there are six methods to discharge a contract and these methods have more types
1) discharge by performance
a) actual performance
b) tender
2) discharge by agreement
a) novation
b) alteration
c) rescission
d) remission
e) waiver
3) discharge by subsequent impossibility
a) destruction of subject matter
b) failure of purpose
c) death of personal incapacity
d) change in law
e) declaration of war
4) discharge by laps of time
5) discharge by operation of law
a) insolvency
b) merger
c) material alteration
6) discharge by breach of contract
a) actual breach
b) anticipatory breach
c) express breach
d) implied breach
Tuesday, 18 December 2012
performance of joint promise
Joint promises may take any of the following shapes:
(i) Where several joint promisors make a promise with a single promisee, e.g., A, B, and C jointly promise to pay Rs. 3,000 to D, or
(ii) Where a single promisor makes a promise with several joint promisees, e.g., P promises to pay Rs. 3,000 to Q and R jointly, or
(iii) Where several joint propiisors make a promise with several joint promisees, e.g., A, B and C jointly promise to pay Rs. 3,000 to P, Q and R jointly.
We have earlier seen as to "Who can demand performance," and "by whom contracts must be performed," when there is an agreement between a single promisor and a single promisee. We now attempt to answer the aforesaid questions in the case of joint promisees.
Who can demand performance of joint promises? The answer to this question is found in Section 45 which provides that when a promise is made to several persons jointly, then, unless a contrary intention appears from the contract, the right to claim performance rests with all the promisees jointly and a single promisee cannot demand performance. When any one of the promisees dies, the right to claim performance rests with the legal representatives of such deceased person jointly with the surviving promisees. When all the promisees are dead, the right to claim performance rests with all of them jointly and on the death of any promisee his legal representatives step into his shoes.
Illustration
A, in consideration of Rs. 5,000 lent to him by B and C, promises B and C jointly to repay them that sum with interest on a day specified. B dies. The right to claim performance rests with B's representative jointly with C during C's life and after the death of C, with the representatives of B and C jointly.
It is worth noting that under the terms of the Section, if a promisor makes, the payment to one of the several joint promisees, it does not operate as a complete discharge of the debt (Govindlal vs. Firm Thakurdas).
By whom joint promises must be performed? The rules on the subject, as contained in Sections 42 to 44 of the Contract Act, are as follows:
1. All promisors must jointly fulfill the promise:
When two or more persons have made a joint promise (e.g., signed a promissory note jointly), then, unless a contrary intention appears by the contract, all such persons must jointly fulfill the promise. When any one of the joint promisors dies, his legal representatives must, jointly with the surviving promisors, fulfill the promise. On the death of all the original promisors, the legal representatives of all of them jointly must fulfill the promise (Sec. 42).
The above rule is of course subject to the following usual conditions:
(a) Contracts involving personal skill, e.g., to paint a picture, come to an end on the death of any of the joint promisors and the liability of performance does not fall on the legal repre-1 sentatives.
(b) Wherever the legal representatives are made liable to perform the promise, they are not personally liable. Their liability is limited to the assets inherited by them.
2. Any one of joint promisors may be compelled to fulfill:
When two or more persons make a joint promise, the promisee is entitled, in the absence of express agreement to the contrary, to compel any one or more of such joint promisors to fulfill the whole of the promise (Sec. 43, Para 1). In other words, according to the Section, the liability of joint promisors is "joint and several" as against the promise, unless there is a contract to the contrary. For example, A, B and C jointly promise to pay D Rs. 3,000. D may compel either A or B or C or all or any two of them to pay him Rs. 3,000.
In case-of death of original debtor, if the debt falls upon a number of heirs, promisee must bring the suit against all heirs collectively, because the liability is only joint and not several in case of co-heirs. Co-heirs are not joint promisors.
3. Right of contribution inter-se between joint promisors:
If one of several joint promisors is made to perform the whole contract, he may require equal contribution from the other joint promisors, unless a contrary intention appears from the contract (Sec. 43, Para 2). Thus, in our example, if A is compelled to pay the entire amount of Rs. 3,000, he can realize from B and C Rs. 1,000 each.
