(2021) CT. - 42024 on tet NI bg qi that “T shall 1B 10 Buy his Mowe 8 and Hs a gherei ty does not ae Motorcycle Pee for neretone : ‘ ¥ to hi * 80,000 al is 1 9, not to sell the mmoterbike to anyone aoe but oe Unless 60 jek HOWE oT G. the motorbike tg 1, ©) Wants to sey) om, a civil sult against C. Advice Al - A seeks yourtl 0 advice ANS: wer of this question, refer th For ans 2 of 2 2 ot Fersp 2019 and Q. 2 of 2007, SF QNo. 1 of 2020, Id lady granted her estate to uld pay an annuity of ee ee the direction de a promise with X that he woul if brother, X. The mother, A. B failed to pay stipulated. annuity as peing aggrieved intends to file a suit against B and ice to X.X What advice would you give him? State Mie po our advice. judicial pronouncements on the same. 0! he (B) sho iat he OB ma ANS. section 2( ‘Consideration’ and set without consideration would Section 2(d) states that when, a or any other person— - Has done or a - Does or abstains from doing [ - Promises to do or to abstain fro something, such act or abstinence or promise is cal for the promise. (d) of the Indian Contract Act, 1872, defines the term ction 25 of the Act provides that an agreement be void, subject to certain exceptions. t the desire of the promisor, the promisee bstained from doing [Past Consideration], or Present Consideration], or m doing [Future Consideration], led a consideration - Ha the ordinary course, when a person makes a promise au 2 loes so with an intention of deriving some advantage W + Peson to whom the proposal is made is capable of conferring upon "t benefit is regarded in law as consideration for the promise. 625we’ Solved Pap 626 Ist Te eed upon as a return or e iy, em something is accepted or oere it is called consideration, Allene (or 4 pro quo) for the promise m . . ji tion Ran Cm The hy isor. An act done all the done at the desire of the promt the promisor will not ¢, person, or without the desir consideration. d v. Baldeo, (1881) 3 All 221, plaintig¢ sue, In Durga Prasa' by which the defendants promised 41 a agreement vr ails sold through their agency jn g Pay hin, a commission on | ed shops, in consideration of the plaintift aati which they ea the consideration of the bazaar. Such mone expended aa oied by the plaintiff at the request of the defendang he Or vonily ee a third person. It was held that such expenditure was no consideration for the agreement, since it was not made at the esire of the promisors, the defendants. 2. The promisee or any other person—Under the Indian Contract Act, the consideration may be given by the promisee or any other Person, Thus, in India, a stranger to the consideration can sue on a contract, This ans that where consideration is furnished by a person other than e promisee such a promisee though a stranger to the consideration can sue upon the contract. Thus, promise made by ‘A’ to ’B’, for which consideration is furnished a ‘C’, is enforceable by ‘B’ although ‘B’ isa stranger to the consideration. However, under the English Law, consideration must move from the promisee or from his agent only or if the consideration moves from a third party, it must move on the procurement of the promise. Thus, a party who wishes to enforce a contract must be able to show thathe himself has furnished consideration for the promise of the other patty: If the consideration is furnished by any other person, the proms becomes a stranger to the consideration and cannot enforce the prom This is called Privity of consideration. °s In Dutton v. Poole, (1677) 83 ER 423, the father of the een about i « i in he i timber on his estate so as to provide for a marriage PO. tinence Ce m desire of he i be Onstitute a g on could nen? Pay the amount to her. It was held that th fate! though she we ah action against the son on his promise 10 Pot moved from her. a party to the contract nor had © det In Indi. wn Baglch La 2 the above decision is applicable, nowew"( of 1 BS 393, wherein gic’ "8S Overruled in Tweedle v. Atkins”). it that each hae: Tespective fathers of the husband and and uld pay a sum of money to the husb Owever, he refrained from doing so on the Pm dash627 of Contract d should have full power to sue for such sums. After the the pusbant th the contracting parties, the husband sued the executors death of bot ment of the wife’s father. The action was not maintainable on the sand was stranger to the consideration. This case thus laid as the hus third party cannot sue on a contract, though made for his down are the nearness of relationship would be immaterial. bene sition is, however, different in India. Section 2(d) of the ~ Erase Act provides that the consideration may move from indian erson beside the promisee. In Chinnaya v. Ramayya, ILR a ot Mad 137, A, by a deed of gift, made over certain property to ce) hter, with a direction that the daughter should pay an annuity _ thee On the same day the daughter executed a deed in writing ae of the brother and agreed to pay the annuity. After that the daughter declined to fulfil her promise and the brother sued to recover the amount. The defendant (sister) contended that as there was no consideration from the side of brother, and that he being the stranger to the consideration had no right to sue. It was held that it is not necessary that consideration must move from the promisee himself. Therefore, the brother was entitled to maintain the suit. Difference between Indian and English Law regarding Consideration The Indian Contract Act, though mainly based on English Law, differs substantially from the corresponding provisions under the English Law. The main points of difference between the two on the topic of consideration are as follows— (i) Under the Indian Law, consideration proceeds either from the Promisee or any other person, however, under the English Law, the consideration must move from the promisee. (ii) Under the Indian Law, consideration may be