Contracts have always been an indispensable part of our lives.

Knowingly or unknowingly,
we enter into a contract hundreds of times in a year. Even when we buy candy, we are
entering into an agreement with the shopkeeper. Every time we visit a restaurant or book a
cab, we are entering into a contract. Although the law of contract is developing with time, the
jurisprudence of contract remains the same. We know what a contract is all about but new
situations arise every day and a new question appears in the mind of whether this particular
agreement should be regarded as a contract or not!

One of the common perplexities among people is recognizing the difference between a
contract and an agreement. They are frequently used interchangeably. For example, when the
owner of a house hands over the rent agreement and says, “Please sign the contract”, this
creates uncertainty whether the document is an agreement or a contract.

We come across ‘contract killers’ in movies who charge money to kill people. Have you ever
thought, ‘Is a contract of killing someone for money, a valid contract?’ or ‘Can the man
giving the contract sue the contract killer in the court of law saying that the other party has
committed a breach of contract by not doing the job even after the payment of money?’.

An agreement (Section 2(e))

An Agreement is a promise between two entities creating mutual obligations by law. Section
2(e) of the Indian Contract Act, 1872 defines an agreement as ‘Every promise and every set
of promises, forming the consideration for each other, is an agreement’.

To form an agreement, the following ingredients are required:

• Parties: There need to be two or more parties to form an agreement.

• Offer/ Proposal: When a person signifies to another his willingness of doing or
omitting to do something with a view to obtain other’s assent. [Section 2(a)]
• Acceptance: When the person to whom the proposal is made signifies his assent
for the same thing in the same sense as proposed by the offeror. [Section 2(b)]
• Promise: When a proposal is accepted, it becomes a promise. [Section 2(b)]
• Consideration: It is the price for the promise. It is the return one gets for his act or
omission. [Section 2(d)]
An agreement is, therefore, a promise or set of promises forming consideration for all the
parties. [Section 2(e)]

Agreement = Promise or set of promises (offer + acceptance) + Consideration (for all the
parties)
If a 7-year-old boy is buying an ice-cream from an ice-cream vendor and giving Rs. 10 in
return, it becomes an agreement. This is because the boy offers to buy ice-cream and the
vendor accepts the offer which makes it a promise. The consideration for both was ice-cream
and money respectively.

The agreement should not expressly be declared to be void

There are certain kinds of contracts which are expressly declared by The Indian Contract Act,
1872 to be null and void. The following are some of the agreements which are not
enforceable in the eyes of law:

• Agreements without consideration except it is written and registered or is a

promise to compensate for something done or is a promise to pay a debt barred by
limitation law.
• Agreements in restraint of marriage
• Agreements in restraint of trade
• Agreements in restraint of legal proceedings
• Agreements void for uncertainty
• Agreements by way of wager
• Agreements contingent on an impossible event
• Agreements to do impossible act
Those agreements are void which are based on any of the subjects mentioned above. There is
no liability for not enforcing the contract and thus, the conditions of the contract are not
binding upon any of the parties.

For example, if Devdas asks Paro not to get married for her entire life then he will give her a
new dress and shoes in return; it cannot be considered as a valid contract because the
agreement is made in restraint of marriage.

Similarly, if the agreement is made to not to work for the entire life in exchange for a new
flat, it will not be considered as a valid contract as it is in restraint of trade.

Also, if a father enters into an agreement with his son that the father will get him a new
bicycle if the son scores 105% in his board exams. It will be considered a void agreement
because it is an agreement to do an impossible act.

The above-mentioned conditions are required to be fulfilled in order to make an agreement

legally enforceable. The agreement becomes void if any of the mentioned conditions are left
unfulfilled except in the case of free consent where the agreement becomes voidable instead
of void and giving the party, whose consent was not free at the time of entering into the
contract, the discretion to continue the contract or not.

Contract (Section 2(h))

A contract is a lawful agreement. In other words, an agreement enforceable by law is a
contract.

Contract = Agreement + Legal enforceability

Or

Contract = legally enforceable Agreement

A type of agreement which is enforceable by law is a contract (Section 2(h) of the ICA).
Enforceable by law means that, if somebody is aggrieved then he may approach the court for
remedies. For example: In case of a Fire Insurance Contract where Titu wants to insure his
goods in the warehouse, he pays the insurance premium and promises to avoid insurance
fraud whereas the insurance company agrees to compensate losses in case of a fire.

So Mathematically,

Agreement + Enforceable by Law = Contract

When an offer is made with the intention to create a legal obligation it becomes an offer for
entering into a contract. Thus an agreement becomes a contract when there is free consent of
the parties, capacity of the parties to contract, lawful consideration and lawful object or
subject matter (Section 10 of the ICA).

For an agreement to become a contract it must give rise to a legal obligation and if it is
incapable of doing so, it is not a contract. In the case of Balfour v Balfour [1919] 2 KB 571,
Mr. Balfour promised to pay his wife £30/month as she stayed in England for medical
reasons. When he failed to pay, Mrs. Balfour sued him. Her action failed because there was
no intention to create a legally binding agreement between Mr. and Mrs. Balfour. A contract
cannot be made without proper indication about the legal rights and obligations of the parties
to the contract. So, if this were to be a contract then the wife would have had a right to
receive payment and the husband would have had the obligation to pay his wife.

This makes an agreement a wider term than a contract. In a Venn diagram, agreements are a
bigger circle than contracts which is a smaller circle and a part of it.

So, an agreement is a contract when:

 1. Free consent of the parties: When there is absence of Coercion (Section 15),
Undue Influence (Section 16), Fraud (Section 17), Misrepresentation (Section 18)
and Mistake (Section 20, 21, 22), the consent is said to be free.
2. Capacity of the parties to contract: Section 11 and 12 lay down that the
competent parties are persons who have attained majority {Exception for this was
laid down in Mohori Bibee v. Dharmodas Ghose} persons who are of sound mind
and persons who are not disqualified by law.
3. Lawful consideration and Lawful object: Section 23 lays down that the
consideration and object is lawful unless it is forbidden by law or it defeats
provisions of any law or is fraudulent or involves injury to person or property or is
violative of public health, morality, peace and order.

Let us look at some examples where agreements are not contracts:

1. Gabbar asked Samba to kill Jay and Veeru and Samba agreed. This is an
agreement but the object of the agreement makes it an illegal one. Therefore, it
cannot be enforced and so it is not a contract.
2. Rajesh promises his wife Chitra that he will bring for her the stars and the moon
and Sonam agrees. Here, the object of the agreement is impossible to perform and
so it is not enforceable and cannot be termed as a contract.
3. A mother promises her crying child that she will buy a Barbie doll for her but she
does not buy it. Here, the promise was not made with the intention to fulfil it and
so it is not enforceable and cannot be termed as a contract.
4. I offer my pen to Neelam and she accepts it, here an agreement is made but such
agreement is made out of friendship and has no consideration. An agreement
without consideration is not a contract (an exception to this is Section 25 of the
ICA which states that near relation and natural love and affection can be said to be
consideration).

Types of contract

There are various types of contracts that are formed voluntarily via civil obligations. They are
as follows:

(I) Adhesion Contracts – These types of contracts are those which are formed by the stronger
party. It is a sort of, “Opt for it or do not” contract. The stronger party or the one that has the
bargaining power leaves the other party with a choice whether to accept or reject the contract.
(II) Aleatory Contracts – This type of contract involves a mutual agreement that comes into
being after an unexpected occurrence, accident, or a natural calamity. In this type of contract
both the parties have an element of risk. Fire or Car insurances are this type of contract.

(III) Bilateral and Unilateral Contracts – Bilateral contracts involve two parties. Both parties
are obliged to one another for performing or abstaining to perform any act. It is also called a
two-sided contract as it involves two way promises. Meanwhile, unilateral contracts are those
in which the promise is made by only one party. They consist of an offeror and offeree. The
offeror makes a promise to perform an action and is bound by the law to do so. The offeree is
not bound to the court even if he fails to execute the requested action because he does not
promise anything at all.

(IV) Express Contracts – These contracts are those wherein the terms of the contracts are
expressed clearly whether in written documents or orally.

(V) Implied Contracts – There are no oral or written terms in this type of contract. The
contracts are assumed owing to the facts of the parties. If an individual visits a medical
professional, he expects to be diagnosed for a disease or illness and be advised a cure. This is
an implied contract and a patient is capable of suing a medical practitioner for malpractice.

(VI) Void and Voidable Contracts – Void contracts are illegal from the very beginning and
hold no validity under law. They are thereby un-enforceable. Voidable contracts are unlike
void contracts in the sense that one party is bound by the contract and the unbound party is
capable of terminating the contract as they are unbound to it.

A quasi-contract is unlike a real contract. Salmond defines quasi contracts as “there are
certain obligations which are not in truth contractual in the sense of resting on agreement, but
which the law treats as if they were”. It is important to remember that even though it is
imposed by law, it is not created by the operation of the contract.

What are the key differences between agreements and contracts?

Basis for
Agreement Contract
Comparison

An agreement is made when a A contract is made when an

Meaning proposal by one party is accepted by agreement becomes enforceable
another lawful consideration. by law.
 Agreement and Enforceability
Elements Offer and Acceptance
under law

Defined in Section 2(e) Section 2(h)

In writing Not necessarily Usually written and registered

Once the agreement becomes a

Legal There is no legal obligation as long as
contract, there is a legal
obligation it is a mere agreement.
obligation by parties involved.

