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Unit 1
1. A) Define "Contract" and describe the various requisites of a valid contract. (10 Marks)
Law means a 'set of rules' which governs our behaviours and relating in a civilized society.
Contracts as Defined by Eminent Jurists
1. "Every agreement and promise enforceable at law is a contract." - Pollock
2. "A contract is an agreement creating and defining obligation between the parties" - Salmond
Contract 2(h):- An agreement enforceable by Law is a contract.
Sec.10:"All agreements are contracts, if they are made by free consent of the parties,
competent to contract, for a lawful consideration and with a lawful object, and not hereby
expressly declared to be void."
ESSENTIALS OF A VALID CONTRACT
Offer + acceptance = Promise + consideration = Agreement
+
Enforceability By Law = Contract
1. Proper offer and proper acceptance with intention to create legal relationship.
Cases; - A and B agree to go to a movie on coming Sunday. A does not turn in resulting in loss
of B's time B cannot claim any damages from B since the agreement to watch a movie is a
domestic agreement which does not result in a contract.
In case of social agreement there is no intention to create legal relationship and there the is no
contract (Balfour v. Balfour) j. In case of commercial agreements, the law presume that the
parties had the intention to create legal relations (An agreement of a purely domestic or social
nature is not a contract]
2. Lawful consideration: - consideration must not be unlawful, immoral or opposed to the
public policy.
3. Capacity: - The parties to a contract must have capacity (legal ability) to make valid contract.
Section 11:- of the Indian contract Act specify that every person is competent to contract
provided.
(i) Is of the age of majority according to the Law which he is subject, and
(ii) Who is of sound mind and
(iii) Is not disqualified from contracting by any law to which he is subject.
Person of unsound mind can enter into a contract during his lucid interval, an alien enemy,
foreign sovereigns and accredited representative of a foreign state. Insolvents and convicts are
not competent to contract.
4. Free consent: consent of the parties must be genuine consent means agreed upon
something in the same sense i.e. there should be consensus-ad-idem. The consent is said to be
free when it is not caused by coercion, undue influence, fraud, misrepresentation or mistake.
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5. Lawful object: The object of agreement should be lawful and legal. Two persons cannot
enter into an agreement to do a criminal act. Consideration or object of an agreement is
unlawful if it
(a) Is forbidden by law; or
(b) Is of such nature that, if permitted, would defeat the provisions of any law; or
(c) Is fraudulent; or
(d) Involves or implies, injury to person or property of another, or
(e) Court regards it as immoral, or opposed to public policy.
6. Possibility of performance: The terms of the agreement should be capable of performance
An agreements to do act, impossible in itself cannot be enforced,
Example: A agrees to B to discover treasure by magic. The agreement is void because the act
in itself is impossible to be performed from the very beginning.
7. The terms of the agreements are certain or are capable of being made certain:
Example: A agreed to pay Rs.5 lakhs to B for ultra-modern decoration of his drawing room. The
agreement is void because the meaning of the term "ultra-modern" is not certain.
8. Not declared Void: The agreement should be such that it should be capable or being
enforced by law. Certain agreements have been expressly declared illegal or void by the law.
9. Necessary legal formalities: A contract may be oral or in writing. Where a particular type of
contract is required by law to be in writing and registered, it must comply with necessary
formalities as to writing, registration and attestation. If legal formalities are not carried out then
the contract is not enforceable by law.
Example: A promise to pay a time. Barred debt must be in writing.
Agreement is a wider term than contract whereas all contracts are agreements. All agreements
are not contracts. Thus we see that an agreement may be or may not be enforceable by law,
and so all agreement are not contract. Only those agreements are contracts, which are
enforceable by law, In short. Hence, we can conclude "All contracts are agreement, but all
agreements are not contracts."
Contracts = Agreement + Enforceability by law.
Distinction between Contract & Agreement
Where a particular type of contract is required by law to be in writing and registered, it must
comply with necessary formalities as to writing, registration and attestation. If legal formalities
are not carried out then the contract is not enforceable by law.
Example: A promise to pay a time, Barred debt must be in writing.
Agreement is a wider term than contract whereas all contracts are agreements. All agreements
are not contracts. Thus we see that an agreement may be or may not be enforceable by law,
and so all agreement are not contract. Only those agreements are contracts, which are
enforceable by law, In short. Hence, we can conclude "All contracts are agreement, but all
agreements are not contracts."
Contracts = Agreement + Enforceability by law.
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Contracts Agreements
Section Sec. 2 (h) Sec. 2 (e)
Every promise or every set of promises
A contract is an agreement
Definition forming consideration for each other is an
enforceable by law.
agreements.
Enforceability Every contract is enforceable Every promise is not enforceable.
Interrelationship A contract includes an agreement. An agreement does not include a contract.
The scope of a contract is limited, Its scope is relatively wider, as it includes both
Scope as it includes only commercial social agreement and commercial
agreements. agreements.
Only legal agreements are called
Validity An agreement may be both legal and illegal.
contracts.
Every contract contains a legal It is not necessary for every agreement to
Legal Obligation:
obligation. have legal

All Agreements are not Contracts: An agreement is termed a contract only when it is
enforceable by law. All agreements are not necessarily legally enforceable. It can rightly be said
that an agreement has a much wider scope than a contract. For example agreements are not
legally binding are an invitation to dinner or to go for a walk and its acceptance. These are
agreements not contracts.
An agreement does not necessarily imply a legal obligation on the parties to the agreement. It is
import here to clarify what exactly is an obligation. Obligation is a legal tie which imposes upon
a person or persons the necessity of doing or abstaining from doing definite act or acts. An
agreement need not necessarily be within the framework of law and be legally enforceable. If it
is, then it is a contract. A promises B to do physical harm to C whom, the latter does not like and
B promises to pay A Rs. 1000 to do that, it cannot be termed as a contract because such an act
would be against the law. Any agreement of which the object or consideration is unlawful is void
and cannot be called a contract.
Conclusion
It would be clear from what has been said so far that an agreement has a much wider scope
than a contract. An Agreement implies fulfilling some agreed condition. It does not necessarily
imply that the stipulated conditions conform to the law and are enforceable by it. It may be said
that an agreement is the genus of which contract is the species. It also makes it clear that all
agreements are not contracts but all contracts are agreements.

B) Define offer. Explain the rules regarding to valid offer with the help of examples. (10
Marks)
Introduction: Every day we directly or indirectly enter into agreements for the purpose of
carrying out various activities. Agreements can be for social/family or for legal relationships. An
agreement entered for legal purpose which intends to have legal relationship can be termed as
Contract. It is the Contract which is considered to be legally enforceable in the eyes of Law as
per section 2(h) of the Indian Contract Act, 1872.
Every Contract to be valid has to satisfy certain essential elements as laid down under the
Contract Act, 1872. The first and foremost essential element for a valid Contract if-
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Meaning: An Offer is intimation by words or by conduct of a willingness to enter into a legally

binding Contract.
Definition: Section 2(a) of the Indian Contract Act, 1872 defines the term "Proposal" as follows:
"when one person signifies to another his willingness to do or to abstain from doing something
with a view to obtaining the assent of the other to such an act or abstinence, he is said to make
a proposal" The person making the 'proposal' or 'offer' is called the 'promisor' or 'offeror' and the
person to whom the offer is made is called the 'offeree'.
Essentials of valid offer:
1. It may be express or implied:
An offer may be made either by words or by conduct. An offer, which is made by words spoken
or written, is called an express offer. The offer, which is made by the conduct of a person, is
called an implied offer.
Example:
M says to N that he will sell his motorcycle to him for RS. 40,000. It is an express offer.
The offer must be made in order to create legal relations otherwise, there will be no agreement.
If an offer does into give rise to legal obligations between the parties it is not a valid offer in the
eye of law.
Example:
1. A invites B to dinner B accept the invitation. It does not create any legal relations, so there is
no agreement.
3. It must be definite & clear:
An offer must be definite and clear, if the terms of an offer are not definite and clear, it cannot be
called a valid offer. If such offer is accepted it cannot create a binding contract.
Example:
A has two motorcycles. He offers B to sell one motorcycle for Rs.27,000. It is not a valid offer
because it is not clear that which motor cycle A wanted to sell.
4. It is different from invitation to offer:
An offer is different from an invitation to offer. It is also called invitation to treat or invitation to
receive offer. An invitation to offer looks like offer but legally it is not offer.
In the case of an invitation to offer, the person sending out the invitation does not make an offer
but only invites the other party to make an offer. His object is to inform that he is willing to deal
with anybody who after getting such information is willing to open negotiations with him. Such
invitations for offers are not offers according to law and so cannot become agreement by
acceptance.
Example:
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Quotations, Catalogues of prices, display of goods with prices issue of prospectus by