past, present or future, whereas under the English Law consideration must necessarily be present or future. (ii) Indian Contract Act, 1872 does not specifically state that the consideration must have some value in the eye of law, however, under the English Law consideration must have Some value in the eye of law. 3. The consideration may be either past, present or future, Le, (i) Has done or abstained from doing (Past Consideratio t something has already been done or abstained from doing and as a return of it, the promise is made therefor. In other words, where the consideration Ppreced i pis les the TOMise : a called past consideration. In India, Past consideration is cient i i i ee to sustain a valid contract, it need not be present ture, as required by the English Law. n)—It meansLLB. Solved p Je, ‘A’ saves B’s life. ‘B’ promises to pay ‘4, Term Ft oF atitude. Here, the consideration is 2 - - Lgg did nothing or refrained from doing an ing on [ ‘Use ‘" B’s promise. He did the act before B’s Promise waco . (ii) Does or abstains from doing (Present or Executed Consider “de, When one party has done or completed all that he tion) to do when the promise was made by the other Mise the consideration is said to be executeg, An oy Py, consideration is something actually done, forbyme ®t suffered contemporaneously with the making of the aan or Promises to do or to abstain from doing (Future or Execy Consideration)—A promise made to do or to abstain from d tory something in future is called an executory Consideration, 4. Something - The consideration must have some value in the ge of law. Consideration is a quod pro quo for promise, i.e., something for (iii) something. A contract without consideration is nudum pactum, ie, a bare promise. Thus, according to Lord Denning, L.J., “consideration isa cardinal necessity of the formation of the contr The law will not enforce a promise given for nothing, i.e., ex nudo pacto non oritur action. Thus, out of a naked pact, no cause of action arises Q. 3/2021 Ram, a minor, falsely represent himself to be of the age of majority enters into an agreement with Mohan, to sell his agriculture Mohan paid full consideration of Rs. 50 lakhs to Ram. However, latet Tefused to execute a sale deed of his agriculture land in favow of Mohan on the plea of minority. Mohan files a suit for breach contract. Will he succeed? Decide the case with the help of statute! and relevant case law. ANs. 2020, Q ie One Of this question, refer the answer of Q. 3 of * # of 2016 and Q. 5 of 3001. Q. 4/2021 o own of e ‘onan Gograj were two brothers and both were eee unis Dunwily Property. They quarreled and had ae _ his brother Khun et; COBra) initiated criminal proceediN view to defeng ies i. Khubj Mortgaged his share of proper from If in the criminal proceedings and borro'contract d interest 9 629 eos at & cOmpOUN: St of 26%, In sg00® a multiplied more than twelve-fold ie fel y F ae the amount port¥"" cancellation of mortgage deed, Ww; 4 6,49,000. Khubi applied for ill he succeeg? Decide : = ie, “ answer of this question, 0. 5/2021 a film producer had entered into a contract wi ibi : i in B’s cinema hall on 25th April 2020, On the bs dor at oe ie coul id not be exhibited due to the outbreak of corona 7 the et halls were to be kept closed in terms of an executive order of the government. As a result, A suffered huge losses, A has filed a wit against B. How would you argue the case of B if engaged as his lawyer? ANS. For answer of this question, refer the answer of Q. 6 of 2016. Q. 6/2021 X, who was a cloth manufacturer had entered a contract with ABC Transport Co. to deliver cloth at Jaipur where he was expected to cary on his business at high profits by the reason of a forthcoming festival. X had only mentioned that the cloth must be delivered at the Specified address. Because of the fault of ABC Transport Co. goods Were delayed and delivered much after the conclusion of festival. A claim Projected losses, that is, the loss of profits that he might sa i. ed had the goods been delivered at the right time. Will A succee “cuss the law and precedent in this regard. Ans, F °F answer of this question, refer the refer the answer of Q, 4 of 2020. answer of Q. 6 of 2020.OF CONTRACT LAW (2020) , 1/2020 torcycle belonging to B ang t : ‘A wants to purchase ang to ‘pay his Motorcycle fo, Re rong he writes a ria ea shall take the ee to be mine stating therein eas does not reply to this letter but directs I hear from you he motorbike to anyone as he (B) Wants to agent), not to sell C sells the motorbike to D. A seeks yor weve!, r ome eeu against C. Advice A. Unless is Sell the UE adVicg ANS. i ion in the present question js law relat; issue under consideration in Ik Telatin, to ese der contract as envisaged under sections 2 to 19 of the Indian Contract Act. ; The word ‘Contract’ is derived from the Latin word “Contractum" which means ‘drawn together’. Simply, contract is an agreement enforceable by law. It is an agreement made between two or more persons to do or to abstain from doing a particular act. A contract invariably creates a legal obligation between the parties by which certain rights are given to one party and a corresponding duty is imposed on the other party, According to section 2(h) of the Indi Contract” is defined as an agreement enforci Thus, section 2(h) contains two ele (An agreement [as defined ite Its enforceability by law, @ Agreement Section 2(e) 9 an Contract Act, the term eable by law. ments:— in section 2(e)] these two elements in detail. and 7 the Contract Act defines agreement as every P a context pa ae forming the consideration for each other. al ate syn fa proposal (offer). The words ‘proP) defines the tem oY ™OUS and are used interchangeably. Sectiom a Proposal’ ag follow: of abstain ae Person signifies to another his willingness 10 ai other t0 such gare ything with a view to obtaining the asset “1 