Scope Wide Narrow

Offer and acceptance

Offer/proposal (Section 2(a))

• The entire process of entering into a contract begins with the proposal or an offer
made by one party to another. The proposal must be accepted to enter into an
agreement.
• According to the Indian Contract Act 1872, proposal is defined in Section 2(a) as
“when one person will signify to another person his willingness to do or not do
something (abstain) with a view to obtain the assent of such person to such an act
or abstinence, he is said to make a proposal or an offer.”

Features of a valid offer

The person making the offer/proposal is referred to as the “promiser” or the “offeror”. And
the person who accepts an offer is referred to as “promisee” or the “acceptor”.

• The offeror must express his willingness to do or abstain from doing an act. Only
willingness is not adequate. Or just an urge to do something or not to do anything
will not be an offer.
• An offer can either be positive or negative. It can be a promise to do some act, and
can also be a promise to abstain from doing any act/service. Both are valid offers.
The element of a valid offer

Here are some essentials which make the offer valid:

There must be two parties

There have to be at least two parties: a person making the proposal and the other person
agreeing to it. All the persons are included i.e, Legal persons as well as artificial persons.

Every proposal must be communicated

Communication of the proposal is mandatory. An offer is valid if it is conveyed to the

offeree. The communication can either be expressed or implied. It can be communicated by
terms such as word of mouth, messenger, telegram, etc. Section 4 of the Indian Contract Act
says that the communication of a proposal is complete when it comes to the awareness of the
person to whom it is made.

Example

‘A’ proposes to sell a car to ‘B’ at a certain price. Once ‘B’ receives the letter, the proposal
communication is complete.

It must create legal relations

An offer must be such that when accepted it will result in a valid contract. A mere social
invitation cannot be regarded as an offer, because if such an invitation is accepted it will not
give rise to any legal relationship.

Example

‘A’ invited ‘B’ to dinner and ‘B’ accepted the invitation. It is a mere social invitation. And
‘A’ will not be liable if he fails to provide dinner to B.

It must be certain and definite

The terms of the offer must be certain and clear in order to create a valid contract, it must not
be ambiguous.

It may be specific or general

The specific offer is an offer that is accepted by any specific or particular person or by any
group to whom it is made. Whereas, The general offers are accepted by any person.
Classification of offer

An offer can be of many types, ranging across the spectrum. There are basically 7 kinds of
offers:

• Express offer
• Implied offer
• General offer
• Specific Offer
• Cross Offer
• Counter Offer
• Standing Offer

Express offer and implied offer (Section 9)

Section 9 of The ICA defines both of them as: In so far as the proposal or acceptance of any
promise is made in words, the promise is said to be expressed. In so far as such a proposal or
acceptance is made otherwise than in words, the promise is said to be implied.

Therefore, any offer that is made with words, it may be regarded as express. Any promise
that is made otherwise than in words is implied. A bid at an auction is an example of an
implied offer.

A case in this regard is Upton-on-Severn RDC v. Powell, wherein the defendant called a fire
brigade assuming that those services would be free to him, however it was found that his
Farm did not come under that of Upton. The court held that the truth of the matter is that the
Defendant wanted the services of Upton, he asked for the services of Upton and in response
to that they offered their services and they were rendered on an implied promise to pay for
them.

In Ramji Dayawala & Sons (p) Ltd v. Invest Import, a case between an Indian and
Yugoslavian party the notice for revocation of an arbitration clause in the contract between
the parties was made by the Indian party, to which the other party gave no reply. It was held
that this would amount to an implied acceptance i.e.- the arbitration clause was deleted from
the contract, and a suit would lie in the court of law. Similarly entering into an omnibus also
amounts to implied acceptance, same as consuming edibles at a self-service restaurant.
Therefore in simpler terms a contract that is entered into because of actions on the offerors
part, may be referred to as an implied offer, any contract entered into otherwise is an express
offer.
General offer

A General Offer is an offer that is made to the world at large. The genesis of a General Offer
came about from the Landmark case of Carlill v. Carbolic Smoke Ball Co. A company by the
name Carbolic Smoke Ball offered through an Advertisement to pay 100 Pounds to anyone
who would contract increasing epidemic Influenza, colds or any disease caused by cold after
taking its Medicine according to the prescribed instructions. It was also added that 1000
Pounds have been deposited in Alliance bank showing our sincerity in the matter. One
customer Mrs Carlill used the medicine and still contracted Influenza and hence sued the
company for the reward. The Defendants gave the argument that the offer was not made with
an intention to enter into a legally binding agreement, rather was only to Puff the sales of the
company. Moreover, they also contended that an offer needs to be made to a specific person,
and here the offer was not to any specific person and hence they are not obliged to the
Plaintiff.

Setting aside the arguments of the Defendant, the bench stated that in cases of such offers i.e-
general offers, there is no need for communication of acceptance, anyone who performs the
conditions of the contract is said to have communicated his/her acceptance, and moreover,
the money deposited by the Defendant in Alliance Bank clearly shows that they intended to
create a legally binding relationship. Hence the Plaintiff was awarded with the amount. An
Indian authority in this regard is Lalman Shukla v. Gauri Dutt, wherein a servant was sent
by his master to trace his missing nephew. In the meanwhile, he also announced a reward for
anyone finding his nephew, this in itself is an example of an offer that is made to the world at
large and hence a General Offer.

Valid acceptance based on fulfilment of condition

This concept has been given statutory authority under section 8 of the ICA:

Performance of the conditions of a proposal, or the acceptance of any consideration for a

reciprocal promise which may be offered with a proposal, is an acceptance of the proposal.

This section was applied by YEARS CJ of Allahabad high court in the case of Har Bhajan
Lal v. Har Charan Lal, wherein the father of a young boy who ran from home issued a
pamphlet for a reward for anyone who would find him. The Plaintiff found him at the railway
station and sent a Telegram to his father. The Court held that the handbill was an offer that
was made to the world at large and anyone who fulfilled the conditions is deemed to have
accepted it. In the State of Bihar v. Bengal Chemical and Pharmaceutical Works LTD, the
Patna HC held that where the acceptance consists of an act, e.g- dispatching some goods, the
rule that there shall be no communication of acceptance will come into play.
General offer of continuing nature

When a general offer is of continuing nature, like it was in a carbolic smoke ball case, it can
be accepted by a number of people till it is retracted. However, when a similar offer requires
information regarding a missing thing, it is closed as soon as the first information comes in.

Specific offer

A Specific offer is an offer that is made to a specific or ascertained person, this type of offer
can only be accepted by the person to whom it is made. This concept was seen briefly in the
case of Boulton v. Jones, wherein the Plaintiff had taken the business of one Brocklehurst,
the defendant used to have business with Brocklehurst and not knowing about the change in
ownership of business, sent him an order for certain goods. The Defendant came to know
about the change only after receiving an invoice, at which point he had already consumed the
goods. The Defendant refused to pay the price, as he had a set off against the original owner,
for which the plaintiff sued him.

The Judges gave a unanimous judgement holding the defendant not liable. Pollock CB held
that the rule of law is clear, if you intend to contract with A, B cannot substitute himself as A
without your consent and to your disadvantage. It was also held that whenever a person
makes a contract with a specific personality, a specific party, so to say, for writing a book, for
painting a picture or for any personal service or if there is any set off due from any party, no
one has the authority to come in and maintain that he is the party contracted with.

Cross offer

When two parties make an identical offer to each other, in ignorance to each other’s offer,
they are said to make cross offers. Cross offers are not valid offers. For example- if A
makes an offer to sell his car for 7 lakhs to B and B in ignorance of that makes an offer to buy
the same car for 7 Lakhs, they are said to make a cross offer, and there is no acceptance in
this case, hence it cannot be a mutual acceptance.

Basic essentials of a cross offer

1. Same offer to one another- When the offeror makes an offer to the offeree and the
offeree without prior knowledge makes the same offer to the offeror, then both the
object and the party remain the same.
2. Offer must be made in ignorance of each other- The two parties must make their
offer in ignorance of each other.
An important case in this aspect is the English case of Tinn v. Hoffman, the defendant wrote
to the complainant an offer to sell him 800 tons of iron at 69s per ton, at the same time the
complainant also wrote to the defendant an offer to buy the iron at similar terms. The issue in
this case was that, was there any contract between the parties, and would simultaneous offers
be a valid acceptance. The court held that these were cross offers that were made
simultaneously without knowledge of one another and would not bind the parties.

Here it is imperative to deduce that for a valid contract to be formed there needs to be an
offer and acceptance of the same, whereas in a cross offer there is no acceptance, but only
simultaneous offers being and therefore a cross offer will not lead to the formation of a
contract.

Counter offer

When the offeree offers a qualified acceptance of the offer subject to modifications and
variations in terms of the original offer, he is said to have made a counter offer. A counter
offer is a rejection of the original offer. An example of this would be if A offers B a car for
10 Lakhs, B agrees to buy for 8 Lakhs, this amounts to a counter offer and it would mean a
rejection of the original offer. Later on, if B agrees to buy for 10 Lakhs, A may refuse. Sir
Jenkins CJ in Haji Mohd Haji Jiva v. Spinner, held that any departure from original offer
vitiates acceptance. In other words, an acceptance with a variation is not acceptance, it is
simply a counter proposal which must be accepted by the original offeror, for it to formulate
into a contract.

The Bombay High court gave this decision based upon the landmark judgement of Hyde v.
Wrench, in which an offer to sell a farm for 1000 Pounds was rejected by the Plaintiff, who
offered 950 for it. Subsequently the Plaintiff gave an acceptance to the original offer. Holding
that the Defendant was not bound by a contract, the court said that the Plaintiff accepted the
original offer of buying the farm at the price of 1000 pounds, it would have been a
completely valid contract, and however he gave a counter proposal to it, thus rejecting the
original offer.

