LAW OF CONTRACT

BY GROUP 2 ABHISHEK AMIT PALLAIVI NISHITHA SANJUKTA

CONTINGENT CONTRACT
Absolute CONTRACT

Contingent
Contingent which depends on something else

Definition: A contingent contract is a contract to do or not to do something. If some event, collateral to such contract, does or does not happen
Ex- Chandu agrees to sell a certain piece of land to Nambi, in case he succeeds in his litigation concerning that land.

Characteristics of Contingent Contract

1. Its performance depends upon the happening
or non happening in future of some event

2. The event must be uncertain

3. The event must be collateral, ie incidental to

the contract

Rules regarding Contingent Contracts

1. Contingent contract dependent on the happening of uncertain future event cannot be enforced until the event has happened. If the event becomes

impossible, such contract become void

Ex. A contracts to pay B a sum of money when B marries C. C dies without being married to B. The contract is void 2. If a contingent contract depends for its performance on doing of an act by the promisor, the contract becomes void where the promisor makes the performance impossible. 3. If a contingent contract contemplates doing of a thing if a specified event

happens within a fixed time, it becomes void if the event does not happen
within that time. 4. Contingent contract to do or not to anything if an impossible event happens, it is void

DISCHARGE OF CONTRACT
Discharge of contract means Termination of the contractual relations between parties to the contract. A contract is said to be discharged when the rights and obligations of parties under the contract come to an end.

Mode Of Discharge By performance By agreement or consent By impossibility of performance By lapse of time By operation of law By breach of contract

1. By Performancea) Actual b) Attempted 2. By Agreement or Consent

a) b) i. ii. iii. iv. v. vi. By express consent By implied consent Novation Alteration Rescission Remission Waiver Merger

3. Discharge by Impossibility
a. Initial impossibility- An agreement to do an act impossible in itself is void. The object of making any contract is that the parties to it would perform their respective promises. If a contract is impossible of being performed., the parties to it will never be able to fulfil their object, and hence such an agreement is void. For example, A agrees with B to discover treasure by magic. The performance of the agreement being impossible, the agreement is void. Similarly, an agreement to bring a dead man to life is also void.

. b. Supervening impossibility- The performance of the contract may be possible when the contract is entered into but because of some event, which the promisor could not prevent, the performance may become impossible or unlawful. Section 56 makes the following provision regarding the validity of such contracts : A contract to do an act which after the contract is made, becomes impossible, or by reason of some event which the promisor could not prevent, unlawful, becomes void when the act, becomes impossible or unlawful. Ex. A and B contract to marry each other. Before the time fixed for marriage, A goes mad. The contract becomes void.

THE DOCTRINE OF FRUSTRATION

When the performance of the contract becomes impossible, the purpose which the parties have in mind is frustrated. Because of a supervening event when the performance becomes impossible, the promisor is excused from the performance of the contract. This is known as doctrine of frustration under the English law, and is covered by section 56 of the Indian Contract Act In Taylor Vs. Caldwell (1863) It was held that when the contract is positive and absolute, but subject to an express or implied condition, e.g., a particular thing shall continue to exist, then in such a case, if the thing ceases to exist, the parties are excused from performing the contract. In this case A agreed with B to give him the use of a music hall and gardens for holding concerts on four different dates. B agreed to pay a rent of 100 for each of the four days. Before the date of performance arrived, the music hall was destroyed by fire. B sued A for the breach of the contract. It was held that the perishing of the hall without any fault on the part of A had made the performance of the contract impossible and, therefore, A was not liable for the non-performance of the contract

The cases covered by supervening impossibility1. 2. Destruction of subject-matter of contract Non-existence or non-occurrence of a particular state of things

3.
4. 5.

Death or incapacity for personal service

Change of law or stepping in of a person with statutory authority Outbreak of war

Impossibility of performance-not an excuse

(a) (b) (c) (d) (e) Difficulty of performance Commercial impossibility Impossibility due to failure of a third person Strikes, lock-outs and civil disturbances Failure of one of the objects

4. By Lapse of Time
The Limitation Act, 1963 lays down that a contract should be performed within a specified period of limitation. If a contract is not performed within the period of limitation and if no action is taken by the promisee in a Law Court, the contract is discharged 5. By Operation of Law This includes discharge by -

(a) Death
(b) Merger (c) Insolvency

(d) Unauthorized alteration of the terms of a contract

(e) Rights and liabilities becoming vested in the same person

6. By breach of contract a. Actual - At the time of performance - During the performance of the contract
b. Anticipatory - By an act of the promisor making performance impossible - By renunciation of the obligation ie express repudiation Ex- A promised to assign to B, within seven years from the date of his promise, all his interest in a lease for the sum of Rs 140. Before the end of seven years he assigned his interest to implied repudiation.