Introduction

The Law of Contract constitutes the most important branch of mercantile or commercial law.
It affects everybody, more so, trade, commerce and industry. It may be said that the contract is
the foundation of the civilized world. The law relating to contract is governed by the Indian
Contract Act, 1872 .The preamble to the Act says that it is an Act "to define and amend certain
parts of the law relating to contract". It extends to the whole of India except the State of Jammu
and Kashmir.

Definition and Essentials of CONTRACT

A Contract is an agreement enforceable by law. An agreement is enforceable by law, if it

is made by the free consent of the parties who are competent to contract and the agreement
is made with a lawful object and is for a lawful consideration, and is not hereby expressly
declared to be void. The agreement which is not enforceable by law is not called contract.
Eg. An agreement to sell a radio set may be a contract, but an agreement to go to see a
movie may be a mere agreement not enforceable by law.
Agreement + Enforceability at law= Contract
"All agreements are not contracts but all contracts are agreements"

Definition of AGREEMENT

According to S. 2 (e) "Every promise and every set of promises, forming the consideration
for each other, is an agreement". In an agreement there is a promise from both sides. Eg. A
promises to deliver his watch to Band in return B Promises to pay a sum of Rs. 2,000 to A.
There is said to be an agreement between A and B. A promise is the result of an offer by
one person and its acceptance by the other. Section 2(b) of the Act, defines "promise" as
"When the person to whom the proposal is made signifies his assent thereto, the proposal is
said to be accepted. A proposal, when accepted, becomes a promise."
Meaning of Contract

A contract is an agreement between parties reduced in writing giving effect to the purpose
of the parties. Section 2(!]) of the Indian Contract Act, 1872,_as follows" An agreement
enforceable by law is a contract''. Two essentials for a contract-(!) an agreement, and (2)
the agreement should comply with the law.

Essentials of valid contract

1. Offer and acceptance: -These must be two parties to an agreement, i.e., one
party making the offer and other party accepting it. The term of the offer
should be definite and the acceptance of the offer must be absolute and
unconditional. The acceptance should be according to themode prescribed in
the arrangement and must be communicated tothe offeror.

2. Intention to create legal relationship: When the two parties go into an

agreement, their intention should 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.
Example - A husband promised to pay his wife a household allowance of 30
every month. Later the parties separate and the husband failed to pay the
amount. The wife sued the husband for the allowance. It was held by the
court that such agreement were outside the realm of the contract altogether

3. Lawful Consideration: -An agreement to be enforceable by the law must be

supported by consideration. 'Consideration' means an advantage or benefit
moving from one party to other. The agreement is legally enforceable only
when both the parties give something and get something in return.
Consideration need
not necessarily be a cash or kind. But it must be real and lawful.

4. Parties to be competent to contract: -The parties to the agreement must be

capable of entering into a valid contract. Every person is competent to
contract if he (i) is the age of majority. (ii) is of sound mind, and (iii) is not
disqualified from contracting by anylaw to which he is subject.
5. Free and genuine consent: It is essential to the creation of every contract
that there must be free and genuine consentf6] of the parties to the
agreement. The consent of the parties is saicf to be free when they agree
about the subject-matter of the contract in the same sense and at the same
time.

6. Lawful object-The object of the agreement must be lawful. In the other

words, it means that the object must not be (a) illegal (b) immoral, or (c)
opposed to public policy.

7. Agreement not declared void: The agreement must not have been expressly
declared void by law in force in the country.

8. Certainty and possibility of performance: The agreement must be certain

not vague or indefinite. Ifit is vague and it is not possible to ascertain its
meaning. it cannot be enforced

Jypes of Contract

1. Voidable contract: An agreement which is enforceable bylaw at the option of

one or more of the parties thereto, but not at the option of the other or
others, is a voidable contract. This happens .when the essential 'element of
free consent in a contract is missing. A voidable contract continues to be valid
till it is avoided by the party entitled to do so.
Example: X promises to sell his motor-cycle to Y for Rs. 15,000. His consent is
obtained by use of force. The contract is voidable at theoption of X. He may
avoid the contract or elect to be bounded by it.