companies are examples of invitation to offer.
5. It may be specific or general:
When an offer is made to a specified person or group of persons, it is called specific offer. Such
an offer can be accepted only by the person or persons to whom it is made. A general offer, on
the other hand, is one, which is made to public in general and it may be accepted by any person
who fulfils the conditions mentioned in it. Both specified and general offers are valid.
Example:
1 M makes an offer to N to sell his bicycle for Rs.800, it is a specific offer. In this case, only N
can accept it.
6. It must be communicated to the offeree:
An offer is effective only when it is communicated to the offeree. If an offer is not communicated
to the offeree it cannot be accepted. Thus an offer, which is not communicated, is not a valid
offer. It applies to both specific and general offers.
Example:
A without knowing that a reward has been offered for the arrest of a particular criminal, catches
the criminal and informs the police. A cannot recover the reward as he was not aware of it.
7. It should not contain negative condition:
An offer should not contain a condition the non-compliance of which may be assumed as
acceptance. An offeror cannot say that if acceptance is not communicated up to a certain date,
the offer would be presumed to have been accepted. If the offeree does not reply, there is no
contract, because no obligation to reply can be imposed on him, on the ground of justice no
agreement because such condition cannot be imposed on the offeree. It is only a one sided
offer.
Example:
A wrote to B offering to sell his book for Rs.500 adding that if he didn't reply within 5 days, the
offeree would be presumed to have been accepted. There is no agreement b/c such condition
can't be imposed on the offeree. It is only a one sided offer.
8. It may be subject to any terms & conditions:
An offeror may attach any terms and conditions to the offer he makes. He may even prescribe
the mode of acceptance. There is no contract, unless all the terms of the offer are accepted in
the mode prescribed by the offeror. It must be noted that if the offeror asks for sending the
acceptance by telegram and the offeree sends the acceptance by letter, and the offeror may
reject such acceptance.
Example:
A asks B to send the reply of his offer by telegram but B sends reply by letter, A may reject such
acceptance because it is opposed to the prescribed mode of communication.
9. It must not contain cross offers:
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When two parties make similar offers to each other, in ignorance of each other's such offers are
called cross-offers. The acceptance of cross-offers does not result in complete agreement.
Example:
On 23rd December 2007, A wrote B to sell him 100 ton of iron at Rs. 10,000 per ton. On the
same day, B wrote to A to buy 100 tons of iron at Rs. 10,000 per ton. There is no contract
between A & B because the offers wee similar and made in ignorance of the other and so there
is no acceptance of each other's offer.
Conclusion:
Therefore, Offer is very important element for starting a Contract. Offer should be clearly
differentiated between Invitation to offer. Offer is legal binding one whereas invitation to offer is
merely an invitation. Quotations, catalogues of prices or display of goods with prices marked
thereon do not constitute an offer. They are instead an invitation for offer and hence if a
customer asks for goods or makes an offer, the shopkeeper is free to accept the offer or not.

a) In a self-service departmental store a customer picks up the article and takes into cash
counter, cashier refuses to sell. Has the customer any right against the owner of the shop? (6
Marks)
In this case, the customer doesn't have any right against the shop owner,
Reason An offer is different from an invitation to offer. It is also called invitation to treat or
invitation to receive offer. An invitation to offer looks like offer but legally it is not offer In the
case of an invitation to offer, the person sending out the invitation does not make an offer but
only invites the other party to make an offer. His object is to inform that he is willing to deal with
anybody who after getting such information is willing to open negotiations with him. Such
invitations for offers are not offers according to law and so cannot become agreement by
acceptance.
In this above problem, the shop owner has just displayed the goods in his shop and this is not
an offer to sale, it is just mere invitation to an offer hence the customer doesn't have any right
against the shop owner.
Example:
Quotations, Catalogues of prices, display of goods with prices issue of prospectus by
companies are examples of invitation to offer.
Offer Invitation to Oder
In the offer, the offeror has willingness In this, the party has no such intention or willingness to have
or intention to have the contract. contract.
The person making the proposal is The party who has arranged the articles or advertised in any
called the offeror/promisor/ proposer. media can't be termed as offeror /promisor/proposer.
An offer, when accepted becomes a An invitation to offer maybe changed as offer, but can't become
promise. as a promise it is only an enquiry
In this, the offeror must signify this
intention or willingness. The party need not his intention or willingness.
An offer maybe classified into a General
There are no such divisions among the invitation to offer.
Offer and Specific Offer.
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An offer contains legal requirements. An invitation to offer does not contain legal requirements.

A out of natural love and affection promises to give his son, B Rs.1000 under a registered
document. Is it valid contract? (6 Marks)
 Yes
 It is a valid contract/document
 It is enforceable under the law
 Reasons - Sec 2(d) defines: consideration- something which is of some value in the eye of
law.
It may consist either of some rights, interest, profit, benefit getting accruing to one party or some
forbearance, detriment, loss or responsibility given, suffered or undertaken by the other at his
request.
An agreement made without consideration is enforceable in these occasions.
Sec 25-1) Promise due to natural love and affection (Sec 25 (1))
"A" is made in favour of near relation on account of natural love and affection, the same is valid,
even though there was no consideration for such a promise. It is lawful and binding.
i) The parties to the agreement must be standing in a near relationship to each other
Father-son
ii) It is made by "A" (Father) party out of natural love and affection for the son "B"
iii) The promise should be in writing and registered. Here it is registered document.
Eg: Gift deeds, Will The Registration Act, 1908 and the Indian Stamp Act, 1899 are
applicable.

Unit 2
1. a) What is free consent? Explain in brief when the consent is said to be free according
to Indian Contract Act, 1872 (10 Marks)
Sec13: Two persons have said to have consented when they agree upon same thing in the
same sense. In English Law this is called "Consensus ad idem"
Effect of absence of consent: When there is no consent at all, the agreement is void-an-initio.
It is not enforceable at the option of either party.
Example 1: X have two cars, one Maruti car and another is Honda car. Y does not know that X
has two cars Y offers to buy a car at Rs.50,000/- Here there is no identity of mind in respect of
the subject matter. Hence there is no consent at all and the agreement is void-ab-initio.
Example 2: An illiterate woman signed a gift deed thinking that it was a Power of Attorney - no
consent at all and the agreement was void-ab-nitio (Bala Devi v/s Manumdats)
Free Consent : Consent is said to be free, when it is not caused by (Section 14)
a. Coercion (Section 15)
b. Undue influence (Section 16)
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c. Fraud (Section 17)

d. Misrepresentation (Section 18)
e. Mistake (Section 20, 21, 22)
Effect of absence of Free consent: If consent is caused by coercion, undue influence, fraud,
misrepresentation, the contract is voidable at the option of the party, whose consent was not
free (19, 19A)
Coercion (Section 15)
Force, compulsion, treats of violence, (Voidable)
Duress is more severe than coercion
Essential elements of coercion: -
a. Committing any act, which is forbidden by the IPC
b. Threatening to commit any act, which is forbidden by the IPC
a. C. Unlawful detaining of any property or
c. Threatening to detain any property
d. Coercion need not necessary proceed from party to contract
e. Coercion need not necessary be directed against the other contracting party.
f. It is immaterial whether the IPC is or is not in force at the time or at the place, where the
coercion is employed (Bay of Bengal Caption)
g. The consent is obtained by threat of an offence and the person is forced to give his consent.
h. It is mainly of a physical character
i. The freedom of will is impaired
j. It is of a violent character
k. The burden of proof lies upon plaintiff
l. It must be uttered with the intention of causing plaintiff to enter into an agreement
 Threat to strike is no coercion.
 Compulsion of law is not coercion
Effect of threat to file a suit: -A threat to file a suit (Whether civil or criminal) does not amount
to coercion, unless the suit is on false charges. Threat to file a suit on false charges is an act
forbidden by the IPC and thus will amount to an act of coercion
Eg:- A husband induced his wife to enter into a contract in threat of committing suicide
(Chikham Ammirjaju v Seshama)
Illustrations: A threatens to kill B if he does not sell his house to him. B sells his house to A
and receives the payments. B's consent has been obtained by coercion. Hence, contract is
voidable at the option of B. If B decides to avoid the contract he will have to return the payment
received from A.
Coercion means compelling a person to enter into a contract, by use of physical force or
activities forbidden by IPC, or threatens to do activities forbidden by IPC or threatens to damage
the property.
In Ranganayakamma v/s Alwar Setty, ILR (1918) 41 Mad 33; The Court held that the
adoption was not binding on the widow as her consent was obtained by coercion and was not
free consent. The adoption Deed was cancelled at the wish of the widow
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Techniques of causing Coercion: Consent is said to be caused by coercion when it is obtained

by pressure exerted by either-
1. Committing or threatening to commit any act forbidden by the IPC;
2. Unlawfully detaining or threatening to detain any property
Threat to commit suicide may amount to coercion: In case of Chikkam Amiraju v/s
Chikkam Seshama, the court held that such threat would amount to coercion. (IPC punishes a
person who attempts to commit suicide, it also punishes the person who abets the committing of
suicide) Threat to criminal prosecution, not coercion but threat to life a false charge, may
amount 160 coercion, this was held in Masjidi v/s Ayisha (1880) Punj.Ree No.135;
Detaining or threatening to detain the property unlawfully amounts to coercion: In
Muthiya Chettiar v/s Karuppan Chetti, AIR 1927 Mad.852; The Court held the consent was
obtained by employing coercion. Thus the contract was cancelled at the desire of the Principal.
If the detention of the property or threatening to detain the property is not unlawful, it will
amount to Coercion.
Burden of Proof: The burden to prove that consent has been obtained by employing coercion
lies on the party who wants to avoid the contract on the ground of coercion. The contract will be
voidable at the option of the party whose consent has been obtained.
Comparison with English law:
English Law - Duress does not include detaining of property or threat to detain property.
 Duress can be employed only by a party to the contract or his agent
 It must be aimed against the life or liberty of the person or members of his family.
 It must be such as to cause immediate violence
 It must be such as to affect a man with ordinary firmness of mind
Effect- When coercion is employed to obtain the consent of a party, the contract is voidable at
the option of the party, where consent was obtained by coercion.

