Unit 1

Indian Contract Act

1872

040070320 Legal Framework of Business

Why Law?

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Unit road map

▰ 1.1.Nature of Contract
▰ 1.2. Essential elements of valid contract (Overview only of the essential elements)
▰ 1.3. Void Agreements
▰ 1.4. Performance of Contract
▰ 1.5 Breach of Contract and its remedies
▰ 1.6. Discharge of contract
▰ 1.7. Definition & examples of Contract of Indemnity, Guarantee, Bailment, Pledge and
Agency.
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1.1
Nature of Contract

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 Object of the law of contract

▰ The law of contract is that branch of law which determines the circumstances in
which promises made by the parties to a contract shall be legally biding on them.

▰ It is most important to people engaged in trade, commerce and industry as their

business transactions are based on contract.
▰ The purpose of the law of contract is to ensure the realisation of reasonable
expectation of the parties who enter into a contract.

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 The Indian Contract Act, 1872

▰ The law relating to contract is contained in the Indian contract Act, 1872.
▰ It deals with;
▻ The general principles of the law of contract (Sec. 1 to 75)
▻ Some special contracts only (Secs. 124 to 238)

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The Act is not exhaustive

▰ The Indian Contract Act deals with the general principles of the law of
contract and with come special contracts only.
▰ Some of the contract not dealt with by the Act are those relating to
partnership, sale of goods, negotiable instruments, insurance, bill of
lading, etc.

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Nature of the law of contract

▰ The law of contract does not lay down a number of rights and duties
which the law will enforce; it consist rather of a number of limiting
principles, subject to which; the parties may create rights and duties
for themselves which the law will uphold.
▰ The parties to a contract, in a sense, make the law for themselves.

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“
Law of contract excludes from its
purview all obligations which are not
contractual in nature and agreements
which are social in nature.

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 Jus in rem Vs. Jus in personam

▰ Jus in rem means a right against ▰ Jus in personam means a right against
or in respect of a thing. on in respect of a specific person.
▰ Available against the world. ▰ Available against particular person
▰ Ex. X is the owner of a plot of land. ▰ Ex. A owes a certain sum of money to
He had right to have quiet B. B has a right to recover this amount
possession and enjoyment of that from A. This right can be exercised
land against every member of the only by B and by none else against A.
public. Similarly public is under an
obligation not to disturb X’s
possession.
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 Definition of Contract

▰ A contract is an agreement made between two or more parties which

the law will enforce.
▰ Sec 2(h) defines contract:
“as an agreement enforceable by law”.

▰ Contract consists of two elements

1. Agreement
2. Its enforceability

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▰ Agreement
▻ Agreement is defined as “every promise and every set of promises,
forming consideration for each other” [Sec. 2(e)].
▰ Promise
▻ A proposal, when accepted, becomes a promise [Sec. 2(b)].

Agreement = Offer + Acceptance

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▰ Consensus Ad Idem
▻ The parties to the agreement must have agreed about the
subject matter of the agreement in the same sense and at the
same time.
▻ Unless there is consensus ad idem, there can be no contract.

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▰ Example:
▻ A, who own two horses named Rajhans and Hansraj, is selling
horse Rajhans to B. B thinking he is purchasing horse Hansaraj.
There is no consensus ad idem and consequently no contract.

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 Obligation

▰ Enforceable by law
▻ An agreement, to become a contract, must give rise to a legal
obligation or duty.
▻ An agreement may be social agreement or legal agreement.
▻ But only those agreements which are enforceable in a court of
law are contracts.

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▰ Example:
▻ A agrees to sell his car to B for Rs. 50,000. the agreement gives rise
to an obligation on the part of A to deliver the car to B and on the
part of B to pay Rs. 50,000 to A. this agreement is a contract.

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▰ Agreement may be social agreement or a legal agreement.
▰ If A invites B to a dinner and B accepts the invitation, it is a social
agreement.
▰ A social agreement does not give rise to contractual obligations and
is not enforceable in a Court of law.

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 Examples

Sr. No. Case Agreement Consideration Intention to

create Legal
Relationship

1 A invite B for Tea at Social Agreement NO NO

his house.

2 Husband promise Domestic Agreement NO NO

Wife to give a gold
necklace.

3 A want to Sell his car Commercial Yes Yes

to B at Rs. 2,00,000. Agreement

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“ All contracts are
agreements, but all
agreements are not
necessarily contract

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 1.2
Essential elements of valid
contract (Overview only of the
essential elements)
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Essential elements of a Valid Contract

1. Offers and acceptance

2. Intention to create legal relationship
3. Lawful consideration
4. Capacity of parties – competency
5. Free and genuine consent
6. Lawful objects
7. Agreement not declared void
8. Certainty and possibility of performance
9. Legal formalities 21
 1. Offers and Acceptance

▰ An offer is a proposal y one party to another to enter into a legally binding

agreement with him.
▰ The person making offer is known as the offeror, proposer, or promisor
and the person to whom it is made is called the offeree or proposee. When
the offeree accepts the offer, he is called the acceptor or promisee.
▻ Example: A says to B, “Will you purchase my car for Rs. 50,000?” A, in
this case is making an offer to B as he signifies to B his willingness to
sell his car to B for Rs. 50,000 with a view to obtaining B’s assent to
purchase the car.

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Legal rules as to offer
1. It must be intended to create legal relations.
2. It must be certain
3. It must be distinguished from

▻ A declaration of intention

▻ And invitation to make offer

4. It must be communicated to the offeree.
5. It must be made with a view to obtaining the assent of the offeree.
6. It must not contain a term the non-compliances of which would amount to
acceptance. 23
 Lapse of offer

▰ An offer lapses or comes to an end

▻ By communication of notice of termination of offer to the offeree.
▻ By lapse of the specified or reasonable time
▻ By death or insanity of the offeror.
▻ By a counter-offer.
▻ By not being accepted according to the prescribed or usual mode
▻ By non-fulfilment of a condition precedent 24
Special terms of offer

▰ These must be bought to the notice of the other party before the
acceptance of the offer otherwise the acceptor will not be bound by such
terms.
▰ Where the acceptor knows that there are some special terms, and his
attention is drawn to them, he is bound by them if he accepts the offer.

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Acceptance

▰ A contract emerges from the acceptance of an offer.

▰ Acceptance is the act of assenting by the offeree to an offer.
▰ When the offeree signifies his assent to the offer, the offer is said to be
accepted. An offer when accepted becomes a promise [Sec. 2 (b)].

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Legal rules as to acceptance
1. It must be absolute and unqualified
2. It must be communicated to the offeror.
3. It must be according to the prescribed or usual mode.
4. It must be given within the prescribed or reasonable time.
5. It must show an intention to fulfil the promise.
6. It cannot precede an offer.
7. It must be given by the specific person to whom the offer is made.
8. It must be given before the offer lapses.
9. Mental acceptance is no acceptance. 27
▰ Effect of silence on acceptance

▻ The acceptance of an offer cannot be implied from the silence of the offeree
unless the offeree has by his previous conduct indicated that his silence means
that he accepts.
▰ Acceptance subject to contract

▻ An acceptance subject to contract means that the parties do not intend to be

bound until a formal contract is prepared and signed by them.
▰ Agreement to agree in future

▻ If the parties have not agreed upon the terms of their agreement but have agreed
to agree in future, there is no contract. 28
 2. Intention to create legal Relationship

▰ When the two parties enter into an agreement, their intention must be to
create legal relationship between them.
▰ If there is no such intention on the part of the parties, there is no contract
between them.
▰ Agreements of a social or domestic nature do not create legal relationship, as
such they are not contracts.
▰ Example, X invited Y to a dinner Y accepted the invitation. It is a social agreement. If X
fails to serve dinner to Y, Y cannot go to the courts of law for enforcing the agreement .

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 3. Lawful Consideration

▰ Consideration means something in return.

▰ It is the price for which the promise of the other is bought.
▰ It must result in a benefit to the promisor and/or a detriment to the promisee
or both.
▰ An agreement to be enforceable by law must be supported by consideration.
▰ The agreement is legally enforceable only when both the parties give
something and get something in return.

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▰ Example,: X agrees to sell his motor bike to Y for Rs. 1,00,000.
Here Y’s promise to pay Rs. 1, 00,000 is the consideration for X’s
promise to sell the motor bike and X’s promise to sell the motor
bike is the consideration for Y’s promise to pay 1, 00,000.

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 Legal rules as to consideration

1. It is essential to support every contract.

2. It must move at the desire of the promisor.
3. It may move from the promisee or any other person
4. It may be past, present or future.
5. It need not be adequate.
6. It must be real and not illusory.
7. It must not be something which the promisor is already legally or
contractually bound to do.
8. It must not illegal, immoral or opposed to public policy. 32
 Stranger to contract

▰ The general rule is that a stranger to a contract cannot sue. But he may sue where
1. A trust or charge is created in some specific immovable property in favour of him
2. A provision is made in a marriage settlement, partition or family arrangement for his
benefit
3. There is an acknowledgement of liability by the promisor or the promisor constitute
himself as agent
4. He is the assignee of rights and benefits under a contract not involving personal skill
5. He enters into a contract through an agent
6. There are covenants running with the land 33
 An arrangement made without consideration is void

▰ The following are the exceptions to this rule, i.e. no consideration is required in
case of
1. A written and registered agreement based on natural love and affection between
parties standing in a near relation to each other
2. A promise to compensate, wholly or in part, a person who has already
voluntarily done something for the promisor
3. Promise to pay time barred debt if it is made in writing and is signed by the
debtor or by his agent
4. Completed gift
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 4. Capacity of Parties - competency

▰ The parties to the agreement must be capable of entering into a valid contract.
▰ Every person is competent to contract if he
A. Is of the age of majority
B. Is of sound mind
C. Is not disqualified from contracting by any law to which he is subject (Sec.
11).

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1. Minor

▰ A minor is a person who has not completed eighteen years of age.

▰ But where a guardian has been appointed to a minor under the
Guardians and Wards Act or where a minor is under the guardianship of
the court of Wards, he attains majority at the age of twenty one.