OF abstinence, he is said to make provost 630f Contract 631 jon 2(0) defines the term ‘promise’ as follows: “when, the person to whom the proposal is ; sere, the proposal is said to be accepted. A ecomes @ promise. made signifies his assent Proposal when accepted By example, Ramesh offers to sell his bike for Rs. 8,000 to Shyam, and treated as an accepts his offer. It becomes a promise sya ent between Ramesh and Shyam. In other words, an a; iv, of an offer by one party and its acceptance by the ee Agreement = Offer + Acceptance. : from the above analysis it is clear that there must be at least two rties to an agreement, one making an offer and the other accepting it No person can enter into agreement with himself. There is another important aspect relating to an agreement i.e., the parties to an agreement must have an identity of minds in respect of the subject-matter. They must eon the same thing in the same sense. This is also called consensus- aidem. Suppose A has two houses, one situated in South Delhi and the other in North Delhi. He offers to sell his North Delhi house to B while B is under the impression that he is buying the South Delhi house. Here, there is no identity of minds. Both the parties are thinking about different houses. Hence there is no agreement. i) Enforceability of an Agreement An agreement in order to be enforceable must have certain essential dements. According to section 10—All agreements are contracts if they me made by the free consent of the parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared 'o be void. Thus, an agreement becomes a valid contract if it has the following elements. (1) Proper offer and its proper acceptance (2) Intention to create legal relationship (3) Free consent (4) Capacity of parties to contract (5) Lawful consideration (6) Lawful object n Agreement not expressly declared “ertainty of meaning void 4 . Vossibility of performance ‘ Ma Legal formalities e. Us now discuss these essential elements one pees i oint in e Proper offer and proper acceptance: Offer is or i. ee do tegmation of a contract. It is a i peas 1 acceptance 7 : Offer is made with a view to obtainLL-B. Solved Papers 7 erm is called the 632 : e roposal is cal ¢ pr making te Fo 'the proposal is made ae other party. The person tow 1] his house to B for Rs ed offeror or promisor. ini oe i" offers to Se" - 10 lakhs the offence or promisce. 3 This is an offer. ' jals of an Off tials © eae Sell ing are the essen implied: An offer could be express si be express oF a e either orally or in writing. Ay . Of ‘and may be ma itten—is called an express offer. bad implied, ords—oral OF writte lied offer - Offer made by conduct js called an implied Offer. — made by conduct tention to create legal relations: Offer sho © There must be an anion to create legal relationship. The made with a enerally agreed without an intention to engagements 2° dl s, any agreements, which are not in legal oe egal relationship, are not enforceable. al . ae must be clear and certain: The terms of offer must be ve, ; si and definite. They must not be vague, @.g. A says to B, ‘I will supply 100 tons of oil’. This is a vague offer because, which oil he is referring to is not mentioned. © It must be communicated to the ofjeree: The offer can be accepted only when it is communicated to the offeree. According to section 4, the communication of a proposal is complete when it comes to the knowledge of the person to whom it is made. Mere ignorance of offer does not amount to acceptance of the same. © It may be specific or general: Specific offer is made person, e.g. A offers to sell his house to B. Ge to the public in general, e.g. A offers to sell his Acceptance Accept i iscreated only afters agreeing the offer made by the offeree. A contract person to who r is accepted. According to section 2(b), “when that the pro rai ae is made assents thereto, it signifies : 0 e accepted”. A proposal becomes a promise, When it is ac : rding to Anson (2002), “acceptance to an offer is an offer. Uuld be Social Create tendeq to a particular neral offer is made house to anybody. ene Acco Which Cannot be r, a gun accepts Pe acepted and it int Purchase the house. A’s offer is said ' by Words one May be express reable agreement between A and 5: acceptance KEN OF Written j i implied. When the acceptance is ~ . S Made otherwise «> Called ‘express acceptance’. When express modes it is called ‘impli633 ceptance may be gathered from the surrounding yf on plied 2c : ae from the conduct of the parties (Section 9). fa valid Acceptance pals ° are the essentials of a valid acceptance. ance must be communicated: When an offer is made to a rclat rson, it can be accepted by him alone (Boulton v. 1857, P- 564). But, in case of general offer, any person to the offer is made can accept it (Carlill v. Carbolic Smoke 1893, P- 256). The offeree must signify his assent or the acceptance to the offeror. The offeror cannot impose upon the offeree a duty to give reply. The offeror cannot say that failure to give reply will be deemed to be the acceptance of the offer. Therefore, mere silence cannot be regarded as acceptance. This point can be illustrated by the well-known case of Felthouse y. Bindley, (1862) EWHC CP J 35. In this case, F offered by a letter to buy his nephew’s horse for £ 30 saying, “If I hear no more about him, I shall consider the horse is mine”. The nephew sent nO reply at all but told Rindley, his auctioneer, not to sell that particular horse as he intends to sell it to his uncle. Bindley, however, sold the horse by mistake. F sued the auctioneer for conversion. It was held that F will not succeed as his nephew had not communicated acceptance and hence there was no contract. Acceptance must be made in prescribed or usual manner: If the manner of acceptance is prescribed by the offeror, the acceptance has to be made in such manner. If manner is not