contract_new_.ppt

May 12, 2019 | Author: Yogita Mandhanya | Category: Offer And Acceptance, Consideration, Contract Law, Business Law, Doctrine
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I ndi an Cont r act  Act ,1872

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Indian Contract Act, 1872

Chapt er–1

Nat ur eandEssent i al ofaCont r act

Busi nessLaw

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Indian Contract Act, 1872

` het  T er m “Cont r act ”i nor di nar ysensemeansan agr eementbet weent woper sons.  Thel aw ofcont r actseekst or egul at et hebehavi orof per sonswhoma makecont r act s,sot hatanyconfli ct ar i sesbet ween t hesepersonsl at ermayber esol ved. Meani ngofCont r act : Sec.2( h)definesacont r act :“Anagr eeme ment enf or ceabl ebyl aw i sacont r act . ” e. g.C makesanagr eeme mentwi t hD t osel lhi m some me goodsf orRs.25000.

Busi nessLaw

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Indian Contract Act, 1872

Bi nvi t esaf r i endSt odi nner .Hema m akesel abor at e pr epar ati ons.Sf ai l st ot ur nupf ordi nnerandal lt he pr epar at i on madebyB gowast e.Si ncet hi swasa cont r actbet ween t hepar t i es,B cannott akeSt o cour tf orl egalact i onagai nsthi mf orbr eaki ngt he comm mmi t mentt ocome mef ort hedi nner .



• How coul di tbesai dt hatt heabovewa wasnota cont actal t hough i twascl ear l yanagr eeme ment  bet weent het wof r i ends?

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Indian Contract Act, 1872

Essential of Valid Contract 1. AnAgr eementorofferandaccept ance: Agr eement=Pr oposal+t hei raccept ance Agr ee.Mustmadebyt woper son,onei smaki ngoffer andanotheri saccept i ngt hi soffer . 2. I nt ent i ont ocr eat el egalr el at i on Cour twoul dl i ket omeasur ethedegr eeofser i ousness . Noteveryl ooseconver sat i on,notanyexchangeof pl easant r i es,notacasualsoci alcommi t ment ,consi der asacont act .

Busi nessLaw

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Indian Contract Act, 1872

3. Compet ent nceofPar t i es Everybodyi sabl et omakecont r actexceptMi nor , Per sonofUnsoundedmi nd, Per sonwhoar edi squal i fied byanyot herl aw.

4. Consi der at i on “Somet hi ngi nRet ur n” e. g.B pr omi set oSt hatHewi l lbuyhi sbi kef or Rs. 35000.

5. Fr eeConsent I ft hepar t i esmaket heagr ee.wi t houtanyki ndof pr essur eormi sgui dance,t hent heagr ee.woul dbe t her esul tofFr eeConsent . “Consensusadi t em”bet weenpar t i es,whi chmeans t hatt her emustbecompl et eunder st andi ngofeach ot her ’ smi ndbet weent hem.

Busi nessLaw

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Indian Contract Act, 1872

6. Lawf ulobj ectandconsi derat i on e. g.Iwi l lki l lyouMr .i fyouwi l lgi vemw 100bot t l e  wi ne.

7. Notexpr essl ydecl ar edvoi d( Cancel l ed)agr eement  Al waysvoi di . e.wi t houtl egaleffectbecauseoft hei r nature. e. g.Agr ee.madewi t houtconsi der at i on Agree.t odoi mposs i bl eact . Agr ee.on t hemeani ngofwhi chuncer t ai net c.

8. Cer t ai nFor mal i t i es Necessaryf ul fil l mentofcer t ai nf or mal i t i esf or maki ngcert ai nspeci fict ypesofcont r act Madei nwr i t t enori npr esenceofwi t ness.

Busi nessLaw

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Indian Contract Act, 1872

Case Law •  A invite B to out for dinner together. B accepts the offer. A hires a taxi but B does not turn up. A has to give the dinner soe copensation. !an A recover it fro B" • # offer to donate $s. 11%%% to hospita&. 'he hospita& accept the offer. !an it recover the aount "

Busi nessLaw

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Indian Contract Act, 1872

Chapt er–2

OFFER  AND  ACCEPTANCE Busi nessLaw

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Indian Contract Act, 1872

OFFER AND ACCEPTANCE • Formation of Agreement required two steps , maing of a proposal !" one person and acceptance of t#is proposal !" ot#er$ • Agreement% &ffer ' t#eir acceptance