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▰ The position as regards his agreements is as follows:
▻ His agreement is altogether void and inoperative
▻ He can be a promise or a beneficiary in a contract
▻ He may enter into contracts of apprenticeship, service, education and
instruction provided these are beneficial for him
▻ He cannot be a partner. But he can be admitted to the benefits of an
already existing partnership with the consent of the order partners.
▻ He can be an agent 37
▰ If he has received any benefit under a void agreement, he cannot be asked
to compensate or pay for it.
▰ The Court never orders specific performance if his agreements.
▰ He can always plead minority and is not estopped from doing so even
when he enters into an agreement by falsely misrepresenting his age.
▰ He cannot be adjudged insolvent.

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Persons of unsound mind

▰ Lunatics - A lunatic can enter into a contract when he is of sound mind.

▰ Idiots – An agreement of an idiot like that of a minor is altogether void.
▰ Drunken or intoxicated persons – This position is similar to that of
lunatics.
▰ These persons, like a minor, are liable for necessaries supplied to them
or other minor dependents.

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 Other persons

▰ Alien enemies – During the war an Indian citizen cannot enter into a contract
with an alien enemy.
▰ Contract made before the war are either suspended or dissolved.
▰ Foreign sovereigns and accredited representatives of foreign state - They can
enter into contracts and enforce these contracts in our courts. But they cannot
be sued in our Courts without the prior sanction of the Central Government. .

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▰ Corporations – The contractual capacity of a statutory corporation is limited by
the Statute Governing it. As regards a company registered under the Companies
Act, 1956, its contractual capacity is regulated by its Memorandum of
Association and the companies Act, 1956
▰ Insolvents – When a debtor is adjudged insolvent, he is deprived of his power to
deal in his property divisible among his creditors.
▰ Convicts – A convict when undergoing imprisonment is incapable of entering
into a contract.

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 5. Free and genuine Consent

▰ All agreements are contracts if they are made by the free consent of the parties.
▰ Two or more person are said to consent when they agree upon the same thing in the
same sense (Sem. 13).
▰ Consent is said to be free when it is not caused by;
▻ Coercion

▻ Undue influence

▻ Fraud

▻ Misrepresentation

▻ Mistake subject to the provisions of Sec. 20, 21 and 22 42

Effect of agreement without free consent

▰ When consent to an agreement is caused by coercion, fraud,

misrepresentation, or undue influence, the agreement is a contract
voidable at the option of the party whose consent was so caused
(Secs. 19 and 19-A).

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▰ Coercion
▻ It is the committing or threatening to commit any act forbidden by the
Indian Penal Code, 1860 or the unlawful detaining, or threatening to
detain, any property, to the prejudice of any person whatever, with the
intention of causing any person to enter into an agreement (Sec. 15).
▻ A threat to commit suicide amounts to coercion.

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▰ Undue Influence
▰ A contract is said to be induced by ‘undue influence’ where the relations subsisting between
the parties are such that one of the parties is in a position to dominate the will of the other,
and uses that position to obtain an unfair advantage over the other.
▰ A person is deemed to be in a position to dominate the will of another -

▻ Where he holds real or apparent authority over the other

▻ Where he stands in a fiduciary relation to the other

▻ Where he makes a contract with a person whose mental capacity is temporarily or permanently
affected by reason of age, illness or mental or bodily distress.
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 Misrepresentation and Fraud

▰ Misrepresentation is a mis-statement of a material fact made innocently

with an honest belief as to its truth or non-disclosure of a material fact,
without any intent to deceive the other party.
▰ Fraud exist when it is shown that a false representation has been made,
▻ Knowingly
▻ Without belief in its truth
▻ Recklessly, not caring whether it is true or false
▻ The make intends the other party to act upon it 46
 Mistake

▰ Mistake is erroneous belief about something.

▰ It may be a (1) mistake of law and (2) mistake of fact.
1. Mistake of law – it may be a (1) mistake of law of the country or (2)
mistake of law of a foreign country.
▻ The general rule as regards mistake of law of the country is that
ignorance of law is no excuse.
▻ Mistake of law of a foreign country is regarded as a mistake of
fact.
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2. Mistake of fact, it may be a –
▰ Bilateral mistake. Where both the parties to an agreement, are under a mistake as to a matter
of fact essential to the agreement, the agreement is void (sec. 20). Mistakes of fact (bilateral
mistake) may relate to;

a. Subject-matter. Mistake of fact regarding subject-matter may relate to existence of the

subject-matter:

i. Price of the subject matter

ii. Quantity of the subject matter

iii. Identity of the subject matter

iv. Quality of the subject matter 48

b. Possibility of performance. Mistake of fact may also relate to (i)
Physical or (ii) legal, impossibility of performance. In both these cases,
the agreement is void.

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▰ Unilateral mistake. Where only one of the parties is under a mistake as to a matter of
fact the contract is not voidable (Sec.22). There are however two exceptions to this rule;

▻ Identity of the person contracted with. If A intends to enter into a contract with B,
C cannot give himself any right in respect of the contract by accepting the offer. In
such a case the contract is void.

▻ Nature of contract. Where a person is made to enter into a contract through the
Judgement of another but through no fault of his own, there is a mistake as to the
nature of the contract, and the contract is void.

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 6. Lawful Object

▰ An agreement is a contract if it is made for a lawful consideration and with a

lawful object (Sec. 10)
▰ Every agreement of which the object or consideration is unlawful is void.
▰ The consideration or object of an agreement is unlawful if it is forbidden by law:
or it is fraudulent, or involves or implies injury to the person or property of
another or the Court regards it as immoral, or opposed to public policy (Sec.
23).

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 Effects of illegality

▰ No action is allowed on an illegal agreement.

▰ This rule is based on the following;
▻ No action arises from a base cause
▻ Where there is equal guilt, the defendant is in a better position

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▰ The effect of illegality are summed up as;
▻ The collateral transactions to an illegal agreement also become tained
with illegality.
▻ No action can be taken for the
▻ Recovery of money paid or property transferred under an illegal
agreement
▻ Breach of an illegal agreement

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 Agreements opposed to public policy

▰ An agreement is said to be opposed to public policy when it is injuries to the

welfare of the society or it tends to be harmful to the public interest.
▰ The following agreements are, or have been held to be, opposed to public policy;
1. Agreements of trading with enemy
2. Agreement to commit a crime
3. Agreements interfering with administration of justice
▻ Agreements for stifling prosecution
▻ Agreements which interfere with the course of justice
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4. Agreements in restraint of legal proceedings.
▻ Agreements restricting enforcement of rights
▻ Agreements to vary periods of limitation
5. Agreements for the sale of public offices.
6. Agreements tending to create interest opposed to duty.
7. Agreements in restraint of parental rights
8. Agreements restricting personal liberty
9. Agreements in restraint of marriage
10. Marriage brokerage agreements
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11. Agreements interfering with marital duties
12. Agreements in fraud of creditors or revenue authorities.
13. Agreements in restraint of trade.
▻ An agreement in restraint of trade is one which restrains a person from
freely exercising his trade, business or profession.
▻ Every agreement, by which anyone is restrained from exercising a lawful
profession, trade or business of any kind is, to that extent, void. Exceptions
are made in case of agreements for sale of goodwill and partners’
agreements provided the restraint is reasonable.
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 7. Agreement not declared void

▰ A void agreement is one which is not enforceable by law [Sec. 2 (g)].

▰ Such an agreement does not give rise to any legal consequences and is void
ab initio.

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 Void Agreements
1. Agreements by incompetent parties.
2. Agreements made under a mutual mistake of fact
3. Agreements the consideration or object of which is unlawful
4. Agreements the consideration or object of which is unlawful in part
5. Agreement made without consideration
6. Agreement in restraint of marriage
7. Agreement in restraint of trade
8. Agreement in restraint of legal proceedings
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Void Agreements

9. Agreements the meaning of which is uncertain

10. Agreements by way of wager
11. Agreements contingent on impossible events
12. Agreements to do impossible acts
13. In case of reciprocal promises to do things legal and also other things
illegal, the second set of reciprocal promises is a void agreement

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Wagering agreements

▰ A wagering agreements is an agreement to pay money or money’s

worth on the happening or non-happening of a specified uncertain
event
▰ Wagering agreements are void in India, in the states of Maharashtra
and Gujarat, they have been declared to be illegal.
▰ The collateral transactions to such wagering agreements in the States
of Maharashtra and Gujarat also become illegal. In the rest of India
collateral transactions are valid.

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▰ “A contract by A to pay money to B on the happening of a given event in
consideration of B’s promise to pay money to A on the event not
happening”
▰ Example:
▻ If A and B enter into an agreement that A shall pay B Rs. 100 if it
rains on Monday, and that B shall pay A the same amount if it does
not rain, it is a wagering agreement.

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▰ Uncertain agreements.
▻ Agreements the meaning of which is not certain, or capable of
being made certain, are void.
▰ Restitution.
▻ It means return of the benefit received from the plaintiff under a
void contact. The principle of restitution is that the defendant who
has been unjustly enriched at the expense of the plaintiff is
required to make restitution to the plaintiff.
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 8. Certainty and possibility of performance

▰ The agreement must be certain and not vague or indefinite (Sec. 29).
▻ Example: A agrees to sell to B ‘a hundred tons of oil”. There is nothing
whatever to show what kind of oil was intended. The agreement is void for
uncertainty.
▰ If it is vague and it is not possible to ascertain its meaning, it cannot be
enforced.
▻ Example: A agrees with B to discover treasure by magic and B agrees to
pay Rs 1,000 to A. This agreement is void because it is an agreement to
do an impossible act.
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 9. Legal formalities

▰ A contract may be made by words spoken or written.

▰ As regards the legal effects, there is no difference between a contract in writing
and a contract made by word of mouth.
▰ It is however, in the interest of the parties that the contract should be in writing.
▰ There are some other formalities also which have to be compiled with in order to
make an agreement legally enforceable;
▻ Stamped document
▻ Not only written but registered contract
▻ Writing contract in presence of witnesses
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1.3
Void Agreements

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 Void agreement
▰ An agreement not enforceable by law is said to be void.

