Model q. Ans for the Indian Contract Act 1872

7/25/2019 Model q. Ans for the Indian Contract Act 1872

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Model Q & Ans. for Judicial Service Main Examon

The Indian Contract Act, 1!"

Q. 1# $istin%uish an o'er( from an invitation to o'er(referrin% case la).

Ans# S *"+a of I.C. Act -rovides that When one personsignifes to another his willingness to do or to abstain rom doinganything, with a view to obtaining the assent o that other to suchact or abstinence, he is said to make a proposal.

e.g.: A bid at an auction sale is an o!er or "proposal#.

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S.S. 3a) Academ4, Civil & 5udicial,6*278, 6*", Ansal 6uildin% +6asement9 $r. Mu:her5ee ;a%ar, $elhi*/


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A proposal, when accepted, becomes promise and that ishow a contract comes into ormation. $n the other hand, aninvitation to o!er is di!erent rom making an o!er.

%n


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that person can insist on buying an article by saying "% acceptyour o!er#.

e.g. %n most bookshops customers are invited to go in and pickup books, but there is no contract, until they proposes to buy andsame is accepted by shopkeeper. 'ere shopkeeper is not bound tosell the book to him.

)hus the display o goods in a shop with price chits attachedto them is not an o!er, even i there is a "sel service# systemin the shop.

*imilarly where a tai driver, with his tai on road, callingthe passengers, to sit in has tai, actually makes an invitation. 'eis not bound to allow every one, who comes to him, to sit in histai, because his calling is not an o!er, that can be accepted by




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any one, rather passengers are to make an o!er to sit in his taito go certain destination, sub-ect to acceptance or reusal by thetai driver. $nly on acceptance by tai driver, the proposal opassengers becomes contract.

)hus a menu card at a restaurant is also not an o!er. %t isonly an invitation to o!er. %n State of M.>. =s @a:im Sin%h AI1/!2 M> "8 it was held that a bidder at auction sale only

makes an o!er, which he can withdraw beore its acceptance ascontemplated by the terms o the auction.

*imilarly a notice calling or tenders is invitation to o!er, thereason being that by way o notice, a party urnishes someinormation calling upon others to make o!ers.




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Q. "# All ille%al a%reements are void, But all voida%reements are not necessaril4 ille%al(. Ex-lain.

Ans# As per * /0h1 An agreement enorceable by law is acontract.

* /0g1 *ays An agreement not enorceable by law is said to bevoid.

An illegal agreement is an agreement, which is orbidden bylaw. 2ut a void agreement may not be orbidden by law.

e.g. 031 A promises to pay 4s. 3, 55,555 to 2, i he kidnaps 6. %tis an illegal contract. All agreements o such type are necessarilyvoid. 7o court can enorce them.

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0/1 A makes promise to put lie in dead body is void agreement,but it is not illegal.

*imilarly 6 promises to fnd out a treasure by magic, is avoid agreement, but not an illegal agreement.

%n such a situation, courts would not enorce such anagreement. %n case o an illegal agreement and void agreement

main or primary agreement is unenorceable and as such isomething has been paid under such an agreement, same cannotbe recovered sub-ect to certain eceptions.

*o it is said that all illegal agreements are void, but all voidagreements are not necessarily illegal.




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Q. 2# Acce-tance is to o'er )hat a li%hted match is to atrain of %un -o)der. It -roduces somethin% )hich cannotBe recalled or undone. 6ut the -o)der ma4 have lain till ithas Become dam- the man )ho lain the train ma4 removeit Before the match is a--lied.

Ex-lain )ith illustration the -rinci-les sou%ht to Beex-ressed in the aBove -assa%e.

Ans# E'ect of Acce-tance

)he statement in (uestion is made by *ir William Anson in thecontet o o!er and acceptance. %t deals with the binding e!ect oacceptance. %t says % once o!er is accepted, it cannot berevoked. $!er is -ust like a train carrying gun powder andacceptance is -ust like a lighted match. As soon as lighted match

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is applied to train carrying gun powder, the train is destroyed.*imilarly as soon as o!er is accepted, o!er is destroyed, andconverted into an agreement, which cannot be revived, ater onceburnt. 2ut the person, who has lain over the train carryingproposal in orm o gun powder, can remove his train beorelighted match is applied. *imilarly a person who has made aproposal, can withdraw it any time beore its acceptance, but notaterwards, -ust like burnt train cannot be revived or removed.