Partial acceptance

Counter offer also includes within its contours Partial acceptance, meaning that a party to the
contract cannot agree to those conditions of the agreement that favour him and reject the rest,
the acceptance should be of the complete agreement i.e.- all its parts. In Ramanbhai M.
Nilkanth v. Ghashiram Ladli Prasad, the plaintiff made an application for certain shares in a
company with the underlying condition that he would be made the cashier in its new branch.
The Company did not comply with this and hence the suit. The court held that the Petitioners
application for shares was condition on him being made the cashier and that he would have
never applied for the shares had there been no such condition.

Acceptance of a counter proposal

In Hargopal v. People’s Bank of Northern India LTD, an application for shares was made
on a conditional undertaking by the bank that the applicant would be made the director of the
new branch. The shares were allotted to him without fulfilling the condition. The applicant
did not say anything and took his dividends, a subsequent suit by him failed as the court held
that he through his conduct had waived the condition. When a counter proposal is accepted
the contract arises in terms of the counter proposal and not in terms of the original
contract.

Standing offer

An Offer which remains open for acceptance over a period of time is called a standing offer.
Tenders that are invited for supply of goods is a kind of Standing Offer. In Percival Ltd. V.
London County Council Asylums and Mental deficiency Committee, the Plaintiff advertised
for tenders for supply of goods. The defendant took the tender in which he had to supply to
the company various special articles for a period of 12 months. In-between this the Defendant
didn’t supply for a particular consignment. The Court held that the Tender was a standing
offer that was to be converted into a series of contracts by the subsequent acts of the company
and that an order prevented the possibility of revocation, hence the company succeeded in an
action for breach of contract.

Difference between an offer and Invitation to offer

Although Invitation to Offer is not a type of offer per se, it is imperative to distinguish both
to even construe what an actual offer is. An invitation to offer is an offer to negotiate, an offer
to receive offers, offers to chauffeur. An offer is a final expression of willingness to get into a
contract upon those following terms. The concept of Invitation to offer was explained in the
Privy Council case of Harvey v. Facey, the Plaintiffs in this asked two questions from the
defendant i.e.- Would you sell me your Bumper Hall pen , telegram me the lowest price? , the
Defendant only gave the answer to the latter question, post which he refused to sell. The
Court held that the defendant was not to sell as he had only answered the second question and
reserved the same for his first question. Thus, this clearly shows the distinction between an
offer and invitation to offer.

Rules regarding display of goods in shops

In Pharmaceutical Society of Great Britain v. Boots Cash Chemists Southern Ltd., Lord
GODDARD CJ, said that it would be wrong to say that a shopkeeper intends to sell
everything that is displayed in his shop. Meaning that the customer makes an offer, to which
the shopkeeper has the discretion to accept or deny. The shopkeeper may say that he doesn’t
have enough stock of that good and therefore may not sell. Similarly, a banker’s catalogue of
charges is also not an offer, the auction held by a person is also only an invitation to offer and
he may not be liable for the transportation costs that people may have to pay to come to the
place of auction, in case he cancels at the end moment.

Difference between general offer and specific offer

 General Offer Specific Offer

General Offer is made to the whole world at A specific Offer is made to some specific
large. person.

A general offer can be considered by any A specific offer can be accepted by only a
person. specific person.

Lapses and revocation of an offer

• An offer lapses after a defined or reasonable time.

• An offer lapse by not being accepted in the specified mode
• An offer lapses by rejection.
• An offer lapses by the offeror or the offeror’s death or insanity until acceptance.
• An offer lapses by revocation before acceptance.
• An offer lapses by subsequent illegality or destruction of the subject matter.

When communication is complete

Communication of offer (section 4)

The communication of the offer is complete when it comes to the knowledge of the person to
whom it is made.

Acceptance (Section 2(b))

The Indian Contract Act 1872 defines acceptance in Section 2 (b) as “When the person to
whom the proposal is made signifies his assent thereto, the offer is said to be accepted. Thus
the proposal when accepted becomes a promise.” An offer can be revoked before it is
accepted.

As specified in the definition, if the offer is accepted unconditionally by the offeree to whom
the request is made, it will amount to acceptance. When the offer is accepted it becomes a
promise.

Example

‘A’ offer to buy B’s house for rupees 40 lacs and ‘B’ accepts such an offer. Now, it has
become a promise.
When an offer is accepted and it becomes a promise it also becomes irrevocable. No legal
obligation created by an offer.

Mode of acceptance

Under the Indian Contract Act, acceptance can be by following two ways:

• Implied acceptance: Acceptance which is not explicitly made by means of speech

or writing but, by the conduct of the person to whom an offer is made. The striking
of hammer thrice by the auctioneer in order to show his acceptance to the offer
made by a bidder is an example of implied acceptance to the offer made by the
bidder at an auction to the auctioneer;
• Express acceptance: Acceptance which is made by means of words, oral or written
is known as an express acceptance. For example, A offers B his watch for sale
through a mail and A replies in positive to the offer by email.

Acceptance: absolute and unqualified (Section 7)

Acceptance to be legally enforceable must be absolute and unqualified. Section 7(1) of the
Indian Contract Act provides that in order to turn an offer into an agreement the acceptance to
the offer must be absolute and unqualified. The logic behind the principle that the acceptance
to the offer must be absolute and unqualified is that when acceptance is not absolute and is
qualified it results into a counter offer which leads to the rejection of the original offer made
by the offeror to the offeree. If the offeree makes any variations in the original terms of the
contract proposed to him and then accepts the contract, such an acceptance would result in
the invalidity of the contract.

For example, if A offers to sell his bike to B for Rupees 10,000. But B persuades A to sell
him the bike for 7,000 rupees to which A denies and if B at any later point of time agrees to
buy the bike for 10,000 rupees. Then A is under no obligations to sell him the bike as the
counteroffer made by B puts an end to the original offer.

It is also important that the acceptance made by the offeree should be in toto, i.e. acceptance
should be given to all the terms and conditions of the offer as acceptance of only a part of the
offer is not a good acceptance under the law. For example, A makes an offer to B of sale of
30 kg of wheat at Rupees 700 but B agrees to buy only 10 kg of wheat. Here the acceptance
made by B is not in toto with respect to the terms of the contract and therefore, the
acceptance made by B is no acceptance in the eyes of law and therefore, A is under no
obligation to sell him wheat since there is no contract between them.

Legal rules and conditions for acceptance

 • Acceptance must be absolute and unqualified
The offeree’s approval cannot be conditional. For example, ‘A’ wants to sell her car to ‘B’
for Rs 2 lakh, ‘B’ can’t come back and says that she accepts the offer but will buy the same
for Rs. 1 lakh.

• Acceptance must be told to the offeror

If the acceptor just accepts the offer in his head and he does not mention the same to the
offeror, it can not be called an Acceptance, whether in an express manner or an implied
manner.

• Acceptance must be recommended in the following mode

Acceptance is sometimes required in a prescribed/specified communication mode.

• In a reasonable amount of time, the acceptance is given

It’s very rare that an offer is always to get acceptance at any time and at all times. Therefore,
the offer defines a time limit. If it does not, it should not be acknowledged forever.

• Mere silence is not acceptance

If the offeree fails to respond to an offer made to him, his silence can not be confused with
acceptance. But, there is an exception to this rule. It is stated that, within 3 weeks of the date
on which the offer is made, the non-acceptance shall be communicated to the offeror.
Otherwise, the silence shall be communicated as acceptance.

When communication is complete

• Communication of acceptance (Section 4)

Communication of acceptance is complete when it is put in the course of transmission to him
as to be out of the power of the acceptor to withdraw the same and when it comes to the
knowledge of the proposer.

Time of revocation of acceptance

An acceptance may be revoked at any time, but not afterward, before the communication of
the acceptance is complete as against the acceptor.

Consideration (Section 2(d))

Why do we need consideration

Only the promises that are backed by consideration are enforceable because any promise
made without any obligation is usually very rash and without any sort of deliberation. The
reason for making consideration an essential part of a contract is because it levies a sort of
burden on the parties to fulfil the terms of the contract. For Example, if, A promises to give B
a car without B doing or abstaining to do anything for it, makes the promise by an
unenforceable. This will be a gift and not a contract per se.

Legal requirements as to consideration

• Must move at the desire of the promisor- Section 2d of the Indian Contract Act,
1872, clearly mentions that the consideration should be at the desire of the
promisor if the consideration is made at the will of the third person or is not
according to the promisor then it is not a good consideration.

• Can move from the promisee or another person- Unlike English law in which the
consideration must move at the desire of the promisor, in Indian law as long as
there is consideration it is immaterial as to who has furnished it. Moreover, in the
case of Chinnaya vs. Rammyya the consideration can also move at the desire of
the third party but only in the condition where he is the beneficiary of the contract.

• Can be an act, abstinence or even a promise- If the promisee does something or

abstains from doing something for the promisor, at his desire, then it will be a
good consideration.
• Can be past, present or future:
PAST- When the consideration is given before the promise was made. For example- A saves
B at the latter’s desire. B after a month promises to pay A. the act of A will amount to past
consideration for the payment made by B.

PRESENT- When the consideration is given simultaneously to the promise made, then this is
present consideration or executed consideration. For example- cash sales.

FUTURE- When the consideration of the promise made is to be passed at a future date then
that is called future or executory consideration. For example- A promises to pay B, when the
latter will fetch newspaper for him.

