Contract act 19 to 25

    

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Section 19 , 20 21 and 22. Indian Contract Act 

Section 19 . voidability of agreements without free consent -----

When consent to an agreement is caused by coercion,fraud or mis representation the agreement is a contract voidable at the option of the party whose consent was so caused .

A party to contact whose consent was caused by fraud or misrepresentation,may if he thinks fit insist  that the contract shall be performed and that he shall be put in the position in which he would have been if the representation made had been true .

Exception ----if such   consent was caused by misrepresentation or by silence, fraudulent within the meaning of section 17 the contract nevertheless is not voidable,

If the party  whose consent was so caused had the means of discovering the truth with ordinary diligence.

Explanation -----

A fraud or misrepresentation which did not cause the consent to a contract of the party on whom such misrepresentation was made  

Does not render a contract voidable 

Landmark judgement ---

Long versus loyad 

In this case respondent had persuaded plaintiff to purchase his lorry .having lied .that his lorry 🚛 was in good condition.in first transportation he had got too many faults .the respondent had accepted his his repairing ,that they will share expenditure  in half amount .plaintiff had accepted it .after that lorry had broken completely .the plaintiff had wanted to  cancel  this contract .

Decision --- the plaintiff had accepted the repairing expenditure at that time he had accepted that lorry was in good condition .so plaintiff cannot file a suit for fraud in this case .

Illustrations 

a.A  intending to deceive B falsely represents that five hundred maunds of indigo are made annually at A 's factory and thereby induces B to buy the factory.the contract is voidable at the option of B 

b .A by a misrepresentation leads B erroneously to believe that five hundred maunds of indigo are made annually at A 's factory.B examines the accounts of factory 

Which show that only four hundred maunds of indigo have been made .after this B buys the factory.the contract is not voidable on account of A 's misrepresentation.

C.A fraudulently informs B that A 's estate is free from incumbrance .B thereupon buys the estate .the estate is subject to a mortgage .B may either avoid the contract or may insist on its being carried out and mortgage debt redeemed .

D.B having discovered having discovered a vein of ore on estate of A ,

Adopts means of conceal and does conceal the existence of the ore from A .though A 's  ignorance B is enabled to buy the estate at an under value .the contract is void able at the option of A .

E.A is entitled to succeed to an estate  at the death of B 

B dies .c having received intelligence of B 's death .prevents the intelligence reaching A and thus induces A to sell him his interest in the estate .the sale is voidable at the option of A .

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Section 19 A .power to set aside contract induced by under influence 

When consent to an agreement is caused by undue influence 

The agreement is caused by undue influence 

The agreement is a contract voidable at the option of the party whose consent was so caused 

Any such contract may be set aside either absolutely or if  the party who was entitled to avoid it has. received any benefit there under upon such terms and conditions as to the court may seem just 

Illustrations 

a.A 's son has forged B 's name to a promissory note .B under threat of prosecuting A 's son .obtains a bond from A for the amount of the forged note .if B sues on this bond the court may set the bond aside .

b.A a money lender advances Rs.100 to B an agriculturist and by undue influence induce B to execute a bond for rs 200 with interest at 6 percent per month .the court  may set the bond aside ordering B to repay the Rs.100 with such interest as may seem just .

Section 20

Agreement void where both parties under mistake as to matter of fact ------

Where both the parties to an agreement are under a mistake as to a matter of  fact Essential to the agreement the agreement is void .

Explanation ---

An erroneous opinion as to the value of the thing which forms the subject matter of the agreement is not to be deemed a mistake as to a matter of fact .

Related land mark case 

Coturear versus hestai

Some wheat  was coming from Australia to England .a contract had been made in England for wheat .both parties did not know that wheat was sold in the path  due to some reasons  .so both parties under mistake .so contract was void.

Illustrations 

a.A agrees to sell to B a specific cargo of goods supposed to be on its way from England to Bombay.it turns out that before the day of bargain the ship conveying the cargo had been cast away and the goods lost .neither party was aware of these facts.the agreement is void .

b.A agrees to buy from B a certain horse .it turns out that the horse was dead at the time of bargain.though neither party was aware of the fact .the  agreement is void.