)he statement o *ir William Anson is relevant in the conteto section 8 o the %9A 3;/. %t reveals the character and e!ect oproposal and acceptance.

* 8 says A proposal may be revoked at any time, beore thecommunication o its acceptance is complete as against theproposer, but not aterwards.

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Illustration

A proposes by a letter sent by post, to sell his house to 2. 2accepts the proposal by a letter sent by post.

A may revoke his proposal at any time beore or at themoment when 2 posts his letter o acceptance, but not aterwords.

*; says %n order to convert a proposal into a promise, theacceptance must be absolute and un(ualifed.

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)hus an o!er beore it is accepted unconditionally it can bewithdrawn, but when o!er is once accepted unconditionally, itcannot be withdrawn because upon its acceptance, it getsconverted into a contract and then remains no o!er which can bewithdrawn.

%n loraBel S:inner =s amlila Mandal AI 1/the '. 'igh 9ourt observed that under the law o

contract? an o!er made by a party to another merely remains ano!er and can be withdrawn at any time beore it is accepted bythe other party. 2ut it is settled principle o law that once o!er isaccepted, an agreement comes into being and the party makingo!er cannot rescind rom the o!er and in spite o resiling rom thesame, would remain bound by the contract.




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)hus in light o provision and illustration made @* 8 o %9A3;/ and observation o ull bench o =>'. 'igh 9ourt in thiscontet in the aoresaid case, we come to conclusion that thestatement made in (uestion is rightly observed by *ir WilliamAnson.

Q. 8 * Mention the circumstances in )hich a contract B4 aminor is +i void +ii voidaBle or +iii valid.

Ans# +i =oid # %n terms o %.9. Act 3;/ A void contract isactually not a contract, because same is void rom the verybeginning. Bide * 35 )he parties to contract must becompetent to contract, while vide * 33 only those persons arecompetent to contract, who are ma-or under their own law, and osound mind and not dis(ualifed by law to make contract. *oincapacity to contract saves the minor to bind him by the

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contract. 'owever a minor can still derive beneft there under.Where a minor has obtained any beneft, he cannot be directed toreund the money. As it is laid down in Mohari 6iBi =s$harmdas


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o a minor in respect o necessaries supplied to him. *uch acontract is actually a (uasicontract and valid in the eye o law.

e.g.: %n case o money advanced to a minor to meet hiseducational epenses or medical epenses, minor would be liableto the creditor. 'owever only property o the minor would be liableand minor personally is not liable.

Q. ?# Dhen the consideration or oB5ect of an a%reement issaid to Be la)ful

Ans# * /D o the %.9. provides that the consideration or ob-ecto an agreement is lawul unless:

0i1 %t is orbidden by law or

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0ii1 is o such a nature, i permitted, it would deeat the provisions oany law? or

0iii1 is raudulent? or

0iv1 involves or implies in-ury to the person or property o another? or

0v1 )he court regards it as immoral or opposed to public policy.

%n each o these cases, the consideration or ob-ect o anagreement is said to be unlawul. Every agreement o which theob-ect or consideration is unlawul is void.

e.g.: 031 A, 2 and 9 enter into an agreement o the divisionamong them o gains ac(uired or to be ac(uired by them by raud.)he agreement is void, as its ob-ect is unlawul.

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0/1 A is to obtain or 2 an employment in the public service and 2promises to pay 4s. 3,55,555 to A. )he agreement is void, as theconsideration or it is unlawul.

%n Fs)al A%ro urane 3td =s Fs)al A%ro urane)or:erGs union, AI "? SC 1??? the *.9 held that Acontract which may otherwise be valid, however, must satisy thetests o public policy, not only in terms o the provisions o

sections "?*F and "?*; of Industrial $is-utes Act,but alsoin terms o section /D o the %ndian 9ontract Act.

%nJa4amma =s maria 6ai AI "8 SC 2/?! Ape 9ourtheld that When an assignment or transer is made incontravention o statutory provisions, the conse(uence thereowould be that the same is invalid and thus being opposed to

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public policy, the same shall attract the provisions o */D o the%.9. Act.

