Short Notes - FAQ’s

1. Valid offer
2. Acceptance by post/Communication of acceptance - Unit No: 2.5.1 Vijay Law Series
3. Coercion - Unit No: 6.2.1 Vijay Law Series
4. Contingent contract - Unit No: 7.7. 1 Vijay Law Series
5. Wagering agreements - Unit No: 7.6.1 Vijay Law Series
6. Agreement in restraint of trade - Unit No: 7.3.3 Vijay Law Series
7. Immoral agreements - Unit No: 7.1.2.e Vijay Law Series
8. Undue influence - Unit No: 6.3.1 Vijay Law Series
9. Anticipatory breach - Unit No: 9.4. I Vijay Law Series
10. Cross offer - Unit No: 2.2.2 Vijay Law Series
11. Void and voidable - Unit Nos: 3.1.5 & 3.1.6 Vijay Law Series
12. Novation - Unit No: 8.6.2 Vijay Law Series
13. Preventive relief - Unit No: 10.10.1 Vijay Law Series
14. Declaratory decree - Unit No: 10.9.1 Vijay Law Series
15. Pardah nashin women - Unit No: 203 Vijay Law Series
16. Privity of contract - Unit No: 4.1.4 Vijay Law Series
17. Restitution in minor's contract - Page No 4
18. Kinds of damages/nominal damages - Unit No: 9.1.3 Vijay Law Series
19. Performance of reciprocal promises - Unit No: 8.2.1 Vijay Law Series
20. Impossibility of performance/Subsequent impossibility - Unit No: 8.5.1 Vijay Law Series

Essay Q&A - FAQ’s

Contracts & Essentials
Introduction:
The word contract is derived from the Latin word contractum which means drawn together. Contract is an agreement
enforceable by law. It is an agreement between two or more parties. The parties are bound by such agreement. Thus, all
agreements are not contracts, but all contracts are agreements. Ex: A, agreed to paint a picture for B and B promised to
pay Rs. 5,000 to A. This agreement is a contract. As per Section2(h) of the Indian Contract Act, 1872 a contract is an
agreement enforceable by law. Every contract must have two essential elements. They are agreement and legal
obligation. Legal obligation binds the parties together. All agreements are not enforceable. Only legal obligations are
enforceable but social obligations are not enforceable. An agreement to go for a film or marriage is the good example for
a social contract. Such agreements are not enforceable.
Essentials of a valid contract:
Section 10 provides that all agreements are contracts if they are made by the free consent of parties, contract, for a
lawful consideration, with a lawful object and are not expressly declared to be void. The following are the essential
conditions of a valid contract.
1. Minimum two parties: There must be at least two parties. They are called offeror and offeree. They are also
called as promisor and promisee.
2. Agreement: There must be an agreement to do same thing in the same sense. Offer by one party and acceptance
by the other party makes an agreement. Therefore, Agreement = Offer + Acceptance.
3. Offer and acceptance: There must be a lawful offer and a lawful acceptance. A person making an offer is called
offeror or proposer and the person who accepts the offer is called offeree or acceptor.
4. Consensus-ad-idem: Consensus-ad-idem means identity of minds. Both parties must have clear understanding
about the subject matter of the contract at the same time and in the same sense. Therefore, Consensus-ad-idem
= Offer + Acceptance. Ex: SA Dresser Rand v. Bindal Agro, 2006: A letter of intent is not intended to bind either
party alternatively to enter into any contract.
5. Capacity to contract: Section 11 and 12 provides that, every person has capacity to enter into contract, if he is a
major with sound mind. Thus, minors and persons with mental disorder have no capacity to enter into contract.
6. Free consent: Section 13 provides that, there must be free consent. It means both the parties must enter into an
agreement without any force, fraud, coercion, misrepresentation, mistake or undue influence.
7. Lawful consideration: Section 2(d) provides that, there must be a consideration in every contract. It must be
lawful. Consideration means something in return. Hence the price is called consideration. A contract without
consideration is void.
8. Legal relationship: Parties must have an intention to create legal relationship between them. Ex: A agrees to sell
his car to B for 95,000. Such agreement creates legal relationship, but some social contracts cannot create legal
relationship.
9. Lawful object: As per Section 23 the object of the contract must be lawful. It must not be immoral or illegal or
opposed to public policy. Ex: An agreement to supply rice to a student hostel is lawful, but an agreement to
supply rice to terrorist's organization is unlawful, because the object of terrorist’s organization is illegal.
10. Certainty of terms: The terms of contract must be clear. They must not be vague or uncertain. Ex: A agrees to sell
B a hundred tons of oil. The terms are not clear because which kind of oil is not mentioned.
11. Possibility of performance: An agreement must be possible to perform. Law never compels anybody to do an
impossible act. Ex: Transfer of the Sun or the Moon is impossibility of performance.
12. Lawful agreement: Agreement must not have been expressly declared void or illegal by any law in force in India.
Ex: Agreement in restraint of trade, or agreement in restrain of marriage, or agreement in restraint of legal
proceedings, or wager agreements.
13. Legal formalities: An agreement may be oral or written. Where the agreement is to be writing it must fulfill the
necessary legal formalities such as writing, registration and attestation. Ex: sale, lease, gift, and mortgage
required to be in writing. An agreement, which fulfils all the above essential elements, is enforceable by law and
is called a contract. Thus, all agreements are not contracts, but all contracts are agreements.
Consideration/Privity of Consideration/Privity of Contract
Introduction:
As per Section 2(d)of the Indian Contract Act, 1872; when at the desire of the promisor, the promisee or any other
person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing
something, such an act or abstinence or promise is called a consideration for the promise. Consideration means price or
a payment. It may be described as something accepted or agreed upon as a return or equivalent for the promise made.
Section 25 provides that, an agreement without consideration is void and cannot be enforced. Hence, consideration is
one of the most important elements of a contract. Consideration is also called quid pro quo which means in return.
When a party to an agreement promises to do something, he must get something in return for it. This is known as
consideration. Consideration need not necessarily be in cash or kind. It may be an act or promise to do or not to do
something. Ex: A agrees to sell his house to B for Rs.5,00,000. Here Rs. 5,00,000 is the consideration for A’s promise to
sell the house and A’s promise to sell the house is the consideration for B’s promise to pay Rs. 5,00,000.
Rules of consideration:
1. Consideration to be given at the desire of the promisor: The act done or loss suffered by the promisee must have
been done or suffered at the desire or request of the promisor. Ex: Durga Prasad v. Bakleo, 1880: The contractor’s
action to recover the commission from vegetable sellers was rejected by the court because the market was not
constructed at the desire of the vegetable sellers but the District Collector.
2. Consideration to be given by the promisee or any other person or privity of consideration: Section 2(d) provides
that, consideration may be given by promisee or any other person. It may move not only from the promisee but
also a third person, who is not a party to the contract. This is known as doctrine of consideration, but in England,
the consideration must move from the promisee only and nobody else as laid down in Thomas v, Thomas, 1842.
Ex: Chinnaya Rau vs. Ramaya, 1882: The court held that although the plaintiff was stranger to the consideration
but since he was a party to the contract, he could enforce the promise of the promisor, since under Indian law,
consideration may be given by the promisee or anyone on his behalf.
3. Doctrine of privity of contract: Privity of contract means only those persons who are parties to the contract can
enforce the contract. A stranger to the contract cannot enforce even though the contract may have been entered
into for his benefit.
4. English law: In English law, only parties to the contract can sue each other. A stranger cannot enforce the claim.
Ex: Dunlop Co. vs. Selfridge Co, 1915: The House of Lords held that Dunlop could not bring an action against
Selfridge company because there was no contract the two parties.
5. Indian law: The rules of privity of contract are equally applicable in India as in England. Only parties to the
contract can enforce the contract.
Consideration may be past, present or future:
1. Past consideration: When an act is done before the date of promise it is called past consideration. Ex: A renders
some service to B in the month of January, In February promises to pay Rs. 5,000, This is a past consideration.
2. Past consideration - English law: Past consideration is no consideration as per English contracts law. The
consideration may be present or future but not past. Therefore, the promise for consideration cannot be
enforced.
 3. Present consideration: It is also known as executed consideration. When the consideration is along with the
promise, it is called present or executed consideration. Ex: A agrees to sell his car to B for one lakh. B pays money
to A at the time of making the contract. This is a present consideration.
4. Future consideration: Also known as executory consideration. When the consideration from one party to other is
to pass after the making of the contract, it is called future or executory contract. Ex: A agrees to supply certain
goods to B and B agrees and promises to pay the price on a future date. This is a future consideration.
Other conditions:
1. Consideration must contain an act, abstinence or promise.
2. Consideration need not be adequate, but it should be real, not illusory or illegal.
3. Consideration in an agreement must be lawful, not illegal, immoral or opposed to public policy.
4. A new consideration by the promisor to perform the pre-existing contract is not valid.
Exceptions:
Section 25 provides that, an agreement without consideration is void. However, agreement without consideration is valid
under the following cases:
1. Gift out of love made in writing and registered.
2. Promise for past voluntary services.
3. Promise to pay a time barred debt.
4. Contract without consideration does not apply to gifts.
5. Charitable subscriptions.

