Indian Contract Act 1872
[Section 1]- Title, Commencement & Scope
This section contains the following information:-
Title- Name of act. i.e. “Indian Contract Act 1872”
Commencement- From 1
st September, 1872
Scope- Applicable to whole of India except the state of J&K
[Section 2] Interpretation-clause
(a) When one person signifies to another his willingness to do or to abstain from
doing anything, with a view to obtaining the assent of that other to such act or
abstinence, he is said to make a proposal.
(b) When the person to whom the proposal is made signifies his assent thereto, the
proposal is said to be accepted. A proposal, when accepted, becomes a promise.
(c) The person making the proposal is called the " promisor and the person accepting the
proposal is called the It promisee ".
(d) When, at the desire of the promisor, the promise or any other person has clone or
abstained from doing or does or abstains from doing, or promises to do or to abstain from
doing, something, such Act or abstinence of promise is called a consideration for the
promise.
(e), every promise and every set of promises, forming the consideration for each other, is
an agreement.
(f) Promises, which form the consideration or part, of the consideration for each other are
called reciprocal promises.
(g) An agreement not enforceable by law is said to be void
(h) An agreement enforceable by law is a contract
(i) An agreement which is enforceable by law at the option of one or more of the partiesthereto, but not at the option of the other or others, is a voidable
|
(j) A contract which ceases to be enforceable by law becomes void when it ceases to be
enforceable.
[Section 3]-. Communication, acceptance and revocation of proposals
[Section 4]-. Communication when complete
Communication when complete- The, communication of a proposal is complete when it
comes to the knowledge of the person to whom it is made.
The communication of an acceptance is complete,--
as against the proposer, when it is put in a course of transmission to him, so as to be
out of the power of the acceptor;
As against the acceptor, when it comes to the, knowledge, of the proposer.
The communication of a revocation is complete,
as against the person who makes it, when it is put into a course of transmission to the
person to whom it is made, so as "to be out of the power of the person who makes it; as
against the person. To whom it is made, when it comes to his knowledge.
[Section 5]-. Revocation of proposals and acceptances.
A proposal may be revoked at any time before the communication of its acceptance is
complete as against the proposer, but not afterwards.
An acceptance may be revoked at any time before the communication of the acceptance is
complete as against the acceptor, but not afterwards.
[Section 6]-. Revocation how made.-
A proposal is revoked-
(1) By the communication of notice of revocation by the pro poser to the other party
(2) by the lapse of the time prescribed in such proposal for its acceptance, or, if no time
is so prescribed, by the lapse of a reasonable time, without communication of the
acceptance;
|
(3) By the failure of the acceptor to fulfill a condition precedent to acceptance; or
(4) by the death or insanity of the proposer, if the fact of his death or insanity comes to
the knowledge of the acceptor before acceptance. 6. Revocation how made.
[Section 7]-. Acceptance must be absolute.
In order to convert a proposal into a promise, the acceptance must be absolute and
unqualified;
be expressed in Some usual and reasonable manner, unless the proposal prescribes the
manner in which it is to be accepted. If the proposal prescribes a manner in which it is to
be accepted, and the acceptance is not made in such manner, the proposer may, within a
reasonable time after the acceptance is communicated to him, insist that his proposal
shall be accepted in the prescribed manner, and not otherwise; but if he fails to
do so, he accepts the acceptance.
[Section 8]-. Acceptance by performing conditions or receiving consideration.
Performance of the conditions of a proposal, or the acceptance of any consideration for a
reciprocal promise which may be offered with a proposal, is an acceptance of the proposal.
[Section 9]-. Promises express and implied.
In so far as the proposal or acceptance of any promise is made in words, the promise is said
to be express. In so far as such proposal or acceptance is made otherwise than in words,
the promise is said to be implied.
[Section 10]-. What agreements are contracts?
All agreements are contracts if they are made by the free consent of parties competent to
contract, for a lawful consideration and with a lawful object, and are not hereby expressly
declared to be void.
Nothing herein contained shall affect any law in force in 1*[India] and not hereby
expressly repealed by which any contract is required to be made in writing2* or in the
presence of witnesses, or any law relating to the registration of documents.
|
[Section 11]-. Who are competent to contract?
