Law & Life

Persons Disqualified by Law 1. Introduction A valid contract requires competent parties , meaning those who are legally capable of entering into an agreement. Section 11 of the Indian Contract Act, 1872 , states that a person is competent to contract if they: Have attained the age of majority (18 years or above) Are of sound mind at the time of contracting Are not disqualified by any law applicable to them If a person falls into any category of disqualified individuals , any contract they attempt to enter into may be void or voidable . The purpose of these legal restrictions is to protect the individual from exploitation and maintain fairness in contractual relations . 📌 Definition (Section 11, Indian Contract Act, 1872): "Every person is competent to contract who is of the age of majority according to the law to which he is subject, is of sound mind, and is not disqualified from contracting by any law to which he is subject." 💡 Example: If a 16-year-old minor...

  Reciprocal Promise Reciprocal Promise 1. Introduction In contract law, a reciprocal promise refers to mutual promises made by two or more parties, where each party’s obligation depends on the promise of the other. Such promises create a binding relationship where both parties must perform their respective duties. 📌 Definition: According to Section 2(f) of the Indian Contract Act, 1872 , "Promises which form the consideration or part of the consideration for each other are called reciprocal promises." 💡 Example: A agrees to sell his car to B for ₹5 lakh, and B agrees to pay the amount on delivery. Here: ✅ A’s promise (to deliver the car) depends on B’s promise (to pay ₹5 lakh). ✅ These are reciprocal promises , as both parties must fulfill their obligations. 2. Explanation Reciprocal promises form the foundation of bilateral contracts , where each party has mutual obligations . Such promises can be of different types, depending on how they are structured. Ty...

 Unsoundmind Persons 1. Introduction In contract law, mental capacity is an essential requirement for entering into a legally valid contract. A person must be of sound mind to understand the terms of the contract and its consequences. If a person is of unsound mind , their ability to form a contract is limited under the Indian Contract Act, 1872 . 📌 Definition (Section 12, Indian Contract Act, 1872): A person is said to be of sound mind for the purpose of making a contract if, at the time when he makes it, he is capable of understanding it and forming a rational judgment as to its effects upon his interests. A person who is occasionally of unsound mind can make a contract when he is of sound mind. 💡 Example: A suffers from a severe mental illness and cannot understand the nature of a contract. If he enters into an agreement, it will be void because he lacks mental capacity. 2. Explanation A person of unsound mind is legally incapable of entering into a valid contract...

Quasi Contracts 1. Introduction A quasi contract is a legal obligation imposed by law, even though there is no formal agreement between the parties. These contracts arise when one party unfairly benefits at the expense of another, and the law intervenes to prevent unjust enrichment . Even though quasi contracts do not require mutual consent , they are enforced by courts as if they were actual contracts. They are also known as implied-in-law contracts because they are created by legal principles rather than by direct agreement. 📌 Definition (Indian Contract Act, 1872): Although the Indian Contract Act does not directly define quasi contracts, Sections 68-72 specify situations where a party may be required to compensate another, even in the absence of a formal contract. 💡 Example: A mistakenly delivers a parcel of expensive clothes to B instead of C. B keeps and uses the clothes . Even though there was no agreement , B is legally bound to pay for them because keeping them...

 Free Consent 1. Introduction In contract law, consent is a fundamental requirement for a valid contract. However, it must be given freely without any force, fraud, or undue influence. If consent is not free , the contract may become voidable at the option of the aggrieved party. 📌 Definition (Section 14, Indian Contract Act, 1872): "Consent is said to be free when it is not caused by— coercion, undue influence, fraud, misrepresentation, or mistake." 💡 Example: A agrees to sell his house to B for ₹50 lakh. If A signs the contract under threat , his consent is not free , and the agreement can be voided by A. 2. Explanation For consent to be free , it must be given willingly and with full understanding of the contract. If any external pressure or deception is involved, the contract may become voidable . Elements Affecting Free Consent: ❌ Coercion (Section 15): Forcing someone to enter a contract by threatening harm or illegal acts . 💡 Example: A forces B...

