Download - Indian Contracts Act Ppt 2
Capacity of stranger to consideration
A Stranger to consideration can maintain suit
Quasi Contracts
When the obligations arising from transaction are such that can not be said as contractual but are still recognized and enforced like contracts, such transactions are called quasi contracts
Quasi Contracts
Example of Quasi Contract
Mr A, a grocery store manager, suppliedgrocery items to Mr B by mistake. However, he had a contract to supply it to Mr C. Mr B receives the goods and consumes it, here even if there is no contract between A and B, B will have to pay the price of the goods consumed on the basis of “Quasi Contract between him and Mr A
Quasi Contracts
Cases which are treated as Quasi Contracts
Claims for necessities supplied to a person, incapable of contracting
The goods must be necessities
Only the property of the incapable person is liable to pay
Quasi Contracts
Cases which are treated as Quasi Contracts (contd..)
Reimbursement to a person paying money due by another, of which he is interested The person making payment should have a
commercial interest It should not be voluntary Payment must have been made to third party
Quasi Contracts
Cases which are treated as Quasi Contracts (contd..)
Obligation of a person enjoying benefits of a non-gratuitous act The thing must be done lawfully Intention must be non-gratuitous The other person must have enjoyed the
benefits
Quasi Contracts
Cases which are treated as Quasi Contracts (contd..)
Responsibility of a finder of goods Finder of goods must take care of it as
any person with ordinary prudence will do.
Quasi Contracts
Cases which are treated as Quasi Contracts (contd..)
Liability of a person to whom money is paid, or thing delivered by mistake or coercion
Quasi Contracts
Cases which are treated as Quasi Contracts (contd..)
That is it!!!!!!
Performance of Contract
Meaning:-Performance of contract means carrying out of obligations under it. The parties to the contract should either perform or offer to perform their respective promises unless such performance is dispensed by the provisions of any Indian Law
Performance of Contract
Offer to perform
It may happen that the promisor offers performance under contract at proper time, place, this is called “tender” or offer to perform. If a valid tender is made and is not
accepted by the promisee, the promisor will not be liable for non performance
Performance of Contract
Who must perform the promise
Promisor or legal representative of promisor
In case where intention of the contract is to have performance by the promisor himself, than only promisor should perform
Performance of Contract
Who must perform the promise
If the promisor dies before the performance, his legal representative should perform
In case where intention is to have performance by promisor only, then on his death, the contract comes to an end.
Performance of Contract
Performance of joint promises
Assignment of joint promises All promisors jointly have to perform In case of any promisor’s death, his legal
representative will have to perform In case of death of all promisors, all
legal representative will have to perform
Performance of Contract
Performance of joint promises
Liability of Joint promisors The promisee can compel anyone or
more promisor to perform the whole contract
Performance of Contract
Performance of joint promises
Right to contribution amongst the promisors If the promisee has compelled any one
promisor or more promisor to perform the whole contract, they can recover the appropriate contribution from the remaining promisors
Performance of Contract
Contracts need not be performed
The parties may mutually agree to substitute the original contract by a new one or rescind it or alter it
The promisee may dispense with or remit, wholly or in part the performance made to him
Voidable contacts The promisee neglects or refuses to afford
the promisor reasonable facilities to perform
Performance of Contract
Rules regarding time, place and manner of performance
Where time is specified The promisor must perform it on the day
fixed during the usual business hours
Where time is not specified The promisor must perform in
reasonable timePerformance of Contract
Appropriation of payments Appropriation by debtor (s 59)
Where either express or implied intimation is given by debtor, then it must be appropriated to that particular debt
Appropriation by creditor (s 60) Where the debtor has omitted to intimate and
there are no other circumstances indicating to which debt payment is made, creditor may appropriate it to his discretion
Performance of Contract
Appropriation of payments
Where neither party appropriates (s 61) Where neither party makes any
appropriation, the payment is to be applied in discharge of the debts in order of time. If the debts are of equal standing, the payments is applied proportionately.
Performance of Contract
Discharge of Contracts
Performance Tender Mutual Consent Subsequent impossibility Operation of Law Breach
Discharge of Contracts
Discharge via performance or tender
Where both the parties have performed their obligations, the contract is discharged
Where the promisor has offered for performance, but promisee has neglected it, the promisor can get discharge from his obligations
Discharge of Contracts
Discharge via mutual consent
Novation Substitution of a new contract for the
original one
Recission Cancellation of all or some of the terms
of contract
Alteration Changing of some or all terms of
contract
Discharge via mutual consent Remission
It is the acceptance of lesser sum or fulfillment than what was contracted for.
