UNIT I INDIAN CONTRACT ACT, 1872

Transcription

1 Contents About the Author I-5 Preface I-7 Syllabus I-9 Chapter-heads I-11 List of Cases I-23 UNIT I INDIAN CONTRACT ACT, ICA, 1872 : NATURE, MEANING, ESSENTIALS AND KINDS OF CONTRACT 1.1 Introduction Extent and commencement Limitations or nature Definition of contract All contracts are agreements but all agreements are not contracts Essentials of a Valid Contract The law of contract is not the whole law of agreements nor is it the whole law of obligations 9 I-13

2 CONTENTS I Kinds of contracts (Classification of Contracts) Some distinctions 14 Test Questions 15 2 ICA, 1872 : OFFER AND ACCEPTANCE 2.1 Introduction Definition of offer What constitutes valid offer? Distinction between offer and invitation to an offer Kinds of offer Special Terms and Conditions in a Contract Acceptance What constitutes valid acceptance? When does an offer lapse? Communication of offer and acceptance Communication of Revocation (Sec. 4) Revocation of offer and acceptance (Sec. 5) Contracts through telephone, telex, fax or Acceptance is to an offer what a lighted match stick is to a train of gun powder. It produces something which cannot be recalled or undone (Anson s Law of Contract) 30 Test Questions 30 3 ICA, 1872 : CONSIDERATION 3.1 Introduction Definition of consideration Essentials of valid consideration Rule of no consideration, no contract - Exceptions Doctrine of privity of contract 38 Test Questions 40

3 I-15 CONTENTS 4 ICA, 1872 : COMPETENCY OF THE PARTIES TO CONTRACT 4.1 Introduction Who are competent to contract? Who is a minor? Nature of minor s agreements Law relating to minor s agreements Persons of sound and unsound mind Disqualified persons 48 Test Questions 50 5 ICA, 1872 : FREE CONSENT 5.1 Introduction Definition of consent (Sec. 13) Definition of free consent (Sec. 14) Factors affecting (vitiating) free consent Coercion Features of coercion Effect of coercion (Secs. 19 and 19A) Distinction between coercion and duress Undue influence Elements of undue influence Presumption of undue influence Effect of undue influence (Sec. 19A) Distinction between coercion and undue influence Fraud Elements of fraud Silence does not constitute fraud Effect of fraud (Sec. 19) Misrepresentation Constituents of misrepresentation Essential elements of misrepresentation Effects of misrepresentation Distinction between fraud and misrepresentation 67

4 CONTENTS I Mistake Types and effect of mistake 68 Test Questions 72 6 ICA, 1872 : LEGALITY OF OBJECT AND CONSIDERATION 6.1 Introduction What considerations and objects are unlawful? Agreements opposed to public policy Effects of illegal agreements 79 Test Questions 80 7 ICA, 1872 : VOID AGREEMENTS AND CONTINGENT CONTRACTS 7.1 Introduction Expressly declared void agreements Collateral transactions in case of expressly declared void agreements Contingent contracts Rules regarding Performance of Contingent Contracts Distinction between Wagering Agreements and Contingent Contracts 93 Test Questions 94 8 ICA, 1872 : DISCHARGE OF CONTRACT 8.1 Introduction Modes of discharge of contract Discharge of contract by performance Discharge of contract by agreement (Sec. 62) Impossibility of performance Discharge of contract by lapse of time Discharge by breach of contract Discharge of contract by operation of law 101 Test Questions 102

5 I-17 CONTENTS 9 ICA, 1872 : QUASI CONTRACTS 9.1 Introduction Quasi contracts : Meaning A Quasi contract : Rationale Kinds of quasi-contracts 105 Test Questions ICA, 1872 : REMEDIES FOR BREACH OF CONTRACT 10.1 Introduction Types of breach of contract Remedies for breach of contract Suit for damages Suit for rescission Suit upon quantum meruit Suit for specific performance Suit for injunction 120 Test Questions 121 UNIT II THE INDIAN CONTRACT ACT : SPECIFIC CONTRACT 11 ICA, 1872 : INDEMNITY AND GUARANTEE 11.1 Introduction Contract of indemnity Essentials of a contract of indemnity Rights of indemnity-holder (Sec. 125) When does the liability of indemnifier commence? Contract of guarantee Essentials of a contract of guarantee Distinction between contract of indemnity and guarantee 129

