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INDIAN CONTRACT ACT,

1871

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CONTRACT

Contracts –

Contract sec2(h)- An agreement enforceable

by law is a contract.

Agreement sec 2(b)- Every promise and every

set of promise forming the consideration for

each other.

Promise – an accepted proposal. Proposal – A proposal when accepted becomes

a promise.

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AGREEMENT

All agreements are contracts if they are made by the free consent of parties competent to

contract, for a lawful consideration and with a

lawful obect, and are not hereby e!pressly

declared to be void.

"onditions of valid contract-

#) "onsideration

2) $arties competent to contract %) &ree consent

') bect lawful

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ESSENTIAL ELEMENTS OF A

VALID CONTRACT

1. Proposal & Acceptance.

2. Consideration.

3. Capacity of parties to contract.

4. Free Consent.5. Agreement should not be epressly declared

!oid.

". #riting & $egistration% if so reuired by la'.

(. )egal $elationship.

*. Certainty.

+. Possibility of Performance.

1,. -nforceable by la'.

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PROPOSAL

Proposal #hen one person signi/es toanother his 'illingness to do or to abstainfrom doing anything% 'ith a !ie' to obtainingthe assent of that other to such act orabstinence% he is said to ma0e a proposal.

An oer 'hich is epressed by conduct is calledan implied oer and the one 'hich is epressedby 'ords 'ritten or spo0en% is called an epressoer.

Promises are also epress or implied. Case pton $ural istrict Council !. Po'ell

Communication of proposal is complete'hen it comes to the 0no'ledge of person

to 'hom it is made. )alman !. auri utt

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IMPLIED

OFFER

EXPRESS

OFFER

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INTENTION TO MAKE CONTRACT

-nglish la' to create a contract there must bea common intention of the parties to enter intoa legal obligation. o pro!ision in the 6CA.

Case 7alfour !. 7alfour

6ntention of parties is naturally to beascertained from the terms of the agreementand surrounding circumstances.

#hat matters is not 'hat the parties had inmind % but 'hat a reasonable person 'ould

thin0% in the circumstances% their intention tobe.

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OFFER AND INVITATION eneral oer an oer can be made to 'orld at

large.

Case Carlill v. Carbolic Smoke Ball Co.

Invitation to ofer #here a party% 'ithout

epressing his /nal 'illingness% proposes

certain terms on 'hich he is 'illing tonegotiate% he does not ma0e an oer% but onlyin!ites the other party to ma0e an oer onthose terms.

Case Harvey v. Facey 8hop0eeper9s catalogue of prices is only an

in!itation to oer.

Announcement of auctions.

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ESSENTIALS OF PROPOSAL

1. :er must be such as in la' capableof being accepted and gi!ing rise tolegal relationship.

2. ;erms of oer must be de/nite%unambiguous and certain.

3. An oer may be distinguished from<

a= A declaration of intention and an

announcement.b= An in!itation to ma0e an oer or do

business.

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CONTINUED

4. :er must be communicated.

)alman utta >. auri 8hu0la

5. :er must be made 'ith a !ie' of

getting assent.". A statement of price is not an oer.

?ar!ey >. Facey

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ACCEPTANCE

#hen one person to 'hom the proposalis made signi/es his assent thereto% theproposal is said to be accepted.

Proposal 'hen accepted becomespromise.

;he person ma0ing the proposal iscalled the Promisor and person

accepting the proposal becomesPromisee.

Case- Brogden v.Metropolitan RailwayCo.

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.

ESSENTIALS OF ACCEPTANCE

1. Acceptance must be absolute and unuali/ed.

2. 6t must be epressed in some usual &reasonable manner.

3. @ental Acceptance is not sucient in )a'.

4. Acceptance must be communicated to theoeror.

5. Acceptance must be by a certain person.

". Acceptance must be gi!en 'ithin a reasonable

time.Case Adam v. indsell

(. Acceptance must be gi!en before the oerlapses or is re!o0ed or is 'ithdra'n.

*.Acceptance of proposal is acceptance of allterms.