▰ It does not create any legal rights or obligations.

▰ It is nullity (an act or thing that is legally void) and is destitute (not
having) of legal effects, altogether.

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 1.4
Performance of Contract

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Performance of a contract takes place when the parties to the contract
fulfill their obligations arising under the contract within the time and in the
manner prescribed, Sec. 37 lays down that the parties to a contract must
either perform or offer to perform their respoective promises, unless such
performance is dispensed with or excused.

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 Offer to Perform (Sec. 38)

▰ ‘attemptea performance’ or ‘tender’. Sometimes it so happens that the

promisor offers to perform his obligation under the contract at the proper time
and place but the promisee does not accept the performance.
▰ A tender of performance is equivalent to actual performance. It excuses the
promisor from further performance and entitles him to sue the promisee for
the breach of contract.

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 Requisites of a valid tender

1. It must be unconditional. It becomes conditional when it is not in accordance with the

terms of the contract.

▻ Ex. A, the debtor, offers to pay B, the creditor, the amount due to him if B sells
some goods to him
2. It must be of the whole quantity contracted for or the whole obligation. A tender of an
instalment when the contract stipulates payment in full is not a valid tender.

▻ A contracted with B to deliver 100 BPL Washing Machines on 1st January 2001.
A offered only 60 machines to B on the appointed day. It is not a valid tender.
Here if B refuses to accept, A is not discharged from his obligations.
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3. It must be by a person who is in a position and is willing to perform the promise.
4. It must be made at the proper time and place. A tender of goods after the business
hours or of goods or money before the due date is not a valid tender.

▻ A owes B Rs. 1,000 payable on 1st June with interest. B offers to pay on 1st May
the amount with interest up to 1st may. It is not a valid tender, as it is not made at
the appointed time.

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5. It must be made to the proper person, i.e., the promisee or his duly authorized agent.
It must also be in proper form.

▻ A contracted with B to deliver 50 sets of Onida TV to him on 1st June 2016. A

delivered the goods to C. the neighbouring shop owner of B. It is not a valid
tender of performance. Thus A is not discharged from his obligations.
6. It may be made to one of the several joint promisees. In such a case it has the same
effect as a tender to all of them.

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7. In case of tender of goods, it must give a reasonable opportunity to the promisee
for inspection of the goods. A tender of goods at such time when the other party
cannot inspect the goods is not a valid tender. But in the following case, the tender
was held to be valid.

▻ A contracts to deliver to B at his warehouse on 1st January 2016, 100 bags

of rice of a particular quality. A must bring the rice to B’s warehouse on the
appointed day under such circumstances that B may have a reasonable
opportunity to satisfy himself that the rice offered is of the quality
contracted for and that there are 100 bags of rice.

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8. In case of tender of money, the debtor must make a valid tender in the legal tender
money.
▰ If a debtor offers to pay by cheque or a promissory note, it is not a valid tender.
Likewise, if the debtor offers goods or gold or silver, the creditor has a right to
reject the tender as it is invalid tender.
▰ But when the creditor files a suit against the debtor, the debtor can set up the
defence of tender.
▰ If he deposits the money in the court and proves his pleas, the creditor gets the
amount originally tendered to him but without any interest.
Pleas : an urgent and emotional request 74
 Effect of refusal of a party to perform promise
wholly

▰ When a party to a contract refuses to perform, or disables himself from performing, his
promise in its entirely, the promisee may put an end to the contract.
▰ But if the promisee has signified, by words or conduct, his acquiescence in the
continuance of the contract, he cannot repudiate it.
▰ Example: A, a singer, enters into a contract with B, the managers of a theatre, to sing at
his theatre two nights in every week during the next two months and B agrees to pay
him Rs. 1,000 for each night’s performance. On the sixth night A wilfully absents
himself from the theatre. B is at liberty to put an end to the contract.

Acquiescence : the act of accepting or agreeing to something, often unwillingly 75

Repudiate : to refuse to accept or obey something or someone
 Contract which need not be performed

A contract need not to be performed –

1. When its performance becomes impossible
2. When the parties to it agree to substitute a new contract for it or to alter it.

▻ A promises to supply certain goods to B one year after date. By that time goods go out
fashion. A and B mutually cancel the contract. A need not perform the contract.
3. When the promisee dispenses with or remits, wholly or in part. The performance of the promise
made to him or extends the time for such performance.

▻ A owes B Rs - 10000. A pays to B and B accepts Rs 5000 in full settlement of the debt of
Rs - 1000. The old debt is discharged.

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4. When the person at whose option it is voidable, rescinds it.

▻ A promises to buy certain goods from B under Fraud. B can avoid a contract If B rejects a
contract A need not perform the contract
5. When the promisee neglects or refuses to afford the promisor reasonable facilities for the
performance of his promise.

▻ A contract with B to repair B's building B neglects or refuses to point out to A the places in
which the building requires repair. A is excused for non performance of the contract. If it is
caused by such neglect or refusal.
6. When it is illegal

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rescinds : to make a law, order, or decision no longer have any legal effect
 By whom must contract be performed

▰ 1. Promisor Performs the Promise

▻ If a contract indicates that the parties intended for the promisor to fulfil the
promise himself, then the promisor is obligated to perform the promise.

▻ Usually, these include promises which involve personal skills, experience, or

expertise and are usually based on trust between the promisor and the
promisee.

▻ Example: Peter is a singer and he promises to sing a song at John’s

wedding reception. In this case, the nature of the contract requires Peter to
perform the promise himself. He cannot delegate it to someone.
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 2. Agent Performs the Promise
▰ If the contract does not require the personal consideration of the
promisor, then the promisor can employ a competent person to
perform the promise.
▰ Example: Peter promises to pay Rs 50 to John. In this case, Peter can
perform the promise himself by paying the money to John or can ask
someone else to pay him.

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3. Legal Representatives Perform the Promise
▰ If the promisor dies before performing the promise, then the legal representatives
become responsible for the same.
▰ If the promise involves the utilization of personal skills or expertise, then the
consideration ceases with the death of the promisor.
▰ Example: Peter promises to pay John an amount of Rs 10,000 within one month of
delivery of certain goods. John delivers the goods. However, Peter dies before he
can pay the money to John. Now, it is his legal representative’s responsibility to
ensure that John receives the payment.
80
4. Third Persons.
▰ When a promisee accepts performance of the promisee from a third person, he
cannot afterwards enforce it against the promisor.
5. Joint Promisors.
▰ “Devolution of joint liabilities and rights”.

81
Devolution of Joint Liabilities and Rights

▰ “Devolution” means passing over from one person to another.

1. Devolution of joint liabilities
2. Devolution of joint right

82
 1. Devolution of joint liabilities.

▰ When two or more persons made a joint promise, they are known as joint promisors.
▰ Unless a contrary intention appears from the contract, all joint promisors must jointly
fulfil the promise.
▰ If any of them dies, his legal representative must, jointly with the surviving promisors,
fulfil the promise. If all of them die, the legal representatives of all of them must fulfil
the promise jointly.
▰ If the parties do not “discharge their obligations of their own volition, Sec.43 comes into
play”. Sec. 43 lays down three rules as regards performance of joint promises.

83
▰ Rule 1 : Any one of the joint promisors may be compelled to perform
▻ When two or more persons make a joint promise and there is no
express agreement to the contrary, the promisee may compel any one
or more of the joint promisors to perform the whole of the promise.
This means the liability of joint promisors is joint and several.
▻ Example: A, B and C jointly promise to pay D Rs. 3,000. D may compel
all or any or either A or B or C to pay him Rs. 3,000.

84
▰ Rule 2 : A joint promisor compelled to perform may clam contribution
▻ When a joint promisor has been compelled to perform the whole of the
promise, he may compel the other joint promisors to contribute equally
with himself to the performance of the promise, unless a contrary
intention appears from the contact.
▻ Example: A, B and C are under a joint promise to pay D Rs. 300. A is
compelled to pay the whole amount to D. he may recover Rs. 100 each
from B and C.

85
▰ Rule 3 : Sharing of loss arising from default
▰ If any one of the joint promisors makes default in the contribution, the
remaining joint promisors must bear the loss arising from such default
in equal shares.
▰ The same principle applies in the case of recovery of a loan by a
creditor from the heirs who by operation of law become joint promisors
after the death of the single promisor.

Heir : a person legally entitled to the property or rank of 86

another on that person's death
▰ Example 1 : A, B and C are under a joint promise to pay D Rs. 3,000. C
is unable to pay anything and A is compelled to pay the whole sum. A is
entitled to receive Rs. 1,500 from B.
▰ Example 2 : A, B and C jointly promise to pay D the sum of Rs. 3,000. C
is compelled to pay the whole sum. A is insolvent but his assets are
sufficient to pay one-half of his debts. C is entitled to receive Rs. 500
(one-half of Rs.1000) from A’s estate and Rs. 1,250 (One-half of Rs.
2,500) from B.
87
▰ Release of a joint promisor:

▻ Where two or more persons have made a joint promise, a release of one of
such joint promisors by the promisee does not discharge the other joint
promisor or joint promisors, neither does it free the joint promisor so
released from responsibility to the other joint promisor or joint promisors.

▻ A, B and C jointly owe Rs.1000 to D. D releases A from his liability and

files a suit against B and C for payment of the Rs.1000. B and C are not
released from their liability nor is A discharged from his liability to B and C
for contribution.
88
2. Devolution of Joint rights

▰ When a person has made a promise to several persons, these persons are
known as joint promisees.
▰ Unless a contrary intention appears from the contract, the right to claim
performance rests with all of the joint promisees.
▰ When one of the joint promisees dies, the right to claim performance rests
with his legal representative jointly with the surviving joint promisees.
▰ When all the joint promisees die, the right to claim performance rests with
their legal representative jointly.