Q. 0# A )rites to 6 o'erin% to sell him his house at acertain -rice. 6 at the same time and date, )rites a lettero'erin% to Bu4 the same house at the same -rice. The t)oletters cross each other. Is there a contract Bet)een A and6.

Ans# S *"+a of the I.C. Act 1!" says When one personsignifes to another his willingness to do or to abstain rom doinganything, with a view to obtaining the assent o that other to suchact or abstinence, he is said to make a proposal.

S *"+B sa4s When the person to whom the proposal is made,signifes his assent there to, the proposal is said to be accepted.

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A proposal when accepted becomes a promise. *o when aproposal is made, the other to whom it is made has to signiy hisassent thereto.

%n this case, A is alleged to have o!ered to sell his house to2. )he o!er has been made by writing a letter. At the same timeand on the same day, 2 is alleged to have made an o!er to A, bywriting him a letter, to buy the very house o!ered by A in his

letter. 2ut both the letters cross each other. 2oth these letters areletters o o!er addressed by one to the other written withoutknowing about the letter o the other. 7either A nor 2 wrote hisletter signiying his assent to the letter o o!er.

@nder %.9. Act o!er becomes promise only when it isaccepted. %n the given circumstances, only when 2 accepts theo!er conveyed to him by A in his letter, it would become promise.

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*imilarly only when A accepts the o!er conveyed to him by2 in his letter, it would become promise. 'ere none o letters is byway o an acceptance o the o!er made by the other. *o this is acase o cross o!ers with no acceptance. 9onse(uently this is not acase o contract between A and 2.

Q. !# Ex-lain the doctrine of frustration or im-ossiBilit4)ith illustrations.

Ans# $octrine of rustration

Each party to a valid contract is legally bound to perorm theirrespective part o the agreement. At times, ater the contract isormed, perormance o part o agreement by one or the otherparty becomes impossible or one reason or the other. *ometimes,




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ater the contract is arrived at, the contract, itsel becomesunlawul.

e.g.: Ater ormation o the contract or import o goods, importo goods is orbidden by the government or the goods getperished or the property in (uestion is destroyed, in such aneventuality, it would have a case o subse(uent impossibility orrustration.

%t is signifcant to note that an agreement arrived atbetween the parties to do an act which is impossible in itsel isvoid.

or exam-le Where A agrees with 2 to -oin two straight lines,the agreement is void.

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Section ?0 of the I.C. Act 1!", deals )ith the doctrine offrustration

It sa4s #

031 An agreement to do an act impossible in itsel is void.

0/1 A contract to do an act, which, ater the contact is made, becomes

impossible or by reason o some event, which the promisor couldnot prevent, becomes void, when the act becomes impossible orunlawul.

e.g.: 031 A contracts with 2 to put lie in a dead body is voidcontract, because it is an agreement to do an act impossible initsel.

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0/1 A and 2 contract to marry each other. 2eore the time fed orthe marriage, A goes mad, the contract becomes void, due tosubse(uent impossibility o the perormance o contract.

Foctrine o rustration or subse(uent impossibility generallyoccurs in the ollowing circumstances.

031 Festruction o the sub-ect matter o contract

0/1 9hange o circumstances

0D1 7onhappening o an event contemplated by the parties.

0G1 %ntervention or restriction by the government

081 Feclaration o war.

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'owever, it is noteworthy that rustration should not be selcreated or sel induced.

* C8 o the %.9. Act provides as to the rights o the parties,when an agreement is discovered to be void or when a contractbecomes void. %t says that when an agreement is discovered tobe void or when a contract becomes void, any person who hasreceived any advantage under such an agreement or contract ,is

bound to restore it or to make compensation or it, to the personrom whom he received it.

e.g.: 031 A pays 2, 4s. 3,55,555 in consideration o 2s promiseto marry 9, As daughter. 9 is dead at the time o promise. )heagreement is void, but 2 must repay A the 4s. 3,55,555.

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0/1 A contracts to sing or 2 at a concert or 4s. 35,555, whichare paid in advance. A is too ill to sing. A is not bound to makecompensation to 2 or the loss o the profts which 2 would havemade, i a had been able to sing, but A must reund to 2 the 4s.35,555 paid in advance.