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COMMUNICATION OF AN ACCEPTANCE

;he communication of an acceptance iscomplete%

as against the proposer% 'hen it is put in acourse of transmission to him% so as to beout of the po'er of the acceptorB

as against the acceptor% 'hen it comes tothe% 0no'ledge% of the proposer.

Eg : 7 accepts As proposal by a letter sentby post. ;he communication of theacceptance is complete% as against A 'henthe letter is posted as against 7% 'hen theletter is recei!ed by A.

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REVOCATION OF PROPOSALS

AND ACCEPTANCES

Revocation of proposals and acceptances.

A proposal may be revoed at any time before thecommunication of its acceptance is complete as againstthe proposer, but not afterwards.

An acceptance may be revoed at any time before the communication of the acceptance is

complete as against the acceptor, but not afterwards

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REVOCATION HOW MADE

7y the communication of notice of re!ocationby the proposer to the other partyB

7y the lapse of time prescribed in such proposalfor its acceptance or% if no time is so prescribed%

by the lapse of a reasonable time% 'ithoutcommunication of the acceptanceB

7y the failure of the acceptor to ful/ll acondition precedent to acceptanceB or

7y the death or insanity of the proposer% if thefact or death comes to the 0no'ledge of theacceptor before acceptance.

Case Hent!orn v. Fraser

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REVOCATION OF ACCEPTANCE

6n -nglish )a' acceptance once made isirre!ocable% applies to postal acceptance.

6n 6ndian )a'% acceptance is generallyre!ocable.

?ence the communication of re!ocation mustreach earlier than the acceptance.

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CONSIDERATION An agreement 'ithout consideration is !oid%

8ec25 6CA.

8ec 2Ed= #hen a the desire of thepromisor% the promisee or any other personhas done or abstained from doing or does

or abstains from doing% or promises to do orto abstain from doing% something% such actor abstinence or promise is called aconsideration for the promise.G

A= at the desire of the of the promisorH Case la' "#rga Prasad v. Baldeo

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CONSIDERATION Pri!ity of contract promisee or any other

person.

"#tton v. Poole

$weddle v. Atkinson

"#nlop Pne#matic $yre Co. v. Sel%ridge &Co.

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EXCEPTIONS TO PRIVITY OF CONTRACT

1=7ene/ciaries under ;rust or Charge or otherarrangements.

'!wa(a M#!ammad '!an v. H#ssaini Beg#m

)regory and Parker v. *illiams

2= @arriage settlement% partition or other familyarrangements.

"aropati v. +aspat Rai

3=Ac0no'ledgement by estoppel

"evara(a ,rs v. Ram 'ris!naia!

Co!enants running 'ith land

Smit! & Snipes Hall Farm td v. River "o#glasCatc!ment Board

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PAST CONSIDERATION

Past consideration is no consideration.

-ceptions

1= Past !oluntary ser!ice

2= Past ser!ice at reuest

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EXCEPTIONS TO CONSIDERATION 8ec 25

1= atural lo!e and aection

2= Past !oluntary ser!ice

3= ;ime barred debt

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CAPACITY OF PARTIES TO

CONTRACT

An agreement becomes a contract if it isentered bet'een the parties 'ho arecompetent to Contract.

8ec. 11 -!ery person is Competent tocontract

1. #ho is of the age of maIority according

to the la'.2. #ho is of sound mind.

3. #ho is not disuali/ed by any la'.

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Capacity of parties

isuali/edPersons

Persons of nsound@ind

@inor

6ntoicate

d Persons

run0ard

s

)unatics or

6nsanePersons6diots

Corporations

6nsol!ent

@arried

#ome

n

Con!icts

Foreign8o!ereigns

&

Ambassadors

Allien-nemie

s

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CAPACITY TO CONTRACT @inor Esec.11=

A. Agreement void-ab-initio . Mo!oribibi v. "!armodas )!os!

7. @inor may be a Promisee or 7ene/ciary

. S!ara% Ali v. oor Mo!d.

C. A minor can al'ays plead minority

. eslie v. S!eill

. o $ati/cation

. Arm#gan v. "#raisinga

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Contract 'ith @inor9s uardian

@inor as an Agent

@inor a partner

8urety for a minor 6nsol!ency

Position of @inor9s Parents.