Every person is competent to contract who is of the age of majority according to the law to
which he is subject, and who is of sound mind, and is not disqualified from
contracting by any law to which he is subject.
[Section 12]-. What is a sound mind for the purposes of contracting?
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 of forming a rational judgment as
to its effect upon his interests. A person, who is usually of unsound mind, but occasionally
of sound mind, may make a contract when he is of sound mind.
A person, who is usually of sound mind, but occasionally of un- sound mind, may not make
a contract when he is of unsound mind.
[Section 13]-. "Consent" defined
Two or more persons are said to consent when they agree upon the same thing in the same
sense.
[Section 14]-. "Free consent" defined
Consent is said to be free when it is not caused by-
1. Coercion, as defined in section 15, or
2. Undue influence, as defined in section 16, or
3. Fraud, as defined in section 17, or
4. Misrepresentation, as defined in section 18, or
5. Mistake, subject to the provisions of sections 20, 21 and 22.
Consent is said to be so caused when it would not have been given but for the existence of
such coercion, undue influence, fraud, misrepresentation or mistake.
[Section 15]-. "Coercion “defined
Coercion" is the committing, or threatening to commit, any act forbidden by the Indian
Penal Code, or the unlawful detaining, or threatening to detain, any property, to the
|
prejudice of any person whatever, with the intention of causing any person to enter into
an agreement. (45 of 1860.)
Explanation.-It is immaterial whether the Indian Penal Code is or is not in force in the
place where the coercion is employed. (45 of 1860.)
Illustration
A, on board an English ship on the high seas, causes B to enter into an agreement by an
act amounting to criminal intimidation under the Indian Penal Code. (45 of 1860.)
A afterwards sues B for breach of contract at Calcutta.
[Section 16]-. "Undue influence" defined
1) A contract is said to be induced by " undue influence where the relations 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.
(2) In particular and without prejudice to the generality of the foregoing principle, a person
is deemed to be in a position to dominate the will of another-
(a) Where he holds a real or apparent authority over the other or where he stands in a
fiduciary relation to the other; or
(b) Where he makes a contract with a person whose mental capacity is temporarily or
permanently affected by reason of age, illness, or mental or bodily distress.
(3) Where a person who is in a position to dominate the will of another, enters into a
contract with him, and the transaction appears, on the face of it or on the evidence
adduced, to be unconscionable, the burden of proving that such contract was not
induced by undue influence shall lie upon the person in a position to dominate the will of
the other.
Nothing in this sub-section shall affect the provisions of section Ill of the Indian Evidence
Act, 1872. (1 of 1872.)
Illustrations
(a) A having advanced money to his son, B, during his minority, upon B's coming of age
obtains, by misuse of parental influence, a bond from B for a greater amount than the
sum due in respect of the advance. An employs undue influence.
|
(b) A, a man enfeebled by disease or age, is induced, by B’s influence over him as his
medical attendant, to agree to pay B an unreasonable sum for his professional services. B
employs undue influence.
(c) A, being in debt to B, the money-lender of his village, contracts a fresh loan on terms
which appear to be unconscionable. It lies on B to prove that the contract was not induced
by undue influence.
(d) A applies to a banker for a loan at a time when there is stringency in the money
market. The banker declines to make the loan except at an unusually high rate of interest.
A accepts the loan on these terms. This is a transaction in the ordinary course of business,
and the contract is not induced by undue influence.]
[Section 17]-. "Fraud" defined
"Fraud" means and includes any of the following acts committed by a party to a
contract, or with his connivance, or by his agent, with intent to deceive another party
thereto of his agent, or to induce him to enter into the contract:-
1) The suggestion, as a fact, of that which is not true, by one who does not believe it to
be true;
2) the active concealment of a fact by one having knowledge or belief of the fact ;
3) A promise made without any intention of performing it
4) Any other act fitted to deceive;
5) Any such act or omission as the law specially declares to be fraudulent.
Explanation.-Mere silence as to facts likely to affect the willingness of a person to enter
into a contract is not fraud, unless the circumstances of the case are such that, regard
being had to them, it is the duty of the person keeping silence to speak,1* or unless his
silence is, in itself, equivalent to speech.
