Contract act part 2
Section 6 to 9 contract act
Section 6.Revocation how made ------A proposal is revoked
1.by the communication of notice of revocation by the proposer to the other party
2.by the lapse of the time prescribed in such proposal for its acceptance
Or if no time is so prescribed
By the lapse of a reasonable time without communication of the acceptance
Explanation ----reasonable time may be different for different transaction . There is very little time is required in gold and silver contract .but in contract of land it may be possible that it will take a long time
3.by the failure of the acceptor to fulfil a condition precedent to Acceptance or
Example --a lake of salt is to be given on lease .but acceptor must have deposited some money in advance .acceptor did not do for three years . allocation had been cancelled . because condition had not been fulfilled by acceptor
4.by the death or insanity of the proposer ,if the fact of of his death or insanity comes to the knowledge of the acceptor before acceptance
N----LCD
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Section 7 . acceptance must be absolute------in order to convert a proposal into a promise the acceptance
must -----
1.be absolute and unqualified
2.be expressed in some usual and reasonable manner
Unless the proposal prescribes the manner in which it is to be accepted .
If proposal prescribes a manner in which it is to be accepted
And the acceptance is not made in such manner
The proposer may within a reasonable time after the acceptance is communicated to him .insist that his proposal shall be accepted in the prescribed manner and not otherwise ,but if he fails to do so
He accepts the acceptance
Example
B offer A that I intend to sell my house for 50,000/ Rs.if you keep desire to buy this house ,you will send your acceptance to H at his address .instead of writing to H .A sent his agent in person to H with Rs.50,000/ .B argues that acceptance was not according prescribed manner .so there was not valid contract arised between the parties .
Case no .2----in this case plaintiff had imposed certain conditions at the time of acceptance that transportation will be free from Mumbai port and no interest will be taken . respondent had denied to accept it .after that plaintiff had accepted the original offer . plaintiff had filed suit.
Explanation -----offer should be absolute and unqualified .then there no legal liability will be raised .the acceptance of plaintiff was counter offer not acceptance .the original offer is cancelled due to counter offer .
3.hyde versus Ranch
Respondent wanted to sell his land at 1000 pond .acceptor wanted to buy his land at 950 pond through his acceptance letter .proposer denied this acceptance .after that plaintiff had agreed to buy that lant at 1000pond .it is decided that no contract had been raised . because original contract had been cancelled due to counter offer .
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Section 8 ----acceptance by performing condition or receiving consideration ----
Performance of the condition of a proposal
Or the acceptance of any consideration for a reciprocal promise
which may be offered with a proposal
Is an acceptance of the proposal
Landmark case
Hindustan cooperative society versus shayam sunder
In this case half proceedings had been completed.innsurance company had informed to proposer that you should send proposal with installment of six month.he did so. The insurance company had encashed these checks but it had forgotten to inform him . To encash these checks are symbol of his acceptance.
2.in this case proposer had contacted that if map of this land had been passed ,he would buy this land and take on lease.if acceptor had done this work .then automatically acceptance had been done without information .
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Section 9 ----promises ,express and implied ----in so far as the proposal or acceptance of any promise is said to be express.in so far as such proposal or acceptance is made otherwise than in words the promise is said to be implied.
Upton rural district council versus pawel
There fire had been broken out in the field of respondent .he had trust that he had right on services of fire brigade without money .after put out fire it was realised that services services was not free .so in this situation implied contract had been made between two parties without any express contract .
Case no.2
In this case a port tribunal had promised to a ship company to give some facilities .the ship company wanted to move their ships under this facilities .but after some time Port tribunal had refused to give these facilities .ship company had filed a suit to get these facilities .
Decision -----the court had found that impiled contract had been made between ship company and port tribunal .so port tribunal was bound to give these facilities .
Example no.3
In this case some goods were to be supplied to the government .but it was not cleared that on which date these good were supplied .there was no implied contract that good were to be given on the 1 day of month
Chapter 2
Of contracts,voidable contracts and void agreements
Section 10--what agreements are contract ----
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 object
And are not hereby expressly declared to be void
Nothing herein contained shall affect any law in force in India and not hereby expressly repealed
By which any contract is required to be made in writing or in the presence of witnesses or any law relating to the registration of documents
Important point
1.it is not sufficient to accept proposal to frame contract but it is very essential to communicate it
2.when anyone accept the proposal and give consideration then contract has been become concluded
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Section 11.who are competent to contract ---
Every person is competent to contract
Who is of the age of majority according to the law to which he is subject
And who is of sound mind
And is not disqualified from contracting by any law to which he is subject.
Important facts
Any contract which is made with a minor such type of contact is void ab initio
Mohari Bivi versus Dharamdas ghosh 1903
Section 12.what is a sound mind for the purposes of contracting ------
A person is said to be of sound mind
For the purpose of making a contract
If at the time when he makes it
He is capable of understanding it and if forming a rational judgement as to its effect upon his interests.
A person who is usually of unsound mind but occasionally of unsound mind may make a contract when he is of sound mind.
A person who is usually of sound mind but occasionally of unsound mind may not make a contract when he is of sound mind
Illustrations
A.a patient is in a lunatic asylum who is at intervals of sound mind
May contract during those intervals
B.a sane man who is delirious from fever or who is so drunk that he cannot understand the terms of a contract or form a rational judgement as to effect on his interest
Cannot contract whilst such delirium or
drunkenness
Important point
Smt.Neelima Ghosh versus harjeet kaur
The parties must be sound mind at the time of contract
Unsound mind person cannot enter into a contract
Unsound mindness must be exist at the time of contract and medical certificate must be available.
