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6. Contract Law > Nature And Formation > Flashcards

Nature And Formation Flashcards

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1
Q

When does an agreement becomes a contract

A 
1. Sec 10
Free consent (13, 14) 
Competent (11) 
Lc (23) 
Lo (23) 
Not expressly declared void (24-30) (56)
  1. Vage and ambiguous ( art 29)
  2. Written down. If law of land requires
  3. Intent to enter into a legal relation
    BALFOUR vs BALFOUR - family arrangement donot inted legal consequences to follow
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2
Q

Offer vs invitation to offer

A
  1. 2(a) - signifies to other his assent to donor abstain- with a view to obtain the asseng of other to do Or abstain from doing something– OFFER
  2. I20- without signifying his final assent- proposes certain terms on which he is willing to negotiate
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3
Q

Examples of invitation to offer

A
  1. Prospects issued by company inviting application
  2. Objects display in a shop ( pharmaceutical society of Britain vs boots)
  3. Quoting of the lowest possible price ( harvey vs facey)
  4. Tender
  5. Auction
  6. Controversy - if advertisement
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4
Q

E contract

A
  1. Contractual obligation between offeror and offered in electronic market
  2. Sec 4 of IT ACT- legal recognition

Sec 10A- Valid and enforceable

  1. Types
    - Emails - trimex international vs Vedanta ltd
    - e commerce
    - agreements
    A. Shrink wrap agreement- terms and conditions , usually license agreement along with software
    B. Click wrap agreement- usually found in installation process of software
    C. Browse wrap agreement- accept the material available on website
  2. Sign - digital signature
  3. Second schedule of IT act, documents which cannot be executed in digital form - power of attorney, will, sale deed of immovable property
  4. No special remedies for breach– same as contracts
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5
Q

Specific offer vs general offer

A

2(a)

  1. Specific person vs world at large
  2. Concrete terms vs lesser
  3. Communication of acceptance vs performance railway timetable

General offer- most coomon example id reward for lost goods. But knowledge of such offer must exist before to consider such performance as acceptance. LALMAN SHUKLA vs GAURI DUTT

controversy exists whether ad I20 Or GO
CARLIL VS CARBOLIC SMOKE BALL-
1. Advertisement had elements of a unilateral offer
2 no need of communication of acceptance before performance

Revocation of general offer offer, same publicity as the original general offer

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6
Q

Crieria for special conditions in offer

A
  1. Specifically communicated
  2. Clearly written
  3. Notice of existence, even if other language
  4. Not bound if not = public policy ( lillywhite vs munnuswami)
  5. Should be given at timr of contract, not afterwards

Henderson vs stevenson - behind

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7
Q

Acceptance must be absolute and unqualified

A
  1. Sec 2(b)
  2. . Sec 7 - acceptance must be absolute and unqualified

ABSOLUTE

  1. No room for doubt
  2. KILLBURN ENGG LTD vs ONGC - 3 components,- absoluteness, commitment, communication

UNQUALIFIED
1 unconditional in its original form
2. When acceptor puts in new condition - not a valid acceptance
2. Hyde vs wrench. - counter offer, which only if accepted by original offeror

Until A and U - negotiation has not passesd and no legal obligation comes into play

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8
Q

Modes of revocation

A 
Sec 6
1. By notice
2. Lapse of specified time 
3. Failure to accept a condition precedent 
4  death and insanity 
5. Counter offer 
6. If not in mode prescribed
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9
Q

Performance of condition is an acceptance of offer

A
  1. Sec 3 and 4 - importance and when A is complete
  2. Benifit of the offeror. Choose to waive.
  3. Unilateral and genreal offer such waiver is presumed
    Sec 8
  4. Unilateral offer - gauged from the action of the promisee- HINDUSTAN iNSURANCE COMPANY vs SHYAM SUNDER - cheque and proposal form. Company enchashes check but no reply
    Encashment = acceptance
  5. General offer -
    Lalman shukla vs gauri DUTT
    Carlil vs carbolic smokeball - no need of acceptance but to fulfill conditions
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10
Q

Mere silence not acceptance

A
  1. Sec 2(b), sec 3, sec 4
  2. Even if he made up his mind , not a valid acceptance unless some external manifestation
    BRODGEN VS METROPOLITAN RAILWAY
  3. Silence cannot be prescribed as a mode of acceptance
    FELTHOUSE vs BINDLEY - i consider the horse mine if I don’t here from you

Oferee- great deal of inconvenience,

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11
Q

Acceptance can given only by person who has knowledge of the offer. 2 case laws

A
  1. 2(b), sec 4
  2. Lalman shukla vs gauridutt- only when it comes to the knowledge of acceptor
  3. Williams vs carwardine - knowledge of offer /proposal important. Not motive
    C husband killer. Knew of offer. One day bet her. Revenge
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12
Q