[Section 18]-."Misrepresentation" defined
"Misrepresentation" means and includes-
1) The positive assertion, in a manner not warranted by the information of the person
making it, of that which is not true, though he believes it to be true
|
2) any breach, of duty which, without an intent to deceive, gains an advantage to
the person committing it, or any one claiming under him, by misleading another
to his prejudice or to the prejudice of any one claiming under him;
3) Causing, however innocently, a party to an agreement to make a mistake as to the
substance of the thing which is the subject of the agreement.
[Section 19]- Voidability of agreements without free consent
When consent to an agreement is caused by coercion, fraud or misrepresentation, the
agreement is a contract voidable at the option of the party whose consent was so caused.
A party to a contract whose consent was caused by fraud or misrepresentation, may, if he
thinks fit, insist that the contract shall be performed, and that he shall be put in the
position in which he would have been if the representations made had been true.
Exception.-If such consent was caused by misrepresentation or by silence, fraudulent
within the meaning of section 17, the contract, nevertheless, is not voidable, if the party
whose consent was so caused had the means of discovering the truth with ordinary
diligence.
Explanation.-A fraud or misrepresentation which did not cause the consent to a contract of
the party on whom such fraud was practiced, or to whom such misrepresentation was made,
does not render a contract voidable.
[Section 20]-. Agreement void where both parties are under mistake as to matter
of fact
Where both the parties to an agreement are under a mistake as to a matter of fact
essential to the agreement, the agreement is void.
Explanation.-An erroneous opinion as to the value of the thing which forms the subjectmatter of the agreement is not to be deemed a mistake as to a matter of fact.
[Section 21]-. Effect of mistakes as to law
|
A contract is not voidable because it was caused by a mistake as to any law in force in
[India]; but a mistake as to a law not in force in [India] has the same effect as a mistake of
fact.
A and B make a contract grounded on the erroneous belief that a particular debt is barred
by the Indian Law of Limitation: the contract is not voidable.
[Section 22]-. Contract caused by mistake of one party as to matter of fact
A contract is not voidable merely because it was caused by one of the parties to it being
under a mistake as to a matter of fact.
[Section 23]-. What considerations and objects are lawful and what not
The consideration or object of an agreement is lawful, unlessIt is forbidden by law;
Or is of such a nature that, if permitted, it would defeat the provisions of any law;
Or is fraudulent;
Or involves or implies injury to the person or property of another
Or; the Court regards it as immoral, or opposed to public policy.
In each of these cases, the consideration or object of an agreement is said to be unlawful.
Every agreement of which the object or consideration is unlawful is void.
[Section 24]-. Agreement void, if considerations and objects unlawful in part
If any part of a single consideration for one or more objects, or any one or any part of any
one of several considerations for a single object, is unlawful, the agreement is void.
[Section 25]- Agreement without consideration, void, unless it is in writing and
registered, or is a promise to compensate for something done, or is a promise to pay a debt
barred by limitation law.
An agreement made without consideration is void, unless-
|
it is expressed in writing and registered under the law for the time being in force for the
registration of 1*[documents], and is made on account of natural love and affection
between parties standing in a, near relation to each other ; or unless
(2) it is a promise to compensate, wholly or in part, a person who has already voluntarily
done something for the promisor, or something which the promisor was legally
compellable to do ; or unless
(3) it is a promise, made in writing and signed by the person to be charged therewith, or
by his agent generally or specially authorized in that behalf, to pay wholly or in part a
debt of which the creditor might have enforced payment but for the law for the limitation
of suits.
In any of these cases, such an agreement is a contract.
Explanation 1.-Nothing in this section shall affect the validity, as between the donor and
done, of any gift actually made.
Explanation 2.-An agreement to which the consent of the promisor is freely given is not void
merely because the consideration is inadequate; but the inadequacy of the consideration
may be taken into account by the Court in determining the question whether the consent of
the promisor was freely given.
[Section 26]-. Agreement in restraint of marriage void
Every agreement in restraint of the marriage of any person, other than a minor, is void.
[Section 27]-. Agreement in restraint of trade void
Every agreement by which any one is restrained from exercising a lawful profession, trade
or business of any kind, is to that extent void.
Saving of agreement not to carry on business of which good-will is sold.-Exception 1.-One
who sells the good-will of a business may agree with the buyer to refrain from carrying on
a similar business, within specified local limits, so long as the buyer, or any person
deriving title to the good-will from him, carries on a like business therein, provided that
such limits appear to the Court reasonable, regard being had to the nature of the business.