What are agreements are said to be void? Explain with illustration. (10 Marks)
Introduction:
Void agreements are those agreements which are not enforced by law courts. Section 2(g) of
the Indian Contract Act defines a void agreement as, "an agreement not enforceable by law"
Thus the parties to the contract do not get any legal redress in the case of void agreements.
Void agreements arise due to the non-fulfilment of one or more conditions laid down by Section
10 of the Indian Contract Act. The Section states as follows:
All agreements are contracts if they are made with free consent of parties competent to
contract, for a lawful, consideration and with a lawful object, and are not hereby expressly
declared void. From the above, it is quite clear that non-fulfilment of any of these conditions by
one of the parties to a contract shall make an agreement void.
Agreements which expressly declared to be void by the Indian Contract Act:
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Certain agreements have been expressly declared to be void by Indian Contract Act 1872. Such
agreements which have been expressly declared to be void by the act discussed below,
1. Agreements made by incompetent person (Section 11).
2. Agreements made under Mistake of Facts (Section 23).
3. Agreements having unlawful objects and Consideration (Section 23).
4. Agreements having unlawful objects and consideration in Part (Section 24).
5. Agreement made without considered as Section 25.
6. Agreement in restraint of marriage (Section 26).
7. Agreement in restraint of trade. (Section 27).
8. Agreement in restraint of legal proceedings (Section 28)
9. Agreement which is ambiguous and uncertain (Section 29)
10. Agreement by way of Wager (Section 30)
11. Agreements to do impossible acts. (Section 56).
Agreements made by incompetent person: Section 11 of contract act deals with the competency
of parties and provides every person is competent to contract. It is follows that the following
persons are incompetent to contract
i. Minor
ii. Person of unsound mind
iii. Person disqualified by any law to which they are subject.
Contracts entered into by persons mentioned above are void.
Illustration: Mohari bibi Vs Dharmo Das Ghose 1903. In this case the court was held that
mortgage by a minor was void.
Agreements made under Mistake of Facts:
Agreement made under a mutual mistake as a matter of where both the parties to agreement
are under a mistake as to a matter of fact essential to the agreement.
Illustration: A agrees to purchase a house from B who is distant relation of his father, never
knowing that he is the actual owner of the house. After getting registration of transfer deed in his
favor he comes to know of his ownership of the said house but could not get back the
consideration money from B.
Agreements having unlawful objects and Consideration:
Agreements of consideration and object are unlawful or agreements which include consideration
or unlawful objects are void-section 24. The consideration on object of an agreement is unlawful
if it is forbidden by law or of such a nature that if permitted, it would defeat the provisions of any
law or is fraudulent or involves injury to the person or property of another or court regards it as
immoral or opposed to public policy.
Illustration: An agreement for sale or purchase of smuggled goods, an agreement to kill
someone/harm someone, an agreement to do immoral activities, an agreement to publish a
defamatory statement in newspaper etc.
Agreement made without considered as Section 25:
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Every agreement to be enforceable at law must be supported by valid consideration. An

agreement made without consideration is void and is unenforceable except in certain cases,
section 25 specifies cases where an agreement though made without consideration will be valid.

Agreement in restraint of marriage:

Agreements in restraint of marriage have been declared void u/s 26 of the Indian Contract Act
since they are illegal. Sec. 26 states, "Every agreement in restraint of the marriage of any
person, other than a minor, is void. This is because of the fact that every person has got a right
as well as freedom of choice to marry. If an agreement is made interfering in this right, that is
unlawful.
Illustration: A promised to marry B only and none else, and in default to pay rupees 2000. But
A Married C. B file a suit, here suit was dismissed on the ground that agreement was in restraint
of marriage and so, void.
Agreement in restraint of trade:
Every person has a lawful right to do or adopt any lawful profession, trade or business. If any
agreement is made to put restriction over this right, that shall be an infringement of his
fundamental right and shall also be against Public Policy. This is why the Indian Contract Act
has specifically declared such agreements void.
EXCEPTIONS:
1. Sale of good will: A person with its goodwill, the seller of the business, may make an
agreement with the buyer, not to carry on the business in competition with the buyer. Such an
agreement, if imposes a reasonable restriction on the seller's right to carry on business is valid.
2. Exception under the Indian Partnership Act, 1923: -
Section 11 (2): The purpose is that the partners will not carry on their own business ignoring
the partnership business. Such an agreement is valid.
Section 36 (2): It may be made between the outgoing partner and the remaining partners, who
continue the business of the firm.
Section 54: It may be made upon or in anticipation of the dissolution of firm.
Section 55 (3): When a person purchases the goodwill of a business, his interest may be
protected by a covenant by the seller of goodwill, that the latter will not carry on business similar
to the one which has been sold.
3. Restraint by a contract of service: An agreement of a service under which an employee
agrees that he will serve a particular employer for certain duration and that he will not serve
anyone else during that period, is valid.
4. Trade combination: Some traders and manufacturers combine together to eliminate
competition as between themselves and make agreement fixing minimum price, regulating the
supply of goods and putting profits in a common pool and diving the same amongst themselves.
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5. Solus agreements: The seller or the manufacturers of a certain product may agree that he
will apply the whole of his product to a particular single buyer only or similarly a buyer may
agree that he will purchase all his requirements of a certain commodity from a particular seller
or manufacturer only and one else; is valid.
Agreement in restraint of legal proceedings: Every agreement by which any party thereto is
restricted absolutely from enforcing his rights under or in respect of any contract, by the usual
legal proceedings in the ordinary tribunals, or which limits the time within which he may thus
enforce his rights, is void to that extent. Two kinds of Agreements are void.
1. Agreement by one party is absolutely barred from enforcing his rights through usual legal
proceedings
2. Agreement which places a time for enforcing a right through legal proceedings.
Ambiguous and uncertain Agreements (Section 29)
Section 29. Which is not certain or capable of being made certain, are void. It is necessary that
there should be no ambiguity about what that parties intend.
Illustrations: '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 was void for uncertainty.
Agreement by way of wager (Section 30)
Essentials of Wager agreement:
i. The parties have opposite views regarding an uncertain event.
ii. There are chances of gain or loss to the parties on the determination of the event one way
of the other.
iii. The parties have no other interest except winning or losing a bet.

Contingent Contracts (Section 31)

It is a contract to do or not to do something, if some event, collateral to such contract does not
happen. When the contract is dependent or conditional upon the happening or non-happening
of a certain future event, the contract is contingent.
'A' contracts to pay 'B' Rs. 10,000, if 'B's house is burnt. This is a contingent contract.
Enforcement of Contingent contract: -
1. Section 32: Contracts contingent on an event happening
2. Section 33: Contracts contingent on an event not happening
3. Section 34: Contracts contingent on the future conduct of a living person
4. Section 35: Contracts contingent on happening of a specified event within a fixed time.
5. Contracts contingent on not happening of a specified event within a fixed time.
6. Section 36: Agreements contingent on impossible event.
Agreements to do impossible acts: Impossibility of performance of an act does not give or
creat any obligation upon the parties to a contract, Section 56 of the Act, declared such contract
as void. This section states as follow: An agreement to do an act impossible in itself is void, a
contract to do an act which, after the contract is made, becomes impossible, or by reason of
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some event which the promisor could not prevent, becomes void when the act becomes
impossible or unlawful.
Illustration:
(a) A agrees with B to discover treasure by magic. The agreement is void.

a) Raju, a shopkeeper, supplied wife and children of Ramu, a lunatic with necessaries
suitable to their condition in life. Raju intends to recover price of the goods from Ramu
Advise him. (6 Marks)
Yes, Raju can recover the price of the goods..
As per the Indian Contract Act, 1872 Sec 68 provides that any person who has supplied any
goods suitable for his life to the minor or lunatic person can recover the price of the goods.
However, the exception to this is lunatic will not be personally liable but his estate or any
property will be liable out of which the lunatic person can reimburse the money. In the above
case Raju can recover the money from Ramu's estate or property but Ramu will not be
personally liable.
To render lunatic estate liable for necessaries to conditions must be satisfied those are listed
below,
1. A contract must be for the goods reasonably necessary for his support in his life.
2. The lunatic person must not have already a sufficient supply of these necessaries.

M, tells his wife that he would commit suicide if she did not transfer her personal assets
to him. She does so under threat. Can wife avoid this contract? (6 Marks)
Yes
-Wife can avoid this contract.
Because this contract is caused by Coercion, as defined in Section 15. According to Section 14,
consent is said to be free from coercion. According to Section 10 of the act, there should be free
consent (Valid contract) of the parties, when they enter into the agreement.
Reasons-
Section 15 defines coercion-The consent is given under the threat, is an offence under IPC.
The consent is obtained by threat of an offence and the person is forced to give his consent
 It is mainly of a physical character.
 The freedom of will is impaired
 It is violent character
 The agreement made by coercion is voidable at the option of the party whose was so
caused.
 The burden of proof lies upon the plaintiff
 The party avoiding the contract is bound to restore to the other party any benefit, which he
may have received under the contract.
14

 The real or apparent authority, which one person has over another- Section 16- Undue
influence.
 Confidence response by one party in another (Fiduciary relationship).