8ec "4 and "5 do not applyE!oidagreement=

@inor as a 8hareholder of a company

-mploymentJ8er!ice Agreement for

@inor

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-ect of minor9s agreement<

1=o estoppel against minor. 2= o liability in contract or tort arising out

of contract.

3= octrine of restitution.

eslie v. S!eill

'!an )#l v. ak!a Sing!

)iability for necessaries Esec. "*=

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CAPACITY TO CONTRACT

nsound mind

-nglish la' C:;$AC; 68 >:6A7)- 6ndian la' E8-C. 12= C:;$AC; 68

>:6 nder Sing! v. Parmes!wari Sing!

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28

FREE CONSENT

"Free onsent! #e$ 1%& ' Consent issai( to )e *ree +en it is not a-se(). /

1= coercion%

2= undue inKuence

3= fraud%

4= misrepresentation%

5= mista0e. Consent is said to be so caused 'hen it

'ould not ha!e been gi!en but for theeistence of such coercion% undueinKuence% fraud% misrepresentation ormista0e.

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COERCION

8ec. 15 Coercion is the committing% orthreatening to commit% any act forbiddenby the 6ndian Penal Code% or the unla'fuldetaining% or threatening to detain% anyproperty% to the preIudice of any person

'hate!er% 'ith the intention of causingany person to enter into an agreement.

-g A% on board an -nglish ship on the highseas% causes 7 to enter into anagreement by an act amounting tocriminal intimidation under the 6ndianPenal Code.

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COERCION ;echniues

1= committing or threatening to commitany act forbidden by the 6PCB or

2= unla'fully detaining or threatening to

detain any property. Aksari Mir/a v. Bibi +ai 'is!ore

C!ikam Amira(# v. C!ikam Ses!amma

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33

UNDUE INFLUENCE

Sec. 16- A contract is said to be induced by

Lundue inKuenceG 'here the relationssubsisting bet'een the parties are suchthat one of the parties is in a position todominate the 'ill of the other and uses

that position to obtain an unfairad!antage o!er the other.

-g A had gi!en ad!ance money to his son 7during his minority% upon 7s coming ofage obtains% by misuse of parental

inKuence% a bond from 7 for a greateramount than the sum due in respect ofthe ad!ance. ?ere A employs undueinKuence.

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CONTINUED 6llustrations

Eb= A% a man enfeebled by disease or age% is induced%by 7s inKuence o!er him as his medical attendant%to agree to pay 7 an unreasonable sum for hisprofessional ser!ices. 7 employs undue inKuence.

Ec= A% being in debt to 7% the moneylender of his

!illage% contracts a fresh loan on terms 'hich appearto be unconscionable. 6t lies on 7 to pro!e that thecontract 'as not induced by undue inKuence.

Ed= A applies to a ban0er for a loan at a time 'henthere is stringency in the money mar0et. ;he ban0er

declines to ma0e the loan ecept at an unusuallyhigh rate of interest. A accepts the loan on theseterms. ;his is a transaction in the ordinary course ofbusiness% and the contract is not induced by undueinKuence.

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UNDUE INFLUENCE *illiams v. Bailey

$eal or apparent authority

Fiduciary relation

@ental distress

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37

FRAUD

8ec. 1( LFraudL means and includes anyof the follo'ing acts committed by a partyto a contract% or 'ith his conni!ance% or by

his agent% 'ith intent to decei!e anotherparty thereto of his agent% or to inducehim to enter into the contract M

1= the suggestion% as a fact% of that 'hichis not true% by one 'ho does not belie!e itto be trueB

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38

CONTINUED

2= ;he acti!e concealment of a fact byone

ha!ing 0no'ledge or belief of the fact.

3= A promise made 'ithout any intentionof performing.

4= Any other act /tted to decei!eB

5= Any such act or omission as the la'

specially declares to be fraudulent.

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CONTINUED 6llustrations Ea= A sells% by auction% to 7% a horse

'hich A 0no's to be unsound. A says nothing to 7about the horses unsoundness. ;his is not fraud inA.

Eb= 7 is As daughter and has Iust come of age.?ere% the relation bet'een the parties 'ould ma0e

it As duty to tell 7 if the horse% is unsound. Ec= 7 says to A L6f you do not deny it% 6 shall

assume that the horse is sound.L A says nothing.?ere% As silence is eui!alent to speech.