• Consideration need not be adequate- It is not necessary that the consideration is

equal or adequate for the promise made. However, it is mandatory that the
consideration should be something in which the law attaches some value. It is for
the parties to decide the value of the consideration and not a court of law. For
example- A sells a table to B and B gives him rs 500. It will be difficult for the
court to ascertain the value of the table, so if A is satisfied with the amount given
then the consideration is valid.
 • Should be real- although the consideration need not be adequate it should be real
and not illusory. The consideration should not be physically impossible, legally
not permissible or based on an uncertain event or condition.

• Should not be something which the promisor is already bound to do- a

consideration to do something which the promisor is already required to do is not a
good consideration. For example- the public duty done by a public servant.
• Should not immoral, or against the public policy of the state- under Section 23 of
the Indian contract it is given that consideration should not be illegal, immoral or
against public policy. The court should decide the legality of the consideration and
if found to be illegal then no action on the agreement should be allowed.

Competent to contract (Section 11)

Sec.11 of the Indian Contract Act, 1872 lists down the qualifications which enable a person
in India to enter into contracts-

• A person should have attained the age of majority as per the law of the country of
which he is a citizen.
In India, the age of majority is governed by the Indian Majority Act, 1875. As per Sec. 3 of
the Indian Majority Act, 1875, an Indian citizen is said to have attained the age of majority
upon completion of eighteen years of age. In the USA (the majority of the states) and the UK,
the age of majority is 18 years as well.

However, if a person is below the age of 18 years and a guardian has been appointed for him,
he shall attain majority at the age of 21 years.

• A person should be of sound mind at the time of entering into a contract.

As per Sec. 12 of the Act, a person can be said to be of sound mind when he can assess,
understand his actions and realize the consequences of obligations imposed on him at the
time of entering into a contract.

• A person should not be disqualified under any law to which he is subject.

Disqualifications for entering into a contract

As per the Indian Contract Act, 1872 all persons who do not meet the criteria as per Sec. 11
of the act are incompetent to contract. Hence, we can deduce that the following category of
persons do not possess the legal capacity to enter into a contract-
Minor

In India, a minor is an Indian citizen who has not completed the age of eighteen years. A
minor is incapable of understanding the nature of the liabilities arising out of an agreement.
Hence a contract with a minor is void ab initio (void from the beginning) and cannot be
enforced in a court of law. The result is that a party cannot compel the minor to perform his
part of obligations as enumerated in the agreement (plead specific performance of an
agreement/rule against estoppel).

Mohori Bibee vs. Dharmodas Ghose

1. The respondent, Dharmodas Ghose, a minor, had mortgaged his property in favor
of the moneylender, Brahmo Dutt for securing a loan amounting to INR 20,000/-.
2. Mr. Brahmo Dutt had authorized Kedar Nath to enter into the transaction through a
power of attorney. Mr. Kedar Nath was informed of the fact that Dharmodas
Ghose was a minor through a letter sent by his mother.
3. However, the deed of mortgage contained a declaration that Dharmodas Ghose
was of the age of majority.
4. The respondent’s mother brought a suit on the ground that the mortgage executed
by his son is void on the ground that her son is a minor.
5. The relief sought by the respondent was granted and an appeal was preferred by
the executors of Brahmo Dutt before the Calcutta high court. The same was
dismissed.
6. An appeal was then made to the Privy council. The Privy council held that-
1. A contract with a minor is void-ab-initio.
2. Sec.7 of the Transfer of Property Act, 1882 states that a person
competent to contract is competent to transfer a property.
3. Hence, the mortgage executed by the respondent is void.
However, if a minor enters into a contract and performs his part of obligations, the other party
can be compelled to perform and fulfill its obligations, and, in such instances, the contract
becomes legally enforceable.

Exception to general rule

For providing protection to a minor, his agreement is void. But there are certain exceptions as
well.

• When a minor has performed his obligation: In a contract, a minor can be a

promisee but not a promisor. So if the minor has performed his part of the
 promise, but the other party hasn’t the minor being in the position of a promisee he
can enforce the contract.
• A contract entered into by a guardian of a minor for his benefit: In that case, a
minor can sue the other party when it does not perform its promise. In the case of
Great American Insurance v. Madan Lal[1] the guardian on the behalf of her son
entered into an insurance contract in respect of fire for the minor’s property. When
the property was damaged and the minor asked for the compensation, the insurer
denied it by saying that a contract with a minor is a void one. But later the court
held that this contract was enforceable, and he is liable to pay compensation.
• Contract of apprenticeship: Under the Indian Apprentices Act, 1850, a contract of
apprentice entered by guardian on his behalf is binding on the minor

Necessities supplied to a minor

If a person is incapable of entering into a contract is supplied by another person with

necessities of life, the person who has supplied is entitled to get reimbursement from the
property of such incompetent person, including a child as well. But if the minor has no
property of his own, then he cannot be bound to reimburse the other person.

Can a minor be a partner?

The way of a contract creates a partnership, and the essential of a contract is that the both the
parties should be of the age of majority. However, as an exception as per Section 30 of the
Partnership Act is that with the due consent of all the partners, the minor can be admitted to
the benefit of partnership for the time being. But he will not be liable for any of his acts.

Liability of a minor under the Negotiable Instrument Act

As per Section 26 of the Act, a minor can draw, endorse, and negotiate and he can bind
everybody except himself. Every person who is capable of contracting according to the law
to which he is subject may bind himself and be bound by the making, drawing, accepting,
delivery and negotiation of a promissory note, cheque or a bill of exchange.

Can a minor be an agent or principal?

A minor can never be a principal because Section 183 of the Indian Contract Act for anybody
to become a principal should be of the age of majority and be of sound mind and since a
minor is not competent to contract, he also cannot employ an agent. But, a minor can become
an agent as per the provisions of section 184 but the principal shall be bound by the acts of
the minor and he would not be personally liable in that case.

Person of unsound mind

 • Idiots- An idiot, in medical terms, is a condition of mental retardation where a
person has a mental age of less than a 3-year-old child. Hence, idiots are incapable
of understanding the nature of the contract and it will be void from the very
beginning.
• Lunatic- A person who is of sound mind for certain duration of time and unsound
for the remaining duration is known as a lunatic. When a lunatic enters into a
contract while he is of sound mind, i.e. capable of understanding the nature of the
contract, it is a valid contract. Otherwise, it is void.
Illustration- A enters into a contract with B for sale of goods when he is of sound mind. A
later becomes of unsound mind. The contract is valid.

• People under the influence of the drug- A contract signed under the influence of
alcohol/drug may or may not be valid. If a person is so drunk at the time of
entering into a contract that he is not in a position to understand the nature and
consequences, the contract is void. However, if he is capable of understanding the
nature of the contract, it will be enforceable.
Illustration- A enters into a contract with B under the influence of alcohol. The burden of
proof is on A to show that he was incapable of understanding the consequence at the time of
entering the contract and B was aware of his condition.

Persons disqualified by law

• Alien enemy- An alien enemy is the citizen of a country India is at war with. Any
contracts made during the war period with an alien enemy are void. An Indian
citizen residing in an alien enemy’s territory shall be treated as an alien enemy
under the contract law. Contracts made before the war period either get dissolved
if they are against public policy or remain suspended and are revived after the war
is over, provided they are not barred by limitation.
Illustration- A, of country X, orders goods from B, of country Y. The goods are shipped and
before they could reach Y, country X declares a war with country Y. The contract between A
and B becomes void.

• Convicts- A convict cannot enter into a contract while he is serving his sentence.
However, he regains his capacity to enter into a contract upon completion of his
sentence.
Illustration- A, is serving his sentence in jail. Any contract signed by him during this period is
void.

• Insolvent- An insolvent is a person who is declared bankrupt/ against whom

insolvency proceedings have been filed in court/resolution professional takes
possession of his assets. Since the person does not have any power over his assets,
he cannot enter into contracts concerning the property.
Illustration- A enters into a contract for sale of goods with B. Before the sale takes place, an
insolvency suit is filed against A. A sell the goods to B during pendency of insolvency
proceedings. The contract is valid.

• Foreign sovereign- Diplomats and ambassadors of foreign countries enjoy

contractual immunity in India. One cannot sue them in Indian courts unless they
submit themselves to the jurisdiction of Indian courts. Additionally, sanction from
the central government is also required in such cases. However, the foreign
sovereign has the authority to enforce contracts against the third person in Indian
courts.
• Body corporate- A company is an artificial person. The capacity of a company to
enter into a contract is determined by its memorandum and articles of association.

Competency of parties to enter into an e-contract

A party can enter into an e-contract if it satisfies the legal requirements as per Sec. 11 and
Sec. 12 of the Indian Contract Act, 1872.

Competency to contract on behalf of another

As per the Indian Contract Act, 1872 a person can employ another who shall enter into
contracts with the third person on his behalf. The person in this instance is known as the
principal and the other person so employed is known as the agent.

Any person may be employed as an agent. However, a minor or a person of unsound mind
cannot be held liable for their acts to the principal.

An agent’s authority may be either-

1. express, i.e. by word of mouth or documented in writing as in Power of Attorney

2. Implied, i.e. it might be deduced from the facts and circumstances of the case
Companies ensure competency of each other while entering into a contract.

Most companies while entering into contracts with one another want to make sure that the
other party is competent enough to enter into a contract. This is required to avoid any legal
complications in the future. This is mostly done through the inclusion of a representation
clause in a contract stating that the company, as per its memorandum and articles of
association, is capable of entering into a contract through its authorized representatives.

A copy of the articles of association may be annexed by both parties to confirm the
representations made.
If the memorandum and articles provide otherwise, a condition precedent clause is
incorporated into the agreement stating that the company shall pass necessary board
resolutions to alter its articles of association. A stipulated date called a long stop date is given
to the other party to comply with the conditions precedent failing which the agreement shall
stand terminated.