C.A being entitled to an estate for the life of B .agrees to sell it to c.B was dead at the time of agreement.but both parties were ignorant of the fact .the agreement is void .

Section 21 

Effect of mistake as to law -----

A contract is not voidable because it was caused by a mistake as to any law in force in India .but a mistake as to a law not in force in India has the same effect as a mistake of fact 

Illustrations 

A and B make a contract grounded on the erroneous belief that a particular debt is barred by the Indian law of limitations the contract is not voidable.

Section 22 .

A contract is not voidable merely because it was caused by one of the parties to it being under a mistake as to matter of fact .

Some landmark cases of mistake 

Landmark judgement 

Abdul Rehman versus Bombay and pertia steam navigation company 

Here plaintiff had hired a ship which was about to departure from Jedah on 10 August 1892 (after 15 days of Haz). plaintiff had thought that this date will fall after 15 days of Haz.on the contrary respondent had thought as according English date .

The plaintiff had wanted to rescind this contract on this behalf the court decided that only under the mistake .so this contract cannot be rescinded .

Case no .1(identity of parties)

Candi versus lindsay 

Here plaintiff had got a written order which had been sent by blackcorn who was a cheater.there was a similar firm of same name .the plaintiff used to send his goods to this firm .so plaintiff had sent goods to this person .this person had sold these goods to the respondent and absconded . plaintiff had filed suit against respondent to get his money 

Decision ---the plaintiff had not Right to get money from original black corn company because contract had not been made with this original company .

Landmark case no.2

Kings Norton metal company versus adridge merat and company 

A person whose name was valis he had made a forged firm which name was helam and company 

He ordered for goods in the name of forged firms . plaintiff had not known this company . plaintiff had these goods to this firm .the firm had sold these goods to respondent .here plaintiff had filed a case against respondent for price of goods .

Decision ---respondent was not responsible for this amount . because there was not any contract between plaintiff and respondent.

  

Section 22

Contract caused by mistake of one party as to matter of fact ---

A contract is not voidable merely because it was caused by one of the parties to it  being under a mistake as to matter of fact .

Section 23

What consideration and object are lawful and what not ----

The consideration of object of an agreement is lawful ,unless--

It is forbidden by law or 

Is of such a nature that  if permitted it would defeat the provision of any law 

 or is fraudulent 

 or 

Involves or implies injury to the person or property of another or 

The court regards its as immoral or opposed to public policy 

In each of these cases the consideration or object of an agreement is said to be unlawful .every agreement of which the object or consideration is unlawful is void .

Landmark judgement 

Forbidden by law 

Nand lal versus Thomas j Williams 

Facts ----plaintiff had got licence under an act to run a shop of booze . according this law plaintiff cannot make a partner  for any purpose in this business .after this plaintiff had made respondent as his partner.

Decision ----this partnership had been decided void because this had been forbidden by law clearly.

B.defeat provision of law 

Fatheh singh versus sawal singh 

Fact ---in this case court had ordered  a person to give bail  of rs.5000/ under crpc .he had given money to a person to give his bail . When that person demanded his money he denied to give money . plaintiff had filed a suit to get his money 

Decision ----this agreement was void . because such act can defeat provision of law.

D.injury to person or property

Ramswaroop  versus Bansi madar 

in this case a pers

Illustrations 

A.A agrees to sell his house to B for 10,000 rupees .here B s promise to pay the sum of 10000/ rupees 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 the 10000 rupees .these are lawful consideration.

B .A ,B and C enter into an agreement for the divison among them of gains acquired or to be acquired by them by fraud .the agreement is void as its object is unlawful .

C.A promises to obtain for B and employment in the public service and B promises to pay 10000/ rupees to A ..the agreement is void as the consideration for it is unlawful.

D.A being agent for a landed proprietor agrees for money without the knowledge of his principal to obtain for B a lease of land belonging to his principal.the agreement between A and B is void as it implies a fraud by concealment by A on his principal.

E.A promises B to drop a prosecution which he has instituted against B for robbery and B promises to restore the value of the things taken .the agreement is void as its object is unlawful.

Void agreement 

Section 24 

Agreement void if consideration and object unlawful in part -----if any part of a single consideration for one or more objects

Or any one or any part of anyone of several consideration for a single object 

Is unlawful the agreement is void .