Q. # Dhether the remedies availaBle H7S *!2 & !8 for theBreach of contract also contem-late a void a%reement.

Ans# 4emedies available @*s ;D > ;G o the %.9. Act 3;/,contemplate only a valid and binding agreement between theparties and not a void agreement. % the oreiture clause iscontained in an agreement which is void, it cannot be enorced, asthe agreement itsel is void @* /5 o the contract Act. %t is wellsettled that a void agreement cannot split up. 7one o the partiesto the agreement can be permitted to seek enorcement o a part

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only o the contract through a 9ourt o law. % the agreement isvoid, all its terms are void, ecept in certain known eceptions.)hese eceptions may be like a case where the clause is treatedto constitute separate and independent agreement, servable romthe main agreement. %n such a situation such a clause oagreement can be enorced separately and independently.

* ;D o the Act, deals with one o the remedies available or

the breach o contract. %t is provided that where a party sustain aloss on account o breach o contract, he is entitled to receive,rom the party, who has broken the contract, compensation orsuch loss or damages

* ;G o the Act comes into application, where the parties tothe agreement stipulate either a particular amount which is to bepaid in case o breach or an amount may be mentioned to be paid

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by way o penalty. %n such a situation, the party complaing o thebreach is entitled, whether or not actual damage or loss is provedto have been caused, to receive rom the party, who hascommitted the breach o contract, compensation not eceedingthe amount mentioned in the agreement or the penalty stipulatedtherein. 'owever this provision o law also contemplates a validand binding agreement between the parties.

Q. /# Dhat is the la) relatin% to restitution in case of avoid a%reement

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Ans# S *0? of the I.C. Act deals )ith an oBli%ation of-erson, )ho has received advanta%e under voida%reement or contract that Becomes void.

It sa4s that when an agreement is discovered to be void or when acontract becomes void, any person who has received anyadvantage under such agreement or contract is bound to restoreit, or to make compensation or it, to the person rom whom he

received it.

* C8 is based on e(uitable doctrine. %t may oten be that theparties may realiHe, ater having entered into the agreement orater having signed the contract, that one o the matters whichwas essential to the agreement, was not understood by them inthe same sense and that both o them were at the time oentering into the agreement or eecuting the document. *uch

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realiHation would have the e!ect o invalidating the agreement@* /5 o the Act. $n such realiHation it can be legitimately saidthat the agreement was "discovered to be void#. 9omprehend asituation in which the parties were su!ering rom a mistake o actrom the very beginning, but had not realiHed, at the time oentering into the agreement or signing o the document, that theywere su!ering rom any such mistake and thereore had actedbonafde on such agreement. )he agreement in such a casewould be void rom its inception, though discovered to be so at amuch later stage.

*o the provision o * C8 i.e. or restitution would come intoapplication in case o an agreement which is void ab initio, but theparties had not realiHed that it was void.

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Q. 1* A stran%er to contract cannot sue on it. Ex-lain thisstatement in context of $octrine of -rivit4 of contract.$iscuss this doctrine of 6ritish 3a) in context of India )ithits exce-tions.

Ans# $octrine of -rivit4 of contract

)he doctrine o privity o contract had its genesis in English

common law, because frst time it was adopted by the 9ourt okings 2ench in Futton Bs =oole 3C;;. %n this case A person hada daughter to marry and in order to provide her a marriageportion, he intended to sell a tree, which was possessed by him atthat time. 'is son the deendant promised that i the atherwould orebear to sell at his re(uest, he would pay to her sister3,555 pond. )he ather accordingly orbore, but deendant did

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not pay 3555 pond to her sister. *o the sister and her husbandsued him or the promised amount.

%t is here clear that the deendant gave his promise to hisather and it was the ather alone, who by not selling the tree, incontract, had urnished the consideration or the promise odeendant.

)he plainti! was neither privity to contract nor interested inthe consideration. 2ut it is e(ually clear that the whole ob-ect othe agreement was to provide a portion to the plainti!. %t wouldhave been highly ine(uitable to allow the son to keep the tree andamount both, and deprive his sister o her portion. Accordingly hewas held liable to pay 3555 pond to his sister, as promised by him.