A party might be asked to produce a copy of board resolution so passed/ changes made in the
articles of association to the other party to prove its compliance with the condition precedent.

It is expressly mentioned in the agreement that both the parties indemnify each other from
any suits, proceedings, or liabilities arising from breach of the representation clause.

Competency of parties to contract is one of the most important requirements to make an

agreement valid and enforceable in a court of law.

A contract made by a person who does not possess the mental capacity to understand the
nature and consequences of the contract is void ab initio. On the other hand, contracts with
lunatics, people under the influence of the drug may/may not be void depending upon the
circumstances surrounding the situation.

A person regains the legal capacity to contract upon removal of any of the disqualifications.

Companies while entering into contracts with one another always try to safeguard their
interests. Representation and indemnification are the most commonly used clauses to ensure
that both the parties are competent to contract.

Free consent (Section 13 and 14)

Consent is said to be free when it is not caused by coercion, undue influence, fraud,
misrepresentation and Mistake.

Consent is an essential element of a valid contract. In its absence, the contract becomes void
or voidable depending on the circumstance. Consent means providing the party with an
opportunity to exercise his/her volition with respect to the contract. For a valid acceptance to
the proposal, the assent must be voluntary and genuine. As discussed earlier assent is required
to form a valid agreement. Assent here refers to the opportunity to exercise one’s volition.
Where consent to an agreement is not free i.e. has any of these factors- coercion, undue
influence, fraud or misrepresentation, the agreement is a contract voidable if the other party
so chooses whose consent was obtained on the basis of vitiating factors. If, for example, a
person is induced to sign an agreement by fraud, he may, on discovering the truth, either
uphold the contract or reject it.
Where consent is caused by mistake, the agreement is void. A void agreement cannot be
affected by the party [Section 2(g)] An agreement which is void doesn’t give rise to legal
consequences and is void ab initio These agreements are not enforced by the court or we can
call this agreement as ‘’ An agreement not enforceable by law’.

Difference between consent and free consent

Section 13 defines consent:

An agreement where both parties share common intention relating to the terms of the contract
is known as true consent or consensus ad idem and is at the root of every contract.

Free consent is defined under the act as consent which is not caused by coercion, undue
influence, fraud, misrepresentation and mistake.

Every free consent is consent but every consent is not a free consent.

Void Agreement and Void Contract

Void agreement is an agreement not enforceable by law. A contract which is not recognised
by law. There can be no action instituted in a court of law to claim rights against parties.

Void agreement is void right from the day the agreement is constructed while a void contract
becomes void at a later stage. In a void contract, the voidness creeps because of some
incident or change in circumstance which is not through the fault of the parties.

Void agreements have been specifically stated in chapter 2 of the act under Sections 11,20,
23 to 30 and 56. No such specific mention has been made for a void contract under any
chapter of the Act.

Coercion (Section 15)

It is defined under Section 15. Coercion is using force or creating circumstances wherein the
other parties’ consent is not free. It might be through taking some property, doing something
which is an offence under IPC, the purpose of these things should be to get the other parties’
consent.

Techniques of causing coercion

Consent is said to be caused by coercion when it is obtained by some act which compels the
other party;
 1. Threatening or doing something which is a crime under IPC; or
2. Seizing or confining someone.
An illustration under the First category would be Consent given at the point of a knife, or by
threatening to injure someone, or by intimidation or by threatening to destroy a man’s
property.

An example of the second type will be a case where the plaintiff had pledged his plate with
the defendant for $20. When he went to redeem it the pledge insisted that an additional $10
interest was also owed. The plaintiff paid this to redeem his plate and then sued to recover it
back. The court allowed it and the defendant had taken advantage of the situation and
extracted an amount which was not lawful.

Undue influence (Section 16)

This is defined under Section 16. It is using one’s position to influence the decision of the
other person to his prejudice. There is a subtle difference between fraud and undue influence.
The party is able to persuade because of the relation they share or he enjoys a certain degree
of confidence of the other person.

What amounts to apply undue influence on someone?

Sometimes the parties to an agreement are so related to each other that one of them is able to
apply undue influence to the expression of choice, willingness and consent of the other.

The person who is in commanding position may use his position and the trust that the other
person reposes on him to his advantage. By ‘’advantage’’ we mean to cause the other person
to express his assent to the proposal.

It is the nature of the relationship that is a Sine qua non in these types of cases, which enables
one party to be at a superior position.

For Example: A spiritual adviser(guru), for example, in a case induced the plaintiff, his
devotee, to gift to him the whole of his property to secure benefits to his soul in the next
world. Such consent is said to be obtained by undue influence. The test is to examine this
from a prudent man’s point of view. Whether in the absence of the nature of the relationship a
prudent man would have done the same?

Subtle species of fraud

The court describes this in Mahboob Khan v. Hakim Abdul Rahim. Undue influence is a kind
of fraud wherein the parties’ mind is hacked in a pernicious way. It can be through various
means such as coercion, fear or other methods which are directed to impair the reasoning of
the person. The result is the person thinks he is using his volition but in reality, his free will is
affected by other parties’ scheme,

Undue influence and coercion

Coercion (duress) in the execution of a contract or deed involves some kind of physical or
bodily threat. The threat is not restricted to the party but to any person, the party is interested
in.

When compared to Undue influence, the difference is that undue influence may exist without
violence or threats of violence against the victim. Undue influence exists because of the
relationship the parties share. It is usually without violence or threats against the victim. The
confidence which the other party reposes in the other is used to one’s advantage.

A person is said to be in a position to dominate the will of another in the following cases-

1. Where he holds a position of dominance or authority or some kind of trust is

reposed in him.
2. Where the victim doesn’t have the mental capacity to understand the consequences
of his actions.
Fiduciary relation

Trust and confidence are essential elements of Fiduciary relation. Confidence is involved in
many of our interactions in everyday life. This category is, therefore, a very wide one. It
includes the relationship of solicitor and client, spiritual adviser and his devotee, doctor and
patient, woman and her confidential managing agent, parent or guardian and child, and
creditor and debtor.

Presumption of undue influence

In certain cases, the presumption of undue influence is raised. The effect of presumption is
once it is prima facie established that the defendant has overpowered the will of the other, it
will be assumed he has used his position to influence the outcome. The defendant has to
establish the contrary.

The presumption is raised at least in the following cases:

• Unconscionable bargains, inequality of bargaining power or economic duress

Unconscionableness: Where one of the parties to a contract is in a position to use undue
influence on the other and the contract is apparently skewed in one parties’ favour, the law
presumes that consent must have been obtained by undue influence. The burden is shifted to
the stronger party to prove that he did nothing to dominate the will of the other.

This case illustrates the above point wherein An old and illiterate woman, incapable of any
business, conferred on her confidential managing agent, without any valuable consideration,
an important pecuniary benefit under the guise of trust. The onus is on the grantee to show
conclusively that the transaction is honest, bona fide, well-understood, the subject of
independent advice and free from undue influence’’.

Position of dominance necessary for presumption to arise

For this presumption to be successful, one of the parties’ have to be in a superior position or
in a dominating position. Where the parties are on equal footing the mere unconscionableness
of the bargain does not create a presumption of undue influence. The mere fact that the
bargain is a hard one is no guard in itself for granting relief.

In Raghunath Prasad Sahu v. Sarju Prasad Sahu the defendant and his father were equal
owners of a vast joint family property over which they had quarrelled. Consequently, the
father had instituted criminal proceedings against the son. The defendant, in order to defend
himself, mortgaged his properties to the plaintiff and borrowed from him about ten thousand
on 24% compound interest. In eleven years this rate of interest had magnified the sum
covered by the mortgage more than elevenfold, viz., Rs1,12,885.

The defendant had contended that the lender had, by exacting a high rate of interest, taken
unconscionable advantage of his mental distress and, therefore, there should be a presumption
of undue influence.

Their lordships, however, held that there should be no such presumption in the circumstances
of the case.

Sub-Section (3) of Section 16, deals with three matters. There is a particular order which
should be followed while determining whether a party has dominated the will of the other.

In the first place, the relation is of a kind where the party can overpower the volition of the
other.

Then comes the second stage where it will be examined whether the contract has been
induced by undue influence.

This leads to the third stage, where onus probandi emerges. The burden of proving that
plaintiff consent is not vitiated by any of the factors shifts on defendant.
This order should be maintained lest error is avoided Unconscionableness of the bargain
cannot be the first thing to be considered. We have to start from the relation that the parties
share with respect to each other.

1. Contracts with Pardanashin woman

A contract with a Pardanashin woman is presumed to have been induced by undue influence.
She can avoid the contract unless the other party can show that it was her ‘’intelligent and
voluntary act’’.

According to the Bombay High Court, a woman does not become pardanashin simply
because ‘’she lives in some degree of seclusion’’. The concept probably means a woman who
is totally ‘’secluded from ordinary social intercourse’’.

Once it is shown that a contract is made with a pardanashin woman, the law presumes undue
influence. In Moonshe Buzloor Raheem v. Shumsoonisa Begum, A window remarried.
Subsequently, she endorsed and delivered to her new husband certain valuable Government
papers. In an action to recover them back from him, she proved that she lived in seclusion
and that she had given over the papers to him for collection of interest. He contended that he
had given her full consideration for the notes. It was held that the mere fact of endorsement
and the allegation of consideration were not sufficient to lift the presumption of undue
influence. He should prove that the transaction was bona fide sale and that he gave full
consideration for the paper which he received from his wife.