Capacity of Minor to Contract

Introduction:
Persons who enter into a contract must have capacity. As per section 10, the parties must have competence to enter into
a valid contract. As per section 11, every person who have attained the age of majority according to the law, is of
unsound mind, and is not disqualified from contracting by any law is competent to enter into a contract. Hence minors,
persons of unsound mind and persons disqualified by law, are not competent to contract. Ex: Mohori Bibee vs.
Dharamdas Ghose, 1903: It has been held that mortgage by a minor was void and inoperative. Therefore, the minor was
entitled to cancel the mortgage and he could not be asked to repay the advance loan Rs. 8000.
1. Minor and rule of estoppel: As per Section 115 of the Indian Evidence Act 1872, if a person makes a statement
today, which misleads another person, he is not allowed to deny the statement tomorrow when the question of
his liability arises, but such rule of estoppel does not apply against a minor. Ex: Khan Gul vs. Lakha Singh, 1928: A
minor is allowed to plead minority as a defense to avoid liability even though he falsely stated that he has
attained the age of majority.
2. Minor under English law and doctrine of restitution: Minor is required to return the benefits so received or
secured by him fraudulently. It is applicable only to goods and properties but not to money. The object of
doctrine of restitution is to return the fraudulent gains taken by the minor to the real owner. However, the
English law of doctrine of restitution is not applicable in India. A fraudulent minor is not exempted from liability.
He can be asked to pay compensation as laid down in Khan Gul vs. Lakha Singh, 1928.
3. Necessaries supplied to a minor: Section 3(3) of the Indian Sale of Goods Act, 1979 and Section 1 of the English
law and the Infants Relief Act, 1874 permits an action for the necessaries supplied to a minor. Ex: A supplies B a
lunatic with necessaries suitable to his condition in life, A is entitled to be reimbursed from B’s property.
4. Minor and contracts of marriage: Contract of marriage must be beneficial to the minor. Hence minor is entitled
to enforce them.
5. Minor and contract of service or apprenticeship: Contracts of service entered into by a minor are void. Ex: Raj
Rani vs. Adib, 1949: Minor is not bound by a contract of service. But a minor is bound by contract of
apprenticeship under the Apprenticeship Act, 1850.
6. Minor and beneficial contract: Although a contract by a minor is void and no liability can be incurred by a minor
under a contract, a minor is not debarred from accepting a benefit. A minor can also sue on a promissory note
executed in his favor. Ex: Great American Co. vs. Madanlal, 1935: It has been held that the minor is entitled to
enforce his claim for compensation for loss to property by fire against the insurance company.
7. Minor and partnership: Minor being incompetent to contract, he cannot become a partner. However, a minor
may with the consent of all the partners for the time being, be admitted to the benefits of partnership. He has a
right to share of property and profits He cannot be made personally liable, but only his share is liable for the acts
of the partnership firm. On attaining majority, he can have the choice either to become a partner or to leave the
firm.
8. Minor and negotiable instruments: Minor is authorized to draw, endorse or deliver or negotiate a negotiable
instrument as per Section 26 of Negotiable Instrument Act, 1881. It binds the other parties but the minor is not
liable for any loss on the negotiable instrument.
9. Minor and agency: Minor can become an agent but he cannot become a principal and cannot appoint an agent.
Minor being an agent he cannot be made liable towards his principal because of his minority.
10. Minor-tort and breach of agreement: Minor is not liable for breach of contract, but he is liable for his torts. Ex:
Ballett vs. Mingay, 1943: A minor hired an amplifier and a microphone. Instead of returning them to the owner,
the minor passed them on to his friend. It has been held that the minor was liable.
11. Minor and specific performance: Generally, a minor’s agreement cannot be enforced but it can be enforced only
when it is entered into on his behalf by his parent or guardian or the manager of his estate.
12. Minor and parent or guardian’s agent: Generally, the parents or guardian are not liable for the contract entered
into by the minor, but when the minor is acting as an agent for the parents or guardian, they shall be liable.
13. Minor and restitution: Restitution means returning it to a rightful owner. Restitution is applied only in valid
contracts. Therefore, no order can be made for compensation against a minor for a benefit under void
agreement.
14. Minor and ratification: A minor’s agreement being a nullity and void ab-initio has no existence in the eye of the
law. A person cannot on attaining majority ratify an agreement made by him during his minority, because a
minor's agreement is void ab initio. It cannot be validated by subsequent ratification after the minor has attained
the age of majority. However, if on becoming major, the minor can make a new promise for fresh consideration,
then this new promise will be binding.
Free Consent
Introduction:
Consent means willingness. According Section 10 the parties must contract with free consent. Where there is no free
consent there is no free consent there is no contract. Section 14 explains the consent is said to be free when it is not
caused by:
1. Coercion: Section 15 of Indian Contract Act, 1872 defines coercion as the committing or threatening to commit,
any act forbidden by the Indian Penal Code, 1860 or the lawful detaining or threatening any property of any
person with the intention of causing any person to enter into an agreement. Ex: Appin Tea Estate vs. Industrial
Tribunal, 1966: It has been held that the demand of the workers for bonus which was accepted as threat of strike
did not amount coercion.
2. Undue influence: Section 16 defines undue influence as an influence exercised by the dominating party to the
weak party to enter into an agreement against his will. Ex: Mahaboob Khan vs. Kakim Abdul Rahim, 1964: The
law will not allow any transaction based on undue influence, because contract is based on mutual trust.
3. Fraud: As per Section 17 fraud means use of false representation or statement to gain an unjust advantage.
Fraud is an intentional misrepresentation of a fact. When there is duty to speak, keeping silence is fraud. Ex:
Deek vs. Peek, 1889: It has been held that there was a mere misrepresentation but no fraud as the statement
had been made without any intention to deceive.
4. Misrepresentation: As per Section 18 misrepresentation means a false statement of facts. When the consent of a
party to a contract has been obtained by misrepresentation it is not free consent and the contract is voidable at
the option of the party. Ex: Walker vs. Boyle, 1982: While selling his wife’s house to walker, innocently
represented that there were no disputes regarding to the boundaries of the property.
5. Mistake : As per Section 20-22, mistake may be defined as a wrong belief about something. The consent obtained
by mistake is not free consent. Agreement entered by mistake is not an agreement at all. Only constructive
mistakes affect the validity of contracts. Ex: Rajini Kumar Mahato vs. Uma Devi Budhia, 2005: An agreement is
void if it is caused by a bilateral mistake as to the fact.
Thus, consent must be free from coercion or undue influence or fraud or misrepresentation or mistake. A contract
without free consent is not valid. When the consent is obtained by coercion or undue influence or fraud or
misrepresentation such agreement is voidable at the party whose consent was so caused. When the consent is caused by
mistake such agreement is void as per Section 20,21,22 and it cannot be enforced under Section 2(g). Free consent is an
essential requisite of a valid contract. Free consent is the consent, which has been obtained by the free will of the parties
out of their own accord. Season 13 provides that two or more persons are said to consent upon the same thing in the
same sense. This is called consensus ad idem in English law. It means that the both parties must have same thing in mind
while entering into contract. If two persons enter into an apparent contract concerning a person or 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.
Principles of consent and supreme court:
As per Central National Bank vs. United Commercial Bank, 1954 the court formulated the following principles:
1. Must be lawful.
 2. Parties must agree to do the same thing in the same sense.
3. State of mind of consenting person is important.
Ex: Andhra Sugar Mills vs. State of A.P: It has been held that the consent obtained by false representation and fraud was
not a free consent.