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2ut ater about /55 years this principle was re-ected by &ordWhiteman in T)eddle =s At:inson 101. 'e held that thedoctrine o privity o contract is well settled principle o Englishcommon &aw, so third person cannot sue on a contract made bythe contracting parties, even or his beneft.

$nce again this principle laid down by &ord Whitman wasaIrmed by &ord 'aldane in $unlo- =s Selfrid%ecase in 3J38

and he held that only a person, who is party to contract alonecan sue upon it.

)his doctrine is even today in practice in England with someeceptions.

A--licaBilit4 of the $octrine in India # %n %ndia considerationmay proceed rom a stranger to the contract i.e. third party, but




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only a party to contract is legally entitled to bring an action orenorcement o contract in 9ourt.

%nJamma $as =s am Autar 1/11,it was held that thepurchasers contract to pay o! a mortgage debt could not beenorced by the mortgage, who was not a party to the contract.

)he *upreme 9ourt has endorsed this principle o privity o

contract in a number o cases? particular reerence may be madeto 031 K.9. 9hako Bs )he *tate o )rakancore A%4, 3J;5 and 0/1Lhusha bhai patel Bs Kohd. 'ussain A%4, 3J3.

Exce-tion to the doctrine # some main eceptions to thedoctrine o privity o contract are:

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031 Where a trust is created in avour o the stranger, as held inCanad4 =s Canad4 1.

0/1 Where provision is made in the marriage settlement as held inh)a5a Mohd. han =s @ussain9 6e%um 1/1.

0D1 Where provision is made in a partition or amily arrangement ormaintenance or marriage o a emale member or minor as held in

$han:aur =s Sarla $evi 1/18.

0G1 Where a charge is created in avour o a stranger as held in ABdul


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%t is clear rom the above matters that so ar as theeceptions to the rule are concerned, they are similar both under%ndian and English &aw.

Q. 11* Ex-lain the terms # 6ailment, 6ailor and 6ailee )ithIllustrations. Dhat are essentials of 6ailment.

Ans# 6ailment, 6ailor & 6ailee

* 3G o %.9. Act defnes the term 6ailment, 6ailor and6aileeas ollows:

A "Bailment# is the delivery o goods by one person toanother or some purpose, upon a contract that they shall whenthe purpose is accomplished, be returned or otherwise disposed oaccording to direction o person delivering them.

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)he person delivering the goods is called 6ailor. )heperson to whom they are delivered is called theKBaileeG.

Ex-lanation

% a person is already in possession o the goods o other,contracts to hold them as a bailee, he thereby becomes the baileeand the owner becomes the bailor o such goods, although they

may not have been delivered by way o bailment.

Case 3a)

031 As per A T. Trust 3td. =s Tri--unthure $evas)orm 1/?8 2ailment is a technical term o the common law. )houghetymologically it might mean any kind o handing over, it involveschange o possession. $ne has custody without possession, like a

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servant or guest using his hosts goods, is not a bailee. $n thewhole a bailment might be described as a delivery on condition towhich the law usually attaches an obligation to redeliver goods orotherwise deal with them as directed, when the condition issatisfed.

0/1 %n HFI =s S.;. Traders AI 1//"Larnataka '.9. held @* ;Do the 4ailways Act, the responsibility o railway administration as

a carrier and also as a bailee commences rom the moment thegoods are entrusted to the railway administration or transit tocarried by railway and continue until the goods are unloaded atthe destination point.

0D1 %n avita Trehan =s 6alsara @4%iene >roducts 3td. AI,1//" Felhi '.9. held %n all cases o bailment the bailee is

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bound to take as much care o the goods bailed to him as a mano ordinary prudence would under similar circumstances.

)his observation o Felhi '.9 is based on * 383 o %.9. Act3;/, which deals with care to be taken by bailee.

Essential Elements of 6ailment

According to * 3G o %.9. Act 3;/, there are three essentialelements o a valid bailment:

031 Felivery o goods by the bailer.

0/1 Felivery o possession upon a contract and

0D1 2ailee bound to return goods or to disposes o goods according todirections o bailor.

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+1 $eliver4 of %oods # )o constitute bailment, there must be adelivery o goods rom one person to another or some specifcpurpose.

As per * 3GJ )he delivery to the bailee may be made bydoing anything, which has e!ect o putting the goods in thepossession o intended bailee or o any person authoriHed to holdthem on his behal.