2. Vold agreement and void contract: An agreement not enforceable by law is

said to be void [Sec. 2 (g)]. A void agreement does not create any legal rights
or obligations. A contract which ceases to be enforceable by law becomes •
void when it ceases to [3] be enforceable [Sec. 2 (j)]. A contract, when
originally entered into, may be valid and l:iinding on the parties, e.g., a
contract to import goods from a foreign country. It may subsequently beco
void, e.g., when a war breaks out between the importing country and the
exporting country.
4. Express contract: If the terms of a contract are expressly agreed upon
(whether by words spoken or written) at the time offormationofthe
contract, the contract is said to be an express contract. Where the offer or
acceptance of any promise is made in words, the promise is said to be
express.

5. Implied contract: An implied contract is one which is inferred from the acts
or conduct of the parties or course of dealings between them. It is not the
result of any express promise or promises by the parties but of their
particular acts. It may also result from a continuing course of conduct of the
parties. Where the proposal or acceptance of any promise is made otherwise
than in words, the promise is said to be implied.
Examples: A fire broke out in P's farm. He called upon the Fire Brigade to put
out the fire which the latter did. P's farm did not come under the free service
zone although he believed to be so. It was held by the court that he was liable
to pay for the service rendered as the service was rendered on an implied
promise to pay [Upton Rural District Council v. Powell].

6. Quasi-contract: A quasi-contract is not a contract at all. A quasi-contract is

created by law. It resembles a contract in that a legal obligation is imposed on
a party who is required to perform it. It rests on the ground of equity that "a
person shall not be allowed to enrich himself unjustly at the expense of
another."
Example: T, a tradesman, leaves goods at C's house by mistake. Ctreats the
goods as his own. C is bound to pay for the goods.

7. E-commerce contract: An E-commerce contract is one which is entered into

between two parties via Internet. In Internet various individuals or
companies create networks which are linked to numerous other networks.
This expands the area of operation in commercial transactions for any
person.
9. Executory contract: 'Executory' means that which remains to be carried into
effect. An executory contract is one in which both the parties have yet to
perform their obligations. Thus in the above example, the contract is
executory if X has not yet painted the picture and Y has not paid the price.
Similarly, ifX agrees to engage Yas his servant from the next month, the
contract is executory.

10. PARTLY EXECUTED AND PARTLY EXECUTORY ·A contract may sometimes

be partly executed and partly executory. Thus ifY has paid the to price X and
X has not yet painted the picture, the contract is executed as to Y and
executory as to X.

11. Unilateral contract: A unilateral or one-sided contract is one in which only

one party has to fulfill his obligation at the time of the formation of the
contract, the other party having fulfilled his obligation at the time of the
contract or before the contract comes into existence.
Example: X permits a railway coolie to carry his luggage and place it in a
carriage. A contract comes into existence as soon as the luggage is placed in
the carriage. But by that time the coolie has already performed his
obligation. Now only X has to fulfill his obligation, i.e., pay charges to the
coolie.

12. Bilateral contract: A bilateral contract is one in which the

obligations on the part of both the parties to the contract are
outstanding at the time of the formation of the contract. In this
sense, bilateral contracts are similar to executor contracts.
BASIS FOR INVITATION TO OFFER
OFFER
COMPARISON

When a person exhresses

Meaning When one~erson something to anot er person, to
expresses is will to invite him to make an offer, it is
another person to do or
not to do something, to known as invitation to offer.
take his approval, is
known as an offer.

Section 2 Not Defined

Defined in
{a)

of the Indian
Contract Act, 1872.

Objective To enter into contract. To receive offers from

people
and
negotiate
the terms on which the
contract will be created.