Agreement made by minor. 9 points regarding his position

A
  1. Sec 10 - competency of party. Sec 11 - one criteria for being competent- NOT a minor
  2. Indian majority act - 18 yrs. Guardian 21 years
  3. Void abinito– no maturity to understand legal implications.
  4. Clearly laid down in MOHIRIBIBI vs DHARMODAS - money lend and mortgage
  5. Position of minor -
    Sec 64 - restoration from voidable contract
    Sec 65- restoration from void contact
    Sec 68- claim reimbursement from property for any necessities. But not personally liable
    - Cannot ratify an contrcat on reaching maturity.
    - Cannot be shareholder
    - cannot be a partner. But can be admitted to the benefits of partnership
    - no estoppel against minor for setting up defence of infancy though he might have induced
    - sec 26 of NI act - draw, endorse, deliver negotiate — so as to bind all parties but himself
    - contract of agency - cannot be principal, but no restriction in being
  6. Only sheild not sword. DOCTRINE OF EQUITABLE RESTITUTION- Retrieved if it can be traced out of his hands. Will not apply when infant obtained cash instead of goods
    Sec 33 of specific relief act
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13
Q

Insanity

A
  1. Sec 12
  2. Sound mind - understanding and forming judgement
  3. Idiot - no faculty to think - void. Lunatic - lucid internvals
  4. Bop- whoever alleges it
  5. Exceptions - sec 65- restore, sec 68- necessities supplied,, mere oldage not sufficient
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14
Q

Inadeuacy of consideration is immaterial

A
  1. Sec 2(d)
  2. Sec 25 - a without c is void. Exp 2- inadeuacy will not invalidate . EX NUNDO PACTO NON ORITUR ACTIO
  3. Sir anson- courts donot sit to make bargain. Need not be adequate. Some value
    Rationale - duty of party to bargain. Courts - enforce that bargain
  4. Bolton vs maddens - if with free consent. Court will not go into adequacy
  5. Peppercorn theory - doesn’t have to be equivalence as long as reciprocal set.
  6. Thomas vs Thomas - annual payment of 1 pound for living in a house considered valid
  7. Illustration - sell for rs 10- worth 1000. Free consent

If A says no free consent- then inadeuacy one of the criteria that court will consider to check validity of contrcat

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15
Q

Consideration should not be illusory

A

Unsubstantial,vague or purely moral obligation

White vs bluett - father gave him money not to bore him with his complaints

Kulashekhara Perumal vs pathakutty - c means something not only which the parties regard as something with value , but also the court. But the courts have been very liberal with its interpretation

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16
Q

Any act done at the will of the promisor’s wish is taken as the fulfilment of consideration of a contract”-

A

Kedarnath vs gorie mohd- subscribed to erect townhall. Plaintiff entered into agreement with a contractor on faith of this subscription

17
Q

Exceptions to consideration

A

Ex nundo PACTO non ORITUR actio
sec 25

  1. Love and affection. In writing. Question of fact.
    A out of natural love and affection- b 1000 rs. Puts it in writing

RAJLUKHY DABEE vs BOOTHNATH MUKHERJEE - agreement to pay wife fixed sum for maintanenece. Agreement also mentions about their enstranged relationship.

  1. Past voluntaty service- promise to compensate, whole/part, anything voluntarily done in the past

Ex : a found b purse. Promise to pay 50 rs

  1. TIME BARRED DEBT
    A debt which could have been enforced by creditor but barred by limitatiom law.
  2. Donor donee, gift
18
Q

Privacy of contract intro

A
  1. Basic rule laid in the English case of TWEEDLE VS ATKINSON. Stranger to contract cannot file a suit to enforce any right
  2. Rationale
  3. Dunlop tyres vs selfridge - d sold to wholesaler - condition not to sell below list price. Sold to S. SOld below list price
    Cannot sue. No privity of contract
  4. Indian position confirmed in the case of MC Chacko vs state bank of travancore - tweedle vs Atkinson applicable in india
19
Q

Exceptions to privity of contract

A
  1. Trust beneficiary
  2. Maintanence of female member - partition of HUF
  3. Marriage settlement of minors
  4. Agent - principle
  5. Covenant running with land
  6. Estooppel- if acknowledge the right of other
20
Q

What is not coercion under sec 15

A
  1. Threat to sue
  2. Statutory compulsion
  3. Threat to strike
  4. Threatening to detain property under Mortgage
  5. Suicide
21
Q

Basis of comparison between offer and invitation to offer

A
  1. Defn
  2. In contract act
  3. Essential for making a contract
  4. Aim
  5. Consequence if accepted
22
Q

Abandon - when lighted match doesn’t explode the gun powder

A
  1. Damp
  2. Removed
  3. Gun powder doesn’t have the required ingredients
23
Q

Framework for coercion

A

10, 14, 15

  1. Offence under ipc, detain property
  2. Aim
  3. Muthiya vs Muthukaruppan
  4. Effect viodable
  5. Sec 72
  6. What’s not coercion

6. Contract Law (7 decks)

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