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Section13 consent defined
-----two or more persons are said to consent
When they agree upon the same thing in the same senses.
Important point
Smith versus heyhuge
According lord heynon both parties of contract must understand in same senses of ingredients part of contract
Section 14 free consent defined ---consent is said to be free when it is not caused by ------
1.coercion as defined in section 15 or
2.undue influence as defined in section 16 or
3.fraud as defined in section 17 Or
4.misrepresehtation as defined in section 18
5.mistake subject to the provision of sections 20,21 and 22
Consent is said to be so caused when it would not have been given but for the existence of such coercion ,undue influence,fraud , misrepresentation or mistake .
Devnand versus khotay
The consent which has been got under coercion,undue influence,fraud , misrepresentation and mistake
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Section 15.coercion defined ---coercion is the
Committing ,or threatening to commit any act
Forbidden by the Indian penal code or
Unlawful detaining or threatening to detain any property to the prejudice of any person whatever
With the intention of causing any person to enter into an agreement
Explanation
It is immaterial wheather the Indian penal code is or is not in force in the place where the coercion is employed.
Illustrations
Aon board an English ship on the high seas causes B to o enter into an agreement by an act amounting to criminal intimidation under Indian penal code.
A afterwards sues B for breach of contract at Calcutta.
A has employed coercion
Although his act is not an offence by the law of England
And although section 506 of the Indian penal code was not in force at the time when or place where act was done .
Comment
Kishanlal kalra versus n.d.m.c. air 2001
To threat arrest in misa with evict forcefully from premises are coercion
Section 16. Undue influence defined
1.a contract is said to be induced by undue influence
Where the relations subsisting between the parties are such that one of the parties
Is in a position to Dominate the will of the other and uses that position
To obtain an unfair advantage over the other
2.in particular and without prejudice to the generality of the foregoing principle
a person is deemed to be in a position to Dominate the will another
a.where he holds a real or apparent authority over the other or where he stands in a fiduciary relation or the other or
b.where he makes a contract with a person
Whose mental capacity is temporarily or permanently affected by reason of age ,illness or mental or bodily distress.
3.where a person who is in a position to Dominate the will of another
Enters into a contract with him
And transaction appears on the face of it or on the evidences adduced to be unconscionable
The burden of proving that such contract was not induced by undue influence
Shall be upon the person in a position to Dominate the will of other .
Nothing in the sub section shall affect the provision of section 111 of the Indian evidence act 1872.
Illustrations
a.a having advanced money to his son B during his minority
Upon B s coming of age obtains by use of parental influence
A bond from B for a greater amount than the sum due in respect of the advance.A employs undue influence .
b.A a man enfeebled by disease of age induced by B s influence over him as his medical attendant
To agree to pay B an unreasonable sum for his professional service
B employs undue influence
C .A being in debt to b
The money lender of his village
Contracts a fresh loan on terms which appears to be unconscionable.
It lies on B to prove that the contract was not induced by undue influence.
D.A applies to a banker for a loan at a time when there is stringency in the money market
The banker declines to make the loan except at an usually high rate of interest
A accepts the loan on these terms .this is a transaction in the ordinary course of business
And the contract is not induced by undue influence
Comment
1.Belachi versus paakrin
Any person is in position or not position to Dominate desire of other persons .this is question of fact
Section 17.fraud defined --fraud means and includes any of the following acts committed by a party to a contract
Or with his connivance or by his agent
With intent to deceive
Another party thereto or his agent
Or to induce him to enter into the contract
1.the suggestion as a fact of that which is not true by one who does not believe it to be true
2.the active concealment of a fact by one having knowledge or belief of the fact
3.a promise made without any intention of performing it
4.any other act fitted to deceive
5.any such act or omission as the law specially declares to be fraudulent
Explanation --mere silence as to facts likely to affect the willingness of a person to enter into a contract is not fraud
Unless the circumstances of the case are such that
Regard being had to them it is the duty of the person keeping silence to speak or unless his silence is in itself equivalent to speech
Illustrations
A.a sells by auction to b a horse which a knows to be unsound .a says nothing to b about the horse unsoundness .this is not fraud in A
A ----seller of a horse
B ----buyer of a horse
Horse is unsound
A does not tell any thing about horse
A does not commit any horse
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B. B is A ' s daughter and has just come of age .here the relation between the parties would make i A 's duty to tell B if the horse unsound
A -----father
B----daughter of A
Horse ----unsound
A bound to tell truth about the horse
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C.B says to A ----if you donot deny it ,I shall assume that the horse is sound
A says nothing here A 's silence is equivalent to speech
D.A and B being traders enter upon a contract.A has private information of a change in price which would affect B 's willingness to proceed with the contract
a is not bound to inform B
Fraud is so serious offence that it will pollute the entire transaction
Section 18 misrepresentation defined ----
1.the positive assertion in a manner not warranted by the information of the person making it
Of that which is not true though he believes it to be true .
2.any breach of duty which without an intent to deceive ,gains and advantage to the person committing it ,or anyone claiming under him by misleading another to his prejudice
Or to the prejudice of anyone claiming under him
3.causing however innocently a party to an agreement
To make a mistake as to the substance of the thing which is the subject of the agreement
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