4. Sharing of loss by default in contribution:
If any one of the joint promisors makes a default in making contribution, if any, the remaining joint promisors must bear the loss arising from such default in equal shares (Sec. 43, Para 3). Thus, in our example, if A is compelled to pay the whole and C is unable to pay anything, A is entitled to receive Rs. 1,500 from B. If C's estate is able to pay one-half of his share, A is entitled to receive Rs. 500 from C's estate and Rs. 1,250 from B [Illustrations (b) and (c) to Section 43],
5. Effect of release of one joint promisor:
In case of joint promise, if one of the joint promisors is released from his liability by the promisee, his liability to the promise ceases but this does not discharge the other joint promisors from their liability; neither does it free the joint promisor so released from his liability to contribute to the other joint promisors (Sec. 44).
performance of contract ( definition )
Execution of a contract by which the contracting parties are automatically discharged (see discharge of contract) of their obligations under it. Although contracts usually call for full and precise performance, a substantial performance may be acceptable under certain circumstances, on a pro rata basis, or on payment of damages for the unfinished or defective performance.
Monday, 17 December 2012
void agreement
Definition:
Literally: Void means having no legal value and agreement means Arrangement, promise or contract made with somebody. So void agreement means an agreement that has no legal value.
Traditionally: “An agreement not enforceable by law is said to be void”. [Sec 2(g)]
A void agreement has no legal effect. An agreement which does not satisfy the essential elements of contract is void. Void contract confers no rights on any person and creates no obligation.
Example of void agreement: An agreement made by a minor, agreement without consideration, certain agreements against public policy etc.
Agreement which become void:
An agreement, which was legal and enforceable when it was entered in to, may subsequently become void due to impossibility of performance, change of law or other reason. When it become void the agreement ceases to have legal effect.
EXPRESSLY DECLARED VOID AGREEMENT
There are certain agreements, which are expressly declared to be void.
They are as follows:
(1) Agreement by a minor or a person of unsound mind.[Sec(11)]
(2) Agreement of which the consideration or object is unlawful[Sec(23)]
(3) Agreement made under a bilateral mistake of fact material to the agreement[Sec(20)]
(4) Agreement of which the consideration or object is unlawful in part and the illegal part can not be separated from the legal part [Sec(24)]
(5) Agreement made. without consideration.[Sec(25)]
(6) Agreement in restraint of marriage [Sec(26)]
(7) Agreement in restrain of trade [Sec(27)]
(8) Agreement in restrain of legal proceedings[Sec(28)]
(9) Agreements the meaning of which is uncertain [Sec(29)]
(10) Agreements by way of wager [Sec(30)]
(11) Agreements contingent on impossible events [Sec(36)]
(12) Agreements to do impossible acts [Sec(56)]
Some discussions on void agreement are as follows:
(1) Agreement by a Minor Or a Person of Unsound Mind-
A person who has not completed his or her 18 years of age signifies as minor. Law acts as the guardian of minors and protects their rights, because their mental facilities are not mature- they do not possess the capacity of judge what is good and what is bad for them. Accordingly, where is a minor charged with obligations and the other contracting party seeks to enforce those obligations against the minor, the agreement is deemed as void.
A person who does not possess a sound mind or whose mental powers are not arranged or whose mental condition is not under his or her own control. Any agreement by person of unsound mind is absolutely void because he has no capacity to judge, what is good and what is bad for him.
Illustration
(a) A, 15 years old boy, made an agreement with B to give him Tk.1000. This is a void agreement.
(b) A mentally disordered man made an agreement with X to marry her, but this is not a valid agreement.
(2) Agreement Made Without Consideration-
An agreement made without consideration is void, unless
1) it is expressed in writing and registered under the law for the time being enforce for the registration of(documents), and is made on account of natural love and affection between parties standing in a near relation to each other; or unless.
2) It is a promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or something which the promissory was legally compellable to do, or unless.
3) It is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorized in the behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits.
In any of these cases, such an agreement is a contract.
Explanation 1–Nothing in this section shall affect the validity, as between the donor and donee, of any gift actually made.
Explanation 2- An agreement to which the consent of the promisor is freely given is not void merely because the consideration may be taken into account by the court in determining the question whether the consent of the promisor was freely given.
Illustrations
a) A promises for no consideration, to give to B Rs. 1000; this is a void agreement.
b) A, for natural, love and affection, promises to give his son, B Rs. 1000. A puts his promise to B into writing and registers it. This is a contract.
c) A finds be B’s purse and gives it to him. B promises to give A Rs. 50. This is a contract.
d) A supports B’s infant son. B promises to pay A’s expenses in so doing. This is a contract.