Busi nessLaw

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Indian Contract Act, 1872

 TheP opo a lor ffe r Pr r os s a rO Off e r Se c . a ) n er n h s e d : e c .2 2( ( a )d defin nea a no off ffe ri nt he e s ewo wor r ds s : “Whenoneper son si gni fi s oano t h r i fie e st t o t he e r h sw i l l i n n od o b t ai n r o n hi n , hi i wi l l ng g nesst t do oo ort t oa a bs s t nf f r om d doi ngany yt t i ng g ,  w t h e w oo a i n n h ss e n a c c e p a n e ) h t  wi i t ha av vi e wt ob bt t a ni ng gt t he ea a s e nt t( ( a c c e pt a nc c e )o of ft ha a o he r o uc h c t t i n n ssai dt o ot t e rt t os s c ha a c tor rabs s ne e nce,h hei omake ea a p op ” pr r posal ” e . g . e l l sS:“Ia m e a o e l lmy c n o e . g .R Rt t e l l a mr e ady yt t os s e l myma ma ch hi i ne ef f or r R . 9 a r e ea d o Rs s . 90 000 0, , a r eyo our a dy yt t ob buy”. .  T si s l ea roffe r r o o  Thi i sc c a e rf f r om m Rt t oS.

Busi nessLaw

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Indian Contract Act, 1872

Requi r ement sf orVal i dOffer 1. Offermustbeexpr essori mpl i ed Mustbemadei namannerwhi chl eavenodoubtabout i t . Pr oposalmadei nwor ds,t hepr omi sei ss ai dt obe expr ess,andpr oposalmadotherwi set han i nwor ds,i ti ss ai d t obei mpl i ed. e. g.B t el l sS:“Can your epai rmycomput er ?”–Expr ess offer  A st r eetsel l erofphot oal bumsqui et l yext endsa pi ecebef or eapasser–bywhot akesi ti nhi spossessi on. I mpl i edoffert osel l . 2. Offermusti nt endt ocreat el egalr el ati on 3. Offermustbecer t ai nandnotvaguei nmeani ng Offermustbedefini t eandcer t ai ni nmeani ng

Busi nessLaw

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Indian Contract Act, 1872

4. Offermaybespeci ficorGener al  Ther emustbedest i nat i onofoffer . I fofferi st ar get edf oronespeci ficper son,i ti scal l eda speci ficoffer . I fi ti star get edf ort hewhol ewor l datl ar ge,i ti scal l ed gener aloffer .e. g.Adver t i sement

5.Offermustbecommuni cat ed Lal manShul ka vsGaur iDut t

6. Offermustbedi st i ngui shedf r om i nvi t at i ont ooffer e. g.Avai l abi l i t yofBooksi nBookSt or ebei ngavai l abl ef or l et t i ngout .Di spl ayofsui twi t hpr i cet agAl lar eexampl eof i nvi t at i ont ooffer .Adver t i sermayormaynotsel lt hi s. e. g.Publ i shi ngofTi meTabl ebyr ai l waysar eexampl eof expr essi onofan i nt ent i on.

Busi nessLaw

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Indian Contract Act, 1872

 Whati sdi ffer encebet weenI nvi t at i ont oOfferandGener al Offer ? I nvi t at i ont oOffer :Ai msatt aki ngt hecust omert ot he adver t i sert ost ar tnegot i at i on. Gener alOffer :Ai msatl eadi ngt heoffer ee( t owhom offer made)t otheper f ormanceofspeci fiedcondi t i on whi ch  woul damountt oaccept anceofoffer .

7. AnOffershoul dnotcont ai nat er mf or ci nganact i on onOffer ee e. g.B t el l sSt hati ncasenor epl yi sr ecei vi ngf r om S  wi t hi n days,i twi l lt r eat edasaccept anceofhi soffer . Sar enotboundbythi soffer .