Ed= A and 7% being traders% enter upon a contract. Ahas pri!ate information of a change in prices 'hich'ould aect 7s 'illingness to proceed 'ith thecontract. A is not bound to inform 7.

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CONTINUED Acti!e concealment

@ere silence no fraud

1= duty to spea0

2= 'here silence is decepti!e

3= change of circumstances

4= half truths

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42

MISREPRESENTATION

8ec.1*L@isrepresentationL means andincludes M

1= the positi!e assertion% in a manner not'arranted by the information of the person

ma0ing it% of that 'hich is not true% thoughhe belie!es it to be true.

2= any breach of duty 'hich% 'ithout anintent to decei!e% gains an ad!antage to

the person committing it% or any oneclaiming under him% by misleading anotherto his preIudice or to the preIudice of anyone claiming under him.

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43

CONTINUED…3= causing% ho'e!er innocently% a party to an

agreement to ma0e a mista0e as to thesubstance of the thing 'hich is the subIect ofthe agreement.

;ypes1= n'arranted statements 7ombay Case

2= 7reach of duty

3= 6nducing mista0e about subIect matter

8uppression of !ital facts of material facts

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0OIDAI2IT3 OF A4REE5ENT#

1+ >oidability of agreements 'ithout free consent M #hen

consent to an agreement is caused by coercion% fraud ormisrepresentation% the agreement is a contract !oidable atthe option of the party 'hose consent 'as so caused. Aparty to a contract 'hose consent 'as caused by fraud ormisrepresentation% may% if he thin0s /t% insist that thecontract hall be performed and that he shall be put in the

position in 'hich he 'ould ha!e been if the representationsmade had been true.

-ception. 6f such consent 'as caused bymisrepresentation or by silence% fraudulent 'ithin themeaning of section 1(% the contract% ne!ertheless is not

!oidable% if the party 'hose consent 'as so caused had themeans of disco!ering the truth 'ith ordinary diligence.-planation. A fraud or misrepresentation 'hich did notcause the consent to a contract of the party on 'hom suchfraud 'as practiced% or to 'hom such misrepresentation'as made% does not render a contract !oidable.

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CONTINUED 6llustrations Ea= A% intending to decei!e 7% falsely

represents that /!e hundred mounds of indigo are made

annually at As factory% and thereby induces 7 to buy thefactory. ;he contract is !oidable at the option of 7. Eb=A% by a misrepresentation% leads 7 erroneously to belie!ethat% /!e hundred mounds of indigo are made annually atAs factory. 7 eamines the accounts of the factory% 'hichsho' that only four hundred mounds of indigo ha!e been

made. After this 7 buys the factory. ;he contract is not!oidable on account of As misrepresentation. Ec= Afraudulently informs 7 that As estate is free fromincumbrance. 7 thereupon buys the estate. ;he estate issubIect to a mortgage. 7 may either a!oid the contract% ormay insist on its being carried out and the mortgage debtredeemed. Ed= 7% ha!ing disco!ered a !ein of ore on theestate of A% adopts means to conceal% and does conceal%the eistence of the ore from A. ;hrough As ignorance 7 isenabled to buy the estate at an under!alue. ;he contractis !oidable at the option of A. Ee= A is entitled to

succeed to an estate at the death of 7B 7 dies< C% ha!ingrecei!ed intelligence of 7s death% pre!ents the

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CONTINUED 1+A. Po'er to set aside contract induced by undue

inKuence M #hen consent to an agreement is caused

by undue inKuence% the agreement is a contract !oidableat the option of the party 'hose consent 'as so caused.Any such contract may be set aside either absolutely or%if the party 'ho 'as entitled to a!oid it has recei!ed anybene/t there under% upon such terms and conditions asto the Court may seem Iust.

6llustrations Ea= As son has forged 7s name to apromissory note. 7% under threat of prosecuting As son%obtains a bond from A for the amount of the forged note.6f 7 sues on this bond% the Court may set the bond aside.