(3) Agreements in Restraint of Marriage-
Every individual enjoys the freedom to marry and so according to section 26 of the contract act “every agreement is restraint of the marriage of any person, other than a minor, is void.” The restraint may be general or partial but the agreement is void, and therefore, an agreement agreeing not to marry at all, or a certain person or, a class of persons, or for a fixed period, is void. However, an agreement restraint of the marriage of a minor is valid under the section.
It is interesting to note that a promise to marry a particular person does not imply any restraint of marriage and is, therefore, a valid contract.
This section enact that agreement in restraint of the marriage of any person, other than a minor is void. In the interest of the society, contracts for marriage are scrutinized with a close and vigilant suspicion of undue influence, fraud or imposition. The law presumes constrictive fraud, on grounds of public policy, in agreements respecting marriages since marriages of a suitable nature are of the deepest importance of the wellbeing of the society, as upon the equality and mutual affection much of their happiness, sound morality, and mutual confidence, hence every temptation of the exercise often undue influence, or a seductive interest in procuring a marriage is suppressed, for there is infinite danger that it may, under the guises of friendship, confidence, flattery or falsehood, accomplish the ruin of person especially females. So the law—
(a) prevents improvident, ill-advised, and often fraudulent matches;
(b) Avoid all such contracts as tend to the deceit and injury, or encourage artifices and improper attempts to control the exercise of free judgment;
(c) Discountenances secret contracts made with prevents and guardians, whereby on a marriage, they to receive a benefits
(d) Renders invalid certain agreements in restraint of marriage.
Illustrations
(a) A agrees with B for good consideration that she will not marry C. It is a void agreement.
(b) A agrees with B that she will marry him only; it is a valid contract of marriage.
(4) Agreement in Restraint of Trade-
The constitution of India guarantees that the freedom of trade and commerce to every citizen and therefore section 27 declares “every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void.” Thus no person is at livery to deprive himself of the fruit of his labor, skill or talent, by any contracts that he enters into.
It is to be noted that whether restraint is responsible or not, if it is in the nature of restraint of trade, the agreement is void always, subject to certain exceptions provided for statutorily.
Illustration
An agreement whereby one of the parties agrees to close his business in consideration of the promise by the other party to pay a certain some of money , is void, being an agreement is restraint of trade, and the amount is not recoverable, if the other party fails to pay the promised some of money. (Mad hub Chander vs. Raj Kumar).
But agreements merely restraining freedom of action necessary for the carrying on of business are not void, for the law does not intend to take away the right of a trade to regulate his business according to his own discretion and choice.
Illustration
An agreement to sell all produce to a certain party, with stipulation that the purchaser was bound to accept the whole quantity, was held valid because it aimed to promote business did not restrained it (Mackengie vs. Striramiah). But where in a similar agreement the purchaser was free to reject the goods (i.e. was not bound to accept the whole quantity tendered) it was held that the agreement was void as being in restraint of trade (Sheikh Kalu vs. Ram Saran)
(5) Agreement in restraint of legal proceedings-
Every agreement, by which any party thereto is restricted absolutely from enforcing his right under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights, is void to that extent. Section 28 declares the following two kinds of agreements void:
(a) An agreement by which a party is restrained absolutely from taking usual legal
Proceeding, in respect of any rights arising from a contract.
(b) An agreement which limits the time within which one may enforce his contract
Rights, without to the time allowed by the limitation act.
Illustration
In a contract of fire insurance, it was provided that if a claim is rejected and a suit is not filed within three months after such rejection, all benefits under the policy shell be forfeited. The provision was held valid and binding and the suit filed after three months was dismissed. (Baroda spinning Ltd. vs. Satyanarayan Marine and Fire Ins. Com. Ltd.)
Exception 1: This section shell not render illegal a contract by which two or more persons agree that any dispute which may arise between them in respect of any subject or class of subjects shell be referred to arbitration and that only the amount awarded in such arbitration shell be recoverable in respect of the dispute so referred.
Exception 2: Nor shell this section render illegal any contract in writing, by which two or more persons agree to refer to arbitration any question between them which has already arisen, or affect any provision of any law in force for the time being as to references to arbitration.
(6) Uncertain Agreements-
“Agreements, the meaning of which is not certain, or capable of being made certain, are void” (Sec-29). Through Sec-29 the law aims to ensure that the parties to a contract should be aware of the precise nature and scope of their mutual rights and obligation under the contract. Thus, if the word used by the parties are or indefinite, the law cannot enforce the agreement.