Doctrine of Frustration
Introduction:
Frustration means disappointment of a hope. Section 56 provides that an agreement to do an act impossible in itself is
void. Ex: An agreement to discover a treasure by magic is void, because it is impossible to perform.
Essentials of frustration:
1. There must be a valid and subsisting contract.
2. There must be some part of incomplete contract.
3. Subsequently it must become impossible to perform.
The doctrine of frustration is based on the maxim lex non cogit ad impossibility which means the law does not compel
the impossible. Sometimes the performance of a contract is quite possible when it made by the parties. However, by
happening of some event subsequently its performance may become impossible or unlawful. In either case the contract
becomes void. Ex: JP Builders vs. A. Ramadas Rao, 2011: It has been held that doctrine of impossibility cannot be applied
to assist a is unwilling to fulfil its obligation under the contract.
Section 56 cannot be applied to a case of self-induced frustration as laid in Boothalinga Agencies v. VTC Pariaswami
Nadar, 1969: Doctrine of frustration comes into play in two situations.
1. Where the performance is physically cut off.
2. Where the object has filled.
The principle of frustration is not confined to physical impossibilities but it extends also the cases where the performance
of the contract is physically possible. The doctrine is based on equity and common sense cannot be permitted to become
a device for destroying sanctity of contract as down in Ganga Singh vs. Santhosh Kumar, 1963.
Mary vs. State of Kerala, 2014: It has been held that the doctrine of frustration excludes ordinarily further performance
when the contract is silent as to the position of the parties in the event of performance becoming literally impossible.
However, a statutory contract in which a party takes absolute responsibility cannot escape liability whatever may be the
reason.
Specific grounds of frustration:
1. Destruction of subject matter: It impossible to perform the contract when the subject matter is destroyed or has
ceased to exist. In Taylor vs. Caldwell, 1863, the Plaintiff hired the Defendant's music hall for rent on certain day
and paid an advance, but before that date, the music hall was destroyed by fire. The plaintiff sued the defendant
to compensate the loss. It has been held that Defendant was not liable because it was not in the hands of
Defendant to perform obligation.
2. Change of circumstances: It may become impossible to perform the contract due to the change circumstances. In
such case the Courts will not enforce the contract as laid down in Continental Construction Co vs. State of M.P,
1988 and Joseph Constantine Steamship Line Ltd. vs. Smelting Com Ltd. 1941, the Plaintiff charted a ship of the
Defendant Company to transport a load on a certain date. Before that date the boiler was damaged due to some
 explosion, which need impossible to perform voyage at the schedule time. The Plaintiff sued for the loss and the
Defendant pleaded the defense of frustration. The House of Lords held that there was frustration due to the
change of circumstances. Therefore, the were not liable.
3. Non-occurrence of contemplated event: Sometimes, the performance of a contract remains entirely possible,
but owing to the non-occurrence of an event it becomes impossible. In Krell vs. Henry, 1903, the parties
contracted to him a room to review a proposed coronation procession was held to have frustrated when the
procession was postponed.
4. Death or incapacity or party: Where the nature or terms of the contract require personal performance by the
promisor, his death or incapacity puts an end to the contract. In Robinson vs. Davison, 1861-73, the Defendant's
wife a pianist agreed to give concert on a specified day. On the morning of the day of the concert she informed
the Plaintiff that she was too ill to attend the concert. The concert has to be postponed and the Plaintiff suffered
loss. The Plaintiff action for compensation was failed. The Court excused her from playing piano and held that
the contract was clearly subject to the condition of her being well enough to perform.
5. Government or legislative intervention: Sometimes the performance of a contract becomes due to the legislative
or administrative interaction. In Sunder vs. Durga, 1966, the seller agreed to sell his hand and was about to
execute a sale deed. Meanwhile the Court declared that the seller was not the true owner of that land. It has
been held that the contract had become impossible of performance. In Man Singh vs. Khazan Singh, 1961, a
contract between certain parties for the sale of the trees of a forest was discharged when the State of Rajasthan
forbade the cutting of trees in the area.
6. Intervention of war: Intervention of war or warlike conditions makes impossible for the performance of the
contract. Ex: The closure of the Suez Canal followed by Anglo French war with Egypt interrupted the
performance of many contracts. In Basanti Bastralaya vs. River India Navigation Co. 1987, the Defendant's
carriage was intercepted by the ever seizing the along with the Plaintiff cargo, during hostilities between India
and Pakistan. It has been held that the Defendants were not liable, because it is impossible to perform the
contract.

