 Raj. 27

Both the parties are equally at fault

Law will leave them where it finds them and will not engage itself in determining
the rights as between them

Exceptions :- Not at fault equally

1. Less Guilty – recover

2. Any benefits which is passed under such contract recovered back.

Remedies for Breach of Contract

Rescission – To Cancel, end, To rescind

Aggrieved Party - Rights

Party who is rescinding the contract

1. Is not required to perform any obligation

2. Claim damages, compensation
3. Restoration of benefits

Who can rescind the contract ?

1. Any one of the parties
2. COURT – VOID, UNLAWFUL

Suit for Damages

1. Make the loss good

Hadley v. Baxendale – Damages

1. H is the owner of a mill
2. Shaft has stopped working
3. Shaft sent for repair to B – H agrees to pay certain amount of money after
repair
4. Don’t delay work – will result into loss of profit.
5. B delivered shaft after a reasonable time

6. H filed suit for LOSS OF PROFIT

Is B LIABLE FOR ANY LOSS OF PROFIT ?

NOT LIABLE

BREACH OF CONTRACT
SUSTAINED LOSS

Different kinds of Damages - TO MAKE THE LOSS GOOD

1. Ordinary Damages (general, actual, compensatory)

Injury or loss – repay the actual loss
To estimate loss – easy in terms of money

2. SPECIAL DAMAGES :-
Loss arising due to special circumstances – (War, COVID-19, Natural Calamities)

A – B – 100 Shirts by 15th

17th A is holding a sale
Special Circumstances – Protest
18th – Delivered

B is liable Late Arrival (Sale), Awareness

Exemplary or punitive or vindictive damages

1. In addition to other damages, Defendant acted with recklessness, malice or
deceit
2. Deterrence (fear) in the minds of others
Blameworthy Conduct – Punished

Nominal damages

Plaintiff sustained no loss

Court may still award some damages – Discretion
Recognition of Plaintiff’s Right –

(Breach – Plaintiff is entitled to damages)

No Monetary Loss but Legal Right of plaintiff is injured

Damages for inconvenience

Plaintiff sustained loss – physical inconvenience, difficulty, mental pressure,

Injury to feelings (emotional injury)
Breach

Liquidated damages and penalty

Party specify the amount – enter into contract

Forfeiture of security deposit

Contract – restored back

SILENT
Court – decide

Interest
Nature of contract
Law in force
Usage of trade (Custom)

Cost of suit or decree

No, we cannot claim it as a matter of right

Discretion
Addition to the actual damages

 When is specific performance allowed?

1. Breach –
Actual damage – not measurable in terms of money
2. Monetary Compensation is not adequate relief

Ancient Artifact (Rare)

House for Movie Shooting

 When specific performance is not allowed?

1. Damages can be adequate relief

2. Measurable
3. Void, Illegal

Suit for Injunction

Stay order, prohibit a person

Quantum Meruit
Restitutory Remedy

Restore to the previous positions – Contract had never been entered into

PLANCHE v. COLBURN (1831)

1. One has done some work

2. Rendered some services
3. Breach
4. Further service useless by the other party
5. Recover the compensation for work done or services rendered

QUASI CONTRACT

1. Declared by law as valid

2. UNJUST ENRICHMENT
3. Principle of Equity and good conscience
4. Not a formal agreement but it is imposed by law

No person shall get any advantage, at the expense of other party

Sec. 68 - Supply of Necessaries

Defendant is entitled to get reimbursement from Minor’s property

Sec. 69 - Reimbursement of money due

Liability of payment

1. Plaintiff – interested in making payment

2. Bound to pay

- One party legally bound to make a payment

- Other party makes the payment
- Making the payment – not legally bound, but interested in making payment
A and B – sale of goods
B sent half of the goods but did not pays tax
 A pays the tax
A will be entitled to recover this amount from B

Sec. 70 - Obligation to pay for benefit out of non – gratuitous act

Lawfully delivering something

Party who delivers something is entitled to
1. Payment
2. Restoration

Sec. 71 - Responsibility of Finder of Goods

Finder’s responsibilities
1. Duty to take reasonable care
2. Not to use goods for his own purpose
3. Duty not to mix the goods with his own goods
4. Reasonable measure to find rightful/real owner

Rights
1. Payment and recover expenses
2. Reward
3. Sell the goods – Perishable goods
Sale proceeds should be given to real owner

Section 72:

A person –
Paid money to another
Delivered something to another
Acted under a mistake or coercion

Entitled to recover its value

1. Payment
2. Restoration
Contingent Contracts
1. Contract to do or not to do something
2. Happening or non-happening
3. Uncertainty
4. Collateral Event – parties does not have control

Section 32 – Uncertain future events

VOID (Impossible)
Happening
Happened – Insurance, Guarantee

Section 33 - Non-Happening
A and B, A - I will pay you money if ship “does not return” within 6 months
Ship is sunk –
Contract enforceable

Section 34

Contract will comes into play only when certain person will act in a certain way in
future
Not act in certain way – Impossible

Section 35

A and B, A - I will pay you money if ship “does not return” / “return” within 6
months
Discharged
Ship is Sunk – 7 months
Contract Not enforceable

Section 36

Impossible event – VOID

CONSIDERATION
Something in return i:e quid pro quo
Section 25, 10

Blackstone, Pollock, Patterson…..