Waiver Where a party waives his rights under the
contract, the other party is released from his obligations
Merger Where an inferior right of a person coincides
with a superior right of himself, the original contract is discharged
Discharge via subsequent impossibility
Destruction of the subject matter of contract
Death of the parties Subsequent illegality Declaration of war Non existence or non occurrence of a
state of thingsDischarge of Contracts
Exceptions to subsequent impossibility
Difficulty of performance Commercial impossibility Non performance or failure to
perform by a third party Strikes, lockouts and civil
disturbances Failure of one of the object
Discharge of Contracts
Discharge Via Operation of Law
All voidable contracts can be discharged with appropriate law application
Insolvency of any of the party to contract can discharge the contract
Unauthorized alteration of terms and conditions of a contract can discharge the contract
Discharge of Contracts
Discharge Via Breach
A breach of contract is one party’s failure without a legal excuse, to live up to any of its promises under a contract.
Breach of contract may arise through Anticipatory Breach Actual Breach
Discharge of Contracts (Breach)
Anticipatory Breach of Contract
The anticipatory breach of contract occurs when a party repudiates it before the time fixed for performance has arrived or when party by his own act disables himself from performing the contract
Discharge of Contracts (Breach)
Consequences of anticipatory breach
The other party can rescind the contract as treat the contract as at an end, and at once sue for damages
He may elect not to rescind but to treat the contract operative and wait for the time of performance and then hold the other party liable for the consequences of non-performance
Discharge of Contracts (Breach)
Case Study
A and B entered into a contract, where by A promised to load a cargo containing medicines into a ship on a particular date. Before that date, A refused to perform his duty. B did not rescind the contract but continued to demand A to perform his obligation. In a meanwhile, by operation of a law, export of such medicines were declared illegal and hence the contract was discharged
Discharge of Contracts (Breach)
Case Study
Can B sue A for damages on the grounds of Anticipatory breach of contract or not?
Discharge of Contracts (Breach)
The anticipatory breach of contract does not by itself discharges the contract. The contract is discharged only when the aggrieved party accepts the repudiation of the contract.
If the repudiation is not accepted and subsequently an event happens, rendering discharge, the party cannot claim for damages
Discharge of Contracts (Breach)
Actual Breach of Contracts
Failure to perform as promised Failure to perform means that one party
must not have performed a material part of the contract. At the time when performance is due During the performance
Making it impossible for the other party to perform
Discharge of Contracts (Breach)
Remedies for Breach of Contracts
The Indian Contracts Act provides basically two remedies for a breach
• Rescission of the contract• Damages for the loss sustained
Discharge of Contracts (Breach)
Rescission of the contract
In such case the aggrieved party is freed from all his obligations under the contract.
Discharge of Contracts (Breach)
Damages (s 75)
Compensation as general damages will be awarded only for those losses that directly result from the breach
Compensation for losses indirectly caused by breach may be paid as special damages if the party making the breach had knowledge that such losses will follow the breach
Discharge of Contracts (Breach)
Damages (s75) contd..
The aggrieved party is required to take reasonable steps to keep his losses to minimum He cannot claim to be compensated by
the party in default for loss which is really not due to the breach but due to his own neglect to minimize loss after the breach
Discharge of Contracts (Breach)
Types of damages
Ordinary These damages are those which naturally
arise in the usual course of things from such breach. The measure of ordinary damages is the difference between the contract price and the market price at the date of breach.
Ordinary damages cannot be claimed for any remote or indirect loss caused by the breach
Discharge of Contracts (Breach)
Types of damages
Special damages When certain special or extraordinary
circumstances present and their existence is communicated to the promisor, the non-performance of the promise entitles the promisor to recover ordinary damages but also to the losses of these special circumstances
Discharge of Contracts (Breach)
Types of damages
Vindictive or punitive damages These damages are not just awarded to
compensate the person who has suffered from breach but also to punish the person who has breached the contract.
Applicable to the severity of the shock to the sentiments of the promisee
Discharge of Contracts (Breach)
Types of damages
Nominal damages These are awarded in cases of breach of
contract where there is only technical violation of the legal right but no substantial loss is caused.
Discharge of Contracts (Breach)