Illustration
(a) A agrees to sell to B “a hundred tons of oil.” There is nothing whatever to show what kind of oil was intended. The agreement is void for uncertainty.
(b) A who is dealer in coconut oil only, agrees to sell to B “a hundred tons if oil.” The nature of A’s trade affords an indication of the meaning of the words, and A has entered into a contract for the sale of one hundred toms of coconut oil.
(c) A agrees to sell to B “one thousand mounds of rice at a price to be fixed by C.” As the price is capable of being made certain, there is no uncertainty here to make the agreement void.
(d) A agrees to sell to “his white house for rupees five hundred or rupees one thousand.” There is nothing to show which of the price was to be given. The agreement is void.
Further, an agreement “to enter into an agreement in future” is void for uncertainty unless all the terms of the proposed agreement are agreed expressly or implicitly. Thus, an agreement to engage a servant some time next year, at a salary to be mutually agreed upon is a void agreement.
(7) Wagering Agreement-
Literally the word ‘wager’ means ‘a bet’ something stated to be lost or won on the result of a doubtful issue, and, therefore, wagering agreements are nothing but ordinary betting agreements. Thus where A and B mutually agree that if it rains today A will pay B Tk.100 and if it does not rain B will pay A Tk.100 or C and D entered into agreement that on tossing up a coin, if it fall head upwards C will pay D Tk.50 and if falls tail upwards D will pay C Tk.50, there is a wagering agreement.
In Tracker vs. Hardy Cotton, L.J., described a ‘wager’ ad follows: “The essence of gaming and wagering is that one party is to win and the other to lose upon a future event which at the time of the contract is of an uncertain nature- that is to say, if the event turns out the other way he will win.”
Agreement by way of wager, void. Section 30 lays down that “agreements by way of wager are void; and no suit shell 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 event on which any wager is made,” Thus, where A and B enter into an agreement which provides that if England’s cricket team wins the match, A will pay B Rs. 100, and if it loses B will pay Rs. 100 to A, nothing can be recovered by the winning party under the agreement, it being a wager. Similarly, whether C and D enter into a wagering agreement and each deposits Rs.100 with Z instructing him to pay or give the total sum to the winner, no suit can be brought by the winner for recovering the bet amount from Z, the stake-holder. Further, if Z had paid the sum to the winner, the looser cannot bring a suit, for recovering his Rs.100, either against the winner or against, the stake-holder, even if Z had paid after the loser’s definite instructions not to pay. Of course the looser can recover back his deposit if he makes the demand before the stake-holder had paid it over to the winner (Ratnakalli vs. Vochalapu). But even such a deposit cannot be recovered by a loser in the States of Maharashtra and Gujarat where such an agreement is void and illegal.
(8) Agreement Contingent on Impossible Events-
“Contingent agreements to do or not to do anything if an impossible event happens are void, whether the impossibility of the event is know on not to the parties to thr agreement at the time when it is made.” (Sec. 36)
Illustration
(a) A agrees to pay B Rs.1000 (as a loan) if two straight line should enclosed a space. The agreement is void.
(b) A agrees to pay B Rs.1000 (as a loan) if B will marry A’s daughter, C. C was dead at the time of the agreement, the agreement is void.
(9) Agreements to do Impossible Act-
“An agreement to do an act impossible in itself is void.” (Sec, 56 Part-1)
Illustration
(a) A agrees with B to discover treasure by magic. The agreement is void. [Section 56].
(b) A agrees with B to run with a speed of 100 Kilometer per hour. The agreement is void.
Literally: Void means having no legal value and agreement means Arrangement, promise or contract made with somebody. So void agreement means an agreement that has no legal value.
Traditionally: “An agreement not enforceable by law is said to be void”. [Sec 2(g)]
A void agreement has no legal effect. An agreement which does not satisfy the essential elements of contract is void. Void contract confers no rights on any person and creates no obligation.
Example of void agreement: An agreement made by a minor, agreement without consideration, certain agreements against public policy etc.
Agreement which become void:
An agreement, which was legal and enforceable when it was entered in to, may subsequently become void due to impossibility of performance, change of law or other reason. When it become void the agreement ceases to have legal effect.