Yes No
Essential to
make an
agreement

Consequence The Offer becomes an An Invitation to

agreement when offer,
accepted. becomes an
offer when
responded by
the
par%
to w om it is made.
Position of Contracts with minors

In India, the age of majority is regulated by the Indian majority act (Act IX of 1875). Every
person domiciled in India attains majority on the completion of 18 years of age. The
position of a minor as regards his agreement may be summed up as follows:

1. An agreement with minor is void ob initio: the reason forthis rule is that it
is presumed in law that a minor cannot understand the implications of his
acts and therefore cannot bebound by any promise made by him. Example: A
minor executed a mortgage for Rs. 20,000 and received Rs. 10,500 from the
mortgagee as advance. Then he sued for setting aside the mortgage. The
mortgagee claimed refund of Rs. 10,500 which he had paid. Held, an
agreement by the minor was void, and the mortgagee could not recover the
amount of Rs. 10,500. (MOHIRI BIBI VS. DHARMODAS GHOST)

2. Estoppel does not apply against a minor: If a minor misrepresents his age
and induces another to enter into a contract with him, estoppels will not
apply against him.

3. Minor not liable in contract or tort arising out of a contract: A minor is

not liable in a contract because he is incapable of giving a valid consent. But a
minor can be made liable if a tort is committed by him. Where a tort arises
because of a contract, a minor cannot be made liable even in tort because
that would be an indirect way of enforcing a contract.
Example: a minor obtained a loan by falsely representing his age. The lender
filled a case of tort of deceit end claimed damages. Held, that loan could not
be recovered as it would be indirectly enforcing a contractual obligation.

4. Doctrine of restitution: if a minor obtains some goods by

misrepresenting his age, he can be compelled to restore it, but
onlyif it is traceable. If it is not traceable minor cannot be asked
to restored.
5. No ratification on attaining majority: A minor cannot ratify an
agreement on attaining majority which he had entered into
during minority. Ratification relates back to the date of the act
and therefore a contract which was void ab initio cannot be
validated by subsequent ratification.
Example: K, an infant, speculated and lost heavily on the stock
exchange. He became liable to the share brokers for E 547. On his
attain in~ the age of majority, he gave two bills for f SO each in
satisfaction of the original debt. Held, K could not be liable on
thebills.

6. Minor cannot become a partner: A minor cannot enter into

partnership agreement. But a minor may be admitted to the
benefits of a partnership with the consent of all the partners. He
can become a full fledged partner on attaining majority
[section30, Indian Partnership Act, 1972).

7. Minor cannot be adjudged insolvent: A minor cannot be

adjudged insolvent as he is incapable of contracting a debt.

8. Beneficial contracts: where a minor has already given the full

consideration to be supplied by him and there is nothing that
remains to be done by him under the contract, a minor can
enforcethe contract.
9. Minor Hable for necessaries: a minor is liable for necessaries
supplied to him or any one whom he is legally bound to support,
to the extent of his estate (sec. 68). The term 'necessaries' is not
defined in the Indian Contract Act, 1892. The En~lish sale of
goods Act, 1893 defines necessaries as follows: 'Goods suitable
to the condition in life of such infant or other person, and to
hisactual requirement at the time of sale and delivery.
Persons of unsound mind
V
In India law one of the essential conditions of competence of parties to a contract is that
the parties should be of sound mind. Sec. 12 lays down a test of soundness of mind.

It reads as follows:

• ''A person is said to of sound mind for the purpose of making a contract, if at
the time when he makes it, if he is capable of understanding it, and of forming
a rational judgment as to its effect upon his Interests.

• A person who is usually of unsound mind, but occasionally of sound mind, may
makes a contract when he is of sound mind.

• A person who is usually of sound mind, but occasionally of unsound mind, may
not make a contract when he is of unsound mind.''

The following persons have been held to be persons of unsoundmind:

1. Lunatics: A lunatic is a person who is mentally deranged due to some mental

strain or other personal experience. He suffers from intermittent intervals of
sanity and insanity. He can enter into a contract only duringthe period when
he is of sound mind.

2. Idiots: An idiot is a person who has completely lost his mentally powers. He
does not exhibit understanding of even minor objects. An agreement with an
Idiot is void.