Section 2(d) –

1. Consideration may move from the promisee or

2. Consideration may be Past, Present or Future
Has done or abstained – Past
Does or abstains – Present
Promises to do or abstain from doing something – Future

3. Consideration should be real and not illusory

Consideration is something which the promisor is not already bound to do

Public Servant perform public duty -

Exceptions to the Rule “No consideration, No contract” (Section 25)

1. Natural Love and Affection

Written or registered agreement based on Natural Love and affection
between NEAR RELATIVES is enforceable without consideration
NEAR RELATIVES – Includes parties related to blood or marriage

2. Past Voluntary Service

Promise to compensate a person, who has already VOLUNTARILY done
something
Act done

3. Time Barred Debt

Limitation Act – Debt
 Time Limit within which it has to be paid
Circumstances – Time Barred Debt is Active
Promise to pay time barred debt makes it active but subject to some
conditions :-
1. Written signed by promisor/ Debtor or agent
2. Promise whole or part of debt
Debt – good consideration Fresh promise
Debt - Ascertained sum of money
Fresh period of limitation – Start when you made the promise

4. Other Exceptions :- Gift, Agency (Section 185), Bailment and Charity

Gratuitous Bailment (Section 148)

Coercion [Section 15]

Ranganayakamma v. Alwar Setit –

Effect of threat to file a suit

No Coercion unless
False Charge – Coercion

UNDUE INFLUENCE
Dominating

FRAUD
TO cheat
To deceive
Withholding information

Essentials :-

1. By the party to the contract – (Stranger no impact on contract)

2. False -
3. Stage – before the conclusion of contract
4. Intention – to deceive other party
5. Actually deceived
6. Gained profit (deceiving) – suffered loss (deceived)

Exceptions: When the silence amount to fraud

1. Duty to speak –
Some facts are in sole knowledge of owner
One party has no means of discovering the truth
Absolute Good Faith – Ubberima Fides

2. Silence itself is equivalent to speech

If you are not denying then I believe Horse is in sound condition

3. Change of circumstances
Circumstances changed – it is fraudulent

4. Half Truths

Sri Krishna v. Kurukshetra University

Candidate just remain silent as to certain important facts -

University have No means of discovering the truth? They have
Using Ordinary diligence

Not a Fraud

Section 19 – Effect of Fraud

Voidable at the option of the party who is defrauded

1. Rescind the contract

2. Compensation/Damages – for loss suffered (specific relief)
3. Right to insist upon performance (specific performance)

Misrepresentation

Asserts something which is not true

Though believes it to be true
False representation made innocently

Difference

Fraud – Intention wrong

Section 19 – Effect of Misrepresentation

Voidable at the option of the party who is defrauded

1. Rescind the contract

2. Compensation/Damages – for loss suffered (specific relief)
3. Right to insist upon performance (specific performance)
MISTAKE

Consensus-ad-idem

Mistake –
Unwanted and unintentional result

Mistake of Law: Section 21 in the Indian Contract Act, 1872

- Maxim ignorantia juris non excusat

- Exceptions

1) Mistake with regard to a Foreign Law – Mistake of fact

2) Mistake with regard to Title or Right –

Cooper v. Phibbs
1. Fishery Rights
2. Lease Agreement
3. Plaintiff took lease Fishery Rights from defendant
4. Plaintiff already have a life interest in fishery rights
5. VOID

Where buyer is actually the owner of property or something

Mistake of Fact
Ignorantia Facti Excusat

1. Bilateral Mistake – Section 20

2. Unilateral Mistake – Section 22

1. Bilateral
Both the parties – Mutual
Fact and not law
Essential/ Important Fact
No meeting of minds
Bilateral
Void

Essential/ Important Fact

1. Subject Matter

Unilateral Mistake
Dularia Devi v. Janardan Singh

Test of Severability
Separate the Void Part
Enforce the Valid Part

1. Agreement in Restraint of marriage [Sec - 26]

“Other than a minor” –

Totally -
Partially – Next five years

Restrain
1. From Marrying at all
2. Restrained from marrying for a fixed period
3. From marrying a particular person
4. Marrying from a class of persons

Agreement in Restrain of trade [Sec - 27] –

Burden of Proof
1. Restraining is necessary – public interest
2. Restraints are injurious to public

Gherulal Parakh v. Mahadeodas Maiya - On Wagering Agreement

v. - CORRECT

never write: V., V/s, V/S

Wagering Agreement

Two-person agreement
Money or Money’s worth
Happening or non-happening
Of uncertain future event

1. Uncertain Event
2. Mutual Chances of Gain and Loss
3. Neither party to have control over the events
4. Neither party should have any other interest in event.
5. One party is to win, and one party is to lose.

Not held as wagers :-

1. Prize
2. Horse Race
3. Crossword Competition
4. Chit Fund