[Section 28]-. Agreements in restraint of legal proceedings void
Every agreement,-
|
(a) by which any party thereto is restricted absolutely from enforcing his rights under or in
respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which
limits the time within which he may thus enforce his rights; or
(b) which extinguishes the rights of any party thereto, or discharges any party thereto
from bay liability, under or in respect of any contract on the expiry of a specified period
so as to restrict any party from enforcing his rights, is void to that extent.
Saving of contract of refer to arbitration dispute that may arise.-Exception 1.-This
section shall not render illegal a contract, by which two or more persons agree that any
dispute which may arise between them in respect of any subject or class of subjects shall
be referred to arbitration, and that only the amount awarded in such arbitration ?hall
be recoverable in respect of the dispute so referred.
Suits barred by such contracts.-1* When such a contract has been made, a suit may be
brought for its specific performance) and if a suit, other than for such specific
performance, or for the recovery of the amount so awarded, is brought by one party to
such contract against any other such party, in respect of any subject which they have so
agreed to refer, the existence of such contract shall be a bar to the suit.
Saving of contract to refer questions that have already arisen.-
Exception 2.-Nor shall this section render, illegal any contract in writing, by which two or
more persons agree to refer to arbitration any question between them which has already
arisen, or affect any provision of any law in force for the time being as to references to
arbitration.2*
[Section 29]-. Agreements void for uncertainty
Agreements, the meaning of which is not certain, or capable of being made certain, are void.
[Section 30]-. Agreements by way of wager void
Agreements by way of wager are void ; and no suit shall be brought for recovering
anything alleged to be won on any wager, or entrusted to any person to abide the result of
any game or other uncertain event on which any wager is made.
Exception in favor of certain prizes for horse-racing.-This section shall not be deemed to
render unlawful a subscription or contribution, or agreement to subscribe or contribute,
made or entered into for or toward any plate, prize or sum of money, of the value or amount
of five hundred rupees or upwards, to be awarded to the winner or winners of any horserace.1*
[Section 1]- Title, Commencement & Scope
This section contains the following information:-
Title- Name of act. i.e. “Indian Contract Act 1872”
Commencement- From 1
st September, 1872
Scope- Applicable to whole of India except the state of J&K
[Section 2] Interpretation-clause
(a) When one person signifies to another his willingness to do or to abstain from
doing anything, with a view to obtaining the assent of that other to such act or
abstinence, he is said to make a proposal.
(b) When the person to whom the proposal is made signifies his assent thereto, the
proposal is said to be accepted. A proposal, when accepted, becomes a promise.
(c) The person making the proposal is called the " promisor and the person accepting the
proposal is called the It promisee ".
(d) When, at the desire of the promisor, the promise or any other person has clone or
abstained from doing or does or abstains from doing, or promises to do or to abstain from
doing, something, such Act or abstinence of promise is called a consideration for the
promise.
(e), every promise and every set of promises, forming the consideration for each other, is
an agreement.
(f) Promises, which form the consideration or part, of the consideration for each other are
called reciprocal promises.
(g) An agreement not enforceable by law is said to be void
(h) An agreement enforceable by law is a contract
(i) An agreement which is enforceable by law at the option of one or more of the partiesthereto, but not at the option of the other or others, is a voidable
|
(j) A contract which ceases to be enforceable by law becomes void when it ceases to be
enforceable.
[Section 3]-. Communication, acceptance and revocation of proposals
[Section 4]-. Communication when complete
Communication when complete- The, communication of a proposal is complete when it
comes to the knowledge of the person to whom it is made.
The communication of an acceptance is complete,--
as against the proposer, when it is put in a course of transmission to him, so as to be
out of the power of the acceptor;
As against the acceptor, when it comes to the, knowledge, of the proposer.
The communication of a revocation is complete,
as against the person who makes it, when it is put into a course of transmission to the
person to whom it is made, so as "to be out of the power of the person who makes it; as
against the person. To whom it is made, when it comes to his knowledge.
[Section 5]-. Revocation of proposals and acceptances.
A proposal may be revoked at any time before the communication of its acceptance is
complete as against the proposer, but not afterwards.