Busi nessLaw

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Indian Contract Act, 1872

 TheAccept ance Sec.2( b)“Whenaper son t owhom t hepr oposali smade, si gni fieshi sassentt heret o,t hepr oposali ssai dt obe accept ance. ”  A pr oposal,whenaccept edbecomeapr omi se. Requi r ement sf orVal i dAccept ance 1. Byapr operper sonThepr operper sont oacceptt heofferi st heonet o  whom i ti st ar get ed. Offer orcannotbef or cedt obeboundi nacont r act  wi t haper sonwi t hwhom hedi dnotwantt obei nvol ved. 2. . Wi t hi npr opert i me  Ti mespeci fiedbyOffer or . e. g.Adver t i sementofI PO

Busi nessLaw

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Indian Contract Act, 1872

3. Mustbeabsol ut eandunqual i fied( t otalandwi t hout condi t i on) Offer eeshoul dnei t heraddt onorr educef r om t he offeranyt hi ngf r om hi ss i de. B offert osel lhi sCart oSatRs. 20, 000.Sacceptt he offerwi t ht hecondi t i ont hatpaymentshal lt akeaf t er amont h.  Thi si scount erofferf r om St oB.Theoffer f r om B st andr ej ect ed.

4. MustbeCommuni cat ed Ment alaccept ancei snoaccept ance.

5. Mustbegi veni napr operMode. I fOffer orpr escr i bedaymodeofaccept ance,i tmust  beadopt edbyoffer eef oraccept ance.E. g.byf ax,by mai l ,byr egi st er edpostetc e. g.A makesanoffert oB andsays:“I fyouacceptt he offer ,r epl aybyemai lonl y. ”B sendt her epl ybypost .

Busi nessLaw

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Indian Contract Act, 1872

6. Accepat ncemustsucceedt heoffer  Twoi dent i calcr ossoffer scannot f or m an agr eement. e. g.A sendsal et t ert oB cont ai ni nganoffer .Al most att hesamet i me,B al sosendsal at t ert oA cont ai ni ngan offeron exact l ysamel i nesThet wooffercr osseachot her dur i ngpost alj our ney.Sot heycal l edi dent i calcrossoffer . Canbot hoft hem t oget herf or m anagr eementbet weenA andB on t hel ogi ct hatt heyr epresentacommon desi r eand commonunder st andi ng? Onl yt woofferar emadeandt her ei snoaccept ance.

Busi nessLaw

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Indian Contract Act, 1872

7.Offeroncer ej ect edcan notbeaccept ed. B makesanoffert ogi vej obt oH atRs.7000pm sal ar y.S says,“No,IwantRs.8000pm mont h.B r ef uses .Ssays,“Al r i ght, Iwi l lwor kf orRs. 7000”.B says,“Iam noti nt er est edi nyou. ”  Ther ei snocont r actbet weenB andSbecauseB’ si ni t i aloffercame i nt oendwi t hi t sr ej ect i onbySt hr ough acount eroffer .Now,i ti s S’ soffert owor kf orRs.7000whi ch B i sr ej ecti ng.( Hydevs Wr ench)

Busi nessLaw

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Indian Contract Act, 1872

Communi cat i on ofOffer ,Accept anceand Revocat i on 1. Communi cat i onofOffer

 Anofferi ssai dt ohavebeenmadewheni t comest oknowl edgeoft heotherper son f or  whom i twasi nt ended.

2. Communi cat i onofAccept ance

ForAccept ancet wost eps r equi r ed:( i )Offer ee t r ansmi t shi saccept anceand( i i )Message r eachest heOffer or . Br ogdenVsMet r opol i t anr ai l waysCo. i .Communi cat i on ofacceptancef r om offer eei s  bi ndi ngupont heOffer or assoonast hel at t erof accept ancei spost edsoas t obebeyondthe Offer ee’ scont r ol . i i .Communi cat i on ofaccept ancef r om offer eei s  bi ndi ngupont heoffer eehi msel fonl ywheni t comest otheknowl edgeoft heOffer or .

Busi nessLaw

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Indian Contract Act, 1872

e. g.Mr .X sendsal at t erofoffert oY onAugust5whi ch mayreach Y onAugust10.Y posthi sl at t erof accept anceonAugust15 whi chmaycomest o knowl edgeofX onAugust20. Offersai dt obemadeon=August10 Offersai dt obeaccept edf orY on =August15 Offersai dt obeaccept edf orX on =August20 Posi t i on oft i megapbet weenAugust15t oAugust20=  Thi st i mei savai l abl ef orY t owi t hdr aw hi saccept ance.