prescribed, the same may be made in some usual or reasonable manner. Such as post, telegram, telephone, or through messenger, etc. Acceptance must be made while the offer is still subsisting: The offeror is free to withdraw or revoke the offer. When, once the offer is withdrawn or revoked it cannot be accepted. Therefore, it is necessary that the acceptance must be made while the offer is : still alive and subsisting. The acceptance must always be made only after the offer is made: It aa precede an offer. If the acceptance precede an offer, it 1s a valid acceptance and does not result in a contract. i scepan, law ha prescribed certain rules for making the offer and bor exam 1 that must be satisfied while entering into an agreement. he oytPle, the offer must be definite and duly communicated a “ununicetet, - Similarly, the acceptance must be unconditiona’ ke Cmnditions 2 the offeror in the prescribe mode, and so On. = Beement fut regard to the offer and the acceptance loes not become enforceable. whom pall CO communicateLL.B. Solved p, 1g Joy t eate legal relationship: There must be create a legal relationship. If an ag aN integ, al obligation it is not a contract. In ¢, ig tot generally there is no intention ea ; or domestic agreements, ly ther ) relationship. For example, in an invitation to dinner there is Pa legal to create legal relationship and therefore, is not a contract intention certain agreements between husband and wife do not become ly, because there is no in Contracts 634 (2) Intention to cr among the parties to capable of creating 4 leg tention to create legal relationship. Thig po; be illustrated by the famous case of Balfour v. Balfour. Mr, Barta promised to pay £ 30 per month to his wife living in England. she could not accompany him to ceylon where he was emplo, i Balfour failed to pay the promised amount. Mrs. Balfour fel ' against her husband for breach of this agreement, it was held on could not recover the amount as it was a social agreement and fe she never intended to create any legal relations. Patties (3) Free consent: For a contract to be valid, it is essenti 1 nti must be free and genuine consent of the parties to the pet lara must have made the contract of their own free will and me any fear or pressure. According to section 14, consent is said i hae when it is not caused by (i) coercion, (ii) undue influence, (iii) fraud, (i misrepresentation, or (v) mistake. In case the consent is obtained by ae the first four factors, the contract would be voidable at the oj sake, : ——— party. But if the agreement is induced by ie WwW. sr oleae to the agreement, it would be void. ‘apacity of parties: The parties competent to contract i.e., they ict ‘be capab [fea oi : soniiaek, Marg party is tha nonevart + e capable of entering into a eee ase valla Now contract is not competent to contract, the to contract? Anawer to this era aa Papen ihek which, say that toéry person de armmpet provided by section 11 off Siajoreg curds Aidan competent to contract who is of the age of : Orang which he is subjec ; and is not disqualified from Sine a ‘» see wie — io as per this section, the law fl aaa He eae : lunacy, idiocy, etc. If a pari cy aaa apt 2 flaws, the agreement, mith a ie ai suffers from any of i (5) Lawful eae . ipa saialylndet eugene rv consideration. Consideration n sgrecinent must te BY also defined as the price paid b pe something in retum the However, this price need BA iw Heat buy the promise of ee . agrees to sell his book to Bore Desir tormna| ot One? For ow A is Bs, 20, and for B itis the book, ee consideration for The considerati : pentane? : ration (not doing something) on be an act (doing something) oF for, a promise to do, or not to do somea deration may be past, present or a 635 me ie. it must have some value in the a oe be aeration need not be adequate. For example, A sel However, the const ‘90 to B for Rs. 10,000 only. This is a valiq’ sells his car w, ge of A is free. Promise provided at a contract to be valid, the consideratj jderation is considered lawful unless it is forbid so be lawful, 3 vaudulent, or involves or implies injury to the ver by law, ot ¥ anotheti or is immoral, or is opposed to public policy t Sead pr @ Lawful object: The object of an agreement must be | ion 23), ent made for any act which is prohibited by law wat waa For example, if A rents out a house for use as a pia of the agreement is oa ent is void because the object is unlawful for any of the reasons mentioned in section 23, consideration as well as the object, on should a valid. the a If the objec : the agreement shall be void. Thus, the of the agreement should be lawful. (7) Agreement not expressly declared void: The agreement must not have been expressly declared void under Contract Act. Sections 24 to 30 specify certain types of agreements which have been expressly declared void. They are agreement in restraint of marriage, agreement in restraint of legal proceedings, agreement in restraint of trade and agreement by way of wager. For example, A agreed to pay Rs. 1,000 to B if he (B) does not marry throughout his life. B promised not to marry at all. This agreement shall not be valid because it is in restraint of marriage which has been expressly declared void under section 26. (8) Certainty of meaning: Section 29 of the Contract Act provides that Agreements, the meaning of which is not certain or capable of being made certain, are void. Thus, to make a valid contract it is absolutely essential that its terms must be clear and not vague or uncertain. For example, A agreed to sell 100 tonnes of vil to B. Here it is not clear what Kind of Oils intended to be sold. Therefore, this agreement is not valid on Sound of uncertainty. F must ®) Possibility of performance: The terms of the ane aa i; such as are capable of performance. An canes ible of impossible in itself is void. (Section 56) If the act be by rs , physically or legally, the agreement cannot ire that & i) Legal formalities: The Contract Act =e i ~ie asin t Must be in writing to be valid. An oral orn rm pate 8 written in some cases romise 10 Pe Ageement tot be made in witing: FOF Oat fr asl * time barred debt must be in writing andLL.B. Solved p, i iting and rep; ty erty must be in wri Bolen Sister, * fer Fa neh a, Transfer ak necessary formalities as to writing, "Risa comply legal formalities are not carried out, then the Contant If these . law. x etree vy discussion, it is clear that all these elements : From ‘n agreement so that it becomes a valid Contract, Jf nt resent in f them is missing or absent, the agreement will not been ent of them 636 on ‘ sent question, 'A’ wants to Purchase a Decision: in by Pee writes to B, offering to buy the mete ee aoa ‘stating "I shall take the motorcycle to be mine i for Rs. 80, ou.” B does not reply, but directs his agent not to calla hear = 2 anyone as ‘B’ intends to sell the same to A. Howe sea eaaae torcycle to D. Here ‘A’ cannot enforce the Contract, becay sells a : oe ie., ‘B’ must have signified his assent to the offer in naeeeae ie, ‘A’ cannot impose upon the offeree ie, 'B’ a duty me ; al of accept the offer. The offeror cannot say that a failure ae = will be deemed to be the acceptance of the offer. This point a be ane by the well known case of Felthouse v. Bindley, [186 EWHC CPJ 35. Q. 2/2020 A, an old lady granted her estate to her son B Hate ie that he (B) should Pay an annuity for Rs. 10,000 to A’s ak The same day B made a promise with X that he would Py ext as directed by his mother, A. B failed to pay stipulated si Bees being aggrieved intends to file a suit against B and rie f your advice. What advice would you give him? State wii judicial pronouncements on the same. Ans. ; ‘on js the doctii® The issue under consideration in the present question 1s of privity of contract. Law Relating to the Doctrine of Privity of Contract ta party wl A contract cannot be enforced by a person who is se t alt even though it is made for his benefit, He is a ‘stranger #0 of Pri ie and can claim no right under it. This is known as the doctrit of Contract, Essentials of Privity of Contract artes Me - A contract has been entered into between two P act 2 portant essential is that there hae been a cont ies,roc 637 im _, gust be competent and there sh, f 4 PG eration: Competency of parties and the be a valid jgeration 2° pre-requisites for application of this doo of as been a preach of contract by on loctrine. nese by one Party is the : @ party: Breach be contract ry " ® essential requirement for sppiction of the doctrine of privity of contract. the arties to contract can sue each other: N : wen only Parties to a contract are entitled to a — viper for non-performance of contract. Bi each w V Indian Law as eral rule, both Indian and English law are similar to each that only parties to contract can sue each other. In a leadin, ; of Tweddle v. Atkinson, it was held that the laintif pi + sue a5 he was both a stranger to the contract as well Dna to tion. This concept of privity of contract was again analyzed in of Dunlop Pneumatic Tyre Co. Ltd. v. Selfridge & Co. Ltd. In the an context also this concept of privity of contract is similar, the only g that in India a person who is stranger to consideration itrorence beil: an sue whereas in England he cannot. consider case tion in Privity of Contract portant element of any contract existing between the parties unless there is consideration a contract is considered tobe void. It is defined in section 2(d) of the Indian Contract Act, 1872. Consideration is considered as the foundation of every contract and it forms the basis of it. Exeptions to the Doctrine of Privity of Contract As a general rule only parties to contract are entitled to sue each other, but now with the passage of time exceptions to this general rule have come, allowing even strangers to contract to prosecute. These ceptions are: 1A beneficiary under a contract: If into between two persons for the being a party, then in the event of fai his part, the third party can enforce his rig For eg., in a contract between Alex and James, in respect of some property may be created in and in that case, Robin can enforce his claim on oH Tight. This concept of a beneficiary under @ contract” B highlighted in the case of Muhammad Khan v- Husaini Begum. 2 Con, scion: There ca ~onduct, Acknowledgement or Admission: ivity of contract Situation in which although there ™4Y be no pri Role of considera’ Consideration is the most im a contract has been entered benefit of a third person not ilure by any party to perform nt against the others.LL.B. Solved Pa, ' St T, ws , if one of them by hj. between the two partis: Peehe right of the other he ae or reco} 1 (Narayani ,. ma ment Fr jaw of estoppe’ iarayani Deoj yp be basis Oot utd.). For e.g. if A enters into g é Bor Corporat Ms. 5000/- every month to B querer fat to his son C. A also acknowlege, 8 bis d after ce of C. Now if A defaults ¢ care this ction in the Pe ing directly a party to contract," Yety him, although ”' maintenance oF Marriage unde, fami, f provisions is treated as i arrangement: Ty of contract for protecting pt to the soe not likely to get a specific share ahs of family members "ect to the will of the testator. Foy st! ao to give maxim rty in equal portions to his 3 sons with a ceil A gives he PoP cath all 3 of them will give Rs. 10,000 each tn te dai of A. Now C can prosecute if any one of them fa 0 ol : Conclusion From the above discussion, the doctrine of privity is both applicable in England and India. Decision of the Question The facts of the given question resembles the facts of Venkata Chinnaya Rau v. Venkatanaraya Garu, (1881) 4 Mad 137, where an old bedy eee some property to her daughter D on the condition that any D nd Pay Some annual amount to her maternal aunt