3. Drunken or intoxicated persons: a drunken person suffers from temporary

incapacity to contract, i.e., at the time when he drunk, so that he is Incapable
of forming a rational judgment. A contract by drunken person may be ratified
by him when he Is sober.
Validity of an agreement without Consideration

The ~eneral rule, as laid down in sec.25, is that an agreement made without consideration
is void. Sec. 25, however, gives three exceptions to tfie general rule. In such cases, the
agreements are contracts even though made without consideration. These cases are:

1. Natural love and affection rsec. 25 (1)1-Where an agreement is expressed

in writing and registered under the law for the time being in force for the
registration of the documents and is made on account of natural love and
affection between the parties standing in a near relation to each other; it is
enforceable even if there is no consideration. There are four essential
requirements of such an agreement:
• it Is in writing;
• it is registered;
• it is made on account of natural love and affection; and
• the parties stand in a near relation to each other.
The term 'near relative is not defined in the Act, but when parties
are related by blood or marriage, they are definitely covered.
'Natural love and affection' implies a degree of instinctive love and
affection between parties in near relatives.

Examples •A, for natural love and affection, promises to give his
son, Rs 1,00,000. A puts his promise to N in writing and registers
it. This is acontract.

2. Compensation for past voluntary service (Sec. 25 (2)) -Where there is an

agreement to compensate wholly or in part, a person who has already
voluntarily done something for promisor,or something which the promisor
was legally compellable to do, tfie agreement is valid even though without
consideration. In simple words, a promise to pay for a past voluntary service
is binding.
CONSENT

"Two or more person are said to consent when they agree upon the same thing in the
same sense", To constitute consent both the partieshave the same thing in mind and the
same thing is understood in the same sense by them. The validity of an agreement
depends not only upon the consent but upon its freeness also.

What is free consent-"Consent is said to be free when It is notcaused by"

• Coercion, as defined In section 15, or

• Undue Influence, as defined in section 16, or

• Fraud, as defined in section 17, or

• Misrepresentation, as defined in section 18, or

• Mistake, subject to the provisions of sections 20, 21 and 22.

COERCION
V
Coercion means compelling a person to enter into a contract under apressure or a threat,
According to Section 15, a contract is said to becaused by coercion when it is obtained by-

• committing any act which is forbidden by the Indian Penal Code; or

threatening to commit any act which is forbidden by the Indian Penal Code;
• unlawful detaining of any property; or
• threatening to detain any property.

Example-A Hindu widow was forced to adopt a child under the threat that the dead body
of her busband would not be allowed to be removed otherwise. Subsequently she applied
for the cancellation of adoption. Held her consent was obtained by coercion and the
adoption was set aside.
 Coercion Un du e Inf lue nc e
Basis

Coercion can be defined as

an
act wh ere force is use d as a Undue inf lue nce can be
tool for making a pa rty wh o defined
is as an ac t of
Me an ing generally unwilling influencing
to com e the will
into a contract. of a pe rso n by an oth er.

Na tur e of It is It is no t
offence regarded reg ard ed
as a criminal as a criminal
offence. offence.

It is covered un de r Section It is covered un de r Section

15 16 of the Indian Contract Act,
of the Indian Contract 1872.
Legal
Act,
provisions
1872.

There is an
already
est ab hsh ed
Relationship of
There is no established relationship
relationship between the
contracting between the
parties contracted
contracting parties. pa rtie s i.e.,
a
fiduciary relationship.
 Threat, physical violence or Psbchological pressure and/or
force. su jecting a£erson to a social
pressure or ilemma.
Actions

Coercion is fcenerally used Undue influence is used as a

as a tool to orce a person to tool in case one of the
enter into a contract with contracting parties has an ill
the other party, usually for intention to take advantage of
the benefit of the other the other parties' position.
Aim party.

Burden of Lies with the aggrieved Lies with the party who is in a
proof party dominating position

"If.' threatens to kill "B" if "C" A teacher tells his student to

does not sell hisrcrope~ to sell him his car for a very low
him. Here, 'W' is orcing 'C". price in return for full marks
in the final examination.
Example
MISREPRESENTATION
V
The term 'Misrepresentation' means a false representation of fact made innocently or non-
disclosure of a material fact without any intention to deceive the other party.