EXPRESSLY DECLARED VOID AGREEMENT
There are certain agreements, which are expressly declared to be void.
They are as follows:
(1) Agreement by a minor or a person of unsound mind.[Sec(11)]
(2) Agreement of which the consideration or object is unlawful[Sec(23)]
(3) Agreement made under a bilateral mistake of fact material to the agreement[Sec(20)]
(4) Agreement of which the consideration or object is unlawful in part and the illegal part can not be separated from the legal part [Sec(24)]
(5) Agreement made. without consideration.[Sec(25)]
(6) Agreement in restraint of marriage [Sec(26)]
(7) Agreement in restrain of trade [Sec(27)]
(8) Agreement in restrain of legal proceedings[Sec(28)]
(9) Agreements the meaning of which is uncertain [Sec(29)]
(10) Agreements by way of wager [Sec(30)]
(11) Agreements contingent on impossible events [Sec(36)]
(12) Agreements to do impossible acts [Sec(56)]
Some discussions on void agreement are as follows:
(1) Agreement by a Minor Or a Person of Unsound Mind-
A person who has not completed his or her 18 years of age signifies as minor. Law acts as the guardian of minors and protects their rights, because their mental facilities are not mature- they do not possess the capacity of judge what is good and what is bad for them. Accordingly, where is a minor charged with obligations and the other contracting party seeks to enforce those obligations against the minor, the agreement is deemed as void.
A person who does not possess a sound mind or whose mental powers are not arranged or whose mental condition is not under his or her own control. Any agreement by person of unsound mind is absolutely void because he has no capacity to judge, what is good and what is bad for him.
Illustration
(a) A, 15 years old boy, made an agreement with B to give him Tk.1000. This is a void agreement.
(b) A mentally disordered man made an agreement with X to marry her, but this is not a valid agreement.
(2) Agreement Made Without Consideration-
An agreement made without consideration is void, unless
1) it is expressed in writing and registered under the law for the time being enforce for the registration of(documents), and is made on account of natural love and affection between parties standing in a near relation to each other; or unless.
2) It is a promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or something which the promissory was legally compellable to do, or unless.
3) It is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorized in the behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits.
In any of these cases, such an agreement is a contract.
Explanation 1–Nothing in this section shall affect the validity, as between the donor and donee, of any gift actually made.
Explanation 2- An agreement to which the consent of the promisor is freely given is not void merely because the consideration may be taken into account by the court in determining the question whether the consent of the promisor was freely given.
Illustrations
a) A promises for no consideration, to give to B Rs. 1000; this is a void agreement.
b) A, for natural, love and affection, promises to give his son, B Rs. 1000. A puts his promise to B into writing and registers it. This is a contract.
c) A finds be B’s purse and gives it to him. B promises to give A Rs. 50. This is a contract.
d) A supports B’s infant son. B promises to pay A’s expenses in so doing. This is a contract.
(3) Agreements in Restraint of Marriage-
Every individual enjoys the freedom to marry and so according to section 26 of the contract act “every agreement is restraint of the marriage of any person, other than a minor, is void.” The restraint may be general or partial but the agreement is void, and therefore, an agreement agreeing not to marry at all, or a certain person or, a class of persons, or for a fixed period, is void. However, an agreement restraint of the marriage of a minor is valid under the section.
It is interesting to note that a promise to marry a particular person does not imply any restraint of marriage and is, therefore, a valid contract.
This section enact that agreement in restraint of the marriage of any person, other than a minor is void. In the interest of the society, contracts for marriage are scrutinized with a close and vigilant suspicion of undue influence, fraud or imposition. The law presumes constrictive fraud, on grounds of public policy, in agreements respecting marriages since marriages of a suitable nature are of the deepest importance of the wellbeing of the society, as upon the equality and mutual affection much of their happiness, sound morality, and mutual confidence, hence every temptation of the exercise often undue influence, or a seductive interest in procuring a marriage is suppressed, for there is infinite danger that it may, under the guises of friendship, confidence, flattery or falsehood, accomplish the ruin of person especially females. So the law—
(a) prevents improvident, ill-advised, and often fraudulent matches;
(b) Avoid all such contracts as tend to the deceit and injury, or encourage artifices and improper attempts to control the exercise of free judgment;
(c) Discountenances secret contracts made with prevents and guardians, whereby on a marriage, they to receive a benefits
(d) Renders invalid certain agreements in restraint of marriage.