P. On the same Later D refused to na eyeement with P to pay her the agreed amount had moved hem ay Tame on the plea that no consideration move from sroniliee vy - e Court held that the consideration may y other person. Here the consideration had moved from mothi enforce it, other to daughter D and as such maternal aunt P could On the ; . a directing that Boh the given problem A had granted her estate The same day B made ould pay annuity of Rs. 10,000 to A’s brother X by his mothe ‘ Promise with X that he would pay annuity t A. B failed to Pay stipulated sum to X. X can (Xsan ne owing grounds — ” thus, he wed beneficiary under the contract betwee A a Contract (in the ane, Covered under the exception to privity | Q) ae. Bht of the ratio laid down in the abovemention | A had already »9: \ \ q ' \tract fom rther ackn B had fu Owledgeq x. 2) he is asta ee, law of esto, matt 639 [As per ratio of Narayani Dey; OM refygy uty, therefore ib (1972). Tagore Cy mma Be the above discussion thus. it; from ” thus, it ig d auld not sue B as ee was Not a party to he t as a Benera} falls under one of the exception discusseg Contract, owe Tule, a suit against B. *P0Ve, he ig entition 0. 3/2020 Ram, a minor, falsely represent him, : 1s into an agreement with Moh, f vokan paid full consideration of ts, 5 lake hi agriculture lang, jam refused to execute a sale deed of his agriculturs However, later of Mohan on the plea of minority, Mohan files a land in favour contract. Will he succeed? Decide the ‘uit for breach of and relevant case law. Self to be Of the age of Majori case with the help of Statutory ANS. The issue under consideration is the law relat ting to the validi enforceability of a contract, one Party to which is 6 validity / a minor. Law relating to minor’s contract in law and equity According to Section 10 of the Contract Act, all agreements are contracts if they are made by the free consent of parties to contract, for a lawful consideration and with a lawful object and are not hereby expressly declared to be void. Thus, one of the essential elements of a valid contract is that the contracting parties must be competent to contract. : According to Section 11 of the Contract Act, every person is competent to contract: (a) who is of the age of majority accordin he is subject; (b) is of sound mind, and : ae ()_ is not disqualified from contracting by any is subject. g to the law to which to which he Nature of Minor’s Agreements ct must be competent. Section 10 defines that the parties to contra‘ , But neither ee Section 1] declares that a minor is not compere pemnent it would Voida it clear, that, if a minor enters into a0 down by ble or altogether void. ent of law Wat 330 aut the oe context, the authoritative oenrmodas Ghose, 09° uncil in Mohori Bibee v. Dhaba LL.B. Solved p, In this case, the plaintiff, a minor, mortgaged his house in fay Tom defendant, a money-lender, to secure 4 Joan of Rs. 20,000, a Our 4, amount was actually advanced to him. While considering net of r the money-lender) receiveq * Prope advance, the attorney (acting fo that the plaintiff was still a minor. Subsequently the minor oo this action stating that he was under age when he executed the and praying for a declaration that it was void and ino, 7 should, therefore, be cancelled. The defendant put in aoe plaintiff was of full age when he executed the mortgage; aay atthe nor his attorney had any notice that the plaintiff was then at Neither je even if he was a minor the declaration as to his age ay infant; that made to deceive the defendant, and disentitled the plainti fraudulen and that in any case the Court should not grant te oki to any Telief. without making him repay the money actually eee “— Telit also argued that according to section 64 of the Act, Ss © defendant having the right to do so, rescinds a voidable contract, ‘h Person Who, restore to the other party any benefit received by him 7 he shall have tp The trial Court found the facts as above stated sane the contract, asked and the appellate Court dismissed the a ’ Branted the reliet The Privy Council held thi Ppeal from him. peat eld that the money-lender was not enti @ money actually advanced by him. TI t entitled to get that all the contracting parties See ae - The Act makes it essential expressly provides that a person who b pe competent to contract and io congact anno eae by reason of infancy is incompet Pac contract within the meanin, petit held id th me out by later sections (Sections 68, 183 oT liege e restitution of money und sign 64 oF H ane aot Mors re 7 be granted ca minor's anes i ied Indian Contract this beehives Similarly, no relief can be a cement is absolutely voi aE ion is confined to those cases wt pS een ee bois void or a contract becomes voi here the agreement is discovered , like, section 64, “ es void. Privy Council : eapmetee “ee , “starts from the basi 7 7 uuncil held that section : i tween com sis of there being an aj ent in etent parties: ig an agreen which there never w, : parties; and has no application to ca Therefore, a ming. Vo 2nd never coul PP in Mohiny Bint 8 Rot liable und ould nave been, any can ibe case, to repay an re section 64 and section 65 as The Pe ve received under oney or compensate for any Privy Council further held a void agreement. 