+" Contract # )here can be no bailment without contract. 'enceor bailment, the essentials o contract @* 35 are to be satisfed.

%n am . AllahaBad '.9 held thatobligation o bailee can arise only out o a contract o bailmentand not otherwise.

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+2 eturn or $is-osal of


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0G1 2y breach and

081 2y operation o law.

+1 >erformance of contract # Each party to a contract is boundto perorm his part o obligation. Ater the parties have made dueperormance o contract, their liability under the contract comesto an end. %n such a case contract is said to be discharged by

perormance.

+" Im-ossiBilit4 of -erformance # Accordin% to Anson Kostlegal systems make provision or the discharge o contract, wheresubse(uent to its ormation a change o circumstances rendersthe contract legally or physically impossible o perormance.

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%n English law, such a situation is provided by the doctrine orustration and in %ndia it is covered by * 8C o %.9. Act 3;/. %nSat4aBrata


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)hus within the meaning o * C/ i parties substitute a newcontract or the old, or revoke it or alter it the original contract isdischarged.

Exam-le

A owes money to 2 under the contract. %t is agreed between A, 2and 9 that 2 shall thenceorth accept 9 as his debtor, instead o A.

)he old debt o A to 2 is at end and a new debt rom 9 to 2 hasbeen contracted.

+8 $ischar%e of contract B4 Breach # Anson Sa4s # % one othe parties to a contract breaks an obligation, which the contractimposes, a new obligation will in every case raise a right o actionconerred upon the party in-ured by the breach. 2esides this thereare circumstances in which the breach not only gives rise to cause

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o action, but will also discharge the in-ured party rom suchperormance, as may still be due rom him.

2reach o contract may be o two type

0i1 Anticipatory breach o contract.

0ii1 2reach o contract during perormance o contract.

+? $ischar%e of contracts B4 o-eration of la) # )he instanceso the discharge o contract by operation o law are ollowing:

0i1 Kerger 0ii1 Fischarge by -udgment 0iii1 Alternation orcancellation o a written instrument 0iv1 2ankruptcy

% in place o lower security, a higher security is accepted,the lower security will be deemed to be merged in the higher

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security and party concerned shall be discharged rom itsobligation in respect o lower security.

A contract may also be discharged by the -udgment o acourt o competent and appropriate -urisdiction in avour o theplainti!.

% a party to contract makes alterlation or cancellation o a

written instrument o contract, the other party is discharged romits obligations under the contract.

When a person is ad-udged a bankrupt by the court, he isthereby discharged rom his debts and other obligations. )husbankruptcy may also operate to discharge the obligations o aparty to a contract.

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Q. 12* $ecide )hether follo)in% are o'er #

+i Catalo%ue and dis-la4 of


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the price list. )hus in the light o above observation Ashopkeepers catalogue o prices is not an o!er. %t is only aninvitation to o!er to buy at the indicated prices.

*imilarly in >harmaceutical Societ4 of


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)hus the display o goods in a shop with price chits attachedto them is not an o!er even i there is a "sel service# system inthe shop.

+ii Announcement to hold auction

An auctioneers announcement that specifed goods will be soldby auction on a certain day is not an o!er to hold auction and he

will not be liable to persons travelling up to place, i he changeshis mind and does not hold auction

%n Hnion of India =s


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goods. )he highest bid is nothing more than an o!er to buy and itre(uires to be accepted by the auctioneer.

In S-encer =s @ordin%9ourt held %t does not matter orthis purpose that the auction was held by the +overnment. Even a+overnment auction may be cancelled beore any bid is fnallyaccepted.

+iii ree $istriBution of Articles

Where in pursuance o a scheme adopted by E**$, the petrolstation proprietors announced that they would give "World cup9oins# one to every buyer o our gallons o petrol, it was held thatthe distribution o the coins was not a contract o sale so as toattract the provisions o =urchase )a Act, but only a git.

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)he above observation was made by the court in ESSF-etroleum Co 3td. =s Commissioner of Customs & Excise.)hus we can say that the ree distribution o articles is not acontract, under contract law. *o an action cannot be brought orbreach o o!er.