Termination of Contract/Modes of Discharge of Contract

Introduction:
Discharge of contract means termination of the contractual relationship between parties. Contract creates relation
between the parties and binds them over. It creates rights and liabilities. The contract is said to be discharged or
terminated when the rights and liabilities comes to an end.
Modes of discharge of contract:
1. Discharge by performance: When both the parties to the contract fulfill their duties as per the terms of the
contract, the contract comes to an end. This is known as actual performance. Ex: National Insurance Company vs.
Boghara Polyfab, 2009: When both parties to a contract confirm in writing that contract has been fully and finally
discharged by performance of all obligations and there are no outstanding claims or disputes, the court will not
refer any subsequent claim or dispute to arbitration.
2. Discharge by lapse of time: Every contract must be performed within a fixed or reasonable period, called period
of limitation. If the contract is not performed and if no legal action is taken by the promisee within the period of
limitation, he loses the remedy under contract. Ex: A agrees to supply certain goods to B for Rs. 10,000. When
there is no agreement about the payment, the payment should be made or suit should be filed to recover the
claim within three years from the date of delivery or the debt becomes time-barred.
3. Discharge by impossibility of performance: Section 56 provides that an agreement to do an impossible act is
void. A contract, in the beginning was capable of being performed or lawful may subsequently become
impossible to perform or unlawful. Such impossibility is called as subsequent impossibility or post contractual
impossibility or supervening impossibility. Ex: Robinson v. Davison, 1871: A singer agreed to perform at a concert
for certain price. Before she could do so, she fell seriously sick It has been held that she was discharged due to
illness.
4. Discharge by operation of law: Sometimes a contract may be discharged by operation of law i.e., by death
insolvency, merger etc.
a. By death of the promisor: In contracts involving personal skill or ability, death of the promisor terminates
the contract.
b. By merger: When a superior right and an inferior right coincide and meet in one and the sane person;
the inferior right disappears into the superior right. Which is called merger. Ex: A hold a property under a
lease. He later buys the same property. His lease rights are merged into ownership right. Thus, merger
discharges the tenancy agreement.
c. By insolvency: When a person is decided as an insolvent, he is discharged from all liabilities prior to that
decision.
d. By unauthorized alteration: Where a party to a contract makes any material alteration in the contract
without the consent of the other party, the contract can be avoided. Ex: Altering the price in the written
agreement.
5. Discharge by breach of contract: Failure to fulfill the promise or obligation is called breach of contract. Breach of
contract may be by actual breach or anticipatory breach. Ex: Naresh. K. Aggarwala vs. Canabank Financial
Services, 2010: In order to claim for breach of contract, party has to prove that termination of contract with
proofs otherwise the contract is deemed to be subsisting.
a. Actual breach of contract: If a party fails to perform his obligation at the time when the performance is
due is called actual breach of contract. Ex: A agrees to deliver to B 100 bags of rice on 1 st March. He does
not deliver the rice on that day. There is a breach of contract.
b. Anticipatory breach of contract: If a party declares his intention of non-performance of the contract
before the performance is due is called anticipatory breach of contract. Ex: A agrees to supply to B 100
bags of rice on 1st March. Before, this date he informs B that he is not going to supply the rice. There is
an anticipating breach of contract.
6. Discharge by mutual agreement or consent: Both the parties to the contract by mutual agreement or consent
may put an end to the contract. This is based on the principle that a thing may be destroyed in the same manner
 in which it is made. The contractual obligation may be discharged by an agreement, which may be express or
implied. Various modes of discharge of a contract by mutual agreement.
a. Novation: According to Section 62, novation means new contract replacing the old contract with the
consent of the parties. The consideration for the new contract is the discharge of the old contract. Ex: A
owes money to B. It is agreed between A, B and C that B shall accept C as his debtor instead of A. The old
debt of A to B is discharged and new debt from C to B is contracted.
b. Rescission: According to Section 62, rescission means cancellation of contract. It takes place when all or
some of the terms of the contract are cancelled. If the parties mutually agree to cancel a contract, such
contract need not be performed. Ex: Ganga Retreat and Towers vs. State of Rajasthan, 2003, it has been
held that the parties can't have any right to rescind contract in cases of completed transfers.
c. Alteration: Section 62 provides that alteration of a contract may take place when one or more of the
terms of the contract are altered by mutual consent of the parties to the contract. In such case old
contract is discharged and parties become bound by a new contract. Ex: A enters into a contract with B
for the supply of 100 bags of rice by the 1st week of March. A and B by mutual consent may alter the
quality or the price.
d. Remission: According to Section 63 remission means acceptance lesser than what was contracted for. Ex:
A owes B Rs. 5000 but B accepts Rs. 3000 instead of Rs. 5000 as the repay of the whole debt. The whole
debt is discharged.
e. Waiver: Waiver means abandonment or losing a right. It takes place when the parties to a contract agree
that they shall no longer be bound by the contract. Neither an agreement nor consideration is required
for waiver.
f. Merger: Merger takes place when an inferior right accruing to a party under a contract merges into a
superior right accruing to the same party under the same or some other contract. Ex: P holds a property
under lease. He later buys the property. His right as a lessee merge into his rights as an owner.
g. Insolvency: Sometimes a person is declared insolvent by the Court of law. After being adjudicated
insolvent, he is released from all his liabilities prior to his adjudication. Ex: National Insurance Co vs.
Boghara Polyfab, 2009: If the party who has executed the discharge agreement or discharge voucher,
alleges that the execution of a discharge agreement or voucher was on account of fraud or coercion or
undue influence practiced by the other party and is able to establish the same, then obviously the
discharge of the contract by such agreement or voucher is rendered void and cannot be acted upon.
Consequently, any dispute raised by such party would be arbitrable.

