ASSESSMENT 2

SUBMITTED BY : VANSHIKA GUPTA

EXERCISE 1:

PART 1
The Agreement between Mr. Ram and Mr. Gopal is a valid contract and it is enforceable
under the law. This is because of the following reasons:

Firstly, the fundamental of contracts is all present in the current factual matrix.

According to Section 10 of the Indian Contract Act,1872 all agreements are considered to be
enforceable under law if it is made by free consent of the parties which have the competency
to contract in exchange of a lawful consideration with the lawful. From the above definition,
it can be inferred that the for enforcing an agreement it should have following essentials:

Offer and acceptance: in the present case Mr. Ram had provided loan to his friend Gopal,
Gopal makes a valid offer when Gopal had promised that he would pay him the amount with
interest within 45 days, and Mr. Ram providing the loan indicated his acceptance.

Competent parties: Since there is nothing contrary mentioned about the state of parties
being minor, or of unsound mind or insolvency. It is assumed that the parties were competent
to contract.

Free consent: There has been no mentioning about any false representation or coercion or
fraud in the factual matrix, it is assumed that there was free consent of the parties.

Lawful consideration: In the present case there was a lawful consideration. The
consideration being a future consideration wherein Mr Gopal will pay Mr. Ram the loan
amount with interest in the future i.e., 45 days.

Lawful object: In the present factual matrix, the object if the contract is to provide loan,
which is a lawful object.

Therefore, it is concluded that by complying with the above essentials, an agreement between
two parties becomes a contract.
COMMUNICATION OF AN OFFER:
In the present factual matrix, as already discussed that all the essentials of contract is valid. It
is also important to look into whether the agreement was communicated properly by the
parties.

As per Section 3 and Section 9 of the Indian Contract Act, an offer and acceptance can be
communicated by orally.

In the present case even though there is no written agreement, it is enforceable under law if it
has followed all the essentials of the agreement. The judicial standpoint of the Apex Court in
the case of Alka Bose vs. Parmatma Devi & Ors1 and Sheela Gehlot vs. Sonu Kochar & Ors
held that it is not important that a contract should be written, but what more important is that
the agreement should be in compliance with Section 10 of the Indian Contract Act. However,
Mr. Ram has the onus of proving the oral agreement as the Apex Court in Food Corporation
of India vs. Vikas Majdoor Kamdar Sahkari Mandli ltd 2 held that the onus of proving an
oral agreement is on the party contending the contract.

Therefore, in the present case Mr. Ram can institute proceedings against Mr. Gopal, as all
the essentials under Section 10 were complied with and oral agreements are enforceable
under the law. However, the onus of proving the existence of such contract is with Mr. Ram.

PART 2

CONSIDERATIONS WHILE REVIEWING OR DRAFTING THE CONTRACT

 Ensure that the Party clause has all the accurate and sufficient information about the
parties.
 Scope and duration: Any contract should have a well defined scope and duration which
helps the parties to be on the same page.
 Governing law: while reviewing a contract it is essential to state clearly the law that
governs the contract. This clause becomes all the more important when parties are ding
business in different jurisdiction or state.
 Checking the Confidentiality and Non- Solicitation clause
 Check the indemnification and other clauses which impose a liability on the parties.
 Check Termination and renewal terms
 Ensure that the language of the contract is unambiguous.

1
Alka Bose vs. Parmatma Devi & Ors [CIVIL APPEAL NO(s). 6197 OF 2000]
2
Food Corporation of India vs. Vikas Majdoor Kamdar Sahkari Mandli ltd 2007 MANU/SC/4367/2007
 Check the clauses related the default regulation
 Check for important dates and deadlines.
 Check for the dispute resolution mechanism.
 Ensure that the waiver od remedies and warranty are according to the discussed terms.
 Review the rights and responsibility clause.
 Check all the necessary exhibits and annexures which are attached with the forms

EXERCISE 2:

Residential Rent Agreement ( title Clause )

This agreement made at Pune, Maharashtra on this 05.10. 2022 between Mr. Vibuthi
Agarwal, residing at ABC Naded City, Pune, Maharashtra,1400101 hereinafter referred to as
the `LESSOR` of the One Part AND Mr. Ram Narayan, residing at XYZ, Pune, Maharashtra,
1400101 hereinafter referred to as the `LESSEE` of the other Part; ( parties clause)

WHEREAS:

The Lessor is the lawful owner of, and otherwise well sufficiently entitled to Flat no. 1101 -
Pancham Building, Nanded City, Pune, 1400101 falling in the category, Apartment and
comprising of 2 Bedrooms, 3 Bathrooms, 1 Carpark with an extent of 5000 Square Feet
hereinafter referred to as the `said premises’

At the request of the Lessee, the Lessor has agreed to let the said premises to the tenant for a
term of 1 year commencing from 1.11.2022 to 31.10.2023 in the manner hereinafter
appearing.

In consideration of the mutual promises and agreements between the parties hereto, the
parties have agreed to enter into this agreement to govern the terms and considtions of their
association. (Recitals)

In consideration of the mutual obligations herein, the adequacy of which is hereby

acknowledged, the parties intending to be legally bound, agree as follows.”

That the lease hereby granted shall, unless cancelled earlier under any provisions of this
agreement, remain in force for a period of 1 year commencing from 1.11.2022 to 31.10.2023
and shall be subjected for subsequent renewal under the conditions mentioned in the contract.
(Term Clause)

That in consideration of the use of the said premises the lessee agrees that he shall pay to the
lessor during the period of this agreement, a monthly rent at the rate of Rs. 13500/-, Thirteen
Thousand Five Hundred Only. The amount will be paid in advance on or before the date of
5th of every English Calendar month either in cash or bank transfer. ( Payment clause)