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– Example : ‘A’ promises to pay ‘B’ a fixed sum of money if a certain ship returns within
a year. The contract may be enforced if the ship returns within the year
and becomes void if the ship is destroyed during the year.
Wagering contract
– Suppose ‘X’ and ‘Y’ take a bet that if it rains tomorrow, ‘Y’ will pay ‘x’ Rs 500 and if it does not rain
tomorrow ‘X’ will pay ‘Y’ Rs 500 . This is a wagering contract .
ESSENTIALS OF A WAGERING AGREEMENT
• Uncertain event game of chance -> uncertainty of the event. The performance
of the bargain must depend upon the ascertainment of an uncertain event
• Mutuality there must be mutual chances of gain and loss ( each party should
stand to win or loss )
• Neither party to have control over the happening of the event one way or the
other
• Neither party should have any other interest in that contract other than the sum or
stake he will win or lose
CONSEQUENCES OF WAGERING AGREEMENTS
• Agreements by way of wager are void and no suit shall be brought for recovering
anything alleged to be won on any wager
• Agreements by way of wager unenforceable and are null, as they are considered
being opposed to public policy
• Horse –race : winners of any horse race shall not be void or winners is not
deemed illegal in the eyes of the law, provided the sum is Rs 500 or more
• Wagering contracts are void, but contingent contracts are good if they are
not declared by law to be bad .
• In a quasi contract there is no real contract , arising from the meeting of the
minds, but the law attributes to a particular situation and the consequences
which are similar to those of a contract.
• Under english law , quasi contract is an obligation which the law creates in the
absence of any agreement
• A quasi contract rests on the equitable principle that a person shall not be
allowed to enrich himself unjustly at the expense of another
• QC maxim: Nemo debet locuplatari ex lina justua No man must grow rich
out of another person’s loss.
• Winfield defines QC : as a liability, not exclusively referable to any other
• Jenks defines QC: a situation in which law imposes upon one person on
• Suit for the recovery of money : the right to file a suit for the recovery of money
may occur under the following conditions :
– Where the plaintiff paid money to the defendant : *under a mistake *in
pursuance of a contract the consideration for which has failed *under coercion,
oppression, extortion or such other means. Example : ‘A’ pays Rs 1000 to ‘B’
by mistake . It is really due to ‘C’. ‘B’ must refund the money to ‘A’. ‘C’ however cannot
recover the amount as there is no privity of contract between B and C.
A debtor may recover from a creditor any excess payment made
to him by mistake. The mistake may be one of facts or of laws
– Payment of money to a third party which another is bound to pay : * in
order to recover, the plaintiff ( pretender) must have been compelled by the law to pay
or the plaintiff has an interest in the payment
• Money obtained by the defendant from third parties on the plaintiff’s account :
* where an agent has got a secret commission or a fraudulent payment from
a third party, the principal can recover the amount from the agent
• Quantum meruit : means ‘as much as he deserves’ A claim for
the recovery of reasonable remuneration may be enforced even if there is no
express agreement provided the services are not intended to be gratuitous.
• Obligation of finder of lost goods : a person who finds
goods belonging to another and takes them into his custody is bound to account
for the goods to the owner. If the owner is traced, he must return the goods to
him. The finder his entitled to get any reward that may have been offered by the
owner, and also any expenses he may have incurred in protecting the property.
• Obligation of person enjoying benefit of non-gratuitous act : where a
person lawfully does anything for another. Or delivers anything to him intending to
do so gratuitously, and when such an another person enjoys the benefit thereof
the latter is bound to make compensation to the former in respect of or to restore,
the thing so done or delivered.
– Example: ‘X’ a merchant leaves some goods at the house of ‘Y’ by mistake. ‘Y’ treats the goods as his
own. He is bound to pay ‘X’ for them
THE SALE OF GOODS ACT 1930
•The act extends to the whole of india except the state of jammu & kashmir
• Contracts for the sale of goods are subjected to the general legal principles
applicable to all contracts – offer & acceptance, capacity of the parties, free
• Two parties : buyer + seller . Buyer means a person who buys or agrees to
buy goods, seller means a person who sells or agrees to sell goods . These
two terms are complementary. Two parties must be competent to contract
• Goods : there must be goods ( the property which is to be transferred
from the seller to the buyer ). The goods which form the subject matter of
COS must be movable. Transfer of immovable property is not regulated by
the sale of goods act
• Price : the consideration for the COS called price must be money. when
goods are exchanged for goods it is not a sale but a barter. There is
however, nothing to prevent the consideration from being partly in money
and partly in goods
• E.g ‘X’ agrees to sell ‘Y’ all the crops to be grown at his farm in
haryana during the year 2009 season for a sum of RS100000.
This is an agreement to sell future goods and not a sale
CONTINGENT GOODS
• E.g ‘X’ agrees to sell to ‘Y’ all the crops to be grown at ‘Z’s
farm in haryana during the year 2009 season for a sum of
RS100000, if ‘Z’ sells the same to ‘X’. This is termed as
agreement to sell contingent goods because the availability of
crops depends on it’s sale by ‘Z’
EFFECT OF DESTRUCTION OF GOODS
• In case of COS ( Sec 7 ) : the COS is void if the following 3 conditions are
satisfied : there must be a COS for specifics goods, the goods must have
perished or become so damaged as no longer to answer to their
description in the contract before making of the contract, the seller must
not be aware about the destruction of goods
• Earnest : in a COS the buyer may give some tangible thing as a token of
good faith as a guarantee or security for the due performance of the
contract. This is known as earnest. If the contract is duly performed or if it
is in the form of money it is adjusted against the purchase price.
• If account of negligence or default committed by the buyer, the transaction
sale could not be completed the earnest money could be taken over by the
seller
• The seller in order to apply the forfeiture clause towards appropriation of
earnest money, must prove the loss he has suffered for claiming liquidated
damages
• E.g ‘x’ asked a car dealer to suggest him a good car and while
suggesting the car, the dealer said that it could run for 20
km/of petrol . But the car could run only 15 km/of petrol. In
this case, the statement made by the seller was a warranty. ‘X’
was therefore not entitled to reject the car but he was entitled
to claim the damages
Condition warranty
• c. where the contract is not severable and the buyer has accepted the goods or
part thereof
EXPRESSED & IMPLIED CONDITIONS AND WARRANTIES :
• Warranty of quiet possession : the buyer shall have & enjoy quiet
possession of the goods. If the buyer is any disturbed in consequence of
seller’s defective title of goods, he can claim damages from the seller
• Warranty to disclose dangerous nature of goods : the seller knows that the
goods are inherently dangerous , he must warn the buyer of the probable
danger, otherwise he will be liable for damages
IMPLIED CONDITIONS :
• E.g ‘C’ bought a bun containing a stone which broke one of ‘C’s teeth.
Held, he could recover damages