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Section 11
Only a person: who is of the age of majority of sound mind, and not forbidden under any other law
Minor
Who is a Minor?
Already discussed. What happens to a contract with or by a minor? Contract is void-ab-initio, i.e., neither the other party nor the minor can enforce. Case law : Mohiri Bibi vs. Dharmdas Ghose.
same or altered form, Minor liable to restore. Minor liable for necessaries supplied to him or any loan for necessaries to him or to any of his dependants. However, only properties of the minor, if any shall be liable. Case law : Nash vs. Inman.
Mental Incompetence
Idiots
Lunatics Intoxicated persons
Section 12
Person usually of unsound mind but
occasionally of sound mind can make a contract when of sound mind (Onus on the other party) Person usually of sound mind but occasionally of unsound mind cannot make a contract when of unsound mind (Onus on the person claiming to be of unsound mind)
Free Consent
Coercion (Sections 15 and 19) Contract voidable at the option of the aggrieved party. Benefits received to be returned. Undue Influence One party is in a position to dominate the will of the other. Uses that dominance to secure undue/unfair contractual advantage
In some relationships, it is presumed, e.g., Parent and Child; Spiritual Advisor and Disciple; Trustee and Beneficiary; Doctor and Patient; Lawyer and Client.
Fraud
Contract voidable at the option of the
party defrauded. Claim for damages. However, relief available only if party actually defrauded. A fraud that does not defraud is no fraud. Case of defective cannon
Misrepresentation
Contract rendered voidable. Damages cannot be claimed.
Mistake
Of Law Of Fact Mistake of Indian Law doesnt render a
contract void or voidable. Ignorance of law is no excuse Mistake of foreign Law to be treated as mistake of fact.
to a specified person or a group of persons. can be accepted only by the person to whom made.
Thus, if offer is addressed to A, B cannot accept it. Case Law: Boulton vs. Jones
Mistake of Fact
Unilateral
- does not render contract void except where induced by fraud Case Law: Cundy vs. Lindsey Bilateral - absence of consent contract is void-abinitio Case Law: Henkel vs. Pape
Consideration
Something in return Section 2(d) 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 promises to abstain from doing something, such act or abstinence or promise is called a consideration for the promise.
Consideration
Past, present or future Must move at the desire of the
promisor May move from promisee or any other person Need not be adequate but must have value in the eyes of law
No Consideration, No Contract
Exceptions (1)(a) Natural love and affection (b) Between parties in a near relation (c) Written (d) Registered
(2)(a) Promise to compensate (b) Voluntary act which promisor was legally bound to do
No Consideration, No Contract
(3) (a) Written promise (b) to pay time-barred debt. (4) Bailment (5) Agency (6) Gift
Breach of contract
Both parties are promisors as
well as promisees If any of the promisors refuses or fails to perform, he is said to be guilty of breach of contract.
Anticipatory Breach
Breach before time for performance
Remedies
(1) Suit for injunction Brook Bond Ltd. vs. Vijay Mallya (2) Claim for damages
Actual Breach
(Refusal or failure when time for
Right of Rescission Claim for damages Suit for specific Performance Suit for Injunction Quantum Meruit
Pre-fixed Damages
Exemplary Damages
Nominal Damages
Penalty
Liquidated Damages (What can be recovered is actual loss or amount prefixed, whichever is less)