89
▰ B and C jointly lend Rs. 5,000 to A who promises B and C jointly to
repay them that sum with interest on a day specified. B dies. The right
to claim performance rests with B’s representatives jointly with C
during C’s life. After the death of C, the right to claim performance rests
with the representatives of B and C jointly.

90
Who can demand performance?

▰ It is only the promisee who can demand performance of the promise

under a contract. It makes no difference whether the promise is for the
benefit of the promisee or for the benefit of any other person.
▰ Example: A promises B to pay C a sum of Rs. 500. A does not pay the
amount to C. C cannot take any action against A. It is only B who can
enforce this promise against A.

91
 Time and Place of Performance

▰ Time and place of performance of a contract are matters to be determined by an

agreement between the parties themselves. Secs. 46 to 50 lay down the following rules
in this regard;
1. Where no application is to be made and not time is specified

▻ In situations where there is no time period specified for the performance of the
contract and the promisor has to perform the contract without any request by the
promisee, in such a case the promisor must perform the contract within a
“reasonable time”.

▻ Example: Srishti takes a loan of Rs 10,000 from Shivani and says that she will return it to her
when she receives her next salary. Here the reasonable time for performance of the contract
is after Srishti receives her next salary. 92
2. Where time is specified and no application is to be made.
▰ When the terms of the contract say that the promisor has to perform the contract
without any request by the promisee, on the exact date specified by him.

▻ Ankita promised to deliver goods to Sheetal on an advance payment of Rs

10,000. Sheetal made the payment and asked Ankita to deliver the goods on
13th of the same month at her office. Since the time is not specified, she should
deliver it between 10 am and 5 pm, assuming those are the regular court timings.

93
3. Application for performance on a certain day and place:
▰ When the terms of the contract say that a performance of a contract has to be made on a
particular day but the promisor will only do so when the promisee makes an application to
the promisor on that specific day for performance.
▰ Example: Manu agrees to supply Nishant 50 cartons of water on 3rd November at his
office. As per terms of the contract, Nishant would have to request Manu for performance.
Thus on the due date and within usual business hours, Nishant should request Manu
regarding a time and place for the supply of goods.

94
4. Application by the promisor to the promisee to appoint place
▰ When the terms of the contract does not specify the place where the goods have
to be delivered and that no request has to be made by the promisee for the
performance of a contract, in such a situation it is the duty of the promisor to
request the promisee of a place reasonable to both where the goods can be
delivered and then accordingly perform the contract.
▰ Example: Shree entered into a contract for supplying 100 cartons of Gram Flour to
Anu on 5th September at a specific price. On the due date of performance, Shree
must apply or request Anu for determining a reasonable place.

95
5. Performance in manner or at time prescribed or sanctioned by the promisee
▰ A contract can also exist in which the promisor agrees to perform the contract in
a manner and at a place and time prescribed by the promisee.
▰ Example: Prankur’s son is in the hospital and needs money for his son’s operation.
Harshil owes money to Prankur and agrees to repay him in at any place or time
decided by Prankur. In this case, Prankur has the liberty to ask for the
performance of the promise in any manner and at any place or time suited to him.

96
Reciprocal Promises

▰ Promises which form the consideration or part of the consideration for

each other are called ‘reciprocal promises’.
▰ Example: A promises to do or not to do something in consideration of
B’s promise to do or not to do something, the promises are reciprocal.

97
▰ The reciprocal promises have been classified as follows;
1. Mutual and independent.
▻ Where each party must perform his promise Independently and
irrespective of the fact whether the other party has performed, or is
willing to perform, his promise or not, the promise are mutual and
independent.
▻ Example: X agrees Y to supply milk daily, while Y agrees to pay the
price of milk every month. Both these are mutual and independent
promises.
98
2. Conditional and dependent.
▻ Where the performance of the promise by one party depends on the prior
performance of the promise by the other party, the promises are
conditional and dependent.
▻ Example. X promises to construct Y’s house, provided that Y supplies
cement and bricks. This will be a conditional and dependent promise.
Here, X need not perform the promise if Y fails to supply cement and
bricks.

99
 3. Mutual and concurrent.
▰ Where the promises of both the parties are to be performed
simultaneously, they are said to be mutual and concurrent
(happening). The example of such promises may be sales of goods
for cash.

100
 Rules regarding performance of reciprocal promises

▰ These are contained in Secs. 51 to 54 and 57 and are reproduced below;

1. Simultaneous performance of reciprocal promises
▻ The promisor need not performed his promise unless the promises to be ready
and willing to perform his reciprocal promise.
▻ A and B contract that A shall deliver certain goods to B to be paid for by B on
delivery. A need not deliver the goods, unless B is ready and willing to pay for
the goods on delivery. B need not pay for the goods unless A is ready and
willing to deliver them on payment.
101
 2. Order of performance of reciprocal promises
▰ When a contract includes a reciprocal promise, the parties might agree
upon the order in which the promises are performed. If that is the case,
then the order, as mentioned in the contract should be followed.
▰ However, if the contract does not specify any such order, then the order of
performance of the reciprocal promises is determined based on the nature
of the transaction.

102
▰ Example: Peter promises to help John find a house in lieu of John’s
promise to pay him a commission for the same. The contract does not
specify the order of performance of the promise. However, the nature of
the transaction suggests that Peter should first help John get a house
before he expects him to perform his promise of paying him the
commission.

103
 3. Effect of one party preventing another from performing promise
▰ In a contract consisting or reciprocal promises, if one party prevents the
other from performing the promise, then the prevented party has the
option of voiding the contract.
▰ Also, the prevented party can claim compensation from the obstructing
party for any loss that he might sustain due to non-performance of the
contract.

104
▰ Example: Raj and Ramesh entered into a contract where Raj promises
to paint Ramesh’s house. In exchange, Ramesh promises to pay Raj Rs
10,000 and clear the house of all furniture before Raj begins. However,
when Raj starts painting, he finds that Ramesh has not cleared the
furniture as promised and does not agree to his requests too. Raj can
void the contract and claim the money since Ramesh obstructed him
from performing his promise.

105
 4. Effect of default as to promise to be performed first
▰ The promisor who is supposed to perform his promise before the other, fails to
perform it, then he cannot claim the performance of the reciprocal promise. He
is also liable to compensate the other party for any loss that he might sustain
due to non-performance of the contract.

106
▰ Example: Peter hires a car for a month and promises to pay the car rental
company a certain amount. The company promises to send the car to his
house within 24 hours of receiving the advance payment. Peter does not
make the payment and fails to perform his promise. The company does not
send the car either. Peter cannot claim the performance of the company’s
promise since he was supposed to perform his promise first. He will also
have to compensate the company for the losses sustained by them due to
him not paying the advance.

107
 5. Reciprocal promise to do things legal and also other things illegal
▰ Imagine two or more people entering a contract consisting of a reciprocal
promise, where they first do certain things which are legal and then, under
certain circumstances, agree to do acts which are illegal. In such cases,
the first set of promises is a valid contract but the second set is void.

108
Time as the essence of the contract

▰ Time is the essence of a contract is an expression in a contract which

means that the performance by one party at or within the period specified
in a contract is necessary to enable that party to require performance by
the other party.
▰ The meaning of time is essence is that the parties have agreed to perform
at a given time agreed in a contract and shall not extend the specified time
in a contract.

109
 1. When time is of the essence
▰ In a contract, in which time is of the essence of the contract, if there is a
failure on the part of the promisor to perform his obligation within the fixed
time, the contract becomes voidable at the option of the promisee.
▰ If, in such case, the promisee accepts performance of the promise after the
fixed time, he cannot claim compensation for any loss occasioned by the non-
performance of the promise at the agreed time. But if at the time of
accepting the delayed performance, he gives notice to the promisor of his
intention to claim compensation, he can do so.
110
 2. When time is not of the essence:
▰ In a contract, in which time is not of the essence of the contract, failure on
the part of the promisor to perform his obligation within the fixed time
does not make the contract voidable, but the promisee is entitled to
compensation for any loss occasioned to him by such failure.
▰ Intention to make time as the essence of the contract, if expressed in
writing, must be in a language which is unambiguous and unmistakable.

111
 Appropriation of Payments

▰ When a debtor owes several distinct debts to a creditor and makes a

payment insufficient to satisfy the whole indebtedness, a question arises: to
which debt should the payment be appropriated?
▰ Secs. 59 to 61 lay down the following three rules in this regard:
1. Where the debtor intimates
2. Where the debtor does not intimate and the circumstances are not indicative
3. Where the debtor does not intimate and the creditor fails to appropriate
112
 1. Where the debtor intimates
▰ If the debtor expressly intimates at the time of actual payment that the
payment should be applied towards the discharge of a particular debt, the
creditor must do so.
▰ If there is no express intimation by the debtor, the law will look to the
circumstances attending on the payment for appropriation.
▰ There is an established maxim of law that, when money is paid, it is to be
applied according to the expressed will of the payer, not of the receiver.

113
 ▰ A owes B, among other debts, Rs. 1,000 upon a promissory note which
falls due on 1 st June. He owes B no other debt of that amount. On 1 st June
A pays to B Rs. 1,000. The payment is to be applied to the discharge of the
promissory note.

Promissory note : a signed document containing a written promise to pay a stated

sum to a specified person or the bearer at a specified date or on demand.
114
 2. Where the debtor does not intimate and the circumstances are not indicative
▰ Where the debtor does not expressly intimate or where the circumstances
attending on the payment do not indicate any intention, the creditor may
apply it at his discretion to any lawful debt actually due and payable to him
from the debtor.
▰ The general principle to the any contract, is that the payment should first be
applied to the interest and after the interest is fully paid off, to the principal.

115
 3. Where the debtor does not intimate and the creditor fails to appropriate:
▰ Where the debtor does not expressly intimate and where the creditor fails to
make any appropriation, the payment shall be applied in discharge of the
debts in chronological order, i.e. in order of time.
▰ If the debts are of equal standing, the payment shall be applied in discharge
of each proportionately.

116
Assignment of Contracts

▰ To ‘assign’ means to ‘transfer’.