Any breach of duty which, without an intent to deceive, gains an advantage to the person
committing it, or anyone claiming under him; by misleading another to his prejudice, or to
the prejudice of anyone claiming under him.

Essential of element of misrepresentation-

1. The misrepresentation must be of facts.

2. It must be made before entering into a contract.

3. The representation must be innocently made without theintention to deceive

the other party.

4. The misrepresentation must have caused the other party to enter into a
contract.

Ex-A told his wife within the hearing of their daughter that the bridegroom proposed for
her was a young man. The bride~room however was over sixty years The daugliter gave
her consent to marry him believmg the statement by her father. It was held by the Court
that the consent was vitiated by misrepresent and fraud.
MISTAKE

Mistake is an erroneous belief concerning something. Mistake maybe of law or of facts.

Mistake of law:

1. Mistake of law in force in India- ''A contract Is not voidable because it was
caused by a mistake as to any law in force in India; but mistake as to a law not
in force in India has the same effect as a mistake of fact".

2. Mistake of foreign law-mistake of foreign law makes thecontract voidable if

there is a bilateral mistake.

Mistake of facts-

1. Unilateral mistake of facts: contract caused by mistake of one party as to

matter of fact. A contract is not voidable merely because it was caused by one
of the parties to it bring under a mistake as to a matter of fact.
Exception: In the following cases unilateral mistake make theagreement
void:

• Mistake as to identity is.

• Mistake as to the character of the written document.

2. Bilateral mistake of facts-bilateral mistake is mistake of both the parties

which may be a common mistake or a mutual mistake. Mistake is common
where both the parties make the same mistake.
Example-X buys' a painting believing it to be worth Rs 50,000 while in fact it
is worth only Rs 5,000. The contract is not void as only Xis making mistake.
Doctrine of Frustration/ Impossibility of Performance
V
ThP aPnPr::11I rnlP nf rnntr::irtc;: <:t::1tP<: th::at thP n::1rtiP<: tn ::a rnntr::irt h::1vP tn fulfill thPir
nhlia~tinn~ nnrtPr thP rnntr~rt ~nrt in r~~P nfhrP~rh thP n~rtv hrPaching the contract has
to compensate the other for the damages caused. The doctrine of frustration is an
exception to this rule.

The doctrine of frustration basically talks about the impossibility of performance of the
contract. It means a contract cannot be executed because of an incident beyond the control
of parties. The performance of such a contract becomes frustrated i.e. it becomes
complicated, impossible or even illegal. The frustration of contract can be due to any
unforeseen, impossible events and events out of control of the parties.

lm~ossibility of ~erformance:

Impossibility of performance is a legal concept that allows one party to be released from a
contract if unforeseen circumstances prevent the contract's performance. There are two
sorts of performance impossibilities:

1. Initial Impossibility: The objective of every contract is for the parties to

fulfil their obligations, and if the parties will never enter into the contract
because it is impossible to fulfil. In simple words, we can say that Initial
impossibility deals with the cases where the contract was impossible to
perform from the beginning only.
For example; If a married man promises to marry again although he is
unable to do so, he is required to compensate the other party.

2. Subsequent Impossibility: Subsequent impossibility is those contracts that

deal with the cases where the contract was possible to perform when entered
the contract, but due to some event, the performance became impossible or
unlawful.
For example, If A buys tickets from B to watch a cricket match and pays half
the price in advance. If the match is cancelled, A will be unable to reclaim
from B because the termination was beyond A's control.
Quasi Contract
V
Quasi-Contracts aris es whe n one pers on has don e som ethi ng for ano
on his beh alf to thir d part y then the cou rt com es forw ard on the gro the r or pai d mo ney
that the pers on receiving the ben efit mus t mak e com pen sati on to und of"e qui ty" say ing
would become rich on the exp ense s of the other." For Exa mp le-Athe oth er oth erw ise he
has been paid or any thin g delivered by mis take mus t repay or retu per son to who m mo ney
contract betw een the part ies to that effect. Such obli gati on, for wanrn it as if ther e was a
appears, are called Quasi-Contracts und er theE ngli sh Law. t of pro per nam e, it
IY.P-es of Quasi-Contract