Illustrations 

A promises to superintend on behalf of B

a legal manufacturer of indigo and an illegal traffic in other articles .B promises to pay A a salary of 10,000 rupees a year .the agreement is void .the object of A 's  promise and the consideration for B's promise being in part unlawful 

    Section 25 

Agreement without consideration void 

Unless it is in writing  and registered or is a promise to compensate for something done or is a promise to pay debt barred by limitation law ------an agreement made without consideration is void ,unless -----

1.it is expressed in writing and registered under the law for time being in force for the registration of documents and is made on account of natural love and affection between parties standing in a near relation to each other or unless 

2.it is a promise to compensate wholy or in part a person who has already voluntarily done something for the promisor or something which the promisor was legally compellable to do or unless

3.it is a promise made in writing and signed by the person to be charged therewith or by his agent generally or specially authorized in that behalf to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits 

In any of these cases such an agreement is a contract.

Explanation 1

Nothing in this section shall affect the validity,as between the donar and donee of any gift actually made 

Explanation 2

An agreement to which the consent of the promisor is freely given is not void merely because the consideration is inadequate but the inadequacy of the consideration may be taken into account by the court in determining the question whether the consent of the promisor was freely given .

Landmark case 1

Natural love and affection 

Raj lekhi versus Bhootnath mukerji 

Facts ----respondent had given house and monthly expenses to her wife to live seperately.promise was written and registered .it was mentioned that it was done due to family jars .the husband denied to give money.the wife had to file a suit .

Decision ----the document was written due to family jars.so this document was not come under exception of 25(1)

Land mark judgement no.2

Bhiva versus shivram 

Facts ---A filed a suit against B to get fifty percent part of land .this case was dismissed.because property was not parental.after this A had given half land to his Brother B by written and registered document and denied again .

Decision ----according court it was decided that this document was written due to natural love and affection .so this case comes under section 25 (1).

2.past voluntary service/past act as request

Lampleh versus Brathwet 

Facts ----respondent had requested to plaintiff to safe him for murder case.plaintiff had tried his best to save him and had done good expenses.respondet had promised him to give 100 pond but did not give.

Decision ---the respondent had given money to plaintiff . because if work is done voluntary or at request ..such promise had become past service as a treaty .

Land mark cases 2

Re cases patents stuart versus kaisi 

A manager had given his services to run patent .a promise had been given to some salary to give some  salary 

Decision ---such promise comes under exception of section 25 .

Landmark judgement no.3

D la Beri versus pierson

Facts ---respondent was owner of a newspaper 🗞️.he had advertised that free financial advice will be given to readers .in this order a person had invested  his money to a person who was insolvent .that person had got loss .he had filed a suit 

Decision ----in this case question is arised that sufficient consideration is available .the court decided that sufficient consideration is available in this situation . because this ad increase circulation of newspaper .

Landmark case no.4

Pridemor versus claywort

Facts -----a woman was injured due to carelessness of respondent .here agent of insurance company pressured her to sign documents on a paper in which she will get 331 dollar as compensation.but she had got 2000 dollar .

Decision ---here court had decided that  compensation was so low that it was not holding water at touch stone of time .the court considers that contract was right due to low compensation 

Illustrations 

a.A promises for no consideration to give to B Rs.1000.this is void agreement.

b.A for natural love and affection ,promises to give his son B .rs.1000.A puts his promise to B into writing and registers it this is a contract .

C.A finds B 's purse and gives it to him .B promises to give A rs.50 .this is a contract.

D.A supports B 's infant son .B promises to pay  A 's expenses in so doing .this is a contract.

E.A owes B rs.1000 but the debt is barred by the limitation act .A signs a written promise to pay B rs 500 on account of the debt .this is a contract .

F.A agrees to sell a horse 🐎 worth Rs.1000 for rs .10.A 's consent to the agreement was freely given .the agreement is a contract notwithstanding the inadequacy of the consideration 

G.A agrees to sell a horse worth rs.1000/ for rs.10 . A denies that his  consent to the agreement was freely given .

The inadequacy of the consideration is a fact which the court SHOULD take into account in considering whether or not A's consent was freely given