Quasi Contracts
Introduction:
Quasi contract means a contract created by law. They are dealt between Sections 68-72 of the Act. Generally, a contract
is created by an agreement between parties, but under special circumstances law creates rights and obligation between
parties although there is no express agreement between them. The parties do not have intention to create into contract.
They are contracts in the eye of laws but not in fact. They are not founded on actual promises. They are known as quasi
contracts or constructive contracts under English law. Quasi contracts are based on the principle of equity that a person
shall not be allowed to enrich himself unjustly at the expense of another. This is also known as doctrine of unjust
enrichment. Law of quasi contract is also known as law of restitution. Therefore, quasi contract is not a contract at all,
because it is created in the absence of an agreement.
Kinds of quasi contracts:
1. Supply of necessaries: Section 68 provides that if a person supplies necessaries to a lunatic or minor or a person
incapable entering into a contract, then he is entitled to recover the expense from the property of such persons.
In India the incapable person is not personally liable but his property only can be attached. Ex: A supplies to 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 interested person: Section 69 provides that a person who is interested in the payment of money
which another is bound by law to pay, and the person who pays is entitled to recover the same. Ex: B holds a
land and could not pay tax to the government. To avoid revenue sale A pays to the Government. A is entitled to
recover the money from B.
3. Obligation to pay non-gratuitous act: Section 70 provides that when a person performs a non-gratuitous act and
such other person enjoys the benefit of the act, he is bound to compensate. Ex: Syndicate Bank vs. Seema
Traders, 1999: It has been held that the plaintiff is entitled to recover the interest amount along with the
principle amount and the defendant cannot enrich himself at the cost of the lender.
4. Finder of goods: Section 71 provides that a person who finds goods belonging to another and takes them into his
custody must take care of the goods. The finder of goods must take as much care of the good as a man of
ordinary prudence would, under similar circumstances, take of his own goods of the same bulk, quality and value
as the goods found by him. He should not mix the goods found by him with his own goods. However, the finder
of goods is authorized to sell the goods found by him under the authority provided under Section 169 in the
following cases:
a. When goods are perishable or losing its value.
b. When the lawful charges exceed 2/3rd of its value.
c. When the owner is not found with reasonable diligence.
d. When the owner refuses to pay lawful charges of finder.
5. Mistake or coercion: Section 72 provides that a person to whom money has been paid or anything delivered, by
mistake or under coercion, must repay or return it. Grindlays Bank vs. Centre for Development of lnstructional
Technology, 1997: The plaintiff bank credited an amount of Rs. 79,601.99 to the defendants account by mistake.
The court held the bank was entitled to recover from the defendant.

Remedies/Damages for Breach of Contract

Introduction:
Law provides certain remedies for the breach of contract to the aggrieved party. When there is a breach of contract the
non-guilty party has one or more of the following remedies.
Kinds of remedies:
 1. Suit for specific performance: Sometimes the non-guilty party to the contract prays the Court to compel the
party who has broken the contract to perform the contract specifically. He can insist to perform the contract as
per the terms agreed upon. However, remedy is not available in contract to personal service. Provisions relating
to specific performance are provided under the Specific Relief Act, 1963. Ex: K. M. Madhav Krishnan vs. S.R.
Swami, 1995: The High Court held that the Appellant is entitled to a decree of specific performance.
2. Suit for injunction: Sometimes a party to the contract may apply for injunction restraining the other party from
making breach of contract. It is a preventive relief where compensation would not be an adequate relief. The
court at its discretion grants a temporary injunction for limited period or a perpetual injunction for an indefinite
period. Ex: Lumley vs. Wagner, 1852: Wagner, a singer agreed to sing only at Lumley’s theatre and nowhere else.
Subsequently, then Wagner entered into contract to sing at Z’s theatre and refused to perform the contract with
Lumely. It has been held that Wagner could be restrained by injunction from singing for Z.
3. Suit for damages: Damages means compensation. The aggrieved party is entitled to file a suit for damages,
through the court of law. Damages are not punitive, but compensatory in nature. The object of awarding
damages to the sufferer is to compensate the loss. Generally, no interest is allowed on the amount of damages
arising out of breach of contract. Ex: Hadley vs. Baxendale, 1854: The plaintiff’s mill had been stopped due to the
breakage of a crankshaft. The broken crankshaft was handed over to the defendants, who were common carriers
to be delivered at Greenwich for necessary repairs. The only information given to the carriers was that the article
to be carried was the broken shaft of the plaintiff’s mill. The delivery of crankshaft was delayed due to the
negligence of the defendants. The mill was stopped for a longer time, which resulted in loss to the plaintiff. The
plaintiff filed a suit for damages. It has been held that the defendants were not liable for damages, because the
defendants were not communicated the special circumstances because the mill stopped only due to the
breakage of crankshaft by the plaintiff.
4. Suit for quantum meruit: Quantum meruit means as much as he has earned. It means so much as he deserved, a
reasonable amount. Claims on a quantum meruit may be contractual or quasi contractual. Ex: If A orders from B,
a wine merchant twelve bottles of whisky at certain price B sends ten bottles of whisky and two bottles of
brandy. A accepts them, in such case A must pay a reasonable price for the brandy too.
Kinds of damages:
1. General damages: The compensation awarded to the injured party for the actual loss caused by breach of
contract it is known as ordinary damages or substantial damages.
2. Special damages: Special damages are those which arise on account of the unusual circumstances affecting the
plaintiff. They are not recoverable unless the special circumstances were brought to the knowledge of the
defendant and the plaintiff is suitably compensated.
3. Nominal damages: Nominal damages are granted where breach of contract is committed without any real loss to
the injured party.
4. Exemplary damages: Exemplary Damages is the compensation awarded more than the actual loss suffered. The
object behind awarding exemplary damages is to punish the breacher. Ex: Breach of promise to marry and
wrongful dishonor of a cheque by bank. It is also known as punitive or vindictive or compensatory or retributive
damages.
 5. Liquidated damages: If the amount of damages in the event of breach is pre-determined by parties at the time of
entering into the contract is called liquidated damages.
6. Damages for loss of reputation: Damages for loss of reputation by breach of a contract are not generally
recoverable. Ex: Dishonor of cheque by a bank in case of trade reputation.
Other kinds of damages:
1. Damages for inconvenience and discomfort: The injured party is entitled to receive damages for physical
inconvenience and discomfort. The measure of damages is not affected by the motive or the manner of the
breach.
2. Mitigation of damages: Mitigation means minimize. Section 73 provides that it is the duty of the injured party to
take all reasonable steps to minimize the loss caused by breach.
3. Difficulty of assessment: If the damages are incapable of assessment, the court must do its best to estimate the
loss and a contingency may be taken into account.
4. Cost of decree: The aggrieved party is entitled, in addition to damage, to get the cost of getting the decree for
damages at the discretion of the court.
5. Penalty: A penalty is a sum fixed at the time of entering into contract, which is disproportionate to the damage
likely to arise as a result of the breach. It is fixed up with a view to securing the performance of the contract.