1 - Section 68

It states that a person is not capable of entering into any contract. Therefore, the supplies
are provided to him or anyone the incapable person is legally bound to support by the
third party. The supplier third party is entitled to recovering the price of such supplier
from the unable person's property.
2 - Section 69

It states that if a person is interested in paying money and pays on behalf of another
person, he is bound to pay by the law. So then, the person who made the payment is
entitled to reimbursement by another party (on behalf of whom he has paid).

3 - Section 70

It states that the receiving party has enjoyed the same benefits if a person does anything
for the other person lawfully or delivers something without intendmg to do the same
gratuitously. Then, such a receiving party is bound to compensate the former party.

4 - Section 71

It states that if a person finds goods that belong to another party and takes such goods into
his custody, then the former has responsibility the same as that of a bailee.

5 - Section 72

It states that if a person has been paid or delivered mistakenly or under coercion, he must
repay or return.
t·ac tors
Con ting ent Contracts
Wagering Contract

Mea ning It is a cont ract to d

do som ethi n . o or not to
It is a prom ise to give mo
to a coll ater al ~~[ efer enc e or mon ey's Worth With ney
happ enin g or not happ enin g. refer ence to an Uncertain
ehvent h~PPening or not
appe ning .

Rec ipro cal

It may not cont ain recip roca l
It cons ists of reciprocal
pro hlis es
prom ises .
prom ises.

Unc erta in
eve nt The even t is colla teral .
The unce rtain even t is the
core factor

Nat ure of
con trac t Con ting ent cont ract may not A wagering agre eme nt is
be wag erin g in natu re. essentially contingent in
natu re.

Inte rest of Con tract ing part ies has

par ties inte rest in the subj ect matt er The cont ract i~ parties have
in a cont inge nt cont ract. no inter est in e subject
matter.

Mut uali ty of Con ting ent cont ract is not A wagering contract is a game,
loss and gain base d on the doct rine of losing and gaining alone
mut uali ty of loss and gain. matt ers.

Effe ct of
con trac t Con ting ent cont ract is valid. A wagering agreement is void.
I
Standard Form contract
V
Standard Form Contract may be understood as the contract made in the standardized
form. It is called 'contract of adheson'. In the case of standard form contract one party has
printed forms of contract containinga large number of terms and conditions .The terms
and conditions often contain the clause restricting the liability or excluding the liability of
the party who has prepared it. The other party has no opportunity to bar~ain. He has
opportunity only to make the contract on term and conditions contained tn the printed
form or to refuse to enter into the contract on the said the term and conditions.

He can not alter the terms and conditions. He has no opportunity even to discuss them
.actually he does not negotiate but merely adheres. The Life insurance Corporation
,Railway authorities. City corporations dry clearness etc. daily enter into several contracts
in standardized forms.
Uniformly and certainly of terms and conditions of the contract are the main advantages of
making of contract in standardized form and on account of these advantages the horizon
thereof has much expanded and itis still expanding.
Breach of Contract
V
A breach of contract occurs when one of the parties of the contract do not abide by the
terms of the contract. The breach in a contract happens even when there is a failure in the
performance of the contract. But such breach of contract comes with some remedies
which provide the aggrieved party for the damages. This article deals with the breach of a
contract, its types and the remedies for breach of contract.

IY.P-eS of Breach of Contract

1. Anticipatory

Anticipation by one of the parties is the anticipatory breach. The breach will occur either
expressly or through conduct. The party will intimate eventually that he or she is going to
commit a breach. The aggrieved party will not have sufficient in the loss if there is
compensation and ifhe waits for the actual breach.

Illustration: In the Hochster v. De La Tour, it was decided that if there is a rejection of the
contract before the performance, then claim for the damages can be made. In accordance
with that, De la Tour agrees to employ Hochster as their for 3 months. De La Tour appoints
Hochster in April to start work from June. But De La Tour withdraws the appointment by
May. Hochster sues them. De La Tour argues that Hochster is under the terms or
obligation, stating that he should be ready to perform until the 3 months is due. But Lord
Campbell CJ dismisses the argument and awards Hochster with the damages.