Busi nessLaw

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Indian Contract Act, 1872

3. Communi cat i on f orRevocat i on Sec5pr ovi der ul eaboutr evocat i onofofferand accept ance.I tst at es: “Apr oposalmayber evokedatanyti mebef oret he communi cat i on ofi t saccept ancei scompl et ef r om accept orasagai nstt hepr oposer ,butnotaf t erwar d. ” “Anaccept ancemayber evokedatanyt i mebef oret he communi cat i on oft heaccept ancei scompl et eas agai nstt heaccept or, butnotaf t erward. ”

Busi nessLaw

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Indian Contract Act, 1872

X makesanoffert oYon5th  May,i tr each t oY on10th  May.  Y post edofhi saccept ancet oX on15th  May.I tr eachest oX on20th  May. X sendwi t hdr awalof hi soffer on9th  May,i tr eachest oY on14th  May. I twi l lcomet oeffecton14th  Mayonl y,event houghX sendon9th  May.I ti scal l edr evocati onofoffer .  Y sendwi t hdr awalofhi saccept anceon17th  May,i t r eachest oX on 19th  May. I twi l lcomet oeffecton19th  Mayonl y,noton 17th  May. I ti scal l edr evocat i onofAccept ance.

Busi nessLaw

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Indian Contract Act, 1872

1.X makesanoffert oY on1th  May,i tr eacht oY on 5th  June.When Offeri scompl et ed? I ti scompet edonl yon5th June. 2.Y post edofhi sacceptancet oX on 10th  June.I tr eaches t oX on30th  June.Whenaccept ancei scompl et ed? -I ti scompl et edonl yon30th  June. 3.X wantt owi t hdr aw hi soffer ,whi chi st hel astdat e? I tmustbebef or e10th  June,nott her eaf t er . 4.Y wantt ocancelhi saccept ance,whi ch i st hel astdat e f orcancel l at i on? I tmustbebef or e30th  June,nott her eaf t er .

Busi nessLaw

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Indian Contract Act, 1872

• Lossofl et t erofAccept ancei nt hePost alt r ansi t  Accept ancei scompl et easagai nstOffer orassoon  – ast hel at t erofaccept ancei spost ed.Thecont r act i scompl et edeven i ft hel att erofaccept ancel osti n t hepost . ti si mpor t antt hatt hel att erofaccept ancei s  – Buti cor r ect l yaddr essed,suffi ci ent l yst ampedand posted.

• Cont r actovert el ephoneort el exoror al communi cat i on  –  Theoffer eemustmakesur et hathi saccept ancei s pr oper l yr ecei vedi . e.hear dandunderst oodbyt he Offer or .

Busi nessLaw

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Indian Contract Act, 1872

 Whendoesanoffercomet oanend?  Anoffercomet oendbyTwoRevocat i onorl aps and Rej ecti onofOffer .  A.Revocat i onorl apsorWi t hdr awalofOffer( Sec. 6) 1. Bycommuni cat i on ofnot i ceofr evocati on byOffer or  bef or ei t saccept ancei scompl et edagai nsthi m 2.Byl apsoft i me -X offerY t osel lsomegoodson 1stMay andagr eed t ogi vehi mt hr eedayst i met oaccept .Y accept ed offeron5th  May. 3.Bynonf ul fil l mentofcondi t i onbyoffer ee -X offert osel lsomegoodst oY,i fY gi vef ul lamount  bef or ecer t ai ndat e. 25

Indian Contract Act, 1872

4. Bydeat hofOffer or -I foffer eeacceptt heofferi ni gnor anceoft he deathofOffer or ,t heaccept ancei sval i d. 5.I fcount erofferi smade 6. I fOfferi snotaccept edaccor di ngt opr escri bed mode 7. I fl aw i schange B.Rej ect i on ofOfferbyOffer ee 1.Expr essRej ect i oni . e.bywor dswr i t t en orspoken 2. I mpl i edr ej ect i on whenoffer eemakecount eroffer Whenoffer eemakecondi t i onalaccept ance Notf ol l owi ngpr escr i bedt i me

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Indian Contract Act, 1872

CaseLaw 1. A gar mentst or egavet hef ol l owi ng advert i sementi nanewspaper :“Speci alsal ef or t omor r ow onl y.Men’ sSui t sr educedf r om Rs. 200t oRs.100. ”I si toffer ? 2. Psayst oQ,“Iwi l lsel lyouacamer a. ”I si toffer ? 3. A advert i sesi nToIt hathewoul dpayRs.Rs. 200 t oanyonewhofindsandr et ur nhi sknowl edge. I si toffer ? 4. A offerbyal at t ert osel lhi scart oB f orRs. 15000.B,att hesamet i me,offerbyl at t ert o  buyA’ scarf orRs. 15000.Thet wol et t er scr oss each ot heri nt hepost .I st her eacont r act  bet weenA andB?