An acceptance may be revoked at any time before the communication of the acceptance is
complete as against the acceptor, but not afterwards.
[Section 6]-. Revocation how made.-
A proposal is revoked-
(1) By the communication of notice of revocation by the pro poser to the other party
(2) by the lapse of the time prescribed in such proposal for its acceptance, or, if no time
is so prescribed, by the lapse of a reasonable time, without communication of the
acceptance;
|
(3) By the failure of the acceptor to fulfill a condition precedent to acceptance; or
(4) by the death or insanity of the proposer, if the fact of his death or insanity comes to
the knowledge of the acceptor before acceptance. 6. Revocation how made.
[Section 7]-. Acceptance must be absolute.
In order to convert a proposal into a promise, the acceptance must be absolute and
unqualified;
be expressed in Some usual and reasonable manner, unless the proposal prescribes the
manner in which it is to be accepted. If the proposal prescribes a manner in which it is to
be accepted, and the acceptance is not made in such manner, the proposer may, within a
reasonable time after the acceptance is communicated to him, insist that his proposal
shall be accepted in the prescribed manner, and not otherwise; but if he fails to
do so, he accepts the acceptance.
[Section 8]-. Acceptance by performing conditions or receiving consideration.
Performance of the conditions of a proposal, or the acceptance of any consideration for a
reciprocal promise which may be offered with a proposal, is an acceptance of the proposal.
[Section 9]-. Promises express and implied.
In so far as the proposal or acceptance of any promise is made in words, the promise is said
to be express. In so far as such proposal or acceptance is made otherwise than in words,
the promise is said to be implied.
[Section 10]-. What agreements are contracts?
All agreements are contracts if they are made by the free consent of parties competent to
contract, for a lawful consideration and with a lawful object, and are not hereby expressly
declared to be void.
Nothing herein contained shall affect any law in force in 1*[India] and not hereby
expressly repealed by which any contract is required to be made in writing2* or in the
presence of witnesses, or any law relating to the registration of documents.
|
[Section 11]-. Who are competent to contract?
Every person is competent to contract who is of the age of majority according to the law to
which he is subject, and who is of sound mind, and is not disqualified from
contracting by any law to which he is subject.
[Section 12]-. What is a sound mind for the purposes of contracting?
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 of forming a rational judgment as
to its effect upon his interests. A person, who is usually of unsound mind, but occasionally
of sound mind, may make a contract when he is of sound mind.
A person, who is usually of sound mind, but occasionally of un- sound mind, may not make
a contract when he is of unsound mind.
[Section 13]-. "Consent" defined
Two or more persons are said to consent when they agree upon the same thing in the same
sense.
[Section 14]-. "Free consent" defined
Consent is said to be free when it is not caused by-
1. Coercion, as defined in section 15, or
2. Undue influence, as defined in section 16, or
3. Fraud, as defined in section 17, or
4. Misrepresentation, as defined in section 18, or
5. Mistake, subject to the provisions of sections 20, 21 and 22.
Consent is said to be so caused when it would not have been given but for the existence of
such coercion, undue influence, fraud, misrepresentation or mistake.
[Section 15]-. "Coercion “defined
Coercion" is the committing, or threatening to commit, any act forbidden by the Indian
Penal Code, or the unlawful detaining, or threatening to detain, any property, to the
|
prejudice of any person whatever, with the intention of causing any person to enter into
an agreement. (45 of 1860.)
Explanation.-It is immaterial whether the Indian Penal Code is or is not in force in the
place where the coercion is employed. (45 of 1860.)
Illustration
A, on board an English ship on the high seas, causes B to enter into an agreement by an
act amounting to criminal intimidation under the Indian Penal Code. (45 of 1860.)
A afterwards sues B for breach of contract at Calcutta.
[Section 16]-. "Undue influence" defined
1) A contract is said to be induced by " undue influence where the relations 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.
(2) In particular and without prejudice to the generality of the foregoing principle, a person
is deemed to be in a position to dominate the will of another-
(a) Where he holds a real or apparent authority over the other or where he stands in a
fiduciary relation to the other; or
(b) Where he makes a contract with a person whose mental capacity is temporarily or
permanently affected by reason of age, illness, or mental or bodily distress.