Misrepresentation (Section 18)

A contract the consent to which is caused by misrepresentation is voidable at the option of the
deceived party. Misrepresentation means the action of giving a false or misleading account
of the nature of something. This inaccurate information might make the difference with
respect to a party deciding to enter into an agreement or not entering the agreement.
Misrepresentation means misstatement of a fact material to the contract. Section 18 defines:

This Section includes the following types of misrepresentation:

• Unwarranted statements: When someone declares a statement which is relevant to

the contract and that statement doesn’t have information which justifies those facts
even though he believes to be true is misrepresentation.
In a Bombay case, for example, The defendant chartered a ship from the plaintiffs, who stated
that the ship was certainly not more than 2800 tonnage register. As a matter of fact, the ship
had never been in Bombay and was wholly unknown to the plaintiffs. She turned out to be of
the registered tonnage of more than 3000 tonnes.
It was held that the defendants were entitled to avoid the charter party. ’’The reason was that
defendants asserted regarding the size of the ship-an assertion not supported/justified by any
information the plaintiff had at the time, and which was not true’’

A statement is said to be warranted by the information of the person making it when he

receives the information from a reliable source. It should not be mere hearsay.

Where a representation acquires the status of being a term of the contract, and it turns out to
be false, the disadvantaged party may, not only avoid the contract but also sue for damages
for breach.

Where the seller of a car stated that the car had done only 20,000 miles, the representation
being untrue, the buyer was allowed to recover compensation for the misrepresentation.

• Breach of Duty
Any breach of duty which is beneficial to the person committing it by confusing the party to
his harm is a misrepresentation. This clause covers all cases which are called as cases of
‘constructive fraud’, in which there is no intention to deceive, but where the circumstances
are such as to make the party who derives a benefit from the transaction equally answerable
in effect as if he had been actuated by motives of fraud or deceit’’.

• Inducing mistake about subject-matter

Causing, however innocently, a party to an agreement to make a mistake as to the substance
of the thing which is the subject of the agreement is also misrepresentation (Section 18 (3)).
The subject-matter is the core of the agreement. This has to be of the quality or value which
the parties expected at the time of constructing the agreement. If one of the parties leads the
other, however innocently, to make a mistake as to the nature or quality of the subject-matter,
there is a misrepresentation.

Example: The government auctioned certain forest coupes. A part of the land was occupied
by tenants. The forest department knew this fact but did not disclose it to the purchaser. The
contract was held to be vitiated by misrepresentation. The purchaser was allowed to recover
damages for loss.

Suppression of vital facts

Misrepresentation may also arise from the suppression of vital facts. Cases of concealment or
suppression will fall either under sub-Section (2) when it amounts to a breach of duty or
under sub-Section(3) when it leads the other party to make a mistake about the subject-matter
of the agreement.

Expression of opinion
A mere expression of opinion cannot be regarded as a misrepresentation of facts even if the
opinion turns out to be wrong. In some cases, a statement of opinion may also amount to
misrepresentation.

It is a mistake to assume that a statement of opinion cannot involve a statement of fact. When
knowledge of the parties is not on the same footing then a statement of opinion by the person
who is more knowledgeable, his statement has a material fact for he tacitly claims
information which justifies his opinion.

Of material facts

A fact is said to be material if it would affect the judgment of a reasonable person in deciding
whether to enter into the contract and, if so, on what terms. Misrepresentation of the age of a
car, showing it to be five years younger, was held to be material because it affected the price
which a willing purchaser would have liked to pay for it.

Inducement

The misrepresentation must be the cause of the consent, in the sense that but for the
misrepresentation the consent would not have been given. It must have played a substantial
role in the plaintiff’s decision to enter or not to enter into the contract.

The representation must be made with the intention that it shall be acted upon by the other
party.

There would be no misrepresentation, even if the advertisement was false if the buyer had
inspected the goods before buying them unless he was the victim of some concealed defect
which could not be known by external examination.

Means of discovering the truth

A party cannot complain of misrepresentation if ‘’ he had the means of discovering the truth
with ordinary diligence’’.

A person who bought a quantity of rice was precluded from alleging misrepresentation about
its quality because he lived very near the place where the goods were lying and, therefore,
might have discovered the truth with ordinary diligence.

Fraud (Section 17)

According to Merriam-Webster fraud is defined as ‘’an intentional perversion of truth in
order to induce another to part with something of value or to surrender a legal right. The
distortion of facts intentionally which are directed towards the other party, in order to receive
their assent to the proposal. Section 17 defines fraud.

Assertion of facts without belief in the truth

In English law ‘’fraud’’ was defined in the well-known decision of the House of Lords
in Derry v Peek. The judges had observed in this case that- ‘’Fraud is proved when it is
shown that a false representation has been made,-

1. Knowingly, or
2. Without belief in its truth, or
3. Recklessly careless whether it be true or false’’.
In this case:

A company’s prospectus contained a representation that the company had been authorised by
a special Act of Parliament to run trams by steam or mechanical power. The authority to use
steam was, in the Board refused consent and consequently, the company was wound up. The
plaintiff, having bought some shares, sued the directors for fraud. They were held not liable
because they honestly believed that once the Parliament had authorised the use of steam, the
consent of the Board was something that was bound to happen. It follows, therefore, that the
person making a false representation is not guilty of fraud if he honestly believes in its truth.
Thus, intentional misrepresentation is of the essence of fraud.

Active concealment

‘’Active concealment’’ is different from ‘’passive concealment’’. Passive concealment means

mere silence as to material facts. Active concealment of a material fact is a fraud; mere
silence, except the few cases noted below, does not amount to fraud. Active concealment
involves some kind of action, behaviour or scheme to trick the other party into giving his
consent to the proposal. The intention is to commit fraud. For example, a husband persuaded
his illiterate wife to sign certain documents telling her that by them he was going to mortgage
her two lands to secure his indebtedness and in fact mortgaged four lands belonging to her.
This was an act done with the intention of deceiving her.

Mere silence is no fraud

False impression is ordinarily conveyed by deliberate misstatement of facts. Misstatement of

facts is just one of the ways by which fraud can be caused. A false impression may be caused
by trick or device or ambiguous language, active concealment of material facts or other
methods. Ordinarily, mere silence is no fraud, even if its result is to conceal ‘’facts likely to
affect the willingness of a person to enter into a contract’’.

A contracting party is under no obligation to disclose the whole truth to the other party or to
give him the whole information in his possession affecting the subject-matter of the contract.
It is under this principle that a trader may keep silent about a change in prices. A seller who
puts forth an unsound horse for sale, but says nothing about its quality, commits no fraud.

When silence is fraud

• Duty to speak (contracts uberrima fides): Duty to speak arises where one
contracting party reposes trust and confidence in the other. A father, for example,
selling a horse to his son must tell him if the horse is unsound, as the son is likely
to rely upon his father.
Duty to disclose the truth will arise in all cases where one party reposes, and the other accepts
confidence.

This duty to speak is also expected from the party when the other party has no means to
discover the truth and has to depend on other parties’ judgment or assessment

A perfect example of this would be a contract of insurance wherein an insurance company

knows nothing about the life or situation of the insured. It is, therefore, the duty of the
assured to put the insurer in possession of all the material facts affecting the risk covered.

A contract of insurance is, for this reason, called a contract of absolute good faith, uberrima
fides.

This case where the plaintiff spent a sum of money to mark the engagement of his son. He
then discovered that the girl suffered from epileptic fits and so broke off the engagement. He
sued the other party to recover from them compensation for the loss which he had suffered on
account of their deliberate suppression of a vital fact which amounted to fraud.

The court concluded that a mere passive non-disclosure of the truth, however misleading in
fact, does not amount to fraud, unless there is a duty to speak. It was observed that the law
imposes no general duty on anyone to broadcast the blemishes of his female relations; not
even to those who are contemplating matrimony with them.

There was no fiduciary connection between the parties. The engagement was, however, held
to be voidable by reason of the misrepresentation, but the plaintiff was not entitled to recover
any compensation under Section 75 of the Contract Act.
 • Where silence is deceptive: Silence is sometimes itself equivalent to speech. A
person who keeps silent, knowing that his silence is going to be deceptive, is no
less guilty of fraud. Where, for example, the buyer knows more about the value of
the property, which is the subject of sale, but prefers to keep the information from
the seller, the latter may void the sale.
• Change of circumstances: Sometimes a change in circumstances might take place
in the intervening period, between the representation of facts and when the
contract is entered into. When this happens it is the duty of the person who made
the representation to communicate the change of circumstances.
A medical practitioner represented to the plaintiff that ‘his practice was worth $2000 a year’.
The representation was true. Five months later when the plaintiff actually bought the practice,
it had considerably gone down on account of the defendant’s serious illness. It was held that
the change of circumstances ought to have been communicated.

• Half-truths: Even when a person is under no duty to disclose a fact, he may

become guilty of fraud by non-disclosure if he voluntarily discloses something and
then stops halfway. A person may be silent, but if he speaks, a duty arises to
disclose the whole truth. ‘’ Everybody knows that sometimes half a truth is no
better than a downright falsehood’’

Difference between fraud and misrepresentation

1. Fraud is intentionally wrong, whereas misrepresentation may be quite innocent.

2. Fraud in addition to making the contract voidable is a cause of action in tort for
damages. Misrepresentation is not a tort but under Section 75 of the Contract Act
3. . ‘’ A person who rightfully rescinds a contract is entitled to compensation for any
damage which he has sustained through non-fulfilment of the contract’’.
4. A person complaining of misrepresentation can be countered with that he had the
opportunity of discovering the truth with ordinary effort’, but excepting, fraud by
silence, it does not lie in the mouth of the person committing fraud to say that his
victim was too easily deceived or had the means of discovering the truth.