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Indian Contract Act, 1872

  Consi der at i on “ Somet hi ngi nRet ur n”

i der at i onasf ol l ow :“When att he Sec.2( d)definescons desi r eoft hepr omi sor ,t hepr omi seeoranyotherper son hasdoneorabst ai nedf r om doi ng,ordoesorabst ai nsf r om doi ng,orpr omi sest odoort oabst ai nf r om doi ng,

somet hi ng,suchactorabstinencesorpromiseis cal l edaconsi derat i onf orpr omi se. ”

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Indian Contract Act, 1872

LegalRul esast oConsi derat i on 1. Consi derat i onatt hedesi r eoft hepr omi sor e. g.A savesB’ sgoodsf r om fir ewi t houtbei ngaskedt odo so.A cannotdemandpaymentf orhi sser vi ce. 2.Consi .f r om pr omi seeoranyot herper son. I ti si mmat eri alwhopr ovi dest heconsi derati onf ora person’ spr omi sesol ongasconsi derat i oni st her e. 3.Con.maybepast ,pr esentorf ut ur e. PastCon.:A findsB’ sSon andB pr omi sest opay  A 10000. Pr esentCon.:Att het i meofmaki ngpr omi se Fut ur eCon.:A pr omi sest odel i vergoodst oB whent he shi par r i vesandbpr omi sest opayA Rs1000agai nstt he r ecei pt sofgoods.I t sf ut ur e,asbot ht hepar t i eswi l l perf or m af t ert hear r i valofshi p. 2(

Indian Contract Act, 1872

4.Con.neednotbeadequat e e. g.X sel lhi shousewor t hRs1l ac f orRs.100t oY. 5.Con.mustber ealandnoti l l usory. i .Physi cal l yI mpossi bi l i ty e. g.X pr omi sest oputl i f ei nt oY’ sdeadwi f eshoul dY payhi m Rs.500. i i .LegalI mpos si bi l i t y i i i .Uncer t ai nConsi der at i on 6. Con.mustbesomet hi ngwhi chpr omi sornotal r eadybound t odue. e. g.Ther ewasapr omi set opayt ot heVaki lan addi t i onal sum i ft hecasewassuccessf ul . 7. I tmustnotbei l l egal ,i mmor aloropposedt opubl i cpol i cy.

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Indian Contract Act, 1872

E(ceptions )*ec$ 2+ 1.)ove and Affection e.g. A father proises to pa* his son 1%%% out of affection and &ove and registers it. +t,s a contract 2.!opensation for vo&untar* services e.g. - finds ,s purse and give it to hi.  proises to give - $s. 5%. 'his is contract. 3. /roise to pa* a tie0barred debt.

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Indian Contract Act, 1872

Capaci t yt oCont r act !apacit*, eans !opetenc* of the parties to enter into a va&id contract. ec.11 dec&ares the fo&&oing persons to be incopetent to contact i. inor  ii. /ersons of nsounded ind iii. /ersons disua&ified fro an* other &a.

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Indian Contract Act, 1872

Mi nor

•  Accor di ngt oI ndi anMi nor i t yAct , 1875. ,aper son whohascompl et ed hi s18th  yearofagei sconsi der edt oo  bemi nor .

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Indian Contract Act, 1872

• Law Rel at i ngt omi nor ’ sAgr eement s: “NO LEGALACTI ON TAKEN AGAI NSTMI NOR” 1. Absol ut l yVoi d  Agr ee.ofmi nor i sabsol ut el yvoi dandnul l i f y. e. g.A mi nort akel oan ofRs.20000f r om moneyl enderand putmor t gageofhi shousei nf avorofmoneyl ender .Lat er , mi norst art edanacti ont ogett hemor t gagecancel l ed.

2.Agr ee.maybeenf or cedf ormi nor ’ sbenefit s. e. g.A mi normaygi vel oan t oaperson andt he  bor r owermayr ef uset or et ur nmoneyont hegr ound t hatagr eementi svoi d. Fundament alr ul e,ai mt opr ot ectt hemi nor .