Unit 3
a. Explain the grounds of impossibility of performance of contract. (10 Marks)
Introduction:
A contract is discharged when the obligations created by it come to an end. Discharge of
termination of a contract means the termination of contractual relationship between the
contracting parties. There are different modes or ways in which a contract may be discharge.
Discharge by impossibility of performance: Supervening impossibility arises due to the
happening of certain 27 events which were neither in the contemplation of the parties when they
entered into the agreement nor either of the parties are responsible for causing the performance
of the contract impossible. In such a case the contract will be void as soon as such events make
the performance of the contract impossible. The impossibility must be either legal or physical
but not commercial. This is called "Doctrine or Supervening Impossibility Section 56 of the
Indian Contract Act lays down:
"An agreement to do an impossible act is veld", a contract to do an act, which after the
contract is made, becomes impossible, or by reason of some event which the promisor could
not prevent, becomes void when the act becomes impossible or unlawful. This is called
"Supervening Impossibility”, i.e. impossibility arising subsequent to the formation of the
contract. The supervening impossibility may be due to any of the following causes.
(a) By the destruction of the subject matter. If the subject matter of the contract is destroyed
subsequent to the formation of the contract, without any fault of either of the parties, the contract
shall become void.
Example:
A person contracted to deliver a part of a specific crop of potatoes. The potatoes were
destroyed through no fault of the party. The contract was held to be discharged. Howell V
Coupland, 1876).
(b) By the non-existence of a state of things necessary for the performance. If a contract is
made on the basis of continued existence of certain state of circumstances, the contract stands
discharged if the state of things ceases to exist.
Example:
(i) H hired a room from K for two days to witness the coronation procession of King Edward VII.
K knew the object of the contract though the contract contained no reference to the coronation.
Owing to King's illness the procession was cancelled. It was held that I was excused from
15

paying rent for the room, as the existence of the procession as the basis of the contract and its
abandonment discharged the contract. (Krell V. Henry 1903).
(d) Change of law. On account of subsequent change in law, the performance of the contract
may become impossible. The object of the contract may be declared to be unlawful
Example
(i) X sold to Y a specific parcel of wheat in a warehouse. Before delivery could be made, the
warehouse was sealed by the Government and the entire quantity was requisitioned by the
Government under Statutory Power. The contract was held discharged (Re Shipp, Anderson &
Co. V. Harrison Brs. and Co's Arbitration (1915),
(e) Outbreak of War. A contract entered into with an alien enemy during the war is unlawful and,
therefore, void ab initio contracts made before the outbreak of war either suspended or declared
void by the Government. If they are suspended, they may be performed after the termination of
the war. Example:
Cases not Covered by Supervening Impossibility:
It may be stated that impossibility to perform arising subsequently to the agreement will not, as
a rule, relieve the promisor from performing his part in all cases, because, "Where there is a
positive contract to do a thing not in itself unlawful, the contractor must perform it or pay
damages for not doing it, although in consequence of unforeseen accidents, the performance of
his contract has become unexpectedly burdensome or even impossible (Tayler V. Caldwell
(1863). Therefore, in the following cases the doctrine of supervening impossibility will not apply.
(a) Difficulty in performance. A contract can be avoided on the ground of supervening
impossibility only when the events taking place make the performance of the contract physically
or legally impossible as contemplated by the parties at the time of the making of the contract.
Difficulty in performance will not discharge a contract on the ground of impossibility of
performance.
(b) Commercial impossibility: A party cannot be discharged from performing his part of the
contract simply on the ground that it will be now-profitable for him to perform the contract.
(c) Impossibility due to behavior of a third person: A contract, the performance of which
depends on the behavior of a third person, shall not become impossible of performance merely
because the third party acted in a particular manner agreed upon, on the ground that if a person
chooses to answer for voluntary act of third person, he must be held to warrant his ability to
procure that act.
(d) Strikes, lockouts and civil disturbances: Strikes lock-outs and civil disturbances will not
discharge a party from performing his part of the contract unless a specific provision to this
effect has been made in the contract.
Example:
X agreed to supply certain goods to Y. The goods were to be procured from Algeria. Due to riots
and civil disturbances in that country goods could not be procured. It was held that there was no
excuse for the non-performance of the contract. (Jacobs V. Credit Ilyonnais 1884).
16

(c) Partial Impossibility: Where there are several purposes for which a contract is made,
failure of one of the objects will not terminate the contract.
Effects of supervening Impossibility
1. The contract becomes void in case its performance becomes subsequently impossible
Parties to the contract will be released from further performance (Sec. 56 para 2).
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
(Sec. 651
3. Where one person has promised to do something which he knew or with reasonable diligence
might have known, and which the promises did not know to be impossible or unlawful, such
promisor must make compensation to such promises for any loss which such promises sustains
through the non-performance of the promise (See. 56 para 3).
Example:
A contracts to marry B being already married to C and being forbidden by the law to which he is
subject to practice polygamy. A must make compensation to B for the loss caused to her by the
non-performance of his promise.

1b. Explain the Doctrine of Frustration with reference to decided cases. (10 Marks)
Discharge of Contract: It means a contract ceases to operate. It also means the rights and
obligations created by the contract come to an end. The termination of the contractual
relationship between the parties.
1. By performance (Sec 37-67)
2. By impossibility of performance (Sec 56)
3. By agreement (Sec 62-67)
4. By breach (Sec 39)
Annul, liability fulfilment, to cancel, to release, dismiss, to relieve obligation.
1. Discharge by performance or Doctrine of Frustration
Frustration: efforts made ineffective: discontented because unable to achieve one's desire:
disappoint a hope;
When the performance of the contract becomes impossible the purpose which the parties have
in mind is frustrated. If the performance becomes impossible, because of a supervening event,
the promisor is excused from the performance of the contract. In English law, it is called
"Doctrine of Frustration" In Indian Law, it is called as "Impossibility of Performance".
See 56 of the Indian Contract Act, 1872. this doctrine is applicable in two circumstances (1)
when the performance of the contract was physically cut off, and (ii) when the object was failed.
Sec 56: Agreement to do impossible Act- an agreement to do impossible in itself is void.
Illustrations
a. A agrees with B to discover treasure by magic. The agreement is void.
17

b. A and B contract to marry each other. Before the time fixed for the marriage, A goes mad.
The contract becomes void.
Rules: Sec 56 explains the circumstances in which the Doctrine of Frustration arises. The
ingredients of Sec 56 are as follows:
a. The agreement is to do an impossible act is in itself void.
i. A contract to do an act becomes impossible or unlawful by an event which the
promisor could not foresee.
ii. The promisor knew or might have known with reasonable diligence that the act he
promised is impossible or unlawful, but the promise did not know of it, in such
circumstances, the promisor is held liable to pay compensation to the promise for
any loss occurred by the promise for the non-performance of the promise.
iii. Illustrations appended to Sec 56 clarify and give propositions of this doctrine.

Effect of Frustration: it is well settled that if and when there is frustration the dissolution of the
contract occurs automatically.
1. The frustrations should not be self-induced: Frustration should arise without blame or
fault on either side. Reliance cannot be placed on a self-induced frustration.
2. Frustration must operate automatically: Frustration operates automatically to discharge
the contract "irrespective of the individual's concerned, their temperaments and failings, their
interest and circumstances". This is particularly true of Indian law as Sec 56 of the Contract Act
lays down a rule of positive law. There must not be anticipation, knowledge or
intention of the parties.
3. Adjustment of rights (Restitution): Sec 65, obligation of the person who has received
advantage under void agreement, or contract that becomes void- when an agreement is
discovered to be void, or when the contract becomes void, any person who has received any
advantage under such agreement or contract is bound to restore it, or to make compensation for
it, to the person from whom he deceived it.
4. As a result of frustration, the contract becomes void.
5. The doctrine of Quantum Meruit is allowed in cases of frustrations, wherever possible.
Grounds of Frustration: Following are the well recognized grounds of frustration on which the
doctrine of frustration may be applied by the courts:
1. Destruction of the subject matter of the contract:
Where the performance of the contract becomes impossible by the destruction of the specific
thing to that performance that contract is discharged. The destruction of the music hall Taylor
v/s Caldwell case is a good example.
2. Non-occurrence of a particular stage of the thing:
The doctrine of frustration has also been applied in cases of non-occurrence of a particular
event which is essential for the performance of the contract.
3. Death or incapacity of the party:
18

Where the performance of a contract depends upon the personal services of a party, the death
or incapacity of such a party may be treated to be a calid ground for frustration of the contract. A
leading case on the point is Robinson v/s Davinson. The court held that in this case the
continued health of the pianist was a condition attached to the agreement. Her serious illness
was a valid ground on the basis of which she was discharged from her obligation under the
contract.
4. Change of circumstances:
If the change of circumstances makes the performance of the contract impossible, the contract
will frustrate and parties will be discharged from their obligations under the contract. If, however,
despite the change of circumstances the performance is still possible the contract will not be
deemed to have been discharged.
5. Building contracts:
Where the execution of the contract is delayed or otherwise becomes impossible by the
happening of an external event, the contract is discharged. But much will depend upon the facts
and circumstances and each case has to be judged on its own merits.
6. Change in law:
The performance of a contract may be also become legally impossible by the change in law. If
the performance is legally impossible, the contract will be discharged. But as pointed in Anson's
Law of Contract, "the change in the law must be such as to strike at the root of the agreement
and not merely to suspend or hinder its operation in part.
7. Legislative or government intervention:
Are the well-recognized grounds of frustration on which the doctrine of frustration on which the
doctrine of frustration may be applied by Courts.

X,Y, and Z, jointly promise to pay Rs.30,000/- to D. Y becomes insolvent. Discuss the
liability of X,Y, and Z. (6 Marks)
-Yes, X, Y, Z have the liability to pay Rs.30,000 to D.
-But Y becomes insolvent. So now X and Z are compelled to pay the amount to D, may have
performed the whole of the promise and they have right to claim the compensation from Y or
their representatives later on.
They are entitled to receive Rs. 10,000/- from Y.
Section 42, 43 and 44 of the Contract Act deal with the question of liability of the joint promisor.
The liability of Joint Promisor is joint and several: When two or more persons make a joint
promise, the promise may, in the absence of express agreement to the contrary, compel anyone
or more of such joint promisors to perform the whole of the promise. Their liability to pay the
money is joint and several under Section 43 of the Contract Act.
Contribution between joint promisors: Since the liability of the joint promisors is joint and
several, one of them may have performed the whole of the promise. He may have, for instance,
19

paid for the share of others also. If that is so, he has right to claim contribution from the
others (Section 43)
Effect of release of a joint promisor: Section 44 of the Indian Contract Act, 1872: "When two
or more persons have made a joint promise, a release of one such joint promisors by the
promisee, does not discharge the other joint promisors, neither does it free the joint promisor so
released from the responsibility to other joint promisors.
Effect of death of a joint promisor: Section 42: On the death of a joint promisor, his
representatives substitute him for the purpose of liability. The liability of the surviving joint
promisors is there, along with the representatives of the deceased one. When all joint promisors
die, the representatives of them all must jointly, fulfill the promise.