Cases FAQ’s
X issued a pamphlet to pay Rs. 2 lacs to anyone who brings to him his missing son, Y traces the boy and brings him to X.
Can Y claim the reward?
Issue:
Whether the offer by X is valid? Yes
Whether communication of award is necessary? Yes
Is there any communication of award to Y? No
Whether ignorance of offer amount to acceptance? No
Whether Y’s clam for reward is valid? No
Rule:
Section 4 of the Indian Contract Act, 1872: Communication of proposal and its completion.
Application:
This problem is related to communication of proposal and its completion. According to Section 4 of the Indian Contract
Act, 1872 the communication of a proposal is complete when it comes to the knowledge of the person to whom it is
made. Mere ignorance of offer does not amount to acceptance of the same. In the instant problem, though an offer may
be made to the whole world, a contract can arise only by acceptance of the offer. Knowledge of terms of the offer is
essential for acceptance. The facts of the problem are similar to the following case.
Lalman Shukla v. Gauri Dutt, 1913: It has been held that the plaintiff was ignorant of offer of reward, his act of bringing
the boy was not an acceptance. In the present case the claim cannot be regarded as one on the basis of a contract. The
plaintiff was in the service of the defendant. As such servant he was sent to search for the missing boy. There was already
a subsisting obligation on the servant and therefore the performance of the act cannot be regarded as a consideration
for the defendant’s promise. The plaintiff was not entitled to claim the reward.
Powell v. Lee, 1908: It has been held that the Board or any authorized person on its behalf did not communicate the
resolution passed by the Board to Mr. Powell, it has been held that it could not give rise to contract. Therefore, the
Defendants were not liable.
Entores Ltd. v. Miles Far East Corporation, 1955: It has been held that where an offer is made by a method of
instantaneous communication like telex, the contract is only complete when the acceptance is received by the offeror,
and the contract is made at the place where the acceptance is received.
Conclusion:
In the instant problem, Y was ignorant of offer of reward and his act of bringing the boy was not an acceptance.
Therefore, the Y is not entitled to claim the reward.

Minor’s Contract
Issue:
Whether any agreement by minor is valid? No.
Whether any agreement on behalf of the minor is valid? No.
Whether the opposite party can sue for breach of contract? No.

Rule:
Section 11 of the Indian Contract Act, 1872:
A contract of service entered into by either or on behalf of minor is void being without consideration. Every person is
competent to contract who is of the age of majority according to law, sound mind and is not disqualified from
contracting by any law to which he is subject.
Application:
This problem is related to the effects of contracts beneficial to minor and minor’s contract of service. Raj Rani vs. Adib,
1949: The plaintiff, a minor was allotted the role of an actress in a certain film by the defendant, a film producer. The
agreement was made with her father. Subsequently, the role was given to another actress by the defendant and the
agreement with her father was terminated. It has been held that neither the minor nor her father could sue on the
promise.
Mohori Bibee vs. Dharamdas Ghose, 1903: The plaintiff mortgaged his property to a money lender to secure a loan of Rs.
20,000. The minor received Rs. 8000, immediately as part of a loan. Subsequently, the minor filed for a cancellation of
mortgage, stating that he was a minor when he executed the mortgage. It has been held that mortgage by a minor was
void. Therefore, the minor was entitled to cancel the mortgage and is not expected to repay the advance loan of Rs.8000.
Conclusion:
As per Indian law all contracts with minor’s are void.

X and Y are traders. X has private information of change in prices which will affect Y’s willingness to enter the contract. X
keeps silent and enter into contract with Y. Is the contract valid?
Issue:
Whether X owes any duty to inform the change in prices? No
Whether mere silence amounts fraud? No
Whether the contract between X and Y is valid? Yes
Rule:
Section 17 of the Indian Contract Act, 1872: Mere silence as to facts is not fraud.
Section 19 of the Indian Contract Act, 1872: Voidable agreements without free consent.
Fraud means and includes any of the following acts done with intent to deceive or to induce a person to enter into a
contract.
1. The suggestion that a fact is true when it is not true and the person making the suggestion does not believe it to
be true.
2. Active concealment of a fact by a person who has knowledge or belief of the fact.
3. Promise made without any intention of performing it.
4. Any other act filled to deceive.
5. Any such act or omission as the law specially declares to be fraudulent.

Application:
This problem is related to the fraud. Mere silence is not a fraud. There is no duty on the contracting party to disclose
each and everything to the other party. If seller makes a false statement as to the quality of goods, it would be fraud, but
if he merely keeps silence as regards the defects in them, there is no fraud.
According to Section 17 of the Indian Contract Act, 1872 states in clear terms that mere silence is not fraud. Where
silence amounts to active concealment, it shall amount to fraud. According to Section 19 of the Indian Contract Act, 1872
states that a contract made on such consent is voidable at the option of the party whose consent has been so obtained.
Intentional misrepresentation of facts is called fraud.
Imperial Pressing Co. v. British Crown Assurance Corporation, 1914: It has been held that there are special duties of
disclosure in particular class of contracts, but there is no general duty to disclose the facts which are or might be equally
within the knowledge of both the parties.
Derry v. Peek, 1889: The directors of a company stated in the prospectus that they had been authorized by the
Parliament to run trains with steam or mechanical power. The permission to use steam was, in fact, subject to the
approval of the Board of Trade, but it was not mentioned in the prospectus. The directors honestly believed that the
same would be obtained as a matter of course. The Board refused permission and consequently the company was
wound up. In an action by a shareholder against the directors for fraud, it has been held that there was a mere
misrepresentation but no fraud as the statement had been made without any intention to deceive.
Conclusion:
In the instant problem, X has no duty to inform the change in prices. Mere silence on the part of X does not amount
fraud because there is no duty on the contracting party to disclose each and everything to the other party. Hence, the
contract between X and Y is valid.
Ramu made a general offer to the public to sell his car. Somu pretending himself as Kittu accepted the offer and
presented a cheque and left with the car. The cheque received for the price of the car is a fake one. Decide the validity of
offer, if the car is sold to a person who received for consideration.
Issue:
Whether the offer made by A is valid? Yes
Whether act of B amounts to misrepresentation? Yes
Whether B gets good title to the car? No
Whether A has the right to sue for cancellation of contract? Yes
Rule:
Section 18 of the Indian Contract Act, 1872: Misrepresentation.
Application:
This problem is related to misrepresentation. Misrepresentation means a false statement of a fact. When the consent of
a party to a contract has been obtained by misrepresentation, it is not free consent and the contract is voidable at the
option of the party. In such case rescission of the contract is the common remedy available. When the consent of a party
to the contract has been obtained by coercion, misrepresentation, fraud or undue influence, rescission of the contract is
the common remedy available. Representation may be made wrongly either innocently or intentionally. If the
representation is made innocently it is known as misrepresentation, and if the representation is made intentionally it is
known as fraud.
Car & Universal Finance v. Caldwell, 1965: Caldwell sold his car to Norris. The cheque was dishonoured when it was
presented the next day. He immediately informed the police and the Automobile Association of the fraudulent
transaction. Subsequently Norris sold the car to X, who sold it to Y, who sold it to Z, who sold it to the plaintiffs. In
interpleader proceedings one of the issues to be tried was whether the defendant's conduct and representations
amounted to a rescission of the contract of sale. It has been held that the contract was voidable because of the
fraudulent misrepresentation and the owner had done everything he could in the circumstances to avoid the contract. As
it had been avoided before the sale to the third party, no title was passed to them and the owner could reclaim the car.
Royscott Trust Ltd v. Rogerson, 1991: A car dealer induced a finance company to enter into a hire purchase agreement by
mistakenly misrepresenting the amount of the deposit paid by the customer, who later defaulted and sold the car to a
third party. The finance company sued the car dealer for innocent misrepresentation and claimed damages. The dealer
was liable for all the losses suffered by the finance company even if those losses were unforeseeable, provided that they
were not otherwise too remote. The Court of Appeal held that the dealer was liable to the finance company under
Section 2(1) for the balance due under the agreement plus interest on the ground that the plain words of Subsection
required the Court to apply the deceit rule. Dealer was liable for all the losses suffered by the finance company even if
those losses were unforeseeable, provided that they were not otherwise too remote.
Conclusion:
In the instant problem B will not get good title to the car because of misrepresentation and the ownership remains with
A. A has the right to sue for cancellation of the contract under the Specific Relief Act, 1963.
A borrowed Rupees from B for starting a gambling house. Afterwards he refused to return the money. What is the
remedy available to B? Decide.
Issue:
Whether borrowing money for gambling purpose is valid? No
Whether the contract between A and B is enforceable? No
Whether B is entitled to recover money from A? No
Rule:
Ex turpi cause non-oritur actio which means from an evil cause, no action arises. According to Section 23 of the Indian
Contract Act 1872, the consideration or object has been considered as unlawful in the following cases:
1. If it is forbidden by law.
2. It would defeat the provision of law.
3. It is fraudulent.
4. It involves or implies injury to another's person or property.
5. The Court regards it as immoral.
6. The Court regards it as opposed to public policy.