Illustrations
(a) A agrees with B for good consideration that she will not marry C. It is a void agreement.
(b) A agrees with B that she will marry him only; it is a valid contract of marriage.
(4) Agreement in Restraint of Trade-
The constitution of India guarantees that the freedom of trade and commerce to every citizen and therefore section 27 declares “every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void.” Thus no person is at livery to deprive himself of the fruit of his labor, skill or talent, by any contracts that he enters into.
It is to be noted that whether restraint is responsible or not, if it is in the nature of restraint of trade, the agreement is void always, subject to certain exceptions provided for statutorily.
Illustration
An agreement whereby one of the parties agrees to close his business in consideration of the promise by the other party to pay a certain some of money , is void, being an agreement is restraint of trade, and the amount is not recoverable, if the other party fails to pay the promised some of money. (Mad hub Chander vs. Raj Kumar).
But agreements merely restraining freedom of action necessary for the carrying on of business are not void, for the law does not intend to take away the right of a trade to regulate his business according to his own discretion and choice.
Illustration
An agreement to sell all produce to a certain party, with stipulation that the purchaser was bound to accept the whole quantity, was held valid because it aimed to promote business did not restrained it (Mackengie vs. Striramiah). But where in a similar agreement the purchaser was free to reject the goods (i.e. was not bound to accept the whole quantity tendered) it was held that the agreement was void as being in restraint of trade (Sheikh Kalu vs. Ram Saran)
(5) Agreement in restraint of legal proceedings-
Every agreement, by which any party thereto is restricted absolutely from enforcing his right under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights, is void to that extent. Section 28 declares the following two kinds of agreements void:
(a) An agreement by which a party is restrained absolutely from taking usual legal
Proceeding, in respect of any rights arising from a contract.
(b) An agreement which limits the time within which one may enforce his contract
Rights, without to the time allowed by the limitation act.
Illustration
In a contract of fire insurance, it was provided that if a claim is rejected and a suit is not filed within three months after such rejection, all benefits under the policy shell be forfeited. The provision was held valid and binding and the suit filed after three months was dismissed. (Baroda spinning Ltd. vs. Satyanarayan Marine and Fire Ins. Com. Ltd.)
Exception 1: This section shell not render illegal a contract by which two or more persons agree that any dispute which may arise between them in respect of any subject or class of subjects shell be referred to arbitration and that only the amount awarded in such arbitration shell be recoverable in respect of the dispute so referred.
Exception 2: Nor shell this section render illegal any contract in writing, by which two or more persons agree to refer to arbitration any question between them which has already arisen, or affect any provision of any law in force for the time being as to references to arbitration.
(6) Uncertain Agreements-
“Agreements, the meaning of which is not certain, or capable of being made certain, are void” (Sec-29). Through Sec-29 the law aims to ensure that the parties to a contract should be aware of the precise nature and scope of their mutual rights and obligation under the contract. Thus, if the word used by the parties are or indefinite, the law cannot enforce the agreement.
Illustration
(a) A agrees to sell to B “a hundred tons of oil.” There is nothing whatever to show what kind of oil was intended. The agreement is void for uncertainty.
(b) A who is dealer in coconut oil only, agrees to sell to B “a hundred tons if oil.” The nature of A’s trade affords an indication of the meaning of the words, and A has entered into a contract for the sale of one hundred toms of coconut oil.
(c) A agrees to sell to B “one thousand mounds of rice at a price to be fixed by C.” As the price is capable of being made certain, there is no uncertainty here to make the agreement void.
(d) A agrees to sell to “his white house for rupees five hundred or rupees one thousand.” There is nothing to show which of the price was to be given. The agreement is void.
Further, an agreement “to enter into an agreement in future” is void for uncertainty unless all the terms of the proposed agreement are agreed expressly or implicitly. Thus, an agreement to engage a servant some time next year, at a salary to be mutually agreed upon is a void agreement.
(7) Wagering Agreement-
Literally the word ‘wager’ means ‘a bet’ something stated to be lost or won on the result of a doubtful issue, and, therefore, wagering agreements are nothing but ordinary betting agreements. Thus where A and B mutually agree that if it rains today A will pay B Tk.100 and if it does not rain B will pay A Tk.100 or C and D entered into agreement that on tossing up a coin, if it fall head upwards C will pay D Tk.50 and if falls tail upwards D will pay C Tk.50, there is a wagering agreement.