Wagering Agreement 1. Introduction A wagering agreement is an agreement between two parties where money or something of value is bet on an uncertain future event . The agreement depends purely on chance and neither party has control over the outcome . 📌 Definition (According to the Indian Contract Act, 1872): The Indian Contract Act does not explicitly define wagering agreements, but Section 30 states that “agreements by way of wager are void, and no suit shall be brought for recovering anything alleged to be won on any wager.” 💡 Example: A and B bet ₹10,000 on whether India will win a cricket match. This is a wagering agreement because the outcome depends purely on chance, and neither A nor B can influence it. Such an agreement is void. 2. Explanation A wagering agreement has the following characteristics: ✅ Uncertain Future Event – The agreement is based on an event whose outcome is unknown at the time of the agreement. ✅ No Control Over the Outcome – Neither part...

Consideration in Contract Law Introduction In contract law, consideration is one of the most essential elements that make an agreement legally enforceable. It refers to something of value exchanged between the parties, making the contract binding. Without consideration, an agreement is not recognized as a valid contract under the Indian Contract Act, 1872 . The principle of consideration is based on the idea that "a contract without consideration is void" , meaning both parties must contribute something in exchange for a valid agreement to exist. Consideration can be in the form of money, goods, services, a promise to do something, or even a promise to refrain from doing something . 📌 Definition of Consideration (Section 2(d), Indian Contract Act, 1872) According to Section 2(d) of the Indian Contract Act, "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 o...

Discharge of a Contract Introduction A contract is a legally binding agreement between two or more parties that creates mutual rights and obligations. However, a contract does not continue indefinitely. It must come to an end at some point, either through fulfillment of its terms or by other legal means . This termination of contractual obligations is known as the discharge of a contract . The discharge of a contract is an essential concept in contract law, as it determines when and how parties are released from their contractual duties. If a contract is not discharged properly, disputes may arise, leading to legal consequences. Under the Indian Contract Act, 1872 , a contract is discharged when the obligations of the parties come to an end, either through performance, mutual agreement, breach, frustration, or operation of law . The different methods of discharging a contract are explained below. 1. Discharge by Performance The most straightforward way to discharge a contract i...

Past Consideration 1. Introduction Past consideration refers to a situation where something is promised in return for something that has already been done or provided. In contract law, past consideration is not legally valid to support a contract because consideration must be contemporaneous with the promise, i.e., it must be given in exchange for the promise made. 📌 Definition: According to Section 25(1) of the Indian Contract Act, 1872 , "an agreement made without consideration is void, unless it is a promise to pay a debt which is barred by limitation law or is made by a written agreement." However, past consideration is not recognized as valid, since it does not provide a mutual exchange at the time the promise is made. 📌 Abbreviation & Meaning: Past Consideration (P.C.): A benefit or detriment that has already been received before the contract was made. Present Consideration: A benefit or detriment exchanged simultaneously with the p...

Undue Influence 1. Introduction Undue influence occurs when one party in a contract unfairly influences the other, taking advantage of their position of power or trust to obtain an unfair advantage. This leads to an absence of free consent , making the contract voidable at the will of the weaker party. 📌 Definition: According to Section 16(1) of the Indian Contract Act, 1872 , undue influence is when “one party is in a position to dominate the will of the other and uses that position to obtain an unfair advantage in a contract.” 📌 Abbreviation & Meaning: Undue Influence (U.I.): The wrongful use of power or trust to manipulate another party into a contract. Coercion vs. Undue Influence: Coercion involves physical force or threats. Undue influence involves psychological pressure or misuse of trust. 2. Explanation For undue influence to be proven, two conditions must exist: ✅ Dominance of Will – One party is in a superior p...

Voidable Contract 1. Introduction A voidable contract is a valid contract that one or both parties can either enforce or void due to certain legal defects. Unlike a void contract, which is unenforceable from the beginning, a voidable contract remains valid until it is legally rescinded by the affected party. 📌 Definition: According to Section 2(i) of the Indian Contract Act, 1872, a voidable contract is “an agreement which is enforceable by law at the option of one or more parties, but not at the option of the other(s).” 📌 Abbreviation & Meaning: Voidable Contract (V.C.): A contract that is initially valid but can be canceled under specific conditions. Void vs. Voidable: A void contract is legally unenforceable, whereas a voidable contract is enforceable unless the aggrieved party chooses to rescind it. 2. Explanation A contract may become voidable due to the following factors: ✅ Coercion – If one party forces the other to enter the cont...