Application:
This problem is related to the illegal agreement. All illegal agreements are void. No action can be brought by a party to an
illegal agreement. The maxim is Ex turpi cause non-oritur actio means from an evil cause, no action arises. Where the
object of an agreement is forbidden by law such agreement is void. An agreement to do an act, which is forbidden by
law, cannot be enforced. e.g. A agrees to pay 50,000 Rupees to B if B kills C. It is the general rule that the object of the
contract must be lawful. It must not be immoral or illegal or opposed to public policy. An agreement with lawful object is
valid but an agreement with unlawful object is not valid. According to Section 23, an agreement is void, when it is
forbidden by law or defeat any provision of law or fraudulent or immoral or opposed to the public policy, or causing
injury to person or property of another. e.g. An agreement to supply rice to terrorist organization is unlawful, because
the object of terrorists is illegal.
M/s. Pratapchand Nopaji v. M/s. Kotrike Venkatta Setty, 1975: It has been held that if one contract is void as being
forbidden by law, every ancillary or collateral agreement which are would also be invalid.
Haseen Bano v. Syed Habeed Sayeedudin, 1997: A money lender carrying on money lending business without
registration and licence under any moneylenders Act has be held to be forbidden by law and therefore void.
Conclusion:
In the instant problem, borrowing money for gambling purpose is illegal. The contract between A and B is not
enforceable. B is not entitled to recover money from A because B had the knowledge of the illegal purpose. Hence, B
cannot recover money from A.

Raghu told Raju that he would give Rs. 10,000 if it rains tomorrow. Raju told to Raghu that he would give Rs. 10,000 if it
does not rain. The next day it rained. Raju demanded money and Raghu refused. Decide. Explain the reasons with
principles.
Issue:
Whether the agreement between Raghu and Raju is valid? No
Whether the agreement amounts wagering contract? Yes
Can Raju recover the amount from the Court of law? No
Rule:
Section 30 of the Indian Contract Act, 1872: All wager agreements are void.
Section 35 of the Indian Contract Act, 1872:
1. The happening of the specified uncertain event within fixed time.
2. The non-happening of the specified uncertain event within fixed time.
Application:
This problem is related to the wager agreements.
According to Section 30 of the Indian Contract Act, 1872: All wager agreements are void.
A wager is generally made on a future event. Each party stands equally either to win or lose the bet. It is a mutual
agreement.

According to Section 35 of the Indian Contract Act, 1872: Contingent contracts.

1. The happening of the specified uncertain event within fixed time becomes void if at the expiration of the time
fixed such event has not happened or if before the time fixed, such event becomes impossible. e.g. A promises to
pay B a sum of money if a certain ship returns within a year. The contract may be enforced if the ship returns
within the year and becomes void if the ship is burnt within the year.
2. The non-happening of the specified uncertain event within fixed time may be enforced by law when the time
fixed has expired and such event has not happened or before the time fixed, such event becomes impossible.
e.g. A promises to pay B a sum of money if a certain ship does not return within a year. The contract may be
enforced if the ship does not return within the year or is burnt within the year.
Carliil v. Carbolic Smoke Ball Co, 1892: One of the parties may win or lose and this is dependent on the completion of the
specified uncertain event.
Jethamal v. Nevatia, 1962: It has been held that both the parties may win but cannot lose, or may lose but cannot win, it
is not a wagering contract.
Subhash Kumar Manwani v. State of Madhya Pradesh, 2000: Law discourages people to enter into games of chance and
make earning by trying their luck instead of spending their time, energy and labour for more fruitful and useful work for
themselves, their family and the society.
Conclusion:
In the instant problem, the contract between Raghu and Raju is void and therefore, Raju cannot recover the amount
through the court of law.

Somu, a bachelor agrees to marry a spinster B after death of his father C, but before C's death, Somu married a person
other than B. B insisted Somu for the marriage or for damages. Decide.
Issue:
Whether the contract between Somu and B is valid? Yes
Whether Somu breached the contract before contingency? Yes
Whether B is entitled to claim damages from Somu? Yes
Rule:
When the performance of a contract is conditional upon the happening of a contingency, an immediate action for
damage will lie for the breach of such contract. Section 39 of the Indian Contract Act, 1872: Effect of refusal of party to
perform promise wholly: When a party to a contract has refused to perform, or disabled himself from performing, his
promise in its entirety, the promisee may put an end to the contract, unless he has signified, by words or conduct, his
acquiescence in its continuance.
Application:
This problem is related to the anticipatory breach of a contingent contract. If a party declares his intention of non-
performance of the contract before the performance is due is called anticipatory breach of contract. A breach of contract
may take place before the time actually fixed for the performance called anticipatory breach of contract. When the
performance of a contract is conditional upon the happening of a contingency, an action for damage will lie for the
breach of contract.
Illustrations:
a) A, a singer, enters into a contract with B, the manager of a theatre, to sing at his theatre two nights in every week
during next two months, and B engages to pay her 100 Rupees for each night's performance. On the sixth night A wilfully
absents herself from the theatre. B is at liberty to put an end to the contract.
b) A, a singer, enters into a contract with B, the manager of a theatre, to sing at his theatre two nights in every week
during next two months, and B engages to pay her at the rate of 100 Rupees for each night. On the sixth night A wilfully
absents herself. With the assent of B, A sings on the seventh night. B has signified his acquiescence in the continuance of
the contract, and cannot now put an end to it, but is entitled to compensation for the damage by A's failure to sing on
the sixth night.
Frost v. Knight, 1872: The defendant promised to marry the plaintiff on the death of his father. While the defendant's
father was still alive, he broke his promise. It has been held that she was entitled to claim compensation, as it was an
anticipatory breach of contract.
Conclusion:
In the instant problem, originally the contract between Somu and B is valid. Somu breached the contract before the
contingency happened. B is entitled to claim damages from Somu for loss suffered because Somu breached the contract
before the contingency happened. Hence, B is entitled to claim damages from Somu for loss suffered by her.