In Tracker vs. Hardy Cotton, L.J., described a ‘wager’ ad follows: “The essence of gaming and wagering is that one party is to win and the other to lose upon a future event which at the time of the contract is of an uncertain nature- that is to say, if the event turns out the other way he will win.”
Agreement by way of wager, void. Section 30 lays down that “agreements by way of wager are void; and no suit shell 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 event on which any wager is made,” Thus, where A and B enter into an agreement which provides that if England’s cricket team wins the match, A will pay B Rs. 100, and if it loses B will pay Rs. 100 to A, nothing can be recovered by the winning party under the agreement, it being a wager. Similarly, whether C and D enter into a wagering agreement and each deposits Rs.100 with Z instructing him to pay or give the total sum to the winner, no suit can be brought by the winner for recovering the bet amount from Z, the stake-holder. Further, if Z had paid the sum to the winner, the looser cannot bring a suit, for recovering his Rs.100, either against the winner or against, the stake-holder, even if Z had paid after the loser’s definite instructions not to pay. Of course the looser can recover back his deposit if he makes the demand before the stake-holder had paid it over to the winner (Ratnakalli vs. Vochalapu). But even such a deposit cannot be recovered by a loser in the States of Maharashtra and Gujarat where such an agreement is void and illegal.
(8) Agreement Contingent on Impossible Events-
“Contingent agreements to do or not to do anything if an impossible event happens are void, whether the impossibility of the event is know on not to the parties to thr agreement at the time when it is made.” (Sec. 36)
Illustration
(a) A agrees to pay B Rs.1000 (as a loan) if two straight line should enclosed a space. The agreement is void.
(b) A agrees to pay B Rs.1000 (as a loan) if B will marry A’s daughter, C. C was dead at the time of the agreement, the agreement is void.
(9) Agreements to do Impossible Act-
“An agreement to do an act impossible in itself is void.” (Sec, 56 Part-1)
Illustration
(a) A agrees with B to discover treasure by magic. The agreement is void. [Section 56].
(b) A agrees with B to run with a speed of 100 Kilometer per hour. The agreement is void.
ausai contract
Kinds of Quasi Contract
(1) SUPPLY OF NECESSITIES (Sec.68)
If a person, incapable of entering into a contract, or anyone whom he is legally bound to support, is supplied by another with necessaries suited to his condition in life, the person who has furnished such supplies is entitled to be reimbursed from the property of such incapable person.
Ex. A supplies B, a lunatic, with necessaries suitable to his condition in life. A is entitled to be reimbursed from B's property.
Ex. A supplies B, a lunatic, with necessaries suitable to his condition in life. A is entitled to be reimbursed from B's property.
(2) PAYMENT BY AN INTERSTED PERSON (sec. 69)
A person who is interested in the payment of money which another is bound by law to pay, and who therefore pays it, is entitled to be reimbursed by the other.
Ex. B holds land in Bengal, on a lease granted by A, the Zamindar. The revenue payable by A to the govt. being in the arrears, his land is advertised for sale by the govt. under the revenue law the consequences of such sale will be annulment of B's lease. B to prevent the sale and the consequent annulment of his own lease, pays to the government the sum due from A. A is bound to make good to B the amount so paid.
Ex. B holds land in Bengal, on a lease granted by A, the Zamindar. The revenue payable by A to the govt. being in the arrears, his land is advertised for sale by the govt. under the revenue law the consequences of such sale will be annulment of B's lease. B to prevent the sale and the consequent annulment of his own lease, pays to the government the sum due from A. A is bound to make good to B the amount so paid.
- The plaintiff should be interested in making the payment. It is not necessary that he should have a legal proprietary interest in the property in respect of which the payment is made. However, often it is used to determine whether plaintiff was interested. Sec. 69 does not invite such judicial limitation that a person who has not an interest in the property can be interested in a payment of that property.
- The plaintiff himself should not be bound to pay. He should only be interested in making the payment in order to protect his own interest.
- The defendant should be under legal compulsion to pay.
- The plaintiff should have made the payment to another parson and not to himself.
(3) OBLIGATION TO PAY FOR NON-GRATUITOUS ACTS (Sec. 70)
When a person lawfully does anything for another person or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the things so done or delivered.
Ex. 1. A, a tradesman, leaves goods at B's house by mistake. B treats the goods as his own. He is bound to pay for them to A.