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Indian Contract Act, 1872

3.“Rul eofEst oppel ”doesnotappl yagai nstmi nor I fmi normi sl ead t heot herpart yt obel i evet hathei s oft hemaj ori t yage,andt hensomebenefit sgetunderan agr eement,hewi l lbepermi t t edt odenyl at t ert hef actt hat hewasofmi nor i t yage.Thereby,hewi l lhavenol i abi l i t y t owar dst heot herpart y. 4.Nor mal l y,nor est i t ut i onwoul dbepermi t t ed Norecover yf r om Mi nor Law r egardi ngr est i t ut i oni saccor di ngt oSec. 33ofSpeci fic Rel i efAct1963 5. Appr ent i ceshi pagreement sar eenf or ceabl e SuchAgr eementar emadef ormi nor ’ sbenefitt oenabl ehi m t oacqui r eski l lundert r ai nedpers onf orf ut ur e. Agr eementmustbemadeunderAppr enti ceAct1961. 35

Indian Contract Act, 1872

6.Ser vi cear gee.f ormi nori snotenf or ceabl e e. g.Fi l m Pr oduceragr eedwi t ht heguar di an ofmi norgi r lt o gi vet ot hegi r lt her ol ei nhi sfil m.Lat er ,hegaver ol et o othergi r l .Can gi r lmakecaseonFi l m pr oducer ? 7.Nor mal l y,speci ficperf or manceofpr omi sesshal lnotbe ordered.  Agr ee.Bymi normaybeor der edf orspeci ficper f or mancei f somecondi t i onar esat i sfied. i .I ti smadebyguardi an onbehal f i i .TheGuar di ani scompet entt omaket hatagr eement i i i .Theagr eementf ormi nor ’ sbenefit 8.Nor at i ficat i ononatt ai ni ngmaj or i t yage. e. g.K ( mi nor )t akel oanf r om B ofRs. 10000andgi ve pr omi ssorynot ei nf avorofB . K wi l lnotbel i abl eundert hi s P/Not eeven af t erat t ai ni ngmaj or i t yagebyK.

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Indian Contract Act, 1872

9.Mi nor ’ sl i abi l i t yf ornecessari es I fper sonpr ovi deanysuppor tornecessi t i est omi norwho ar enotenabl et omakecont r act ,t hi sper sonwhohad pr ovi denecessi t yhaver i ghtt or ei mbur sef r om t he pr opert yoft hemi nor ,becausei ti sbenefitoft hemi nor . 10. Mi norasamemberofpar t ner shi pfir m Mi norcan notbepart ner . 11. Mi norasshar ehol der  A mi norcanbecomeashar ehol deri nacompany t hr ough hi sguardi an whowi l lactashi st r ust ee. Mi nordi r ect l ycannotent er edi nt ocont r actwi t ht he company. 12. Mi norasanagent  A mi norcanbeappoi nt edasaagentbecauseagentdonot i ncurper sonalLi abi l i t y

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Indian Contract Act, 1872

13. Posi t i onofMi nor ’ sPar ent s Par ent sar enotl i abl ef orMi nor ’ sact 14.Posi t i onofaj oi ntcont r actofmaj orandmi nor Mi norwi l lnotbel i abl emaj or( adul t )ar el i abl e. 15.I nsol vencyofMi nor -Cour tcan notbedecl ar edi nsol vencybycour t .

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Indian Contract Act, 1872

!ontinued • !ontracts b* person of unsound ind   !ontracts b* &unatics   !ontracts b* drun9ards

• !ontracts ith /arda0:ishin oen. • !ontracts b* arried oen • !ontracts b* corporation • !ontracts b* inso&vents 3(

Indian Contract Act, 1872

Fr eeConsent  Accor di ngt oSec.13‘ Twoormor eper sonar esai dt oconsentwhen t heyagr eeupon t hesamet hi ngsi nt hesamesense. ’  Thi smeant hatt her eshoul dbeper f ecti dent i t yofmi nd ( consensusadi dem)r egardi ngthesubj ectmat t erofcont r act.  Accor di ngt oSec.14consenti ssai dt obef r eewheni ti snotcaused  byanyoft hef ol l owi ng: 1.Coer ci on 2.UndueI nfluence 3.Fr aud 4.Mi sr epr esent ati on 5.Mi st ake

4%

Indian Contract Act, 1872

•i .A hast wo cars,onebl ueand otherr ed.Hewant s t osel lhi sbl uecar .B whoknowsofonl yA’ sr ed car , offert opur chaseA’ scarf orRs.20000.A acceptt he offert hi nki ng t hati ti sf orhi sbl ue car .Thi si sno consent because both t he par t i es ar e not under st andi ngt hesamet hi ngsi nt hesamesense.

i .I fB goest oA andon t hepoi ntofpi st olasksA t o •i sel lhi sr edcarf orsum ofRs.20000t ohi m,t her ei s consentbecausebothar eunder st andi ngthatr edcar i s t he subj ect mat t er of t he consent , but t he consenti snotf r eebecausei thasbeen obt ai ned by Coer ci on.