+iv Tender

)ender is not an o!er rather an invitation to o!er. Ater itsacceptance, it sometimes becomes what is known as a standingo!er or continuing o!er. A contract takes place only ater theorder is placed.

%n 6en%al Co. 3td =s @ome Dadia & Co Feendantentered into an agreement to supply a kind o coal rom time totime re(uired by the plainti! or a period o twelve months. )he




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plainti!, in pursuance o the said agreement, placed certainorders and the deendant supplied the coal. 2ut beore the lapseo 3/ months they withdrew their o!er and reused to supply thecoal any more. )he plainti! thereupon fled the suit against themor the breach o contract. )he court dismissed the suit on theground that there was no contract, and it was only a "continuingo!er#. *o deendants have right to revoke it. 'owever they couldnot revoke their o!er in respect o the orders actually placed.

)his principle was aIrmed by -udicial committee o the privycouncil in =s $emers 1//.)he *.9 o %ndia has also laid downthe same principles in HFI =s Madala Thathiah An o!ershould be distinguished rom an invitation to receive o!ers.

Q. 18 $istin%uish Bet)een #

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+1 =oid and =oidaBle Contract+" =oid and Ille%al Contract+2 Coercion and $uress+8 Coercion and Hndue inLuence+? raud and Misre-resentation+0 Contract of Indemnit4 and Contract of


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0/1 Boid contract has no legal binding e!ect, while voidable contractcontinues to be legal till declared void.

0D1 %n void contract, the deects are incurable, while in a voidablecontract, the deect is curable and may be condoned.

0G1 )he contract becomes void, when it ceases to be enorceable. Acontract becomes voidable only when consent to agreement is

obtained by coercion, undue inNuence, raud ormisrepresentation.

081 Boid contract is defned in sec / 0-1, while voidable contract isdefned in * /0i1 o 9ontract Act 3;/.

+" $istinction Bet)een void and Ille%al Contract

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031 All void agreements are not necessarily illegal, while all illegalcontracts are void.

0/1 All collateral contracts to a void contract are not void while allcollateral contracts to illegal contract are void.

0D1 +round or the voidness has to be proved in case o void contract,while in case o illegal contract, 9ourt on its own motion may

reuse to enorce it, even though the illegality has not beenpleaded.

0G1 )he parties to a void contract are not necessarily liable to penalty,while parties to an illegal contract are liable to be penaliHed.

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+2 $istinction Bet)een coercion and $uress

031 9oercion can be employed against any person including astronger, while Furess can be employed only against party to thecontract or the members o own amily.

0/1 %mmediate violence need not arise rom coercion, but Furess mustbe such as to cause immediate violence.

0D1 9oercion need not be such as to a!ect a man with ordinarystrength o mind? Furess must be such as to a!ect a man withordinary strength o mind.

0G1 9oercion may be employed by any person, while Furess may beemployed only by the party to the contract or his agent.

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+8 $istinction Bet)een Coercion and Hndue InLuence

031 %n coercion consent is obtained by threat o an o!ences whileunder undue inNuence consent is obtained by dominating the willo the giver.

0/1 9oercion is mainly a physical character, while undue inNuence is amoral character.

0D1 %n case o coercion relationship between parties is not necessary,while in case o undue inNuence there must eist somerelationship between the parties to contact.

0G1 9oercion is o violent character, while undue inNuence is moresubtle and intangible.

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+? $istinction Bet)een raud and Misre-resentation

031


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+0 $istinction Bet)een Contract of Indemnit4 and Contract of


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0/1 )he liability o promisor is primary. 0/1 )he primary liabilityis o princ7o secondary liability. ipal debtor and the liabilityo

surety is secondary.

0D1 )he contract between the 0D1 )he contractbetween the surety

indemnifer and the indemnity and principal debtoris impliedholder is epress and specifc. and betweencreditor and prin

cipal debtor is epress.

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0G1 %n contract o indemnity there is only 0G1 %n contract o+uarantee there isone agreement three agreement

081 9ontract o indemnity protects the 081 9ontract oguarantee is or thepromisee rom the loss surety o thecreditor.

0C1 %n case o contract o indemnity the 0C1 %n case o contract oguarantee

Model q. Ans for the Indian Contract Act 1872

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Transcript of Model q. Ans for the Indian Contract Act 1872