▰ Assignment of a contract means transfer of contractual rights and
liabilities under the contract to a third party with or without the
concurrence of the other party to the contract. It may take place by:
1. Act of the parties
2. Operation of law

117
1. Act of the parties

▰ Assignment is said to take place by an act of the parties when they

themselves make the assignment.
▰ Assignment of contractual obligations. This is subject to the following
rules;
1. Contractual obligations involving personal skill or ability cannot
be assigned
2. A promisor cannot assign his liabilities or obligations under a
contract

118
1. Contractual obligations involving personal skill or ability cannot be assigned
▰ A contractual obligation by an opera singer to sing or by a film actor to act in a film or
a contract to many or paint a picture, cannot be assigned.
2. A promisor cannot assign his liabilities or obligations under a contract
▰ A promisee cannot be compelled by the promisor or a third party to accept any person
other than the promisor as the person liable to him on the promise.

▻ If D owes L Rs. 5000 and is owed the same sum by A, D cannot ask L to recover
the amount from A unless L accepts the performance from A.

119
▰ Limitations to the rule
I. It is open to a party to have the contract performed through the agency of a
competent person provided the contract does not expressly or implied
contemplate performance only by the promisor.
▰ However, the original party remains liable for the proper performance of the
obligations under the contract.
▰ Example: If A undertakes to do some work for B which needs no special skill,
B cannot complain if A gets the work done by an equally competent person.
120
 II. The promisor may transfer his liability with the consent of the promisee and
of the transferee.
▰ In such a case, novation takes place.
▰ Novation is the substitution of a new contract for an existing one between
one of the parties and a third party, the discharge of the old contract on the
same terms being the consideration for the new one.

121
Assignment of contractual rights.
This is subject to the following rules,
1. The rights and benefits under a contract not involving personal skill may be
assigned, subject to all equities between the original parties.
▰ This means that when sued by the assignee, the debtor can raise against the
assignee all defences (including right of set off) that he could have raise
against the assignor the time he received notice of the assignment.

122
▰ Example: D owes Rs500 to C. C, the creditor can transfer his right to T to
recover the amount from D. If D has already paid Rs. 200 to C, T will be
bound by this payment and shall be entitled to recover only Rs. 300 from D.

123
 2. An actionable claim can always be assigned but the assignment to be
complete and effectual must be effected by an instrument in writing.
▰ Notice of such assignment must also be given to the debtor.

124
2. Operation of law

▰ Assignment by operation of law takes place by intervention of law. This

takes place in the following two cases:
1. Death. Upon the death of a party to a contract (except in the case of
contracts requiring personal skill or services) his rights and liabilities
under the contract devolve upon his legal representatives.
2. Insolvency. In case of insolvency of a person, his right and liabilities
incurred previous to adjudication pass to the official receiver or assignee,
as the case may be.

125
 1.5
Breach of Contract and its
remedies

126
▰ Discharge of contract. It means termination of the contractual
relationship between the parties.
▰ A contract is said to be discharged when it ceases to operate, i.e. when
the rights and obligations created by it come to an end.
▰ In some cases, other rights and obligations may arise as a result of
discharge of contract, but they are altogether independent of the original
contract.

127
▰ A contract may be discharged:
▻ By performance
▻ By agreement or consent
▻ By impossibility of performance
▻ By lapse of time
▻ By operation of law
▻ By breach of contract
128
129
 1. Discharge by Performance

▰ Performance means the doing of that which is required by a contract.

Discharge by performance takes place when the parties to the contract fulfil
their obligations arising under the contract within the time and in the
manner prescribed.
▰ In such a case, the parties are discharge and the contract comes to an end.
▰ But if only one party performs the promise, he alone is discharged.
▰ Such a party gets a right of action against the other party who is guilty of
breach.
130
 Performance of a contract is the most usual mode of its discharge.

1. Actual Performance 2. Attempted performance or tender.

▰ When both the parties ▰ Tender is not actual performance but is
perform their promises, the only an offer to perform the obligation
contract is dischrged. unde the contract.
▰ The effect of a valid tender is that the
contract is deemed to have been
performed by the tenderer.

131
 2. Discharge by Agreement or Consent

▰ As it is the agreement of the parties which binds them, so by their further

agreement or consent the contract may be terminated.
▰ The rule of law in this regard is as follows:
▻ A thing may be destroyed in the same manner in which it is
constituted.
▻ This means a contractual obligation may be discharged by
agreement which may be expressed or implied.

132
▰ Example: A sells a car to B ‘on approval’ with the condition that it should
be returned within seven days if it is found wanting in efficient
functioning. B may return the car within seven days if it is found wanting.
Consent to return the car is given to B at the time of the formation of the
contract.

Found wanting - lacking all that is needed or expected 133

▰ The various cases of discharge of a contract by mutual agreement are
dealt with in Secs. 62 and 63 and are discussed below:
1. Novation
2. Rescission
3. Alteration
4. Remission

134
 1. Novation (the substitution of a new contract in place of an old one.):
▰ Novation takes place when
▻ A new contract is substituted for an existing one between the same
parties.
▻ A contract between two parties is cancel in consideration of a new
contract being entered into on the same terms between one of the
parties and a third party. It is essential for the principle of novation to
apply that there must be the mutual or tripartite consent of all the
parties concerned,
135
▰ A owes money to B under a contract. It is agreed between A, B and C that
B shall henceforth accept C as his debtor, instead of A. the old debt of A
to B is at an end, and new debt from C to B has been contracted.
▰ A owes B Rs. 10,000. He enters onto an agreement with B and gives B a
mortgage of his estate for Rs. 5,000 in place of the debt of Rs. 10,000.
this is a new contract which extinguishes the old one.

136
▰ Novation should take place before expiry of the time of the performance
of the original contract. If it does not, there would be a breach of the
contract.
▰ If a new contract is subsequently substituted for the existing contract, it
would only be to adjust the remedial rights arising out of the breach of
the old contract.
▰ If for any reason the new contract cannot be enforced, the parties can
fall back upon the old contract.

137
 2. Rescission.
▰ Recession of a contract takes place when all or some of the terms of the
contract are cancelled. It may occur –
▻ By mutual consent of the parties
▻ Where one party fail in the performance of his obligation. In such a
case, the other party may rescind the contract without prejudice to
his right to claim compensation for the breach of contract.

Rescission : Cancellation 138

▰ Example: A promises to supply certain goods to B six moths after date. By that time
the goods go out of fashion. A and B may rescind the contract.
▰ Rescission may be total or partial.
▰ Total rescission is the discharge of the entire contract; partial rescission is the
variation of the original contract by
▻ Rescinding some of the terms of the contract,

▻ Substituting new terms for the ones which are rescinded

▻ Adding new terms without rescinding any of the terms of the original contract.
139
 3. Alteration:
▰ Alteration of a contract may take place when one or more of the terms
of the contract is/are altered by the mutual consent of the parties to the
contract. In such a case, the old contract is discharged.
▰ Example: A enters into a contract with B for the supply of 100 ton of
cotton at his godown No. 1 by the first of the next month. A and B may
alter the terms of the contact by mutual consent.

140
 4. Remission.
▰ Remission means acceptance of a lesser fulfilment of the promise made,
e.g. acceptance of a lesser sum than what was constructed for, in
discharge of the whole of the debt.
▰ It is not necessary that there must be some consideration for the
remission of the part of the debt.
▰ Example: A owes B Rs. 5,000. In satisfaction of the whole debt, Rs. 2,000
paid at the time and place at which Rs. 5,000 were payable. The whole
debt is discharged..
Remission : the cancellation of a debt 141
 5. Waiver.
▰ Waiver takes place when the parties to a contract agree that they shall no
longer be bound by the contract.
▰ This amounts to a mutual abandonment of rights by the parties to the
contract.
▰ Consideration is not necessary for waiver.

142
 6. Merger.
▰ Merger takes place when an inferior right accruing to a party under
contract merges, into a superior right accruing to the same party under
the same or some other contract.
▰ Example: P holds a property under a lease. He later buys the property. His
right as a lessee merge into his rights as an owner.

143
3. Discharge by Impossibility of Performance

▰ If an agreement contains an undertaking to perform an impossibility, it is void

ab initio.
▰ According to Sec. 56, impossibility of performance may fall into either of the
following categories:
1. Impossibility existing at the time of agreement

2. Impossibility arising subsequent to the formation of contract

144
 1. Impossibility existing at the time of agreement
▰ An agreement to do an act impossible in itself is void.
▰ This is known as pre-contractual or initial impossibility. The fact of
impossibility may be;
i. Known to the parties
ii. Unknown to the parties

145
 i. Known to the parties
▰ This is known as absolute impossibility.
▰ In case of absolute impossibility, the agreement is void ab initio.
▰ Example: when A agree with B to discover treasure by magic, or
undertakes to put life into the dead wife of B, the agreement is void.

146
 ii. Unknown to the parties.
▰ At the time of making the contract both the parties are ignorant of the
impossibility, as in the case of destruction of subject-matter to the
ignorance of both the parties, the contract is void on the ground of mutual
mistake.
▰ If the promisor alone knows of the impossibility of performance at the
time of making the contract, he shall have to compensate the promisee for
any loss which such promisee sustains through the non-performance of
the promise.
147
 2. Impossibility arising subsequent to the formation of contract.
▰ Impossibility which arises subsequent to the formation of a contact is
called post-contractual or supervening impossibility.
▰ The contract become void when the act becomes impossible or unlawful.
▰ Impossibility of performance of a contract, as a general rule, is no excuse
for the non-performance of the contract; but where this impossibility is
caused by the circumstances beyond the control of the parties, the parties
are discharged from further performance of the obligation under the
contract.
148
▰ A contract is discharged by supervening impossibility in the following cases;
1. Destruction of subject-matter of contract
2. Non-existence or non-occurrence of a particular state of things
3. Death or incapacity for personal service
4. Change of law or stepping in of a person with statutory authority
5. Outbreak of war
149
 1. Destruction of subject-matter of contract
▰ When the subject matter of a contract, subsequent to its formation, is
destroyed without any fault of the parties to the contract, the contract is
discharged.
▰ Example: C let a music hall to T for a series of concert for certain days.
The hall was accidently burnt down before the date of the first concert.
Held, the contract was void.