Mistake (Section 20, 21, and 22)

Mistake may operate upon a contract in two ways. It may defeat the consent altogether that
the parties are supposed to have given, that is to say, the consent is unreal. Two or more
persons are said to consent when they agree upon the same thing in the same sense.

Definition of ‘’Mistake’’
Mistake happens when one of the parties has some misconceptions about the facts stated in
the contract. Section 20 defines

Illustration:. Two people contract that one of them will buy their house but none of them is
aware that the house was burnt when they were negotiating the contract. The agreement is
void.

Section 20 will come into play:

1. When both the parties to an agreement are mistaken,

2. Their mistake is as a matter of fact, and
3. The fact about which they are mistaken is essential to the agreement.
Contract caused by mistake of one party as a matter of fact-

A contract will not become voidable when one of the parties’ is under a mistake relating to
some fact involved.

Legality of object and consideration (Section 23)

Another essential feature of a valid contract is that the object and the consideration must be
lawful and not against the provisions by law. The object and the consideration of the object
need to be lawful otherwise the contract will be declared void. In some cases, the object for
which the parties entered into an agreement is lawful but the consideration for the same is
defeating the provisions of a lawful consideration and which will lead the agreement to be
termed as void and vice versa. So, for an agreement to be a valid one both the object and
consideration should be lawful. The court will not enforce any agreement if its object and
consideration are not lawful. The term “object of an agreement” is used to define the purpose
of design. Section 23 of the Indian Contract Act, 1872 clearly states about what object and
consideration are lawful and what are not. These are-

• If that object or consideration is forbidden by law specifically.

• Are of that nature which will defeat the very basic purpose of the law.
• If the object or consideration is fraudulent.
• If that involves or results in injury to any living person or the property of the
person.
• If the court has regarded any special objects and considerations as immoral.
• Those objects and considerations which are against the policy of the public and
can cause harm to the public.
If a contract shows any of these elements then it is unlawful and void u/s 23.
A contract is forbidden by law if it is either against any law, both substantive and procedural.
E.g. An agreement to sell liquor without a licence, despite the law mandating to have a
licence. In a particular case, the Plaintiff owner of a bar and having the licence to sell liquor
transferred the management of the bar and liquor sale to the defendant who had no such
licence. The court held that transferring business and sale of liquor to a person without the
license, was prohibited by law and thus cannot be enforced.

If a contract circumvents a provision of any law or defeats the purpose of the law (i.e it
makes the provision irrelevant), it shall be deemed to defeat the provision of that law.

If the consideration or object of the contract is to commit fraud, the contract is void. Thus if
the object of agreement is to deceive another person, the same is void.

Even if a part of a single consideration is unlawful, the agreement is void

Intention to create legal relationship

Intention to create a legal relationship is one of the most fundamental aspects of the law. It is
defined as the intention to enter a legally binding agreement or contract, it implies that the
parties acknowledge and accept legal consequence in case of a breach of a contract. Intention
to create legal relations consist of readiness of a party to accept the legal consequences of
having entered into an agreement.

“Contracts must not be the sports of an idle hour, mere matters of pleasantry and badinage,
never intended by the parties to have any serious effect whatsoever”.

It is essential to the creation of a contract that both parties should agree to the same thing in
the same sense. Thus if two persons enter into an apparent contract concerning a particular
person or a ship, and it turns out that each of them, misled by a similarity of name, had a
different person or ship in his mind, no contract would exist between them.

Not expressly declared void

Apart from conditions u/s 10, contract act specifically declared a few classes of contract as
void. Section 26 to 30 deals with such contracts. There are those contacts which have been
expressly declared void by the Contract Act.

Agreements restricting a marriage (section 26)

Section 26[xix] expressly declares that an agreement which in effect prevents, either party to
marry, then it is void. Section 26 does not differentiate between partial or absolute restraint,
thus any agreement enabling the two is void.
Agreements restricting trade (section 27)

Section 27 says that every agreement by which a person is restrained from exercising a lawful
profession, trade or business of any kind, is to that extent void.

It must be noted that the contract will be void only to such extent by which a person is
restrained. Thus the entire contract will not be declared void.

Eg. If a contract contains a “non-compete clause”, which restricts a person from carrying out
a trade, then only the non-compete clause will be void and not the entire contract.

Agreements in restraint of proceedings (section 28)

According to Section 28(a) an agreement by which any party to the contract is completely or
absolutely restricted in enforcing their rights (i.e. their right to move courts), by usual legal
proceedings in the ordinary tribunals, or

Which limits their time within which he may enforce his legal rights, is void.

Thus if a clause in a contract prevents a party to initiate a suit against the other party, then
that agreement is void. However, an agreement which provides for arbitration when a dispute
arises, then that clause is not void.

Agreements void due to uncertainty (section 29)

According to Section 29, a contract is said to be certain if its terms are capable of being
understood, in the sense, in which it has been intended to be understood, by the promisor, and
are not ambiguous and vague[xxii]. It should be capable of being reasonably interpreted by
the courts. Certainty is achieved, when intentions of the parties, safeguards, expectations,
performances, are clear or can be objectively ascertained.

Illustration A: A agreeing to sell B a 100 tons of oil, but without being satisfied about the
quality and kind of oil. Such an agreement is uncertain and void.

Illustration B: A entered into a contract with B for construction of the building and it was
agreed that A would pay B the consideration within a month after the construction was
completed.
Agreement of wager are void (section 30)

According to Section 30, Wagering agreements are void and no suit shall be brought to
recover anything that has been won by a wager. Further, no suit can be brought to make a
person abide by the result of any game or any other uncertain event if such an event was the
subject of a bet.

Meaning

According to Sir William Anson, a wager is “a promise to give money or money’s worth
upon the determination or ascertainment of an uncertain event.”

Thus a wagering agreement is one whose outcome is based on a future uncertain event and
upon the happening of that uncertain event one party will gain and the other party will lose
and the loser shall pay the winner a sum of money or any other stake. Such parties shall not
have any other interest other than winning or losing the bet.

It must be noted that an insurance contract is not a wagering contract, an insurance contract
falls under contingent contracts.

What is a wagering contract?

When we talk about contracts we come across various types and kinds of contracts such as
Quasi-contracts, Implied contracts, Expressed contracts and many more. One such type of
contract is known as Wagering Contract. Wagering Contract is one in which there are two
necessary parties between which the contract has been made and wherein, the first party
promises to pay a certain sum of money to the second party on the happening of a particular
event in the future and the second party agrees to pay to the first party on not happening of
that particular event. The basic fundamental of a wagering agreement is the presence of two
parties who are of sound mind to get profit or loss. A Wager in the common language means
Betting or Gambling. The basic meaning of the term wager is betting. Section 30 of the
Indian Contract Act specifically talks about agreements by way of wager, as void. The
section read as follows:

“Agreements by way of wager are void and no suit shall be brought for recovering anything
alleged to be won on any wager, or entrusted to any person to abide the result of any game or
other uncertain events on which any wager is made.

