Law of Contract Doctrines | Important Doctrines for CLAT

and other Law Exams

1. Consensus ad idem i.e. the meeting of minds.

There must be meeting of minds of both the parties on the same

subject for a valid contract.
EXAMPLE X contracts with B to sell his White house. B sends
his acceptance for the same horse. A valid Contract is made.
EXAMPLE X contracts with B to sell his White Horse. B sends
his acceptance for the Black horse of X. This is not a valid
contract.

2. Ubberrima fides - Utmost good faith.

It is the name of a legal doctrine which governs insurance

contracts. This means that all parties to an insurance contract
must deal in good faith, making a full declaration of all material
facts in the insurance proposal. This contrasts with the legal
doctrine caveat emptor ("let the buyer beware")

3. Nudum Pactum- A gratuitous or bare promise, devoid of

any consideration.

A nudum pactum in Latin literally means 'Bare or Naked

Promise.' In common law, it refers to a promise that is not
legally enforceable for want of consideration. An example of a
nudum pactum would be an offer to sell something without a
corresponding offer of value in exchange. While the offer may
bind a person morally, since the offer has not been created with
any consideration, it is gratuitous and treated as a unilateral
contract. The offer is therefore revocable at any time by the
offeror before acceptance by the offeree.
4. Quid pro quo- something for something/ consideration.

Quid pro quo, Latin for "something for something," is used to

describe when two parties engage in a mutual agreement to
exchange goods or services. In a quid pro quo agreement one
transfer is contingent upon a reciprocal transfer. As a term, quid
pro quo is used similarly in business and legal contexts to
convey that a good or service has been exchanged for something
of equal value.

5. Doctrine of restitution- If a minor has unjustly enriched

himself. Equity demands that such property or goods be
restored by minor.

Example- X a minor makes a contract with D to sell his house

and pays him 50000 rupees. The contract is held as void ab
intio by the court and the house is returned to X. X must return
the Consideration for the house i.e. 50k back to D.

6. Right to recession of contract- contract induced by fraud,

misrepresentation, undue influence, and coercion is voidable
at option of party whose consent was so caused.

EXAMPL EX gives a threat to B her husband that she will

commit suicide if he does not transfer the property in her name.
B transfers the property out of coercion. This is a voidable
agreement and B can repudiate it.

7. Defence of “Non est factum”- document executed in

ignorance. Mistake as to nature of promise. It allows signing
party to escape performance of agreement which is
fundamentally different from what he or she has intended to
execute or sign.
8. Novation- substitute existing contract for new one/ replace
obligation; adding obligation; or replacing a part to
agreement.

9. Alteration- change of nature of obligation of contract/

modification of terms of contract with assent of both parties.

10. Doctrine of Implied term- practice of setting down

default rules for contract.

11. Doctrine of supervening impossibility- impossibility

arising after the formation of contract but before performance
by the promisor. After the contract has been made impossible,
no party is liable for penalty for non-performance. X and Y
are citizens of India and Pakistan respectively. They enter into
a contract but after 3 days the countries goes into war. The
contract is repudiated by the supervening impossibility.

12. Quantum meruit- reasonable sum of money rendered or

work done when the amount due is not stipulated in a legally
enforceable contract. Used when price is not fixed
for service rendered.

Examples of these situations include receipt of care by an

emergency room physician, legal services without signing a fee
agreement, or obtaining spur-of-the moment services of the
neighbor’s gardener. In such situations there can be no doubt
that the individual deserves to be paid for services rendered, but
it is not uncommon for disputes to arise over the actual amount
billed after the fact.

13. Quantum valebant- “as much as they were worth”. Used

in case of goods sold without specifying any price.

14. Res extincta- Courtrures v Hastie- applies where both

parties enter a contract with belief that subject matter exists
where in fact it does not exist.
15. Pari delicto- “in equal fault”.

EXAMPLE X contracts with B to paint his house after it has

been completed on 1 January 2029. Neither the house is
completed nor does the painter come to paint the house as he is
busy. Here both parties are at equal fault and no action in court
of law arises.

16. Ex dolo malo non oritur action- illegal contract- “No

right of action can have its origin in fraud”

17. Nudum pactum non oritur action- Consideration-

Agreement without consideration is one from which no action
arises.

18. Ex acquo et bona- quasi contract. “from equity and

conscience”.

19. Ex contractu- reasonable amount to be paid for the work

done.

20. Suppressio verI - The active concealment of a fact by one

having knowledge or belief of the fact. “It is a rule of equity,
as well as of law, that a suppressio veri is equivalent to a
suggestio falsi; and where either the suppression of the truth
or the suggestion of what is false can be proved, in a fact
material to the contract, the party injured may have relief
against the contract.”

21. Subrogation- Substitution of one person or group by

another in respect of debt or insurance claim.

EXAMPLE X gives guarantee on behalf of B to A that he will

pay the money if B is unable to pay the money. B fails to Pay.
Here A can subrogate X in place of B because he is the
guarantor of debt

22. Repudiation- rejection of proposal or idea.

EXAMPLE- N contracts with M to buy his vintage car for 1
crore rupees. M repudiates the proposal by not accepting the
offer.

23. Remission- acceptance of lesser sum than what was

agreed in the contract for discharge of the whole debt.

EXAMPLE X contracts with B to lend him money sum of

10000 rupees in lieu of 5%interest each year. X after 10 years is
only able to return principal plus 2%interest. Here B has done
remission of the remaining 3%.