2.Actual

The refusal to abide by the contract is an actual breach. If one of the party withdraws to
perform before the due date or if he performs incompletely, then he commits a breach.

Illustration: Poussard was to perform opera in the London run for 3 months. The
producers found a substitute when she was ill. The producers refuse to take her back
when she returned. The court was with the producers as it discovered their defence
justifiably. The court did not award her with the damages. The contract claims that she
must perform from the first day. Failure to oblige by the contract made the producers
reject her contract.
Concept of Free Consent

For a contract to be valid it is not enough that the parties have given their consent. The
consent should also be free i.e., it has been given by the free will of the parties involving no
pressure or use of force. Section IO of the Contract Act specifically provides that all agreements
are contracts if they are made by the free consent of the parties. Section 14 of the Act states that
Consent is said to be free when it is not caused by
(i) coercion, or
(ii) undue influence, or
(iii) fraud, or
(iv) misrepresentation, or
(v) mistake.
When the consent of any party is not free, the contract is treated as voidable at the option of the
party whose consent was not free. If, however, the consent has been caused by mistake on the
part of both the parties, the contract is considered void.
g re e m e n ts ca C o n tr a c t A c t,
oidable u n d e r th e In d ia n

72. &
e m e n ts : A g re e m e n ts th a t are n o t
Void agre
a lly b in d in g a n d ca n n o t be e n fo rc e d .
leg
le a g re e m e n ts : A g re e m e n ts th a t a re
Voidab
va lid b u t ca n be m a d e void b y th e
initially
aggrieved party.

oid agreements &

e m e n ts th a t are u n la w fu l in p a rt
Agre
si d e ra ti o n
Agreements w it h o u t co n
e m e n ts th a t re st ri ct m a rr ia g e
Agre
A g re e m e n ts th a t re st ri ct tr a d e
•
re e m e n ts th a t ar e b a se d on a w a g e r
• Ag
m e n ts th a t a re so u n ce rt a in th a t th e ir
• Agree
rm in e d
meaning ca n n o t be d e te

oidable agreements &

g re e m e n ts m a d e u n d e r co e rc io n
• A
e n ts m a d e u n d e r u n d u e in fl u e n ce
• Agreem
A g re e m e n ts m a d e u n d e r fr a u d
•
n ts m a d e u n d e r m is re p re se n ta ti o n
• Agreeme
The purp ose of cont ract law is to ensure
that agre eme nts are kept and that peop le
are held acco unta ble for thei r promises.
Con trac t law has evol ved over time to mee t
the nee ds of soci ety, and is now aligned
with inter natio nal legal prac tices . &

Purpose of contract law &

• Ensure agreements are kept: Contract law

holds people accountable for their promises.
• Provide remedies for breach of contract: If
a part y breaches a contract, the law can
provide remedies.

Evolution of contract law &

• Ancient roots: Contract law in India has

roots in religious texts.
• Colonial rule: During colonial rule,
indigenous practices were combined with
English common law.
• Modern era: India's cont ract law has
adapted to meet the needs of its people and
is now aligned with international legal
 ompensatory damages are •
type of monetary remedy :=~~~:oR
or breach of contract that :oNTRAcrs
ompensate the injured par-
y for direct losses. They are
lso known as general damages. &

xplanation
• Compensatory damages: A monetary
remedy that compensates the injured party
for direct losses. e'>

• Rescission: A remedy that allows the injured

party to void the contract and act as if it
never existed. &

• Injunction: A remedy that prevents the

breaching party from taking actions that
violate the contract. e'>

• Restitution: A remedy that restores property

to the original owners. &
• Consequential damages: A remedy that
compensates the injured party if the
breaching party could have foreseen the loss
when the contract was made. e'>
• Suit for damages: A remedy that allows the
injured party to bring an action for damages
against the breaching party. e'>