150
 2. Non-existence or non-occurrence of a particular state of things.
▰ Sometimes, a contract is entered into between two parties on the basis of a
continued existence or occurrence of a particular state of things.
▰ Example: A and B contract to marry each other. Before the time fixed for the
marriage, A goes mad. The contract become void.

151
 3. Death or incapacity for personal service.
▰ Where the performance of a contract depend on the personal skill or
qualification of a party, the contact is discharged on the illness or
incapacity or death of that party.
▰ The man’s life is an implied condition of the contract.
▰ Example: An artist undertook to perform at a concert for a certain price.
Before she could do so, she was taken seriously ill. Held, she was
discharged due to illness.

152
 4. Change of law or stepping in of a person with statutory authority.
▰ When, subsequent to the formation of a contract, change of law takes
place, or the Government takes some power under some Ordinance or
Special Act, as for example, the Defence of India Act, so that the
performance of the contract becomes impossible, the contract is
discharged.

153
▰ Example:
1. D enters into a contract with P on 1st March for the supply of certain
imported goods in the month of September of the same year. In June by
an Act of Parliament , the import of such goods is banned. The contract
is discharged.

154
 5. Outbreak of war.
▰ A contract entered into with an alien enemy during war is unlawful and
therefore impossible of performance.
▰ Contracts entered into before the outbreak of war are suspended during
the war and may be revived after the war is over.
▰ Example: A contracts to take in cargo for B at a foreign port. A’s
Government afterwards declares war against the country in which the
port is situated. The contract becomes void when war is declared.

155
 Impossibility of performance – not an excuse
▰ “Impossibility of performance is, as rule, not an excuse for non-performance,”
▰ Ordinarily when a person undertakes to do something he must do it unless its performance
becomes absolutely impossible due to any of the circumstances already discussed.
▰ In the following cases, a contract is not discharged on the ground of supervening
impossibility;
1. Difficulty of performance 2. Commercial impossibility
3. Strikes, lock-outs and civil disturbance 4 . Failure of one of the objects.
5. Impossibility due to failure of a third person 156
 1. Difficulty of performance.
▰ A contract is not discharged by the mere fact that it has become more
difficult of performance due to some contemplated events or delays.
▰ Example: A sold a certain quantity of Finland timber to B to be supplied
between July and September. Before any timber was supplied, war broke
out in the month of August and transport was disorganised so that A
could not bring any timber from Finland. Held, the difficulty in getting the
timber from Finland did not discharge A from performance.

157
2. Commercial impossibility.
A contract is not discharged merely because expectation of higher profits is
not realised, or the necessary raw material is available at a higher price
because of the outbreak of war, or there is a sudden depreciation of currency.
Example: A promised to send certain goods from Mumbai to Singapore in
September. Before the goods were sent war broke out and there was a sharp
increase in shipping rates. Held, the contract was not discharged.

158
3. Impossibility due to failure of a third person
Where a contract could not be performed because of the default by a third
person on whose work the promisor relied. It is not discharged.
Example: A, a wholesaler, entered into a contract with B for the sale of a
certain type of cloth to be produced by C, a manufacturer of that cloth. C did
not manufacture that cloth. Held, A was liable to B for damages.

159
4. Strikes, lock-outs and civil disturbance.
Events such as these do not discharge a contract unless the parties have
specially agreed in this regard at the time of formation of the contract.
Example: The unloading of a ship was delayed beyond the date agreed with
the ship-owners owing to a strike of dock workers. Held, the ship-owners
were entitled to damages, the impossibility of performance being no excuse.

160
 5. Failure of one of the objects.
▰ When a contract is entered into for several objects, the failure of one of
them does not discharge the contract.
▰ Example: A company agreed to let a boat to H to view, (i) the naval review
at the coronation; and (ii) to cruise round the fleet. Due to the illness of
the King the naval review was cancelled, but the fleet was assembled.
The boat, therefore, could sail round the fleet. Held, the contract was not
discharged.

161
▰ Effect of supervening impossibility
1. When the performance of a contract becomes impossible or unlawful
subsequent to its formation, the contract becomes void.
2. The person, who has received any advantage under a contract which
becomes subsequently void is bound to restore it or to make compensation
for it to the person from whom he received it.

162
3. Where one person has promised to do something which he knew or with
reasonable diligence might have known, and which the promisee did not
know to be impossible or unlawful, such promisor must make
compensation to such promisee for any loss which such promisee sustains
through the non- performance of the promise

163
 4. Discharge by lapse of time

▰ A contract should be performed within a specified period, called period of

limitation.
▰ If it is not performed, and if no action is taken by the promisee within the period
of limitation, he is deprived of his remedy at law. In short the contract is
terminated.
▰ Example: Alok takes a loan from Om and agrees to pay instalments every month
for the next five years. However, he does not pay even a single instalment. Om
calls him a few times but then gets busy and takes no action. Three years later,
he approaches the court to help him recover his money. However, the court
rejects his suit since he has crossed the time-limit of three years to recover his
debts. 164
 5. Discharge by Operation of Law

▰ A contract may be discharged independently of the wishes of the parties, i.e.,

by operation of law,. THIs includes discharge-
▻ By death
▻ By merger
▻ By insolvency
▻ By unauthorised alteration of the terms of a written agreement.
(alteration in the contract without the consent of the other party)
▻ By rights and liabilities becoming vested in the same person
165
6. Discharge by breach of contract

▰ Breach of contract means a breaking of the obligation which a contract

imposes.
▰ It occurs when a party to the contract without lawful excuse does not
fulfil his contractual obligation or by his own act makes it impossible that
he should perform his obligation under it. It confers a right of action for
damages on the injured party. Breach of contract may be –
1. Actual breach of contract
2. Anticipatory or constructive breach of contract
166
1. Actual breach of contract. It may take place –
i. At the time when the performance is due.
▻ Actual breach of contract occurs, when at the time when the
performance is due, one party fails or refuses to perform his
obligation under the contract
▻ Example: A agrees to deliver to B 5 bags of wheat on 1st January. He
does not deliver the wheat on that day. There is a breach of contract.

167
ii. During the performance of the contract.
Actual breach of contract also occurs when during the performance of the
contract, one party fails or refuses to perform his obligation under the
contract. This refusal to perform may be by –
a. Where there has been some performance of the contract and one party by
his word or act refuses to continue to perform his obligation in some
essential respect, the other party can treat the contract as no longer binding
on him and sue for breach of contract.

168
▰ Example: C contracted with a railway company to supply it 3,000 tons of
railway chairs at a certain price, to be delivered in instalments. After
1,787 tons had been supplied, the railway company asked C to deliver no
more. C, could bring an action for breach of contract.

169
 b. Implied repudiation,
▰ If a party during the performance, makes by his own act the complete
performance of the contract impossible, the effect is as if he has breached the
contract, and the other party is discharged from the further performance of the
contract.
Example: P, a British subject, was engaged by the Captain of a warship owned by the
Japanese Government to act as a fireman. Subsequently when the Japanese Government
declared war with china, P was informed that the performance of the contract would bring
him under the penalties of the Foreign Enlistment Act. He consequently left the ship. Held, he
was entitled to recover the wages agreed upon.
170
 2. Anticipatory breach of contract
▰ It occurs when a party to an executory contract declares his intention of
not performing the contract before the performance is due. He may do
so—
i. By expressly renouncing his obligation under the contract
ii. II. By doing some act so that the performance of his promise becomes
impossible.

171
1.6
Remedies for Breach of
Contract

172
 Where there is a right, there is a remedy

▰ A contract gives rise to correlative rights and obligations.

▰ A remedy is the means given by law for the enforcement of a right.

173
▰ When the contract is broken, the injured party has one or more of the
following remedies;
1. Recession of the contract
2. Suit for damages
3. Suit upon quantum meruit (what one has earned)
4. Suit for specific performance of the contract
5. Suit for injunction
174
1. Rescission

▰ When a contract is broken by one party, the other party may sue to treat
the contract as rescinded and refuse further performance.
▰ In such a case, he is absolve of all his obligations under the contract.
▰ Example: A promises B to supply 10 bags of cement on a certain day. B
agrees to pay the price after the receipt of the goods. A does not supply
the goods, B is discharged from liability to pay the price.

175
2. Damages

▰ Damages are a monetary compensation allowed to the injured party by

the Court for the loss of Injury suffered by him by the breach of a contract.
▰ The object of awarding damages for the breach of a contract is to put the
injured party in the same position, so far as money can do it.

176
▰ When a contract has been broken, the injured party is entitled to –
a) such damages which naturally arose in the usual course of things from such
breach. This related to ordinary damages arising in the usual course of things
b) such damages which the parties knew, when they made the contract, to be
likely to result from the breach. This relates to special damages. But—
c) such compensation is not to be given for any remote or indirect loss or
damages sustained by reason of the breach : and
d) such compensation for damages arising from breach of a quasi-contract shall
be same as in any other contract. 177
The Rules relating to damages

1. Damages arising naturally – ordinary damages

▰ When a contract has been broken, the injured party can recover from the
other party such damages as naturally and directly arose in the usual
course of things from the breach.
▰ These damages are known as ordinary damages.