Eb= A% a moneylender% ad!ances $s.1,, to 7% an

agriculturist% and% by undue inKuence% induces 7 toeecute a bond for $s. 2,, 'ith interest at " per cent. permonth. ;he Court may set the bond aside% ordering 7 torepay the $s. 1,, 'ith such interest as may seem Iust.Agreement !oid 'here both parties are under mista0e asto matter of fact.

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MISTAKE #here both the parties to an agreement are under a

mista0e as to a matter of fact essential to theagreement the agreement is !oid.

-planation.HAn erroneous opinion as to the !alueof the thing 'hich forms the subIectmatter of theagreement% is not to be deemed a mista0e as to a

matter of fact. Ill-strations

Ea= A agrees to sell to 7 a speci/c cargo of goodssupposed to be on its 'ay from -ngland to 7ombay.6t turns out that% before the day of the bargain the

ship con!eying the cargo had been cast a'ay andthe goods lost. either party 'as a'are of thesefacts. ;he agreement is !oid.

Eb= A agrees to buy from 7 a certain horse. 6t turnsout that the horse 'as dead at the time of the

bargain% though neither party 'as a'are of the fact. ;he a reement is !oid.

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CONTINUED

Ec= A% being entitled to an estate for thelife of 7% agrees to sell it to C% 7 'as dead atthe time of agreement% but both parties'ere ignorant of the fact. ;he agreement is!oid.

CO55ENT#

@ista0e

;here can be a mista0e of identity only'hen a person bearing a particular identityeists 'ithin the 0no'ledge of the plaintiand the plainti intends to deal 'ith himonlyB Ning9s ortan @etal Co. !. -dridge%@errett & Co.% E1*+(= 14 ;)$ +* ECA=.

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CONTINUED

61$ Efet o* istae as to la+

A contract is not !oidable because it 'ascaused by a mista0e as to any la' in force in6ndiaB but mista0e as to a la' not in force in

6ndia has the same eect as a mista0e of fact.

Ill-stration

A and 7 ma0e a contract grounded on theerroneous belief that a particular debt isbarred by the 6ndian )a' of )imitationB thecontract is not !oidable.

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CONTINUED

66$ Contrat a-se( ). istae o*one part. as to atter o* *at

A contract is not !oidable merelybecause it 'as caused by one of theparties to it being under a mista0e as toa matter of fact.

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CONTINUED @ista0e as to identity

a= Assumption of false identity

+aggan at! v. Secretary

b= @ista0e caused by ta0eo!er of business

Bo#lten v +onesc= @ista0e of identity caused by fraud

Hardman v Boot!

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CONTINUED @ista0e as to subIectmatter

a= oneistent subIect matterCo#t#rier v Hastie0S!ip cast away1

b= @ista0e as to title of rights

Sole v. B#tc!er0tenancy case1

c=ierent subIectmatters in mind

Ra2es v *ic!el!a#s0 Peerless s!ip case1

d= @ista0e as to substance of subIectmatter

Seik! Bros. td v 3c!ener0sisal man#%act#re1

@ista0e as to uality of subIectmatter Smit! v H#g!es0oats case1

@ista0e as to nature of promise

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CONTINUED )imitations

1. @ista0e of both parties

2. -rroneous opinion

3. @ista0e of fact and not of la'

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VOID AGREEMENTS 8ec.2Eg= An agreement not enforceable by la'

is !oid.1. Agreements of 'hich consideration and

obIects are unla'ful in part E8.24=

2. Agreements 'ithout consideration E8.25=

3. Agreements in restraint of marriage E8.2"=4. Agreements in restraint of trade E8.2(=

5. Agreements in restraint of legal proceedingsE8.2*=

".

nmeaning agreements E8.2+=(. #agering agreements E8.3,=

*. Agreements to do impossible acts E8.5"=

OF THE CONSEQUENCES OF BREACH OF

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OF THE CONSEQUENCES OF BREACH OF

CONTRACT 73- Compensation for loss or damage caused by breac of contract !

#en a contract as been bro$en% te party &o suffers by sucbreac is entitled to recei'e% from te party &o as bro$en te

contract% compensation for any loss or damage caused to im

tereby% &ic naturally arose in te usual course of tings from

suc breac% or &ic te parties $ne&% &en tey made te

contract% to be li$ely to result from te breac of it. Suc

compensation is not to be gi'en for any remote and indirect loss ordamage sustained by reason of te breac.