41

Indian Contract Act, 1872

-ndue Influence nfluencei st hei mproperuseofanypower • Unduei possessedovert hemi ndoft hecont r acti ngpart y.  Accor di ngt oSec.16acont r acti ssai dt obeaffect edby • unduei nfluencewhen: ( a)t her el at i onsubsi st i ngbetweent hepar t i esar esuch t hatoneoft hepart i esi si naposi t i ont odomi nat et he  wi l loft heot her ,and ( b)Uset hatposi t i ont oobt ai nan unf ai radvant agesover ot her .

42

Indian Contract Act, 1872

 Theper sondeemedt obei nposi t i ont odomi nat et hewi l l • oft heot her . -Wher ehehol dsar ealorappar entaut hor i t yovert he otherl i kemast erandServant,chi l dandpar ent s. Wher ehest andi nafiduci aryr el at i onshi p( Mut ual t r ustandconfidence)l i ker el i gi ousgur uandf ol l ower , doct orandpat i ent s,l awyerandcl i ent s. -Wher ehemakesacont r actwi t ha person whose ment alcapaci t yi st empor ari l yorpermanent l y affect edbyr eason ofage,i l l nessorment alorbody di s t r es s.

43

Indian Contract Act, 1872

.urden of /roof  •  Theper sonwhocl ai m unduei nfluencehast opr ove t hati twast hecauseofcont r act .Hehast opr ove t hatpr eexi st i ngr el at i onshi p,t heposi t i onof domi nat i on,andt hemi suseoft heposi t i on.

44

Indian Contract Act, 1872

0ifference .etween Coercion and -ndue Influence 1$ode of &!taining Consent  In Coercion ,Consent o!tained !" t#reatening to act$  In -$I$ , Consent o!tained !" using dominating power$ 2$ 3"pe of Force In Coercion, p#"sical force is e(ercised$  In -$I$ , oral forced is used$ 4$ E(istence of 5elations#ip relations#ip !etween t#e promisor and t#e promisee is not necessar"$ *ome sort of relations#ip -*3 e(ist !etween t#e two parties to t#e contract$

45

Indian Contract Act, 1872

F5A-0 audmeansmet hodofmi sl eadi ngaper son del i ber at el y • Fr t ocausei nhi m awr ong under st andi ngofsoast o obt ai ni ngthat ’ sperson’ sconsentf oracont act . g.M f al sel yt el l sR t hatt hecart hathewasofferi ngt o • E. sel lwasonceownedbySachi nTendul kar .Thi si saf r aud agai nstR commi t t edt oobt ai nhi sconsentt opur chase t hecar .

46

Indian Contract Act, 1872

I*5E/5E*E63A3I&6 sr epr esent at i oni saf al ser epr esent at i onmade • Mi i nnocent l ywi t houtanyi nt ent i onofdecei vi ngt heot her part y.I tmayi ncl udet wot hi ngs: ( a) Wr ongst at ementofamat er i alf act snotknownt obe f a l s e ( b)Nondi scl osur eoft hef act swher etherei sal arge dut yt odi scl osewi t houtanyi nt ent i ont odecei ve.

47

Indian Contract Act, 1872

0iff$ !etween Fraud and isrepresentation 1.I nt ent i on: -I nf r aud,t her ei si nt ent i ont odecei ve( mi sl eadt o somebody) . I nMi s.,t her ei snoi nt ent i ont odecei ve. 2.Consequence: I nFr aud,damagecan beavai l abl et ot heaffect ed part yf ort hel osssuffered. I nMi s.,nosuch damagear eavai l abl e. 3.Def ense: I nFr aud,t hegui l t ypart ydoesnothaveanydef ense i ni t sf avor . I nMi s.,t hegui l t ypart yhavedef ensei ni t sf avor . 48

Indian Contract Act, 1872

ista9e •  A mi st akemeansaner r ori nunder st andi ngt he f actr el evantf orf or mat i onofacont r act .