Ex 2. A saves B's property from fire. A is not entitled to compensation from B, if the circumstances show that he intended to act gratuitously.
Ex. 1. A, a tradesman, leaves goods at B's house by mistake. B treats the goods as his own. He is bound to pay for them to A.
Ex 2. A saves B's property from fire. A is not entitled to compensation from B, if the circumstances show that he intended to act gratuitously.
Before any right of action under sec. 70 arises, 3 conditions must be satisfied:
(1) The thing must have been done lawfully.
(2) the person doing the act should not have intended to do it gratuitously.
(3) The person for whom the act is done must have enjoyed the benefit of the act[union of India vs. Sita ram, AIR 1977,S.C. 329]
(1) The thing must have been done lawfully.
(2) the person doing the act should not have intended to do it gratuitously.
(3) The person for whom the act is done must have enjoyed the benefit of the act[union of India vs. Sita ram, AIR 1977,S.C. 329]
EX. A village was irrigated by a tank. The government effected certain repairs to the tank for its preservation and had no intention to do so gratuitously for the zamindars. The zamindars enjoyed the benefits thereof. Held, they were liable to contribute {Damodar mudaliar vs. secretary of state for India, 1894, 18 Mad. 88}.
(4) RESPONSIBILITIES OF FINDER OF GOODS (Sec. 71)
A person, who finds goods to another and takes them into his custody, is subject to the same responsibilities as a bailee. He is bound to take as much care of the goods as a man of ordinary prudence would, under similar circumstances, take of his own goods of the same bulk, quality and value. If he does not, he will be guilty of wrongful conversion of the property. Till the owner is found out, the property in goods will vest in the finder and he can retain the goods as his own against the whole world.
Ex. F picks up a diamond on the floor on k's shop. He hands it over to K to keep it till true owner is found out. No one appears to claim it for quite some weeks in spite of the wide advertisement in the newspapers. F claims the diamond from K Who refuses to return. K is bound to return the diamond to F who is entitled to retain the diamond against the whole world except the true owner.
Ex. F picks up a diamond on the floor on k's shop. He hands it over to K to keep it till true owner is found out. No one appears to claim it for quite some weeks in spite of the wide advertisement in the newspapers. F claims the diamond from K Who refuses to return. K is bound to return the diamond to F who is entitled to retain the diamond against the whole world except the true owner.
(5) MISTAKE OR COERSION (Sec. 72)
A person to whom money has been paid, or anything delivered, by mistake or under coercion, must repay or return it to the person who paid it by mistake or under coercion.
Ex. (1) A pays some money to B by mistake. It is really due to C. B must refund the money to A. C, however, cannot recover the amount from C is no privity of contract between B and C.
(2) A railway company refuses to deliver up certain goods to the consignee, except upon the payment of an illegal charge for carriage. The consignee pays the sum charged in order to obtain the goods. He is entitled to recovers so much of the charge as is illegally excessive.
Sec. 72 does not draw any distinction between a mistake of fact and mistake of law {D. cawasji & co. vs. state, AIR. 1969 mys.23}
(2) A railway company refuses to deliver up certain goods to the consignee, except upon the payment of an illegal charge for carriage. The consignee pays the sum charged in order to obtain the goods. He is entitled to recovers so much of the charge as is illegally excessive.
Sec. 72 does not draw any distinction between a mistake of fact and mistake of law {D. cawasji & co. vs. state, AIR. 1969 mys.23}
Ex.(1). K paid sales tax on his forward transactions of bullion. Subsequently this tax was declared ultra vires. Held, K could recover the amount of sales tax and that sec. 72 is wide enough to cover not only mistake of fact but also mistake of law.{sales tax officer, benares vs. kanhaiya lal mukand lal safaf, 1959 S.C.J. 53}.
(2) An insurance company paid the amount on a policy under the mistake that the goods had been destroyed by a peril insured against. The goods infact had been sold. Held, the money could be recovered by the insurance company {Norwich etc. society ltd. vs. price W.H. LTD 1934 A.C. 455}
(3) An insurance co. paid the amount on a policy which had lapsed by a reason of non- payment of premiums by the assured. The company knew this fact but it was overlooked at the time of payment. Held, the company could recover the amount "however careless the party (company paying money) may have been omitting to use the diligence to inquire into the fact"{Kelly vs. solari 1841 9 M. &W. 54}
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