A musical hall was agreed to let out on certain day, but before that, it was destroyed by
fire. Is the promisor absolved from the contract? (6 Marks)
Yes.
The promisor is absolutely absolved from the contract.
The promisor is not liable for the non-performance of the contract.
Because, by impossibility of performance (Section 56)
The performance of the contract had become void. Before the date of performance arrived, the
music hall was destroyed by fire. The contract was possible when the contract is entered into,
but because of fire, the performance, subsequently became impossible or unlawful.
The performance is deemed to be impossible and the parties are excused from performing the
contract.
Discharge of contract in the following ways:
 By performance of the contract-Section 37 to 67.
 By breach of the contract-Section 39
 By impossibility of performance - Section 56
 By agreement and novation - Section to 67
 Discharge by impossibility of performance: an agreement to do an act impossible in itself, is
void, which becomes unenforceable.
➤ Initial impossibility: -
'Les non cogit ad impossibilia' the law does not compel a man to do what he cannot
possibly perform.
Impossibility here means not only physical impossibility, but also legal impossibility (Section 23)
➤ Subsequent impossibility: -
The performance of the contract may be possible when the contract is entered into, but because
of some event, the performance may subsequently become impossible or unlawful So the
20

purpose which the parties have in mind is frustrated. If the performance becomes impossible,
because of a supervening event, the promisor is excused from the performance of the contract.
This is known as 'Doctrine of Frustration' under the English Law.
Unit 4
Explain the Remedies for Breach of Contract. (10 Marks)
Remedies for Breach of Contract (Sec73-75):
When a contract has been broken, the party who suffers by such breach is entitled to receive,
from the party who has broken the Contract, compensation for any loss or damage caused to
him thereby, which naturally arose in the usual course of things from such breach, or which the
parties knew, when they made the contract, to be likely to result from the breach of it.
In estimating the loss or damage arising from a breach of contract, the means which existed of
remedying the inconvenience caused by the non-performance of the contract must be taken into
account.
Example: A contracts to repair B's house in a certain manner, and receives payments in
advance. A repairs the house, but not according to contract. B is entitled to recover from A the
cost of making the repairs conform to the contract.
There are 5 Kinds of Remedies for Breach of Contract:
1. Recession of Contract
2. Suit for Specific Performance
3. Injunctions
4. Quantum Meruit
5. Suit for Damages
a. Liqundated Damages
b. Un-Isquidated Damages
1. Recession of Contract:
When one of the parties to a contract does not fulfill the obligation, the other party can rescind/
cancel the Contract. He can refuse the performance of his part of obligation. Recession is an
equitable remedy and awarded at the discretion of the Court. Recession of a contract is remedy
offered for a contract if entered in by misunderstanding or misrepresentation or by mistake or
under Undue Influence etc.
See 75 of the Indian Contract Act, 1872 says the Party rightfully rescinding contract is entitled
to Compensation, where a person who rightfully rescinds a contract is entitled to compensation
for any damage, which he has sustained through the non performance.
Example: A, a singer contracts with B the Manager of a theater to sing at his theater for two
nights in every week during the next two months, and B engages to pay her Rs.100/- for each
night's performance. On 6 night, A willfully absents herself from the theater and B in
21

consequence rescinds the Contract. B is entitled to claim compensation for the damage which
he has sustained through the non fulfillment of obligation of the Contract.
Sec 27 to 30 of the Specific Relief Act, 1963 also deals with the Rescission of Contracts:
Sec 27: Where rescission may be adjudged (to declare/declaration by the Court) or refused.
Any person who is interested in a contract my sue to have it rescinded and such rescission may
be court where the contract is voidable (Terminable) by the plaintiff (aggrieved)
Sec 28: Rescission in certain circumstances of contracts for sale or lease of immovable
property, the specific performance of which has been decreed (order in favour of plaintiff).
Sec 29: Alternative prayer for rescission in suit for specific performance. The Plaintiff may pray
for alternative prayer that if contract cannot be specifically enforced it may be rescinded and
delivered up to be cancelled.
Sec 30: Court may require the parties to do Equity i.e. to restore so far as maybe any benefit
which they may have received from each other.
2. Suit for Specific Performance:
The suit for Specific Performance is regulated by Specific Relief Act, 1963. Specific
Performance means the actual carrying out of the contract as agreed. The Court may grant for
specific performance where it is just and equitable to do.
The Essentials of Specific Performance:
1. Valid Contract- the suit for specific performance is in agreement of sale hence the
agreement should be a valid Contract.
2. Unregistered Agreement for sale: unregistered agreements are also permitted.
3. Readiness and Willingness: the party seeking specific performance is willing to perform his
part of the contract.
4. Time is essence of Contract- An intention to make time as an essence of the contract must
be expressed in unequivocal (leaving no doubt/unambiguous).
5. Addition of parties in specific performance suit: In cases of an assignment (allotment),
creation or devolution (transfer or delegate) of any interest during the pendency of a suit and
the suit may, by leave of the court, be continued by or against the person to or upon whom
such interest has come.
Grounds for granting Specific Performance:
 Lack of standard for ascertaining damages
 In cases where the compensation is not adequate
 Substantial part of the obligation fulfilled by the plaintiff
Grounds for rejecting Specific Performance:
 Where monetary compensation is an adequate relief
 Where the Court cannot supervise the actual execution of the work
 Where the Contract is for personal services
 Where the Contract is not enforceable by either party against the other
 Where one party is minor
22

Example: A agrees to purchase the land from B. B then refuses to sell. The Court can order B to
perform his duty as per the contract and sell the land to A.
3. Injunctions:
Injunction is a court order by which an individual is required to perform, or is restrained from
performing a particular act. Injunctions in relation to contract are exceptional remedies available
when the compensation for the breach is unascertained or inadequate.
Injunction means a Command, a behest, a restraining writ, or a order of the Court of Justice
directing the defendant to do some positive act or restraining the commission or continuance of
some prohibitory act causing injury to the plaintiff.
An Injunction is a judicial order the general purpose of which is to restrain the commission,
continuance, or repetition of some wrongful act of the party enjoined. It is a Preventive Relief.
Essential ingredients of Injunction are: -

1. Injunction is a judicial process

2. The object is to restrain or prevent a person to do an act.
3. The restrained or prevented act is a wrongful act.
Injunction is an order issued by a court directing the party to refrain from doing an Act which is
likely to cause harm or injury to the plaintiff. For obtaining injunction the plaintiff has to prove
before the court the harm or loss which he is suffering or likely to suffer from the wrongful act of
the defendant.
In Preksha v/s Prasad, the wife filed for restitution of Conjugal rights and Temporary Injunction
to restrain her husband not to marry during the pendency of the suit. The court granted an
injunction restraining the husband as per the prayer.
 Prima facie case-means on the face of it. That it is sufficient to establish a fact or raise a
presumption unless disproved or rebutted. It means that the contentions which the plaintiff is
raising require consideration in merit and are not liable to be rejected summarily.
 Balance of convenience- to see balance of convenience it is necessary to compare case of
parties comparative mischief or inconvenience which is likely to sue from withholding the
injunction will be greater than which is likely to arrive from granting it.
 Irreparable loss- there are many injuries incapable of being repaired but a court of equity
does not regard them as irreparable. Ordinarily injury is irreparable when without fair and
reasonable address of the court, it would be denial of justice.
The Provisions relating to grant of injunctions are contained in Section 36 to 43 of the Specific
Relief Act 1963 and procedure for grant of temporary or interlocutory injunction is governed by
Order XXXIX of the C.P.C 1908.
Kinds of Injunctions:-
1. Interim and Temporary Injunction
2. Perpetual and Permanent Injunction
3. Mandatory and Prohibitory Injunction
23

When to prevent the breach of an obligation, it is necessary to compel the performance of

certain acts which the court is capable of enforcing, the court may in its discretion grant an
injunction to prevent the breach complained of, and to compel performance of the requisite acts.
4. Quantum Meruit:
It means as much as carned. If one party to the contract is prevented from finishing or
completing his part of performance or obligation of contract by the other party, he can claim
Quantum Meruit ie he must be paid reasonable remuneration of his service or value of work he
has already performed.
Quantum Meruit"as much as carned", as much as merited/deserved.
When a person has done some work under a contract, and the other party repudiates the
contract, or some event happens which makes the further performance of the contract
impossible, then the party who has performed work can claim remuneration for the work he has
already done.
Illustration:
A agrees to deliver B, 500 bags of wheat and when A has already delivered 100 bags, B
refused to accept any further supply, and A can recover from B the value of wheat which he has
already delivered.
Section 65 of the act lays down that when an agreement is discovered to be void or becomes
void any person who has received any advantages under such agreement is bound to restore it.
Or to make compensation for it, to the person from he received it.
Section 70: provides that where a person lawfully does anything for another person, or delivers
anything to him not intending to do so gratuitously, and such other person enjoys the benefit.
5. Suit for Damages
The party suffered because of the other party's broken promises can claim compensation for the
loss or damages caused in the normal course of business, such damages are not payable if
loss is in abnormal nature ie. in ordinary course of business (usual transactions, customs and
practices of certain business and of certain firm). There are two types:
a. Liquidated Damages. Parties to the contract will agree the amount payable at the Breach,
b. Un-liquidated Damages: Here amount payable due to Breach is assessed by the Courts or
any appropriate authority.
The parties suffering loss due to non-performance of obligations, the aggrieved party can file a
suit for compensation, following:
 The suffering party compensation for any loss carrying naturally can claim
 Even if the party knowing that they can suffer certain losses, he can claim compensation.
 Special damages if any can be claimed only if suffering party has given notice about it
earlier
 Suffering party cannot claim compensation for indirect loses or damages.
24

Example: A agrees to sell 50kgs of Rice to B for RS.5000/- But A breaches the contract and he
did not deliver. So B had to purchase the same from C for Rs.6000/- for same quality and
quantity of rice, now the differed amount is of Rs.1000/- can be claimed by B from A.