A, B and C jointly promise to pay D 5,000 Rupees. A and B are not traceable. Can D compel C to pay him in full? Decide.
Issue:
Whether the joint promises made by A, B and C is valid? Yes
Can D compel C to pay him in full? Yes
Rule:
Section 43 of the Indian Contract Act, 1872.
The liability of the joint promisors is joint and several: When two or more persons make a joint promise, the promisee
may, in the absence of express agreements to the contrary, compel anyone or more of such joint promisors to perform
the whole promise. Each of two or more joint promisors may compel every other joint promisor to contribute equally
with himself to the performance of the promise, unless a contrary intention appears from the contract.
Explanation:
Nothing in this Section shall prevent a surety from recovering, from his principal, payments made by the surety on behalf
of the principal, or entitle the principal to recover anything from the surety on account of payments made by the
principal.
Illustration:
a) A, B and C jointly promise to pay D 3,000 rupees. D may compel either A or B or C to pay him 3,000 rupees.
Application:
This problem is related to the liability of the joint promissors. The liability of the joint promisors is joint and several.
Section 43 of the Indian Contract Act, 1872 provides that when two or more persons make a joint promise, promisee
may, in the absence of express agreement to the contrary, compel any one or more of such joint promisors to perform
the whole of the promise.
Sharing of loss by default in contribution:
If any one of two or more joint promisors make default in such contribution, the remaining joint promisors must bear the
loss arising from such default in equal shares.
Rama Shanker Singh v. Shyamala Devi, 1970: It has been held that when two or more persons jointly take a lease, their
liability to pay the rent is joint and several as per Section 43. When an action has been brought against a number of joint
promisors, the decree should be against them all.
Conclusion:
In the instant problem, the joint promises made by A, B and C is valid. D may compel C to pay him in full because their
liability is joint and several. Thus, when two or more persons make a joint promise, the promisee may, in the absence of
express agreements to the contrary, compel any one or more of such joint promisors to perform the whole promise.

Rajendra, a violinist entered into contract to render a programme in the theatre belonging to Kesav. Afterwards Rajendra
met with an accident and was not able to perform the programme. Is there any remedy to Kesav? Explain the principles.
Issue:
Whether the contract between Rajendra and Kesav is valid? Yes
Whether Rajendra is to render programme after accident? No
Whether Kesav is entitled to enforce contract against Rajendra? No
Rule:
Section 56 of the Indian Contract Act, 1872. Doctrine of frustration: An agreement to do an impossible act is void.
Application:
This problem is related to an agreement to do an impossible act. According to Section 56 of the Indian Contract Act,
1872, an agreement to do an act impossible in itself is void. A contract to do an act which, after the contract is made,
becomes impossible or by reason of some event which the promisor could not prevent becomes void and the act
becomes impossible or unlawful.
Essential ingredients of frustration:
1. There must be a valid and subsisting contract.
2. There must be some part of incomplete contract.
3. Subsequently it must become impossible to perform.
A contract, in the beginning was capable of being performed, or lawful may subsequently become impossible to perform
or becomes unlawful. Such impossibility is called as subsequent impossibility or post contractual impossibility or
supervening impossibility.
Taylor v. Caldwell, 1863: It has been observed that in contracts in which the performance depends on the continued
existence of a given person or thing, a condition is implied that the impossibility arising from the perishing of the person
or thing shall excuse performance.
Robinson v. Davison, 1871: A singer agreed to perform at a concert for certain price. Before she could do so, she fell
seriously sick. It has been held that she was discharged due to illness. Hence, the singer was not liable.
Howell v. Coupland, 1876: The defendant contracted to sell a specified quantity of potatoes to be grown on his farm, but
failed to supply them as the crop was destroyed by a disease. Neither party liable if the performance becomes
impossible.
Krell v. Henry, 1903: The coronation procession was cancelled due to the illness of the king, the defendant refused to pay
the balance. It has been held that both the parties knew the real object of the contract i.e. to have a view of the
coronation procession. The object of contract was frustrated by nonhappening of the coronation and hence, the plaintiff
was not entitled to recover the balance of rent.
Sushila Devi. V. Hari Singh, 1971: It was observed that the impossibility contemplated by Section 56 of the India Contract
Act,1872 is not confined to something which is not humanely possible. As it was a case of lease of property, which after
the unfortunate partition, the property in dispute which was situated in Gujranwala, went onto the side of Pakistan,
hence, making the terms of the agreement impossible.
Conclusion:
The agreement between Rajendra, the violinist and Kesav becomes void and cannot be enforced because of supervening
impossibility. Rajendra need not to render a programme in the theatre belonging to Kesav. Hence, Kesav has no remedy
against Rajendra.

A contracts to pay a sum of money to B on a specific day. A does not pay the amount on that day, as a consequence of
non-payment. B is totally ruined. Advice the remedies available to B.
Issue:
Whether the contract between A and B is valid? Yes
Whether the act of A amounts to breach of contract? Yes
Whether B is entitled to any remedy against A? Yes
Rule:
Section 73 of the Indian Contract Act, 1872: Compensation of loss or damage caused by breach of contract.
Application:
This problem is related to the compensation or loss or damage caused by breach of contract. According to Section 73,
when a contract has been broken, the party who suffers by such breach is entitled to receive, form the party who has
broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual
course of things from such breach, or which the parties knew, when they made the contract, to be likely to result from
the breach of it. Thus, when an obligation resembling those created by contract has been incurred and has not been
discharged, any person injured by the failure to discharge it is entitled to receive the same compensation from the party
in default.
Illustration:
Section 73 of the Indian Contract Act, 1872 provides that A contracts to pay a sum of money to B on a day specified. A
does not pay the money on that day. B, in consequence of not receiving the money on that day, is unable to pay his
debts, and is totally ruined. A is not liable to make good to B anything except the principal sum he contracted to pay,
together with interest up to, the day of payment.
Adhunik Steel v. Orissa Manganese and Minerals, 2007: It has been pointed out that the proper remedy against a
defendant, who acts in breach of his obligation under a contract, is either damages or specific relief. Thus, the two
principal varieties of specific relief are decree of specific performance and injunction.
Conclusion:
In the instant problem, as per Section 73 of the Act, A is not liable to make good to B anything except the principal sum
he has contracted to pay, together with interest upto the day of payment. Thus, when there is breach of contract, B has
one or more remedies such as a) Suit for specific performance, b) Suit for injunction, c) Suit for damages, d) Suit for
quantum meruit and e) Rescission of contract.