MULLA The Lndian Ontract Act

430 Pages·477.334 MB·English

by  SIR DINSHAW FARDUNJI MULLA

MULLA
The Lndian
Ontract Act
SIR DINSHAW FARDUNJI MIULLA
15th Edition
AniTudlh Wedlhwa
LesNeis
iVX
THE INDIANCONTRACTACT -1/934ed
(Act 9 of 1872)
-1X 191qari)
GeneralConten!s
eMeaveon33.JU0H2
.
Preface to the Fifteenth Edition.
*********************************
Preface to theFourteenth Edition.
Preface to the Thirteenth Edition.. X
Preface to the Twelfih Edition.. ********* *************************"
Preface to the Eleventh Edition.. ******* Xi
*****************
xii
Preface to the Ninth Edition. **********
xiv
Preface to the Eight Edition...
xli
TableofCases.
*****************
Introduction... **** CV
..******************** *****
Preliminary
**********************
ChapterI-
OF THE COMMUNICATION, ACCEPTANCE AND REVOCATION OF
23
PROPOSALS ************************************************"********************* ************
ChapterII--
51
OFCONTRACTS,VOIDABLECONTRACTSANDVOID AGREEMENTS..
ChapterIl
145
OF CONTINGENT CONTRACTS.*.**********
ChapterIV
150
OF THEPERFORMANCEOF CONTRA*C**T**S*.*.*.******************************************
ChapterV-
208
OF CERTAIN RELATIONSRESEMBLINGTHOSECREATEDBY CONTRACT..
ChapterVI-
223
OFTHCEONSEQUENCEOSFBREACHOFCONTRACT ..
ChapterVI
249
*************************** **** *****
SALE OF
[xv]
xvi General Contents
.
Chapter VIII
OF INDEMNITY AND GUARANTEE.. 250
*****************************
ChapterX-
OF BAILMEN*T*.*.*.**************************************************************..... ... 281
TDATDASTO A 1IHT
ChapterX-
AGENCY..
*************************** ****************************************************** 311
ChapterXI-
OFPARTNERSHIP(Repealed).*.************************************************************ 371
SCHEDULE-EnactmentsRepealed.. *******************.*****oo****........... 371
SUBJECTINDEX..
373
****************************:1***********************************************
*********************
Hx
**********************
ix
ilx
*******
************ **** ****************************************************************.oitaauin
T6aimitat
***************** ********************** * ****************
-Ri 19tqst
*********..GI
*******************************.*****.* JiFAlV0JTYVU I
**************************** **********
80S
---I 9iged
ESS
*********"*"**************:*
*********** **** **********************"******************** '
itiV
912/ 1o1f9)ve-
THE INDIAN CONTRACT ACT
(Act 9 of 1872)
Contents y4HT 10
Preamble...
Preliminaryit oim ') tosbolA
S. 1. Short title.....
********************************************************************************************
Extent. Commencement.
***************************** *************
S6a**v*in**g**********************************************************************************************
Law anteriortoContractAct:IntroductionofEnglishLawintoIndia..
1
Applicability o**f*t*h*e***A**c*t*.******************************************************************
2
Scopeof t*h*e******A*C**t*.*.***************************************************************************
How farnativeLawofContractsis still in force.. 2
Saving ofusageorcustomoftrade,etc. **
***** **************************
Notinconsistentwith theprovisionsofthis Act. aa..aa............aa..aa.......
Evidence astousageof trade*.*.*****************************************************
Sections referring to usage or custom of trad*e*.*.*********************************
Foreign COnurac... *e*****************************************************************
Act not retrospective.. ************************************************
S. 2. Interpretation clause.
***************** *************************************
Scopeof section.
************ t1,iA
Theory of Formation ofa*C*o**n*t*r*a*c**t.*.****************************************************
Ag*r*e*e**m**e*n**t.*.*********************************..*.**************************************************** 6
Proposaland Promise*.*.***********************************************************
Promisor and Promisee.
**** ******************************************************************
Privity ofContract(Impositionofliabilitiesuponthirdparty). ..... ...
Promise and Conside**r*a*t*io**n*.*.*.********************************************************** 9
Doctrine ofConsideration 0
*****************************************************************
.Definition oCf onsideration. 10
"At thedesireofthepromisor". 10
***********************************************************
."Promisee or any other per*s*o*n**"*.*"********************************************* 11
i
Privity ofContract (Acquisitionof rights bya thirdparty) .*.****** 12
Past,Present, Prospective Consideration.*.************************************* 16
Pa**s*ct*o**n*s*i*d*e**r*a*t*io**n*.******.****************************************************1*6*******
"Or doesorabstainsfromdoing":Forbearanceasconsideration. . 17