Explain Quasi Contracts and its essentials and how they are different from ordinary
Contracts with the help of important cases.
QUASI CONTRACTS: (10 Marks)
One person is accountable to another even when there is no Contract, because without such
accountability the other person suffers loss. This Quasi Contracts exists to provide remedies in
circumstances of this kind. (Else nobody would have helped anybody) Quasi Contract is not a
happy or positive term, it is also known as Constructive Contracts, which are created without the
consent or agreement between the two. It is titled that "of certain relations resembling those
created by contracts" Quasi Contracts are not contracts but "they are like Contracts" (it will not
be like a formal contract with promise, acceptance, consideration, or other terms or
anything in writing)
Quase Contracts will be imphed contracts, not expressed one they are also legally recognized
as "A relacion resembling those created by Contract"
Important Features:
1. Right to a sum of money (not previously or initially agreed)
2. It is imposed by law and does not arise by agreement of the parties.
3. Right is available only against a person and not others.
Section 68-72 of Indian contracts Act, 1872, deals with certain relations resembling those
created by contract. It incorporates those obligations which are known as quasi contracts under
English Law. The basis of the obligations is that no one should have unjust benefit at the cost of
the other. In an action for unjust enrichment, the following essentials have to be proved:
1. The defendant has been enriched by the receipt of a benefit.
2. The enrichment is at the expense of the plaintiff.
3. The retention of the enrichment is unjust.
The Indian Contract Act deals with the following quasi-contractual obligations:
1. Claim for necessaries supplied to a person incompetent to contract (Section 68):
If a person, incapable of entering into a contract, or anyone whom he is legally bound to
support, is supplied by another person with necessaries suited to his condition to his life, the
person who has furnished such supplies is entitled to be reimbursed from property of such
incapable person.
Illustrations:
A supplies B, a lunatic, with necessaries suited to his condition in life. A is entitled to be
reimbursed from B's property.
Essential elements are:
25

 A person must be incapable of contracting to anyone whom he is legally bound to support.

 Necessaries must be suitable to his condition of life.
 The person supplying necessaries is entitled for reimbursement.
 The liability of such person isuust be limited to his property
2. Reimbursement of money pald, due by another (Section 69)
i.e. Payment must be on behalf of another. A person who is interested in paying money which
another is bound by law to pay, therefore pays it, is entitled to be reimbursed by the other. Two
essentials:
Examples:
Tenant paying water tax, being in arrears for which notice has been issued for cutting the water
connection if occurs. Then the Owner is bound to pay to the tenant.
3. Obligation of person enjoying benefit of non-gratuitous Act (Section 70): Where a
person lawfully does anything for another person or delivers anything to them, not intending to
do so gratuitously and such other person enjoys the benefit, thereof the latter is bound to make
compensation to the former in respect of or to restore the thing so done or delivered. For
applications of this section, the following conditions are to be satisfied.
a. A person lawfully do something for another person or should deliver something to him;
b. The person making the payment or delivering the thing must not do so gratuitously, that is,
he should expect payment for the same; and
Unjust benefit to the defendant necessary: Sec 70 is found on the principle that one should
not gain unjust enrichment at the cost of the other. If there is no unjust gain obtained in any
transaction, Sec 70 has no application.
Application of Sec 70 against government:
Sec 70 prevents unjust enrichment and it applies as much to individuals as to corporations and
government. If the services rendered or goods supplied to the government are under a
purported enntract, which does not materialize because of non-falfillment of the formalities
prescribed in Art.299 of the Constitution, the government can still be made liable to compensate
for the same under Sec 70 of the Contract Act, if it has enjoyed the benefit of what has been
done under the purported contract
Sec 70 cannot be invoked against a Minor:
A minor's agreement being void ab initio, he cannot be made liable under Sec 64 and 65 of the
Contract Act. But if necessaries are supplied to a minor, his estate can be made liable under the
Sec 168. It has been held that no action can be brought against a minor to recover
compensation from him under Sec 70. Sec 70 cannot be invoked against a minor. Firstly, the
Section covers every "Person" whether he is competent to contract or not. Secondly, there is
nothing in law which debars a minor from enjoying the benefit of the act done by another
person.
Case Law:
In Damador Mudaiar v/s Secretary of State of India, here the Government affected repairs of a
Tank which irrigated 11 Villages, some irrigated villages belonged to Zamindars who also
26

enjoyed the benefit of the act/repairs. Therefore held liable to pay their contribution towards
such repairs (tank repairs) also held that a person enjoying benefit of a non-gratuitous act by
another must for it person done lawfully compensate.
4. Responsibility of the finder of goods (Section 71):
Sec 71 contemplates still another quasi contractual situation, i.c., when a person is a finder of
goods belonging to another and takes the goods to his custody and is in the position of a bailee
with all responsibility. "Bailment" is an act of delivering goods to a bailee for a particular
purpose, without transfer of ownership. Every bailee has following duties:-
 Duty to take reasonable care of the Goods
 Duty to retain the goods
 Duty to make proper use of bailment/goods bailed
 Duty not to mix his own goods with that goods
 Duty not to question title of Bailor
 Duty of Bailee to increase profit of the goods bailed
5. Llability of a person getting benefit under mistake or coercion (Sec 72): A person to
whom money has been paid, or anything delivered by mistake or under coercion must repay or
return it.

Case Law:
Money paid by mistake of fact or law can be recovered. Tax payment under a, Mistake of law
can also be recovered. In New India Industries Itd v/s Union of India, here government duty was
refunded by the Authority for collecting illegal Tax.
Essential elements are:
 Unjust benefit under mistake: Section 72 covers a situation where money has been paid, or
anything delivered by one person to another either by mistake or under coercion.
 Money paid or anything delivered under mistake: According to Art.265 of the Constitution,
no tax shall be levied or collected except by the authority of law. Law here means only valid
law. Sec 72 and the same ought to be refunded by the government because the government
cannot be allowed to unjustly enrich itself by retaining the tax so received.
 Money not recoverable where there is no enrichment of the defendant. If the receiver of the
money has no longer the same with him, and has further paid it under a similar mistake, he
cannot be required to repay the same.
 Unjust benefit under coercion: Sec 72 permits the money paid or anything delivered, either
by mistake or under coercion, to be recovered back.
 Compulsion of law is not coercion.

Write a brief note on Remoteness of Damage (6 Marks)

Remoteness is the state of being distant from something or the lack of connection or relation to
something. Section 73(2) says that compensation is not to be given for any remote or indirect
loss or damage sustained by reason of the breach.
27

Theoretically there may be endless consequences of a breach; the defendant cannot be liable
for all of it. Hence, a limit is put on the liability beyond which the damage is said to be too
remote and therefore irrevocable.
The Defendant is liable only for those consequences which are not too remote from his conduct
of Breach. No defendant can be made liable ad infinitum (endlessly) for all the consequences
which follow his Breach. On practical grounds, a line must be drawn somewhere and certain
kinds or types of losses, though a direct result of the defendant's conduct may remain
uncompensated.
The rule has been laid down in Hadley v/s Baxendale (1854) 9 Ex.34, where it has been
observed that the Court will take into account only such loss as may be fairly and reasonably be
considered either arising naturally i.e. according to the usual course of things, from breach of
contract itself, or such as may reasonable supposed to have been in contemplation of the both
parting at the time of contract itself as probable result of breach of it. Remoteness of Damages
for remote consequences is usually not allowed.
Now the problem arises where to draw the line?
Till now we saw that, when two parties have made a contract which one of them has broken, the
damages which the other party ought to receive in respect of such breach of contract should be
as may fairly and reasonably be considered either arising naturally i.e. in the course of events
from such breach itself or reasonably be supposed to have been in contemplation of the both
parting at the time of contract itself as probable result of breach.
"If special circumstances are already known or in knowledge of the Contract Breaker" In
Simpson v/s London and North Western Railway, it was held that the party breaking the contract
is aware of the special circumstances then he is liable and communicating the same is not
necessary.
"Everyone as a reasonable person is taken to know the ordinary course of things"
That is it is known to both the parties that what are consequences or loss shall be in breach of
contract ordinarily. As we all know that compensation is recoverable for any loss or damage, but
it is the plaintiff should show that damages have been sustained and what shall be the measure
of converting the loss into money.
"Escalation of Cost"
Escalation means a rapid increase or rise/hike in prices. Cost escalation means increase in
price of goods.