(3) Where a person who is in a position to dominate the will of another, enters into a
contract with him, and the transaction appears, on the face of it or on the evidence
adduced, to be unconscionable, the burden of proving that such contract was not
induced by undue influence shall lie upon the person in a position to dominate the will of
the other.
Nothing in this sub-section shall affect the provisions of section Ill of the Indian Evidence
Act, 1872. (1 of 1872.)
Illustrations
(a) A having advanced money to his son, B, during his minority, upon B's coming of age
obtains, by misuse of parental influence, a bond from B for a greater amount than the
sum due in respect of the advance. An employs undue influence.
|
(b) A, a man enfeebled by disease or age, is induced, by B’s influence over him as his
medical attendant, to agree to pay B an unreasonable sum for his professional services. B
employs undue influence.
(c) A, being in debt to B, the money-lender of his village, contracts a fresh loan on terms
which appear to be unconscionable. It lies on B to prove that the contract was not induced
by undue influence.
(d) A applies to a banker for a loan at a time when there is stringency in the money
market. The banker declines to make the loan except at an unusually high rate of interest.
A accepts the loan on these terms. This is a transaction in the ordinary course of business,
and the contract is not induced by undue influence.]
[Section 17]-. "Fraud" defined
"Fraud" means and includes any of the following acts committed by a party to a
contract, or with his connivance, or by his agent, with intent to deceive another party
thereto of his agent, or to induce him to enter into the contract:-
1) The suggestion, as a fact, of that which is not true, by one who does not believe it to
be true;
2) the active concealment of a fact by one having knowledge or belief of the fact ;
3) A promise made without any intention of performing it
4) Any other act fitted to deceive;
5) Any such act or omission as the law specially declares to be fraudulent.
Explanation.-Mere silence as to facts likely to affect the willingness of a person to enter
into a contract is not fraud, unless the circumstances of the case are such that, regard
being had to them, it is the duty of the person keeping silence to speak,1* or unless his
silence is, in itself, equivalent to speech.
[Section 18]-."Misrepresentation" defined
"Misrepresentation" means and includes-
1) The positive assertion, in a manner not warranted by the information of the person
making it, of that which is not true, though he believes it to be true
|
2) any breach, of duty which, without an intent to deceive, gains an advantage to
the person committing it, or any one claiming under him, by misleading another
to his prejudice or to the prejudice of any one claiming under him;
3) Causing, however innocently, a party to an agreement to make a mistake as to the
substance of the thing which is the subject of the agreement.
[Section 19]- Voidability of agreements without free consent
When consent to an agreement is caused by coercion, fraud or misrepresentation, the
agreement is a contract voidable at the option of the party whose consent was so caused.
A party to a contract whose consent was caused by fraud or misrepresentation, may, if he
thinks fit, insist that the contract shall be performed, and that he shall be put in the
position in which he would have been if the representations made had been true.
Exception.-If such consent was caused by misrepresentation or by silence, fraudulent
within the meaning of section 17, the contract, nevertheless, is not voidable, if the party
whose consent was so caused had the means of discovering the truth with ordinary
diligence.
Explanation.-A fraud or misrepresentation which did not cause the consent to a contract of
the party on whom such fraud was practiced, or to whom such misrepresentation was made,
does not render a contract voidable.
[Section 20]-. Agreement void where both parties are under mistake as to matter
of fact
Where both the parties to an agreement are under a mistake as to a matter of fact
essential to the agreement, the agreement is void.
Explanation.-An erroneous opinion as to the value of the thing which forms the subjectmatter of the agreement is not to be deemed a mistake as to a matter of fact.
[Section 21]-. Effect of mistakes as to law
|
A contract is not voidable because it was caused by a mistake as to any law in force in
[India]; but a mistake as to a law not in force in [India] has the same effect as a mistake of
fact.
A and B make a contract grounded on the erroneous belief that a particular debt is barred
by the Indian Law of Limitation: the contract is not voidable.
[Section 22]-. Contract caused by mistake of one party as to matter of fact
A contract is not voidable merely because it was caused by one of the parties to it being
under a mistake as to a matter of fact.