6 CONTENTS I Kinds of guarantee Revocation of continuing guarantee Nature and extent of surety s liability Rights of surety Discharge of surety 135 Test Questions ICA, 1872 : CONTRACT OF BAILMENT 12.1 Introduction Bailment Essentials of a valid contract of bailment Kinds of bailment Distinction between Gratuitous and Non-gratuitous bailment Duties of bailor Duties of bailee Rights of bailor Rights of bailee Right of lien and its types Distinction between particular lien and general lien Termination of bailment 150 Test Questions ICA, 1872 : CONTRACT OF AGENCY 13.1 Introduction Definition of agent and principal Principles regarding the law of agency Essential features of a contract of agency Some distinctions Creation of agency Extent of authority of an agent Sub-agent and substituted agent Distinction between Sub-Agent and Substituted Agent Duties of agent Rights of agent Liability of the Principal for the Acts of the Agent 167

7 I-19 CONTENTS Personal liability of agent Termination of agency 172 Test Questions 172 UNIT III SALE OF GOODS ACT, SALE OF GOODS ACT, 1930 : NATURE AND FORMATION OF CONTRACT OF SALE 14.1 Introduction Definition of a contract of sale Essentials of a valid contract of sale Some distinctions Subject-matter of the contract of sale Classification of goods (Sec. 6) Effect of perishing of specific goods Ascertainment of price 186 Test Questions SALE OF GOODS ACT, 1930 : CONDITIONS AND WARRANTIES 15.1 Introduction Conditions and warranties Distinction between condition and warranty When breach of condition is to be treated as breach of warranty? Express and implied conditions and warranties Doctrine of caveat emptor 196 Test Questions SALE OF GOODS ACT, 1930 : TRANSFER OF PROPERTY 16.1 Introduction Rules regarding transfer of property (ownership) Nemo dat quod non-habet (Sale by non-owners) 204 Test Questions 207

8 CONTENTS I SALE OF GOODS ACT, 1930 : PERFORMANCE OF CONTRACT OF SALE 17.1 Introduction Meaning and modes of delivery Rules relating to delivery of goods 210 Test Questions SALE OF GOODS ACT, 1930 : UNPAID SELLER AND HIS RIGHTS 18.1 Who is an unpaid seller? Rights (remedies) of unpaid seller Buyer s remedies against the seller 222 Test Questions 223 UNIT IV INDIAN PARTNERSHIP ACT, NATURE AND CHARACTERISTICS OF PARTNERSHIP 19.1 Introduction Definition of Partnership Essential Elements of a Partnership Test of Partnership Partners, firm and firm name Some important Distinctions 232 Test Questions FORMATION/REGISTRATION OF PARTNERSHIP 20.1 Introduction Registration of Firms Effects of Non-Registration Duration of Partnership Types of Partners 241 Test Questions 243

9 I-21 CONTENTS 21 RELATIONS OF PARTNERS INTER SE AND TO THIRD PARTIES 21.1 Introduction Mutual rights of partners Mutual duties of partners Minor admitted to the benefits of partnership Relations of partners to third parties Liabilities of a Firm and its partners to third parties 251 Test Questions DISSOLUTION OF PARTNERSHIP FIRM 22.1 Introduction Distinction between dissolution of partnership and dissolution of firm Modes of dissolution of a firm Consequences of dissolution Settlement of accounts upon dissolution (Secs. 48, 49 and 55) Sale of goodwill after dissolution (Sec. 55) 261 Test Questions 262 UNIT V THE NEGOTIABLE INSTRUMENTS ACT, MEANING AND CHARACTERISTICS OF NEGOTIABLE INSTRUMENTS 23.1 Introduction Definition of Negotiable Instrument Characteristics of a Negotiable Instrument Promissory Note Bill of Exchange Cheque Some important distinctions Classification of Negotiable Instruments Maturity of Negotiable Instruments Payment in due Course (Sec. 10) 282

10 CONTENTS I Payment of Interest 283 Test Questions PARTIES TO A NEGOTIABLE INSTRUMENT 24.1 Introduction Holder Holder in due course Privileges of a holder in due course Distinction between holder and holder in due course Capacity of parties Liability of parties (Sections and 35-42) 290 Test Questions NEGOTIATION AND ASSIGNMENT 25.1 Introduction Definition Who may negotiate? Assignment Distinction between negotiation and assignment Duration of negotiability Modes of negotiation Delivery of a negotiable instrument Indorsement Negotiation back Negotiation by unauthorised parties Negotiable instruments made without consideration 301 Test Questions CROSSING AND BOUNCING OF A CHEQUE 26.1 Introduction Crossing of a cheque Bouncing of cheques 307 Test Questions 310