Short note on Measure of Damages (6 Marks)

Once when the damages are determined whether they are general damages or special
damages, they have to be evaluated in terms of money, now this is governed by Fundamental
principles:
1. Claim for Damages is not debt- The claim for damages caused out of breach even if it is
general or liquidated, remain only a claim till its adjudication by the Court, and also becomes a
debt only after the court awards it.
28

2. Damages are Compensatory, not penal- The governing purpose of damages is to put the
party whose rights have been violated in same position so far as money can do so, as if his
rights have been observed. When this is accomplished, the primary aim of law of damages is
fulfilled.
In Robinson v/s Harman, The Court allowed plaintiff by way of damages, the expense incurred
by him on the preliminary legal work and also for profit which he would have earned if the lease
had been granted to him.
3. Inconvenience caused by Breach- Sometimes this is also taken in to account, in case of
Hobbs v/s London and South Western Railway Co., where a train pulled its passengers to a
wrong direction, consequently the plaintiff and his wife finding no convenience or no place to
stay had to walk to their home at midnight. So the Jury allowed S8 as damages.
5. Loss caused by Misrepresentation- When a thing is purchased and it is differed with real
value, when representation is discovered it will be liable for compensation. In Naughton v/s
Ocallaghan, here a horse was purchased described as fit for race, but turned out to be of
different breed..
6. Incidence of Taxation-Only compensation and not more than compensation is the Principle
for Damages. The benefit if any, that the plaintiff has received against the loss suffered are to
be taken into account.
7. Nominal Damages (No loss situation)- When plaintiff suffers no loss, the court may still
award Nominal Damages in recognition of his Right. This in the discretion of the Court, the court
may refuse it or may award substantial Damages. The Delhi High Court in Mackey v/s
Kameshwar Singh Case, J.Prakash Narian said that no compensation can be awarded if there
is no loss or damage suffered by the plaintiff.
8. Pre-Contract Expenditure- It can also be covered as Damages if it is within contemplation of
the parties. In sometimes Angelia Television Ltd v/s Reed, here a T.V. Actor repudiated the
Contract. The Producer was unable to find substitute, so he had to abandon the project. Now
the loss of profit is incapable of being estimated. The Court allowed him damages as money
spent by him in engaging Director, a designer etc and other kind of Expenditure was within the
contemplation.
9. Mental Pain and Suffering and Punitive Damages In ordinary cases for mental pain and
suffering caused by breach are not allowed. But maybe allowed in some case or if the contract
is commercial.
The House of Lords in Addis v/s Gramophone Co. ltd, listed 3 situations which mental pain and
sufferings can be taken into Account.
 Action against a Bank for referring to pay Customer's Cheque, when he has funds in his
account.
 Action for Breach of Promise of Marriage (Now it is abolished in England slowly abolishing in
India also)
 When Vendor of real estate/property fails to make title.
10. Compensation for Non Pecuniary Loss (Non calculative loss)- The Damages which are
not readily quantified or valued in terms of money such as Proposed Compensation for pain and
29

suffering. They cannot be arithmetically calculated. They compensate intangible loss which
cannot be seen or measured. (Physical or Psychological pain, Suffering, Mental agony etc)
In Farley v/s Skinner, a claimant was considering purchase of property near Airport. He
instructed the Surveyor to report the volume of Aircraft noise in area. The Surveyor negligently
reported that property is unlikely to be affected by noise but subsequlently he discovered that it
was significantly affected by such noise. He brought an action against the surveyor to recover
compensation. The Court approved $10,000/- as damages for Breach of Contractual Duty of
care in respect of survey report.
10. Damages for Breach of Confidence: Damages can be assessed by reference to
claimant's financial losses such as lost of sale confidentiality or both contractual and equitable
obligation of confidence (lowering the person's self esteem).
Unit 5
What ae Injunctions and explain its kind along with differences (10 Marks)
INJUNCTION - A command, a behest, a restraining writ.
Sections 36-44 of The Specific Relief Act, 1963- deals with PREVENTIVE RELIEF OR
INJUNCTION
A Preventive Relief (Injunction) is an order or command of the court preventing a party from
doing something, which he is under a legal duty not to do.

An injunction is a judicial process, by which one who has invaded or is threatening to invade the
rights, legal or equitable, of another, is restrained from continuing or commencing such wrongful
acts. An injunction is an order framed according to the circumstances of the case commanding
an act, which the court regards as essential to justice or restraining an act, which it esteems
contrary to equity and good conscience.
Preventive relief how granted: Section 36 lays down that preventive relief is granted at the
discretion of the court by injunction, temporary or perpetual.
Object: The object to grant the injunction are:
1. Breach of Obligation to be prevented;
2. To restrain judicial proceedings
3. To restrain breach of contracts
4. To prevent tortuous acts.
Injunctions are granted to prevent mishappenings and injury to the aggrieved parties. The relief
granted by injunctions are preventive nature. Injunction is a court order by which an individual is
required to perform, or is restrained from performing a particular act.
An Injunction is a judicial order the general purpose of which is to restrain the commission,
continuance, or repetition of some wrongful act of the party enjoined. It is a Preventive Relief.
Essential ingredients of Injunction are: -
 Injunction is a judicial process
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 The object is to restrain or prevent a person to do an act.

 The restrained or prevented act is a wrongful act.
Injunction is an order issued by a court directing the party to refrain from doing an Act which is
likely to cause harm or injury to the plaintiff. For obtaining injunction the plaintiff has to prove
before the court the harm or loss which he is suffering or likely to suffer from the wrongful act of
the defendant. In Preksha v/s Prasad, the court granted an injunction restraining the husband as
per the prayer.
The object of the injunction is to protect the plaintiff against the injury by violation of his right for
which he could not be adequately compensated in damages recoverable in the action if the
uncertainty were resolved in his favour at the trial.
Principles guiding the grant of Injunction:
• Prima facie case- means on the face of it. That it is sufficient to establish a fact or raise a
presumption unless disproved or rebutted. It means that the contentions which the plaintiff is
raising require consideration in merit and are not liable to be rejected summarily.
• Balance of convenience- to see balance of convenience it is necessary to compare case of
parties comparative mischief or inconvenience which is likely to sue from withholding the
injunction will be greater than which is likely to arrive from granting it.
• Irreparable loss there are many injuries incapable of being repaired but a court of equity
does not regard them as irreparable. Ordinarily injury is irreparable when without fair and
reasonable address of the court, it would be denial of justice.

The Provisions relating to grant of injunctions are contained in Section 36 to 43 of the

Specific Relief Act 1963 and procedure for grant of temporary or interlocutory injunction
is governed by Order XXXIX of the C.P.C 1908.

Kinds of Injunctions: -

1. Interim and Temporary Injunction

2. Perpetual and Permanent Injunction
3. Mandatory and Prohibitory Injunction

Interim and Temporary Injunction: It is issued provisionally before the final hearing to
prevent the defendant from commission or continuance of an alleged injury to the
plaintiff. A Temporary Injunction is such as to continue until a specific time, or until the
further orders of the court.

Perpetual and Permanent Injunction: It is issued after the final hearing and
determining of the question in issue between the parties perpetual injunction is granted
when the suit is decreed.

Mandatory and Prohibitory Injunction: The word Mandatory means Compulsory. It is

an order of the Court directing the defendant to do some positive act. Normally it is
granted only after hearing upon merits of the suit.
31

Kinds of injunction: Section 35 of Specific Relief Act lays that, there are 2 kinds of
injunctions.
TEMPORARY INJUNCTION

1. It is to continue until a specified time or until the further order of the court. It is
granted at any period of suit and is regulated by C.P.C.
2. It is provisional in its nature. It cannot conclude the right. It may be given without
hearing the defendant.
3. It can be granted at any stage of suit.
4. It may be granted to the plaintiff on his making out of prima facie case in his support.
5. It is a mere order.\
6. A temporary injunction has temporary nature as its name itself implies.
7. It is regulated by the provisions of CP.C

PERPETUAL INJUNCTION

1. It can only be granted by a decree made at the hearing and upon the merits of the
suit.
2. It finally determines the rights of the parties and forms part of the decree made at the
hearing.
3. It can only be granted at the final hearing of the suit.
4. It is granted upon the merits of the Act.
5. A perpetual injunction is a decree.
6. It has permanent nature, final decree, as its name itself implies.
7 It is governed by the Specific Relief Act
CLASSIFICATION OF INJUNCTION
In respect of natural act, injunctions may be divided into two: - Prohibitory and Mandatory.
PROHIBITORY INJUNCTION: It is an order of the court restraining the person to whom it is
directed from doing continuing or repeating some wrongful act, which constitutes a breach of
legal or equitable obligation or duty.
Examples-
1. Injunction against environmental pollution.
2. Injunction against exceeding limit of natural right to drainage.
MANDATORY INJUNCTION: It is the one which commands the defendant to do some positive
act. In proper cases only, courts have power to issue an injunction mandatory in its nature.