[Section 23]-. What considerations and objects are lawful and what not
The consideration or object of an agreement is lawful, unlessIt is forbidden by law;
Or is of such a nature that, if permitted, it would defeat the provisions of any law;
Or is fraudulent;
Or involves or implies injury to the person or property of another
Or; the Court regards it as immoral, or opposed to public policy.
In each of these cases, the consideration or object of an agreement is said to be unlawful.
Every agreement of which the object or consideration is unlawful is void.
[Section 24]-. Agreement void, if considerations and objects unlawful in part
If any part of a single consideration for one or more objects, or any one or any part of any
one of several considerations for a single object, is unlawful, the agreement is void.
[Section 25]- Agreement without consideration, void, unless it is in writing and
registered, or is a promise to compensate for something done, or is a promise to pay a debt
barred by limitation law.
An agreement made without consideration is void, unless-
|
it is expressed in writing and registered under the law for the time being in force for the
registration of 1*[documents], and is made on account of natural love and affection
between parties standing in a, near relation to each other ; or unless
(2) it is a promise to compensate, wholly or in part, a person who has already voluntarily
done something for the promisor, or something which the promisor was legally
compellable to do ; or unless
(3) it is a promise, made in writing and signed by the person to be charged therewith, or
by his agent generally or specially authorized in that behalf, to pay wholly or in part a
debt of which the creditor might have enforced payment but for the law for the limitation
of suits.
In any of these cases, such an agreement is a contract.
Explanation 1.-Nothing in this section shall affect the validity, as between the donor and
done, of any gift actually made.
Explanation 2.-An agreement to which the consent of the promisor is freely given is not void
merely because the consideration is inadequate; but the inadequacy of the consideration
may be taken into account by the Court in determining the question whether the consent of
the promisor was freely given.
[Section 26]-. Agreement in restraint of marriage void
Every agreement in restraint of the marriage of any person, other than a minor, is void.
[Section 27]-. Agreement in restraint of trade void
Every agreement by which any one is restrained from exercising a lawful profession, trade
or business of any kind, is to that extent void.
Saving of agreement not to carry on business of which good-will is sold.-Exception 1.-One
who sells the good-will of a business may agree with the buyer to refrain from carrying on
a similar business, within specified local limits, so long as the buyer, or any person
deriving title to the good-will from him, carries on a like business therein, provided that
such limits appear to the Court reasonable, regard being had to the nature of the business.
[Section 28]-. Agreements in restraint of legal proceedings void
Every agreement,-
|
(a) by which any party thereto is restricted absolutely from enforcing his rights under or in
respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which
limits the time within which he may thus enforce his rights; or
(b) which extinguishes the rights of any party thereto, or discharges any party thereto
from bay liability, under or in respect of any contract on the expiry of a specified period
so as to restrict any party from enforcing his rights, is void to that extent.
Saving of contract of refer to arbitration dispute that may arise.-Exception 1.-This
section shall not render illegal a contract, by which two or more persons agree that any
dispute which may arise between them in respect of any subject or class of subjects shall
be referred to arbitration, and that only the amount awarded in such arbitration ?hall
be recoverable in respect of the dispute so referred.
Suits barred by such contracts.-1* When such a contract has been made, a suit may be
brought for its specific performance) and if a suit, other than for such specific
performance, or for the recovery of the amount so awarded, is brought by one party to
such contract against any other such party, in respect of any subject which they have so
agreed to refer, the existence of such contract shall be a bar to the suit.
Saving of contract to refer questions that have already arisen.-
Exception 2.-Nor shall this section render, illegal any contract in writing, by which two or
more persons agree to refer to arbitration any question between them which has already
arisen, or affect any provision of any law in force for the time being as to references to
arbitration.2*
[Section 29]-. Agreements void for uncertainty
Agreements, the meaning of which is not certain, or capable of being made certain, are void.
[Section 30]-. Agreements by way of wager void
Agreements by way of wager are void ; and no suit shall be brought for recovering
anything alleged to be won on any wager, or entrusted to any person to abide the result of
any game or other uncertain event on which any wager is made.
Exception in favor of certain prizes for horse-racing.-This section shall not be deemed to
render unlawful a subscription or contribution, or agreement to subscribe or contribute,
made or entered into for or toward any plate, prize or sum of money, of the value or amount
of five hundred rupees or upwards, to be awarded to the winner or winners of any horserace.1*
No comments:
Post a Comment