178
The Rules relating to damages

▰ Example: A contracts to sell and deliver 50 Quintals of farm wheat to B at

Rs. 775 per quintal, the price to be paid at the time of delivery. The price
of wheat rises to Rs. 800 per quintal and A refuses to sell the wheat. B
can claim damages at the rate of Rs. 25 per quintal.
▰ A contracts to buy of B at Rs. 950 per quintal of rice, no time being fixed
for delivery. A afterwards informs B that he will not accept the rice
tendered to him. The market price of rice on that day is Rs. 930 per
quintal. B is entitled to receive from A compensation at the rate of Rs.20
per quintal.
179
 The Rules relating to damages

▰ In a contract for the sale of goods, the measure of damages on the breach of a
contract is the difference between the contract price and the market price of
such goods on the date of the breach.
▰ If, however, the thing contracted for is not available in the market, the price of
the nearest and best available substitute may be taken into account in
calculating damages.
▰ In the absence of market at the place of delivery, market price of the nearest
place or prevailing in the controlling market is to be considered.
180
The Rules relating to damages

▰ Compensation is not to be given for any remote or indirect loss or

damage
▰ Examples. A contracts to pay a sum of money to B on a specified day. He
does not pay the money on that day. B, in consequence of not receiving
the money on that day, is unable to pay his debts, and is totally ruined. A
is not liable to make good to B anything except the principal sum he
contracted to pay together with interest up to the day of payment.

181
The Rules relating to damages

▰ Effect of neglect by promisee

▻ If any promisee neglects or refuses to afford the promisor reasonable
facility for the performance of his promise, the promisor is excused by
such neglect or refusal as to any non-performance caused thereby.
▻ Example: A contract with B to repair B's building B neglects or refuses
to point out to A the places in which the building requires repair. A is
excused for non performance of the contract. If it is caused by such
neglect or refusal.
182
The Rules relating to damages

2. Damages in contemplation of the parties – Special damages

▰ Damages other than those arising from the breach of a contract may be
recovered If such damages may reasonably be supposed to have been in
the contemplation of both the parties as the probable result of the breach
of the contract,.
▰ Such damages, known as special damages, cannot be claimed as a
matter light.
▰ These can be claimed only if the special circumstances which would
result in a special loss in case of breach of a contract, are brought to the
notice of the other party 183
The Rules relating to damages

▰ Examples. S sent some specimens of his goods for exhibition at an

agricultural show. After the show he entrusted some of his samples to an
agent of a railway company for carriage to another show ground at New
Castle. Or the consignment note he wrote "Must be at New Castle
Monday certain”. Owing to a default on the part of the railway company,
the samples arrived late for the show. Held, S could claim . damages for
the loss of profit at the show.

184
The Rules relating to damages

▰ G, a tailor, delivered a sewing machine and some cloth to a railway

company to be delivered at a place where a festival was to be held. He
expected to earn some exceptional profit at the festival but he did not
bring this fact to the notice of the railway authorities- The goods were
delivered after the conclusion of the festival. Held, he could not recover
the loss of profit.

185
 The Rules relating to damages

3. Vindictive or exemplary damages

▰ Damages for the breach of a contract are given by way of compensation for loss
suffered, and not by way of punishment for wrong inflicted (cause).
▰ Hence, ‘vindictive’ or ‘exemplary’ damages have no place in the law of contract
because they are punitive (involving punishment) by nature.
▰ But in case of (a) breach of a promise to marry, and (b) dishonour of a cheque by
a banker wrongfully when he possesses sufficient funds to the credit of the
customer, the Court may award exemplary damages.

186
 The Rules relating to damages

4. Nominal damages.
▰ Where the injured party has not in fact suffered any loss by reason of the
breach of a contract the damages recoverable by him are nominal, i.e., very
small, for example, a rupee. These damages merely acknowledge that the
plaintiff has proved his case and won.
▰ Example. A firm consisting of four partners employed B for a period of two
years. After six months two partners retired, the business being carried on by
the other two. B declined to be employed under the continuing partners. Held.
he was only entitled to nominal damages as he had suffered no loss.
187
 The Rules relating to damages
5. Damages for loss of reputation
▰ Damages for loss of reputation in case of breach of a contract are generally not
recoverable.
▰ An exception to this rule exists in the case of a banker who wrongfully refuses to
honour a customer’s cheque.
▰ If the customer happens to be a tradesman, he can recover damages in respect of
any loss to his trade reputation by the breach.
▰ And the rule of law is : "the smaller the amount of the cheque dishonoured, the
larger the amount of damages awarded." But if the customer is not a tradesman, he
can recover only nominal damages .
188
 The Rules relating to damages

6. Damages for inconvenience and discomfort

▰ Damages can be recovered for physical inconvenience and discomfort. The
general rule in this connection is that the measure of damages is not affected by
the motive or the manner of the breach.
▰ Examples. (a) A was wrongfully dismissed in a harsh and humiliating manner by
G from his employment. Held, (I) A could recover a sum representing his wages
for the period of notice and the commission which he would have earned during
that period ; but (ii) he could not recover anything for his injured feelings or for
the loss sustained from the fact that his dismissal made it more difficult for him
to obtain employment.
189
 The Rules relating to damages

7. Mitigation of damages
▰ It is the duty of the injured party to take all reasonable steps to mitigate
the loss caused by the breach.
▰ He cannot claim to be compensated by the party in default for loss which
he ought reasonably to have avoided.
▰ That is he cannot claim compensation for loss which is really due to the
breach but due to his own neglect to mitigate the loss after the breach.

190
The Rules relating to damages

8. Difficulty of assessment
▰ Although damages which are incapable of assessment cannot be
recovered, the fact that they are difficult to assess with certainty or
precision does not prevent the aggrieved party from recovering them.
▰ The Court must do its best to estimate the loss and a contingency may
be taken into account.

191
The Rules relating to damages

▰ Example. H advertised a beauty competition by which readers of certain

newspapers were to select fifty ladies. He himself was to select twelve
out of these fifty. The seeded twelve were to be provided theatrical
engagements. C was one of the fifty and by H’s breach of contract she
was not present when the final selection was made. Held, C was entitled
to damages although it was difficult to assess them.

192
The Rules relating to damages

9. Cost of decree
▰ The aggrieved party is entitled, in addition to damages, to get the cog of
gating the decree for damages. The cost of suit for damages is in the
discretion of the Court.

193
 The Rules relating to damages

10. Damages agreed upon in advance in case of breach

▰ If a sum is named in a contract as the amount to be paid in case of its breach,
or if the contract contains any other stipulation by way of a penalty for failure
to perform the obligations, the aggrieved party is entitled to receive from the
party who has broken the contract, a reasonable compensation not exceeding
the amount so named.
▰ Examples. A contracts with B to pay B Rs. 1,000 if he fails to pay B Rs. 500 on
a given day. B is entitled to recover from A such compensation not exceeding
Rs. 1,000 as the Court considers reasonable.
194
 The Rules relating to damages

▰ Liquidated damages and penalty

▰ Sometimes parties to a contract stipulate at the time of its formation that
on the breach of the contract by either of them, a certain specified sum
will be payable as damages.
▰ Such a sum may amount to either 'liquidated damages' or a 'penalty'.
'Liquidated damages' represent a sum, fixed or ascertained by the parties
in the contract, which is a fair and genuine pre-estimate of the probable
loss that might ensue as result of the breach, if it takes place.

195
The Rules relating to damages

▰ A 'penalty' is a sum named in the contract at the time of its formation,

which is disproportionate to the damage likely to accrue as a result of the
breach.
▰ It is fixed up with a view to securing the performance of the contract. In
other words, 'penalty' means an amount fixed in terrorem without any
regard to the Probable loss.
▰ English Law gives effect to 'liquidated damages' but relieves a-party
against 'penalty'. In India no such distinction is observed. The Courts in
India allow only 'reasonable compensation‘.
196
The Rules relating to damages

▰ The rules for determining whether a stipulation is by way of a penalty or

by way of liquidated damages are as follows;
1. The parties to a contract may use the words ‘penalty’ or ‘liquidated
damages’ interchangeably.
▰ The Court is not bound by the phraseology used, for “equity looks to the
intent rather than to the form". It must ascertain whether a sum is in truth
a Penalty or liquidated damages.

197
The Rules relating to damages

2. The essence of a penalty is the payment of money stipulated as in

terrorem ( a condition in which is intended to frighten) of the offending party,
that is to say, its intension is to compel the performance of the contract by
providing something by way of punishment if the contract is not performed.
▰ The essence of liquidated damages is a genuine pre-estimate of damage
which seems likely to be caused should the breach occur.

198
The Rules relating to damages

3. The question whether a sum stipulated is a penalty or liquidated damages is

a question of construction, to be decided upon the terms of the contract and
circumstances of each particular case, judged of as at the time of making the
contract, and not as at the time of breach.
▰ Example. D sold tyres to N who contracted not to re-sell them, or offer them
for sale , at a price below D's list price. N agreed to pay a sum of Rs. 500 by
way of liquidated damages for every breach of the agreement. N sold a tyre
at less than the list price. D filed a suit for damages for breach. Held, the
sum fixed by the parties was a genuine pre-estimate of the damage and not
a penalty.
199
The Rules relating to damages

4. The sum stipulated is a penalty if— .

(a) it is unreasonable in amount compared with the greatest loss which could
imaginable

(b) the breach consists of not paying a sum of money a certain time, and the
sum fixed is greater than the sum to be paid.

200
The Rules relating to damages

▰ Examples. (a) A agrees to pay B Rs. 1,000 on January 1, and if he fails to

make the payment at the stipulated time he agrees to pay Rs. 1,500 as
liquidated damages. The extra Rs. 500 will be a penalty.
▰ (b) A chit fund contract which provided for payment of money in
instalments, stipulated that on default in payment of any of the
Instalments all the future instalments shall be payable at a time with
interest. Held, the stipulation was not penal in nature.

201
The Rules relating to damages

5. When a single lump-sum is made payable on the occurrence

of one or more of several events, some of which may occasion
serious and other unimportant damage, there is a presumption
that the sum is a penalty.

202
▰ Example. F agreed to act at K’s theatre and to conform to all the
regulations of the theatre. Each party agreed that on breach by
either of them of the agreement to pay Rs. 1,000 as liquidated
damages. F broke the contract and damages payable by him were
assessed at Rs. 650. held, the Rs. 1000 was a penalty because it
was payable even if F had broken any of the smallest regulations
of the theatre and hence K could only recover Rs. 650.