Explain the nature and scope of Specific Relief Act, 1963 with the help of decided cases
(10 Marks)
Introduction and History:
Prior to this there was Specific Relief Act, 1877 after amendment and repealed in 1963, it was
repealed because Sec 45 and 50 are enjoined and gave power to the Presidency Courts or
32

High Courts to issue writ of mandamus, but finally after 26/01/1950, the Writ Jurisdiction
Constitutionally gave power to High Court and Supreme Court under Art.226 and Art.32
respectively in case of Fundamental Rights.
Now after repeal, this Act under Part III provides for Preventive Reliefs (by which a person is
prevented to do an act, which is not validly liable to do. When a Court prevents a party from
doing that which he is under an obligation not to do is called Preventive Relief.
Usually the Decree of Specific enforcement is of 2 types:
1. Compensation is neither an adequate relief nor it is proper or reasonable to grant
compensation (non-calculative in terms of money)
2. Special and practical features difficult to ascertain compensation.
Whether to grant Decree of Specific enforcement depends on the discretion of the Court
 It cannot be granted, where compensation is the actual adequate relief.
 If it requires supervision of Court, which the court conveniently cannot do it.
Section 9 of Chapter 2 and Part II of the Act relates to the Defences respecting suits for reliefs
based on Contract, where relief claimed under a contract, the person against whom relief is
made, shall plead by way of defences on any ground available under Contract Law.
To get the decree of Specific Performance, the Contract must be proved to be valid or enforce-
able and not void.
The suit for Specific Performance is regulated by Specific Relief Act, 1963. Specific
Performance means the actual carrying out of the contract as agreed. The Court may grant for
specific performance where it is just and equitable to do.
The Essentials of Specific Performance:
1. Valid Contract the suit for specific performance is in agreement of sale hence the agreement
should be a valid Contract.
2. Unregistered Agreement for sale: unregistered agreements are also permitted.
3. Readiness and Willingness: the party seeking specific performance is willing to perform his
part of the contract
4. Time is essence of Contract- An intention to make time as an essence of the contract must
be expressed in unequivocal (leaving no doubt/unambiguous).
5. Addition of parties in specific performance suit: In cases of an assignment (allotment),
creation or devolution (transfer or delegate) of any interest during the pendency of a suit and
the suit may, by leave of the court, be continued by or against the person to or upon whom
such interest has come.
Grounds for granting Specific Performance:
 Lack of standard for ascertaining damages
 In cases where the compensation is not adequate
 Substantial part of the obligation fulfilled by the plaintiff
Grounds for rejecting Specific Performance:
 Where monetary compensation is an adequate relief
33

 Where the Court cannot supervise the actual execution of the work
 Where the Contract is for personal services
 Where the Contract is not enforceable by either party against the other
 Where one party is minor
Example: A agrees to purchase the land from B. B then refuses to sell. The Court can order B to
perform his duty as per the contract and sell the land to A.
Sec 10-13 explains the provisions about contracts which can be specifically enforced. Specific
performance is an equitable relief. Sec 10 defines cases in which specific performance of
contract is enforceable.
Rules:
1. No standard of ascertaining damages: When there exists no standard for ascertaining the
actual damage caused by the non-performance of his act agreed to be done. A contract to
deliver specific goods will be enforced by way of performance if they are "articles of unusual
beauty, rarity and distinction" or of special value to the party suing by reason of personal or
family association or the like.
In case of Immovable Property, in Kartar Singh v/s Harijander Singh, there was a joint property
of brother and sister, the brother on behalf of his sister made an agreement to sale and also
agreed to get it registered the same. But his sister refused to sell her part of the property, so
Appellant filed a suit for Specific Performance, the trail Court decreed the suit (the property shall
be sold), but in Appeal it was not concerned with the performance of part of the Contract.
In case of Movable Properties, usually it can be compensated in terms of money, but there are
two exceptions
 Where it is not an ordinary article
 There is special interest of the plaintiff
 Such goods are not easily available in the market

In case of Vijaya Minerals Ltd v/s Bikash Chandra Deb AIR 1996 Cal 67,68; the question here
arose is whether Manganese and Iron ores are ordinary artivles within Sec10, the Calcutta High
Court held Manganese and Iron Ores are found only in such areas of mines, therefore they can
be said as ordinary articles of commerce, held that Damage would be better remedy that
granting an order of Injunction or Specific Performance
Other examples of contracts which can be specifically enforced:
a. Agreement to retire.
b. Contract to convey a contingent interest.
c. Contract for the sale and purchase of life amenities.
d. A contract for the sale of patent.
e. An agreement for separation between husband and wife not containing any
provision, which is void.

2. Pecuniary compensation not adequate relief: When compensation is an adequate relief to the
plaintiff, a decree for the specific performance of the contract should not be made. Illustration: A
34

contracts to sell and B contracts to buy a certain number of railway shares of a particular
description.
Other examples of contracts of these kinds, which can be specifically enforced, are:-
1. Shares of company:
2. Shares of property;
3. Chattels;
4. Building contract etc.
3.When pecuniary compensation is not recoverable: The insolvency of a defendant is generally
a ground for granting specific relief to the plaintiff under this head, where there is a probability
that pecuniary compensation, if awarded, cannot be recovered and specific performance can be
granted

By whom and against whom a specific performance of contract can be claimed? (6

Marks)
According to Section 15: Who may obtain specific performance Except as otherwise provided by
this Chapter, the specific performance of a contract may be obtained by-
(a) any party thereto;
(b) the representative in interest or the principal, of any party thereto:
Provided that where the learning, skill, solvency or any personal quality of such party is a
material ingredient in the contract, or where the contract provides that his interest shall not be
assigned, his representative in interest of his principal shall not be entitled to specific
performance of the contract, unless such party has already performed his part of the contract, or
the performance thereof by his representative in interest, or his principal, has been accepted by
the other party;
(c) where the contract is a settlement on marriage, or a compromise of doubtful rights between
members of the same family, any person beneficially entitled thereunder;
(d) where the contract has been entered into by a tenant for life in due exercise of a power, the
remainder-man;
(e) a reversioner in possession, where the agreement is a covenant entered into with his
predecessor in title and the reversioner is entitled to the benefit of such covenant,
(f) a reversioner in remainder, where the agreement is such a covenant, and the reversioner is
entitled to the benefit thereof and will sustain material injury by reason of its breach; (g) when a
company has entered into a contract and subsequently becomes amalgamated with another
company, the new company which arises out of the amalgamation;
(g) when the promoters of a company have, before its incorporation, entered into a contract for
the purposes of the company, and such contract is warranted by the terms of the incorporation,
the company: Provided that the company has accepted the contract and has communicated
such acceptance to the other party to the contract.
35

It is a general rule that a contract cannot be got enforced except by a party to the contract. This
general rule is embodied in clause (a) of Section 15. But there are certain exceptions to this
general rule. These exceptions are contained in clause (b) to (h) of the section and contain list
of persons who although not a party to the contract, are entitled to obtain specific performance
of contract.
These are:
1. A representative in interest or the principal thereto.
2. Any person beneficially entitled
3. The remainder man
4. A reversioner in possession
5. A reversioner in remainder
6. The amalgamated company
7. The company
Other situation where contract can be enforced by any person other than the party thereto are
where:
1. A trust is created in favor of a stranger by the contract.
2. The promisor constitutes himself as agent for the stranger.
3. It is so provided by a marriage settlement
4. The contract itself provides for maintenance
5. The contract itself provides for marriage expenses.
6. The aim of contract itself is to benefit a stranger.
7. A change is created in favor of a stranger by the contract etc.

Shyam Singh, v. Daryao Singh, Under the provisions of S. 15(b) specific performance of the
contract may be obtained by 'any party thereto' or their representative in interest." This
expression clearly includes the transferees and assignees from the contracting party in whose
favor the right exists. Such right of seeking specific performance would, however, be not
available in terms of proviso below Cl. (b) where the contract provides that the 'interest shall not
be assigned.

Cancellation of Instruments. (6 Marks)

The Specific Relief Act provides for specific reliefs. Specific Relief means relief of a certain
species, i.e. an exact or particular, a named, fixed or determined relief. It is understood as
providing relief of a specific kind than the general relief of damages or compensation.

 Recovery of possession of property

 Specific performance of contracts
 Rectification of instruments
 Rescission of contracts
 Cancellation of instruments
 Declaratory decrees
 Preventive relief viz injunctions
36

Sec 31-33 deals with the cancellation of instruments.

Sec 31-Cancellation maybe ordered....

 Any person against whom a written instrument is void or voidable.

 Who has reasonable apprehension that such instrument if left outstanding may cause him
serious injury.
 He may sue to have the instrument adjudged by the court as void or voidable.
 The court in such a suit may, in its discretion adjudged the instrument as void or voidable
and order it to be delivered up and cancelled.
Illustrations:

1. A, the owner of a ship, by fraudulently representing her to be sea-worthy induces B, an

underwriter, to insure her; B may obtain the cancellation of the policy.
Cancellation of sale deed due to fraudulently executed by defendant without consent and
knowledge of owner
Statement contained in will admissible in suit for cancellation of sale deed.
Suit for cancellation of sale-deed, the civil court's jurisdiction do not bar, by invoked Sec331 of
UP.Zamindari Abolition and Land Reforms Act 1950.
Maintainability of Suit for Declaration of Sale Deed, as null and void.
Dismissal of suit for declaring sale deed as void on ground of fraud and misrepresentation.
Suit filed after lapse of 13 years barred by limitation (Sale Deed as null and void is within 3
years from the date of accrual of cause of action)
Power of attorney suit for declaration, injunction and cancellation of Sale Deed, suit proceedings
are not bonafide proceedings.
What instruments maybe cancelled partially (Sec 32)
The rights and obligations contained wherein are separable. In such a case the court may, in its
discretion allow a part of the instrument to be cancelled and allow the remaining to stand.
Where the rights and obligations under an instrument are not separable, the good part cannot
be separable from the bad part, there cannot be partial cancellation of the instrument.
Power of the court to restore benefit or allow compensation on cancellation of an instrument
(Sec 33)
Where instrument is cancelled or is successfully resisted as being void or voidable Sec 33(1)
the court may require the plaintiff, the party whom the relief is granted-
1. To restore, so far as may be any benefit which he may have received from the other
party, and
2. To make any compensation to him which justice may require.
Sec 33(2): Requires the defendant to restore benefit received by him and to pay compensation,
when he resists the suit of enforcing an instrument against him.
37

Sec 39: any person against whom a written instrument is void or voidable, who has reasonable
apprehension that such instrument, if left outstanding, may cause him serious injury, may sue to
have it adjudged void/voidable and the court may, in its discretion so adjudged it and order it to
be delivered up and cancelled.
Sec 41: on adjudging the cancellation of an instrument, the court may require the party to whom
such relief is granted to make any compensation to the other which justice may require.