Discharge of Contract
 The term discharge of contract means ending of the contractual relationship between the
parties.
A contract is said to have been discharged when it ceases to operate i.e. when the rights and
obligations created by the parties came to an end.
A contract can be discharged if the parties mutually agree to terminate the contract. Also
there are different methods through which contracts can be discharged
Modes of Discharge of Contract with
Examples: A contract is said to be discharged using the following methods:
Discharge by Performance
Discharge by Agreement or Consent
Discharge by Impossibility of Performance
Discharge by Lapse of Time
Discharge by Operation of Law
Discharge by Breach
Discharge by Performance
Performing means doing all those things which are required by a contract. Discharge of
performance occurs when the parties to the contract fulfil their obligations set out under the
contract within the specified time and in the manner prescribed.
In such a case, parties are discharged and contracts come to an end. But if only one of the
party performs, he alone is discharged. Such a party gets the right of action against the other
party who is guilty.
Discharge of Performance may be:
Actual Performance
Attempted Performance
Actual Performance: When both the parties perform their performance, then the contract is
said to be discharged. Performance should be complete and precise according to the terms of
the agreement. Majority of the contracts are discharged by performance in this manner.
Attempted Performance
Attempted performance is only an offer to perform the obligation under the contract. When
the promisor agrees to perform the contract but the promisee refuses to accept the
performance, then in such case, it is termed as discharge of contract by attempted
performance or tender. Example: John contracts with Emma to build a fence around her
garden for ₹50,000. The agreement specifies the type of materials and the deadline for
completion.
Discharge by Actual Performance: John completes building the fence exactly as per the
agreed terms within the specified time. Emma inspects the work, finds it satisfactory, and
pays him ₹50,000. The contract is discharged as both parties have fulfilled their obligations.
Discharge by Attempted Performance: John brings the materials and starts building the fence
on the agreed day, but Emma refuses to allow him to begin without a valid reason. In this
case, John has attempted performance and is discharged from his obligation, as Emma’s
refusal prevents completion.
Discharge by Agreement or Consent:
Novation: The term novation means the substitution of the new contract by the original one.
The new agreement may be with the same parties or with the new parties. For a contract to be
valid and effective, the consent of all the parties including the new one if any is necessary.
Moreover, the second party must be capable of enforcement of law, the consideration for
which is the exchange of promise not to carry out the original contract.
Alteration: This refers to change in one or more terms of a contract with the consent of all the
parties entered in the contract. Alteration leads to formation of new contracts but the parties
to it remain the same.
Remission: This means the acceptance by the promisee of a lesser sum than what was
mentioned in the contract, or a lesser fulfilment of the promise made. According to the
section 63, every promise may:
May remit or give up with it
Extend the performance time
Accept any other satisfaction rather than performance
Recession: The term recession refers to cancellation of all or some of the material terms of
the contract. If the parties entered into the contract, mutually agreed to do so, then in such
case the respective contractual agreement of the parties gets terminated.
Example: A and B enter into a contract where A agrees to supply 500 chairs to B within one
month. Midway, both parties agree to terminate the contract because B no longer needs the
chairs. This mutual decision to end the contract is an example of discharge by agreement or
consent.
Novation: A new contract replaces the old one.
Example: A owes B ₹10,000. They agree that C will pay B instead, discharging A’s
obligation.
Rescission: Both parties agree to cancel the contract.
Example: A agrees to supply goods, but both A and B mutually decide to cancel the deal.
Alteration: The terms of the contract are changed.
Example: A was to deliver 100 chairs but agrees with B to deliver only 50 instead.
Remission: One party accepts less than what was agreed.
Example: B agrees to accept ₹8,000 instead of ₹10,000 from A to settle the debt.
Waiver: The term waiver means abandonment of rights. When one party deliberately
abandons his right under the contract, the other party is released of his obligations, else
binding upon it.
Discharge by Impossibility of Performance: If it is impossible for any of the parties entered in
the contract to perform their obligations, then the impossibility of performance of contract
leads to discharge of contract.
If the impossibility of performing the contract exists from the start, then it is termed as
impossibility by ab-initio. However, impossibility of performing the contract may also arise
later due to: An unforeseen change in the law Destruction of subject-matter of the contract
Non-existence or Non-occurrence of a particular state of things.
Outbreak of War
Simple Discharge of Contract
Example: John enters into the contract with this friend Tom to marry his sister within 6
months. However, John met with an accident and became insane. This impossibility of
performance leads to discharge of contract.
Discharge of Contract by a Lapse of a Time: According to The Limitation Act, 1963, there is
a specific time period for the performance of a contract. If the promisor failed to perform his
duties and the promisee failed to take action within this specified period, then the promisee in
such a case cannot be deprived of his remedy through law. Here, the contract is said to be
discharged due to the lapse of time.
For example: John takes a loan from one of his friends and agrees to pay him instalments
every month for the next five years. However, he does not pay even a single instalment. His
friend calls him several times but then gets busy and takes no action. After three years, he
approaches the court to help him recover his money. However, the court rejects his complaint
because he has crossed the time-limit of three years to recover his debts.
Discharge of Contract By Operation of Law: A contract can be discharged by the operation of
law in the following circumstance:
Unauthorized Material Alteration of Written Document: A party can discharge the contract
i.e from his side if the other party changes the terms such as price or quantity of contract
without taking any permission from the former.
By Insolvency
By Death Discharge
By Breach of Contract: A contract is obliged to perform according to its terms. But when a
promisor fails to perform a contract according to the terms of the contract, then he is said to
have committed a breach of contract. The breach of contract is of two types
Actual Breach, Anticipated Breach
Actual Breach: Actual breach of contract refers to failure to perform the obligation when the
performance is due.
For example, if a seller fails to deliver the goods by the appointed time, or the goods are
delivered but not upto the mark in terms of quality or quantity specified in the contract.
Anticipatory Breach: Anticipatory Breach, also known as Breach by Contradiction, takes
place when one party before the arrival of the fixed date for performance states that it cannot
or will not able to perform material part of the contractual obligation on the specified date or
it aims to perform the contract in a way that is inconsistent with the deeds specified in the
contract at the initiation.
The discharge of a contract marks the end of the obligations between parties. It can happen
through performance, mutual agreement, impossibility, breach, or operation of law.
Understanding the types of discharge helps ensure fairness and clarity in legal and business
dealings. By fulfilling terms or addressing issues responsibly, parties can avoid disputes and
maintain trust, ensuring smooth resolution when a contract ends.

A Legally binding Agreement. In other words, a Contract is an Agreement, the purpose of

which is to create a Bond. Thus, when a Contract allows a person to force another person to
do something or to avoid doing something, it is called a Contract.

What is a Breach of Contract?

A Contract may be terminated or broken when one of the parties fails or refuses to fulfil his
or her obligations, or his or her promise under the Contract. Therefore, it can be said that
when a binding Agreement is not honoured by one or more parties for not fulfilling his
promise, the Agreement may be terminated.

Introduction- The parties to the Contract are legally required to perform their duties
respectively, so naturally, the law does not deal with violations of any party. Therefore, once
one party violates an Agreement, the law provides for three other Remedies. He may want to
find out: Ongoing loss injuries, or The law of some practice, or Instruction.

The laws relating to civil proceedings are governed by the Contracts Act, while the rules
relating to orders and certain functions are governed by the Special Benefit Act, 1963.
Remedies for Contract Violations- If a promise or Agreement is broken by any parties
involved we call it a Breach of Contract. Therefore if one of the parties does not comply with
the terms of the Agreement or does not fulfil its obligations under the terms of the Contract
that is a Breach of Contract. There are several Remedies for Contract Breach available from
the Victim. Let's take a look.

Contract Reduction- If one of the Contractors does not fulfil his or her obligations, then the
other party may withdraw the Contract and deny the performance of his or her obligations. In
terms of section 65 of the Indian Contract Act, a company that rescinds a Contract must repay
any benefits received under the specified Agreement. And section 75 states that the entity
withdrawing a Contract is entitled to claim damages and/or compensation for such Recession.

Sue for Damages- Section 73 makes it clear that the Victim as someone who has broken a
promise may claim compensation for loss or damages incurred in the normal course of
business. Such damages will not be paid if the loss is not natural in nature, i.e. not in the
normal course of business. There are two types of damage in terms of the Act,
Discontinued Damage: Sometimes Contract parties will agree to the amount payable in the
event of a Breach. These are known as liquidated damages. Unintended Injury: Here the
amount payable for Breach of Contract is assessed by the courts and any other relevant
authorities.
Sue for Specific Performance - This means that the offending party will have to do its job
contractually. In some cases, the courts may insist that the party enter into an Agreement
Injunction - An order is basically the same as the law of a particular operation but of the
opposite Contract. An order is a court order that prohibits a person from committing an act.
So the court may issue an injunction suspending the Contractor from doing something he has
promised not to do. In a restraining order, the court suspends the action and by order, will
suspend the continuation of the illegal act.
Quantum meruit means "earned money". Sometimes when one part of a Contract is prevented
from completing its Contract performance by another, it may require quantum suitability. So
he should be paid a fair wage for part of the Contract he has made. This could be the reward
for the work he did or the amount of work he did. Parties to a Contract area are unit duty-
bounded to perform their guarantees. However, things arise wherever one among the parties
to a Contract could break the Contract by refusing to perform his promise. This can be what's
referred to as the Breach of Contract. Once one party commits a Breach of Contract,
presently the opposite party is entitled to the subsequent Remedies. When one among the
party commits a Breach of the Contract, the opposite party becomes entitled to any of the
subsequent reliefs:
Rescission of the Contract Damages for the loss suffered Suit for the precise performance
Suit upon quantum meruit, Suit for the injunction
Rescission of the Contract
When one among the parties commits a Breach of Contract, another party shall additionally
treat the Contract as void or cancel. Once the Contract is cancelled, the affected party is
mechanically discharged from all the commitments beneath the Contract. Section 64 of the
Act provides that the party cancel the Contract if he has received any profit under it from the
opposite party; restore such profit to the person from whom it had been received. Further, the
one that truly cancels the Contract is entitled to compensation for any loss that he faced from
the non-fulfilment of the Contract.
Damages for the Loss Suffered The term “Damages” means that financial compensation
collectable by the defaulting party to the affected party for the loss suffered by him once the
Contract was broken. Therefore, the aggrieved party could bring associate action for damages
against the party who are guilty of the Breach of Contract. The party is guilty of the Breach
and is vulnerable to pay damages to the aggrieved party.
Suit upon Quantum Meruit
In a literal sense, the expression “Quantum Meruit” means that, “as very much like attained “.
In an exceedingly Legal sense, it means that payment is in proportion to the work done. This
principle provides for the payment of compensation under certain circumstances, to someone
who has offered the products or services to the opposite party under a Contract, which
couldn't be performed under certain circumstances.

Cases for Claim on Quantum Meruit

Wherever the work, that has been done and accepted under Contract, is afterwards discovered
to be void – Here the party has affected a part of the Contract will truly the quantity for the
work he has done. And therefore the party that accepts and reaps the profit under Contract,
should create compensation to the opposite party.
Wherever one party abandons or refuses to perform the entire Contract. Here the
compensation for the work done could also be recovered supporting quantum meruit.
Wherever one thing is finished with non-intention to try and do gratuitously. In such cases,
the opposite person is certain to create the payment if he accepts such services or
merchandise, or enjoys their profit.
Wherever the Contract is cleavable and therefore the party has enjoyed the advantages of the
work done – In such cases, the halfway in default could sue on quantum meruit if the
opposite party has enjoyed the advantages of the part performance.

Suit for Injunction

The term” Injunction” could also be outlined as an associate order of the Court instructing
someone to refrain from doing a little act that has been the subject-matter of the Contract.
Wherever a celebration has secured to not do one thing and he will it, and thereby commits a
Breach of Contract, the aggrieved party could ask for the protection of the Court beneath sure
circumstances and procure associate injunction.

Example: A narrowed to sing solely at B’s theatre and obscurity else for an exact amount.
Afterwards, A created a Contract with C to sing at C’s theatre and refused to sing at B’s
theatre. The Court refused to order a selected performance as a result of the Contract was
private however granted an associate injunction against A to restrain him from singing
anyplace else.