Compensation for failure to discarge obligation resembling tose

created by contract - #en an obligation resembling tose created

by contract as been incurred and as not been discarged% any

person in(ured by te failure to discarge it is entitled to recei'e

te same compensation from te party in default% as if suc personad contracted to discarge it and ad bro$en is contract.

)*planation - +n estimating te loss or damage arising from a breac

of contract% te means &ic e*isted of remedying te

incon'enience caused by te non-performance of te contract must

be ta$en into account.

ILLUSTRATIONS

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ILLUSTRATIONS Ea= A contracts to sell and deli!er 5, maunds of

saltpeter to 7% at a certain price to be paid on

deli!ery. A brea0s his promise. 7 is entitled torecei!e from A% by 'ay of compensation% the sum% ifany% by 'hich the contract price falls short of theprice for 'hich 7 might ha!e obtained 5, mounds ofsaltpeter of li0e uality at the time 'hen the

saltpeter ought to ha!e been deli!ered. Eb= A hires 7s ship to go to 7ombay% and there ta0e

on board% on the /rst of Oanuary% a cargo 'hich A isto pro!ide and to bring it to Calcutta% the freight tobe paid 'hen earned. 7s ship does not go to

7ombay% but A has opportunities of procuringsuitable con!eyance for the cargo upon terms asad!antageous as those on 'hich he had charteredthe ship. A a!ails himself of those opportunities% butis put to trouble and epense in doing so. A isentitled to recei!e compensation from 7 in respectof such trouble and epense.

ILLUSTRATIONS

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ILLUSTRATIONS Ec= A contracts to buy of 7% at a stated price% 5,

maunds of rice% no time being /ed for deli!ery. Aafter'ards informs 7 that he 'ill not accept the riceif tendered to him. 7 is entitled to recei!e from A% by'ay of compensation% he amount% if any% by 'hichthe contract price eceeds that 'hich 7 can obtainfor the rice at the time 'hen A informs 7 that he 'ill

not accept it. Ed= A contracts to buy 7s ship for ",%,,, rupees% but

brea0s his promise. A must pay to 7% by 'ay ofcompensation% the ecess% if any% of the contractprice o!er the price 'hich 7 can obtain for the ship

at the time of the breach of promise.

74- COMPENSATION FOR BREACH OF

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CONTRACT WHERE PENALTY

STIPULATED FOR #hen a contract has been bro0en% if a sum is named in the contract

as the amount to be paid in case of such breach% or if the contractcontains any other stipulation by 'ay of penalty% the party complainingof the breach is entitled% 'hether or not actual damage or loss ispro!ed to ha!e been caused thereby% to recei!e from the party 'hohas bro0en the contract reasonable compensation not eceeding theamount so named or% as the case may be% the penalty stipulated for.

-planation. A stipulation for increased interest from the date ofdefault may be a stipulation by 'ay of penalty.Q

-ception. #hen any person enters into any bailbond% recogni Ranceor other instrument of the same nature% or% under the pro!isions of anyla'% or under the orders of the 1SCentral o!ernmentQ or of any 8tateo!ernment% gi!es any bond for the performance of any public duty or

act in 'hich the public are interested% he shall be liable% upon breachof the condition of any such instrument% to pay the 'hole summentioned therein.

-planation. A person 'ho enters into a contract 'ith o!ernmentdoes not necessarily thereby underta0e any public duty% or promise todo an act in 'hich the public are interested.

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ILLUSTRATION

Ea= A contracts 'ith 7 to pay 7 $s.1%,,,% if he fails to pay 7 $s. 5,, on agi!en day. A fails to pay 7 $s. 5,, onthat day. 7 is entitled to reco!er from Asuch compensation% not eceeding $s.1%,,,% as the Court considersreasonable.

Eb= A contracts 'ith 7 that% if Apractices as a surgeon 'ithin Calcutta%he 'ill pay 7 $s. 5%,,,. A practice as asurgeon in Calcutta. 7 is entitled to suchcompensation% not eceeding $s. 5%,,,%as the Court considers reasonable.