77 (now in the above case that section is discretion to the rains 33(1)(a) of the Specific Re Teel ono eC Fee he pty © the : justice may requir is given to make compensation Contract. It is based on qe dnt®: The relief is in equity and 7 Principle: “He who seeks equil) Tocontract 641 ee gas a minor. From this case, it is evident that relief under the wer We ‘¢ discreti £ Act is discretionary, and the Court nd¢ pe ss the defendant's case. must be satisfied of ine jandmark case on the a available against a fraudulent minor decision of the Lahore High Court in Khan Gul y. Lakha Singh, ist 1928 Lah 609. In this case, a minor, by fraudulently concealing contracted to sell a plot of land to the plaintiff, He received is 28 ation of Rs. 17,500 and then refu: ee his consideration of Rs. en refused to perform his part of in ba gain. The plaintiff sued the defendant minor for delivery of the on of the plot, or in the alternative, for a decree for recovery of amount along with interest. The defendant minor pleaded minority avoid the contract. The issue before the Court was whether a minor to be made to repay, as the English doctrine of restitution does not cover the cases of money. The Full Bench of the Lahore High Court observed that the doctrine of restitution finds expression in section 41 of the Specific Relief Act. The statute, however, nowhere says that uniary compensation should not be allowed, when the award thereof would tantamount to a repayment of money borrowed on the strength of void transaction. The Courts in India have ordered the minor to refund the money received by him before allowing him to recover the property sold or mortgaged to the other party. Thus, the doctrine of restitution would not be of any help unless it was extended to cover money cases also. Sir Shadilal C.J., gave following reason to extend the doctrine of restitution to money cases also: “There is no real difference between restoring the property and refunding the money, except that the property can be identified but cash cannot be traced.....t must be remembered that, while in India all contracts made by infants are void, there is no such general rule in English. There should therefore be a greater scope in India than in England for the application of the doctrine of restitution. The doctrine ‘ests upon the statutory principle that an infant cannot be allowed by a of equity to take advantage of his own fraud. A false representation Yan infant that he was of full age give rise to an equitable liability.” pen the Court relied upon the equitable jurisdiction of the Court €t restitution of Rs. 17,500 to the plaintiff. The Court observed that restora Of such a relief is not an enforcement of the contract, but a i ion of the state of affairs as they existed before the formation of looker 8¢t (Status quo ante). The Court, while giving this relief, has not therein al the contract to give effect to any of the stipulations a should deed the relief is granted not because there is a contract whicl axigt «0° eAforced but because the transaction being void does not before hee Parties should revert to the condition in which they were transaction,LL.B. Solved 642 Term . atudhia Prasad v. Chandan Lal, ATR 1937 Bole in — follow this enlarged view of restitution 1, Sulaiman, eee decree against the minor would tan, helg that the ainor’s iary liability under the contract what g the Behe defendants (minors) executed a mortgage dead ® void. In this om sntiffs. When @ suit was filed to enforce the mort h a ded that they were minors at the time of the morige found that there was fraudulent concealment of the fact im deed. It was ! rs at the time of the execution of the mortgage deed, they were anaes habad High Court considered at length the reasonin full bench of Allal A 1 Gul case and dissented from it, Sulimap in given by the Full cea eel view of restitution made in Khan Gul 4h -, India were probably bound by the pring; ore ce genie | Leslie case, his Lordship ia of seve 4 contract of transfer of property is void, and such Property can be traced, the property belongs to the promisor and can be followed, There is every equity in his favour for restoring the property to him, But, where the property is not traceable, and the only way to grant compensation would be by granting a money decree against the minor, decreeing the claim would be almost tantamount to enforcing the minor's pecuniary liability under the contract which is void....There is no rule of equity, justice and good conscience which entitles a Court to enforce a void contract of a minor against him under the cloak of restitution.” Thus, no decree could be given to the plaintiff for the recovery of money against the defendant. This gave rise to a conflict between the two opinions given by Lahore High Court and the Allahabad High Court. This was resolved by the Law Commission of India. _ The 9" Report of The Law Commission of India preferred the opinion in, Khan Gul v. Lakha Singh, AIR 1928 Lah 609, and accordingly stated eae au ei ard to restore an unjust benefit should not depend upon : re fara re of a person coming before the Court as a plaintiff or ecipaers ae ee the doctrine of unjust enrichment, /. nefitted at the cost of the other. As a consequence, the new Specifi i o section 33 provides- pecific Relief Act, 1963 was enacted Whe i Loa fi tng otird to the Court as a plaintiff (ie. when 4 i fu against the other party), he can be compel fits received from the other party and of nation to him which justice may requis. [Section eal . ‘eae fic Relief Act, 1963] (ie, when other party ght before the Court as a defendant Sompelled to restore such teat! against the minor) he ca" the defendants plea fit, including money, to thec ayntract yf at to the extent to which it has Fas education or training, or it has b pe ach to the estate means that there should his estate a catate The money spent by the minor on ente accretion to his ad drinking cannot De recovered as there is 1 ting rsonally or to his estate. [Section 33(2)(b) of = benefit to hin 1963]- © Specific Relies the Court may order the minor to bas " esentation of age by him. - benefi : turn the benefit in case However” sowed: th < @) Where the other party is aware of the minori deceived. (o) Where the other party is unscrupulous in his dealings with the minor. ere the other party is so zealous to a : a . the false jae ta by the nia oar ae (4) Where justice does not require the return of property or mane by the minor. Decision of the Question As per the