4(

Indian Contract Act, 1872

!ase &a - X ,apoorwi dow,borr owedRs.3000f r om amoneyl enderat 100% perannum r at eofi nt er estf ort hepur poseofenabl i ngher t oest abl i shherr i ghtofmai nt enance.I sshel i abl et or epl ayt he l oan on t heset er ms? -No,t hi si sanunconsci onabl et r ansact i onandt hus amountt oacont r actcausedbyunduei nfluence. •  A woman wentt o aj ewel l er ,f al sel yr epr esent ed her sel ft o bea  wi f eofSachi nTendul karandt ookwi t hherar i ngont hepr et ext ofget t i ng the appr ovalofherhusband .She deposi tt he ri ng  wi t h Mr .Kambl i .Can t he j ewel l er r ecover t he r i ng f r om Mr . Kambl i ? 0 es  Y ,because,t her ewasami st akeofi dent i t yon t hepar t oft hej ewel l er ,Thust heagr eementwasvoi d.

5%

Indian Contract Act, 1872

 Voi dAgr eement 1. Agr eementmadebyi ncompet entpar t i es ( Sec.11) Everybodyi sabl et omakecont r actexcept Mi nor , Per son ofUnsoundedmi nd, Per sonwhoar edi squal i fied byanyot herl aw. 2. Agr ee.t heconsi der at i onorobj ectofwhi chi sunl awf ul i npar t .( Sec.24)   Iwi l lki l lyouMr .i fyouwi l lgi vemw 100bot t l ewi ne. 3. Agr ee.Madewi t houtconsi der at i on.( Sec.25) 4. Agree.i nr est r ai ntofmarr i age.( Sec. 26) Fr eedom ofchoi cei nmar r i agehasbeen guar ant eedt o everyper sonwhoi smaj ori nage. 51

Indian Contract Act, 1872

5. Agree.i nr est r ai ntoft r ade.( Sec.27) X andY wer ecompet i t orshopkeeperi nal ocal i t yi nSur at .Y agr eedt opayX ,asum ofmoneyi fhewoul dcl osehi s  busi nessi nt hatl ocal i t y. .X di dsobutY r ef uset opay money.

6. Agr ee.i nr est r ai nt sofl egalpr oceedi ng.( Sec.28) 7. Agr ee.t hemeani ngofwhi chi suncer t ai n.( Sec.29) 8. Agr eebywayofwager .( Sec.30)  A agr eeswi t hB t hati ft her ei sar ai nonacer t ai n day,A wi l lpayB Rs.50.I ft herei snor ai nB wi l lpayRs. 50.  A betonhor ser ace.  A betonwi nni ngorl oosi ngofcr i cketmat ch. 9.Agreet odoi mpossi bl eact .( Sec.56) 10. Agr eementmadeunderamut ualmi st akeoft hef act . ( Sec.20) 52

Indian Contract Act, 1872

•  Agreeent void here both parties are under ista9e as to atter of fact. ;here both the parties to an agreeent are under a ista9e as to a atter of fact essentia& to the agreeent< the agreeent is void. • =xp&anation.0An erroneous opinion as to the va&ue of the thing hich fors the sub>ect0atter of the agreeent is not to be deeed a ista9e as to a atter of fact. 53

Indian Contract Act, 1872

• +&&ustrations [email protected] A agrees to se&& to B a specific cargo of goods supposed to be on its a* fro =ng&and to Boba*. +t turns out that< before the da* of the bargain< the ship conve*ing the cargo had been cast aa* and the goods &ost. :either part* as aare of the facts. 'he agreeent is void. • [email protected] A agrees to bu* fro B a certain horse. +t turns out that the horse as dead at the tie of the bargain< though neither part* as aare of the fact. 'he agreeent is void. 54

Indian Contract Act, 1872

=ffect of ista9es as to &a • .0A contract is not voidab&e because it as caused b* a ista9e as to an* &a in force in +ndiaC • !ontract caused b* ista9e of one part* as to atter of fact.0 A contract is not voidab&e ere&* because it as caused b* one of the parties to it being under a ista9e as to a atter of fact. 55

Indian Contract Act, 1872

!onsideration va&id or not "" • ;hat considerations and ob>ects are &afu& and hat are not.0'he consideration or ob>ect of an agreeent is &afu&< un&ess0 it is forbidden b* &a C or is of such a nature that< if peritted< it ou&d defeat the provisions of an* &aC or is fraudu&ent C or invo&ves or ip&ies in>ur* to the person or propert* of another or C the !ourt regards it as iora&< or opposed to pub&ic po&ic*. 56

Indian Contract Act, 1872

• . +&&ustrations [email protected] A agrees to se&& his house to B for 1%
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