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ILLUSTRATION

Ec= A gi!es a recogniRance binding him in a

penalty of $s. 5,, to appear in Court on acertain day. ?e forfeits his recogniRance. ?eis liable to pay the 'hole penalty.

Ed= A gi!es 7 a bond for the repayment of

$s. 1%,,, 'ith interest at 12 per cent at theend of si months% 'ith a stipulation that% incase of default% interest shall be payable atthe rate of (5 per cent from the date of

default. ;his is a stipulation by 'ay ofpenalty% and 7 is only entitled to reco!erfrom A such compensation as the Court

considers reasonable.

7' PART3 RI4;TF<223

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7 PART3 RI4;TF<223RE#CINDIN4 CONTRACT ENTIT2EDTO CO5PEN#ATION /

A person 'ho rightfully rescinds a contract isentitled to compensation for any damage 'hichhe has sustained through the nonful/llment ofthe contract.

6llustration A% a singer% contracts 'ith 7% themanager of a theatre% to sing at his theatre fort'o nights 6n e!ery 'ee0 during the net t'omonths% and 7 engages to pay her 1,, rupeesfor each nights performance. :n the sith night%

A 'illfully absents herself from the theatre% and7% in conseuence% rescinds the contract. 7 isentitled to claim compensation for the damage'hich he has sustained through the nonful/llment of the contract.

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PERFORMANCE OF CONTRACTS #o can demand performance,

#o must perform contracts,

1. romisor imself

2. y te promisor or is agent3. y te legal representati'es

4. y a tird person

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ORDER OF PERFORMANCE /utual and +ndependent

/utual and ependent

/utual and Concurrent

Conseuences if a party pre'entsperformance

ime and place of performance

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DISCHARGE OF CONTRACTS ctual erformance

ttempted performance or tender

a. nconditional

b. roper time and placec. #ole obligation

d. 5easonable opportunity

e. Competent person

f. o proper person

g. )*act amount

. oint promises

DISCHARGE BY MUTUAL

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DISCHARGE BY MUTUAL

CONSENT o'ation

lteration

5ecission

5emission #ai'er

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DISCHARGE BY IMPOSSIBILITY Subseuent or Super'ening impossibility

1. estruction of sub(ect matter

2. ailure of ultimate purpose

3. eat or personal incapacity of promisor4. Cange of la&

9. :utbrea$ of &ar

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CASES NOT COVERED ifficulty of performance

Commercial +mpossibility

+mpossibility due to default of tird person

Stri$es and loc$-outs ailure of one of te ob(ects

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iscarge by lapse of time

iscarge by operation of la&

a. eat

b. +nsol'encyc. /erger

d. nautorised material alteration

DISCHARGE BY BREACH OF

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DISCHARGE BY BREACH OF

CONTRACT nticipatory breac

a. )*pressly

b. +mpliedly

. ctual reac

REMEDIES FOR BREACH OF

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CONTRACT #en one of te parties to te contract

ma$es a breac of te contract te follo&ing

remedies are a'ailable to te oter party.

. D!"!#$% & 5emedy by &ay of damages is

te most common remedy a'ailable to te

in(ured party. is entitles te in(ured party

to reco'er compensation for te loss

suffered by it due to te breac o;f

contract% from te party &o caused tebreac. Section 73 to section 79 incorporate

pro'isions in tis regard.


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CONTRACT

'. Q(!)*(" "$+(,* & #en te in(ured party asperformed a part of is obligation under tecontract before te breac of contract as

occurred% e is entitled to reco'er te 'alueof &at e as done% under tis remedy.

. S$/,0,/ P$+01+"!)/$ !)2 I)3()/*,1) &

Sometimes a party to te contract instead ofreco'ering damages for te breac may a'erecourse to te alternati'e remedy of specificperformance of te contract% or an in(unctionrestraining te oter party from ma$ing abreac of te contract. ro'isions regardingtese remedies a'e been contained in teSpecific 5elief ct% 1;63.

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TYPES OF DAMAGES :rdinary

Special

)*emplary or puniti'e or 'indicti'e

a. reac of contract to marryb. isonour of ceue.

. ominal damages

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