facts of the question,-Ram has falsely represented himself of majority and induced Mohan to enter into a contract with him. Thereafter, Mohan paid full consideration of Rs. 50 lakhs to Ram under that agreement. However, Ram refused to execute the contract of sale of his agricultural land to Mohan on the ground that he was minor when he entered into a contract with Mohan. As per the law laid in Mohiri Bibi v. Dhurmodas Ghose, (1903) 30 1A 114, the contract between them is wid ab initio as Ram was not competent to contract as per mandate of section 11 of Indian Contract Act. Further, Ram cannot be compelled toperform a void contract under sections 64 and 65 of the Contract Act and is also not estopped under section 115 of Evidence Act to plead his minority. But he can be directed to pay the amount he has received a qk, as provided in section 33(2)(b) of the Specific Relief i 0) we Mohan can claim the amount of Rs. 50 lakhs under sec ed t) ofthe Specific Relief Act, 1963 on the ground that he wae by not revealing his real age. 2 42020 al owners Ahubi ana Gograj were two brothers and both wre a over this i joint family property. They quarreled . i Raingt L: Due to the same, Gograj Ss share of property brother Khubi. Khubi mortgaged in the following cases restitution b ‘i Y @ minor will no t be ity so that he is not644 LL.B. Solved P, oe Ist 9, Vikram t imself in the criminal proceedings a, ™m from ee % 0 capes ata compound interest of 26%, ores the amount borrowed multiplied more cr twelve-fold ie, at, 649,000. Khubi applied for cancellation of mortgage deeq wit succeed? Decide. be ANS. ion in the present i The issue under consideration in Pp question ig i 7 relating to “undue influence”. : Sometimes, the parties to an agreemen ate Telated to each that one of them is in a position to domina ah e will of the Other, ‘on who is in a position to dominate the will of the other May prevai a the other to obtain his consent to an agreement due to his SUperig position. Such a consent is said to be obtained by undue influeee ; unfair advantage is taken. Thus, the person who has influence can not betray the confidence reposed in him. According to section 16(1) of the Indian Contract Act: “A contract is said to be induced by ‘undue influence’ where the relation 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.” Elements of Undue Influence Sub-section (1) of section 16 mentions two elements of undue influence. They are: (1) the relationship subsisting between the parties to a contract are such that one of them is in a position to dominate the will of the other; and (2) he uses that position to obtain an unfair advantage over the other. According to section 16(2) of the Act, a person is deemed to bein 4 position to dominate the will of another — (i) Where he holds a real or apparent authority over the other or (ii) Where he stands in a fiduciary relation to the other; 0 (iii) Where he makes a contract with a person whose me capacity is temporarily or permanently affected by of age, illness, or mental or bodily distress. Section 16(3) i x ition 1 E ) provides that “Where is in a posit te the will of the a, ther e a person who is the enters into a contract with him, ary “ppears, on the face of it or on evidence adduced, to be uncnsoeie Contract proving that such contract was not i jr * on ot induc i , fe upon si Rete ee ee to dominate the mt undue influence Thus, according to section 16(3), if one pe : of the other.” inate the will of the other and the Gece 18 I a position to dome" gen of proving that such cont ion is unconscionable, tract was i he i th « a not induced b fen shall Hie upon Te Person a 8 position. to a a 645 of the other. Raghunath Prasad v. Sarju Prasad, AIR 1924 PC 66, the ¢ and his father were the joint ape property: Owing to quarrel ieee bie sonal joint 4 inal proceedings against the son. In order to defend Goneci te i mortgaged his property for a sum of Rs. 9,999 borrowed fr i the ndent (father) at 2 per cent per month, subject to the condition th f in the event of non-payment of interest, the interest will be ares at the same rate on the principle of compound interest. In eleven years, the amount borrowed with interest came to Rs. 1,12,885. In a suit by the respondent for the recovery of the amount the appellant (son) contended that there should be presumption of undue influence as the lender by fixing high rate of interest, had taken unconscionable advantage of his mental distress. The issue before the Privy Council was, whether the appellant, in the circumstances proved in the case, fell within the protective provisions of section 16(3) of the Indian Contract Act, 1872. The Privy Council held that three matters are dealt with in sub-section 3 of section 16. They are as follows: “In the first place, the relations between the parties to each other must be such that one is ina position to dominate the will of the other. Once that position ts established the second stage has been reached — namely, the issue whether the contract has been induced by undue influence. Upon the determination of this issue @ third point emerges, which is that of the onus probandi. If the transaction appears to be unconscionable, then the burden of proving that the contract was not induced by undue influence is to lie upon the person who was in a position to dominate the will of the others. E i ise if the order of these propositions be rror is almost due to arise if the of se Feet thing changed. The unconscionableness 9 the bargain is 1 t to considered. The first thing be considered is the Sagat 2 mee parties. Were they such as to put one in a position to dom the will of the other.” The Privy Council further said that in this (or the aerate Fe such mental distress as would enable a moneylen es ee are ees Since the fact of the domination of toe 9 | was ough the targa of undue influence could not be raised, Was unconscionable.