203
The Rules relating to damages

Payment of interest
▰ The following rules are observed with regard to payment of interest:
1. Payment of interest in case of default. A condition for payment of interest
in case of default is not in the nature of a penalty, if the interest is reasonable.
If the Court finds that the rate of interest is unreasonably high, it may grant
relief.

204
2. Payment of interest at higher rate –
a) From the date of the bond. A condition for increased interest from the date
of the bond, and not from the date of default, is always in the nature of a
penalty, and relief is granted against it.
b) From the date of default. A condition for increased interest from the date
of default may be a condition by way of penalty. When it is so, relief is
granted against it.
▻ Whether such a stipulation is punishment, is a question of construction
dependent on the terms of the contract and the circumstances of each
case. 205
3. Payment of interest on default—
(a) at the same rate as simple interest. A stipulation in a bond for payment
of compound interest on failure to pay simple interest at the same rate as
was payable upon the principal is not a penalty.
(b) at the rate higher than simple interest. A stipulation in a bond for the
payment of compound interest at a rate higher than that of simple Interest is
a penalty and would be relieved against.

206
3. Quantum Meruit

▰ The phrase 'quantum meruit' means 'as much as earned‘.

▰ A right to sue on a quantum meruit arises where a contract, partly
performed by one party, has become discharged by the breach of the
contract by the other party.
▰ The right is founded not on the original contract which is discharged or is
void but on an implied promise by the other party to pay for what has
been done.

207
4. SPECIFIC PERFORMANCE

▰ In certain cases of breach of a contract, damages are not an adequate

remedy.
▰ The Court may, in such cases, direct the party in breach to carry out his
promise according to the terms of the contract.
▰ This is a direction by the Court for specific, performance of the contract
at the suit of the party not in breach.

208
Some of the cases In which specific performance of a contract may, in the
discretion of the Contract, be enforced are as follows:
a) When the act agreed to be done is such that compensation in money for
its non-performance not an adequate relief.
b) When there exists no standard for ascertaining the actual damage,
caused by the non-performance of the act agreed to be done.

209
5. Injunction (authoritative warning)

▰ Where a party is in breach of a negative term of a contract (i.e. where he

is doing something which he promised no to do), the court may, by
issuing an order, restrain him from doing what he promised not to do.
▰ Such an order of the court is known as an ‘injunction’.
▰ Example: W agreed to sing at L’s theatre, and during a certain period to
sing nowhere else. Afterwards W made contract with Z to sing at another
theatre and refused to perform the contract with L. Held, W could be
restrained by injunction from singing for Z.
210
▰ Rectification or Cancellation
▰ When through fraud or a mutual mistake of the parties, a contract or other
instrument does not express their real intention, either party may institute a
suit to have the instrument rectified.
▰ In such a case, if the court finds that there has been a fraud or mistake, it
may ascertain the real intention of the parties, and may in its discretion,
rectify the instrument so as to express that intention.
▰ If rectification is not possible, the court orders for the cancellation of the
contract.
211
▰ Example:
▰ A, the owner of a ship, fraudulently representing the ship to be seaworthy,
induce B, an underwriter, to insure the ship, B may obtain the
cancellation of the policy.

212
 1.7
Definition & examples of Contract of
Indemnity, Guarantee, Bailment, Pledge
and Agency
213
 Contract of Indemnity

▰ A contracat by which one party promises to save the other from loss
caused to him by the conduct of the promisor himself, or by the conduct
of any other person, is called a ‘contract of indemnity’.
▰ The person who promises to make good the loss is called the indemnifier
and the person whose loss is to be made good is called the indemnified or
indemnity holder.

214
▰ Example:
▰ A contract to indemnify B against the consequences of anu proceedings
which C may take against B in respect of a certain sum of Rs. 200. This is a
contract of indemnity.
▰ A and B claim certain goods from a railway company as rival owners. A
takes delivery of the goods by agreeing to compensate the railway against
loss in case B turn gut to ne the true owner. There is a contract of
indemnity between A and the railway company.

215
▰ A contract of indemnity may be express of implied.
▰ An implied contract of indemnity may be inferred form the circumstances
of the case or from relationship of the parties.
▰ Exaample: A, on the instruction of T, sold certain cattle belonging to O. O
held A liable for it and recovered damages from him for selling it. Held, A
could recover the loss from T as a promise by T to A for any such loss
would be implied from his conduct in asking A to sell the cattle,

216
 Contract of Guarantee

▰ A 'contract of guarantee' is a contract to perform the promise, or discharge

the liability, of a third person in case of his default.
▰ The person who gives the guarantee is called the 'surety', the person in
respect of whose default the guarantee is given is called the 'principal debtor'.
And the person to whom the guarantee is given is called the 'creditor'.
▰ A guarantee may be either oral or written.

217
▰ S requests C to lend Rs. 500 to P and guarantees that if P fails to pay the
amount, he will pay. This is a contract of guarantee. S, In this case, is the
surety, C, the creditor and P, the Principal debtor.
▰ S and P go into a shop, S says to the shopkeeper, C, “Let P have the goods,
and if he does not pay, I will.

218
 Bailment

▰ The word bailment is derived from the French word ‘Bailler’ which means ‘to
deliver’. It involves change of possession of goods from one person to
another for some specific purpose.
▰ Sec. 148 defines ‘bailment’ as the delivery of goods by one person to
another for some purpose, upon a contraact, that they shall, when the
purpose is acoomplished, be returned or otherwise disposed of according
to the directions of the person delivering them. The person delivering the
goods is called the ‘bailor’ and the person to whom they are delivered is
called the ‘bailee’.
219
▰ Example:
▰ A delivers a piece of cloth to B, a tailor, to be stitched into a suit. There is a
contract of bailment between A and B.
▰ A sells certain goods to B who leaves them on the possession of A. the
relationship between B and A is that of bailor and bailee.
▰ An insurance company palces a damaged car of A in possession of R, a
repairer. A is the bailor, the isnurance company is the bailee, and R is the
sub-bailee.

220
 Pledge

▰ It is a special type of bailment.

▰ It is a bailment of goods as security for payment or performance of duty.
▰ The person who pledges the goods (or bailor) is the pledgor or pawner. The
person to whom such goods are deposited is known as pledgee or pawnee
(section 172).

221
▰ The producer of fil;e borrowed a sum of money from a financier-distributor
and agreed to deliver the final prints of the film when ready.

222
Contract of Agency

▰ A person who has capacity to contract may enter into a

contract with another (i) either by himself or (ii) through
another person.
▰ When he adopts the latter course, he is said to be acting
through and ‘agent’

223
Thank You

224
YOU CAN ALSO SPLIT YOUR CONTENT

White Black
Is the color of milk and fresh Is the color of coal, ebony, and
snow, the color produced by the of outer space. It is the darkest
combination of all the colors of color, the result of the absence
the visible spectrum. of or complete absorption of
light.

225
IN TWO OR THREE COLUMNS

Yellow Blue Red

Is the color of gold, Is the colour of the Is the color of blood,
butter and ripe lemons. clear sky and the deep and because of this it
In the spectrum of sea. It is located has historically been
visible light, yellow is between violet and associated with
found between green green on the optical sacrifice, danger and
and orange. spectrum. courage.

226
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228
USE CHARTS TO EXPLAIN YOUR IDEAS

White Gray Black

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AND TABLES TO COMPARE DATA

A B C

Yellow 10 20 7

Blue 30 15 10

Orange 5 24 16
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 MAPS

OUR OFFICE

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 89,526,124
Whoa! That’s a big number, aren’t you proud?

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89,526,124$
That’s a lot of money

185,244 users
And a lot of users

100%
Total success!
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OUR PROCESS IS EASY

first second last

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LET’S REVIEW SOME CONCEPTS

Yellow Blue Red

Is the color of gold, butter and Is the colour of the clear sky and Is the color of blood, and because
ripe lemons. In the spectrum of the deep sea. It is located of this it has historically been
visible light, yellow is found between violet and green on the associated with sacrifice, danger
between green and orange. optical spectrum. and courage.

Yellow Blue Red

Is the color of gold, butter and Is the colour of the clear sky and Is the color of blood, and because
ripe lemons. In the spectrum of the deep sea. It is located of this it has historically been
visible light, yellow is found between violet and green on the associated with sacrifice, danger
between green and orange. optical spectrum. and courage.

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 GRAPH TITLE

You can insert graphs from Google Sheets 236

ANDROID PROJECT
Show and explain your
Place your screenshot here
web, app or software
projects using these
gadget templates.

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iPHONE PROJECT
Show and explain your
web, app or software Place your screenshot here

projects using these

gadget templates.

238
TABLET PROJECT
Show and explain your
web, app or software Place your screenshot here

projects using these

gadget templates.

239
DESKTOP PROJECT
Show and explain your Place your screenshot here

web, app or software

projects using these
gadget templates.

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THANKS!
Any questions?
You can find me at
@username & user@mail.me

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CREDITS

Special thanks to all the people who made and

released these awesome resources for free:
▰ Presentation template by SlidesCarnival
▰ Photographs by Startup Stock Photos

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PRESENTATION DESIGN

This presentation uses the following typographies and colors:

▰ Titles: Roboto Condensed
▰ Body copy: Roboto Condensed
You can download the fonts on this page:
https://material.io/guidelines/resources/roboto-noto-fonts.html

Navy #3f5378 · Dark navy #263248 · Yellow #ff9800

You don’t need to keep this slide in your presentation. It’s only here to serve you as a design guide if you need to create
new slides or download the fonts to edit the presentation in PowerPoint®

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SlidesCarnival icons are editable shapes.

This means that you can:

● Resize them without losing quality.
● Change line color, width and style.

Isn’t that nice? :)

Examples:

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ͺ
Now you can use any emoji as an icon!
And of course it resizes without losing quality and you can change the color.

How? Follow Google instructions https://twitter.com/googledocs/

status/730087240156643328

’ȱȴȸɏɑɒɓɔɕɮ‫ؾ‬
ɻ§ͳͺͼ΃ΞɡΩȊŅŇ
ʍʶˀ̑ŶŻƖƶǞĄ˵˺
and many more...
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