."Or promises to do or to abstain from doing something" Mutual
18
promises..*****************************************************************************************
xvii
xvii Contents
"Such act or abstinence or promise is called a consideration for the
promise Further requirements... **.*.*.*********** ******* 18
Promissory Estoppel and ConsiderationI..*.********* 19
Sub-ss.(e) to G):Agreementand contract.. ***** 20
VoiduacC**o*n**tr*a**c*t*..************************************************* 21
Distinction between void and voidable contracts 21
VoidCaobnletract.. .
21
BecomesVoid .. ************************************************* ******************** 22
CHAPTER I
OF THE COMMUNICATION, AcCEPTANCE AND
REVOCATION OF PROPOSALS
S. 3. Communication, acceptance and revocation of proposals.. 23
Whatiscommunication.. 23
***************************************
ModesofCommunication. *********************************** ******* 23
Communication by si*le**n*c*e**..**************************************** 25
Communication in Electronic Form . .. 25
*********** *
Communicatioonsfpeciaclonditions. .
Shrinkwrap Lice*n*c**e*s*.*******************************************
S. 4. Communication when complete.. 27
*** ***********************************************
Scope and object.***********************************************************"* ******* 28
Communication of a pro*p*o**s*a**l.*.********************************************** 28
Agreemebnettweepnartiesatadistance.. . . 28
Non-instantaneouscommunication throughpost, courier or telegram.. 28
EnglisRhules.. on.snnssesnasnns************** 30
Instantaneouscommunicationonphoneor on telex...******** 30
*******
Communication through fax, email or other electronic means. 31
*****
Modeofacceptance.. *****.******************* 31
RevocationofAcceptance.. 31
******************************** **
Time and Place of Contrac*t*..*.**********"*************
Statutoryconsents. 33
*******************
S. 5 Revocation of Proposals and acceptances. 33
Scope. 33
***************************************************************************************************
Revocationofoffersgenerally.
* ******************" .....
Revocationof 'conditionalI'clS.*************************** 34
Revocationof 'firm' offers... 34
Standingoffers.. 35
Sale byAuction,Tenderetc. 36
*****************************
Revocationof Acceptan*c**e*.**"****************** *7 38
IndianOaths Act. ************************************ 38
S.6Revocationhowmade.. 8
*****************************************
Scopeand object... 38
*********************************************"****
..
Noticeof revocation... 38
****************************************.**
Lapseoftime forAcceptance.. 39
*************************************************************
Condition precedent to Acceptance. 40
************************** ******
Deathor insanityofproposer 40
*****
.Revocation distinct from 'rejection' or"refusal 41
***************************************|
Contents xix
S.7 Acceptance must be absolu*t*e*.*********************** 12
TOO
CertainAtoycf ceptance..
42
Acceptancesubjectto form*a**li*t*ie**s*.*.*********************************************** 44
Modes or ACceptance.. iss***************** *s*s******** 14
Acceptance in aprescribed manner.*.*********************************s************ 45
Usual and reasonabie man*n**e*r*****************************************************s***********
6
AcknowledgmentofElectronic Records*.*.*************************************
S.8 Acceptance by performing conditionsorreceiving consideration. 46
Scopeand******o*b*j*e*c**t.*.*.**************************************************************4*6***
6
Acceptancebyperformance.******* ************** ***
Acceptance in lgnorance of ****o*f*f*e*r*.*..************************************************ 48
Acceptance by receiving consideuroal*timons.s.d**************************************** 18
.When isacceptancecomplete.. 49
usmerannane*******************************************C*I*.**
S.9 Promises,expressand implied. 49
Express and tacit promise**s*.*.************************ es**eee..ss*ss............... 49
Placeo*f***C**o*n*t*r*a*c**t.*.***********************************************************************5*0*
Conflict**o**f*L**a*w********************************************************************************5*0
CHAPTERII
OF CONTRACTS, VOIDABLE CONTRACTS
AND VOID AGREEMENTS
S. 10 What agreements are contra*c*t*s*.************************************************* S1
Enforceable C*o*n*t*r*a*c**t.*******************************************************************51
Freedomof Contract.. 51
Requirementofformalities..**************************************************************** 52
Oral C*o*n**tr*a**c*t*s*.********************************************************************************53
Written contracts. 53
***************************1****"
Contracts required to be in writ*in**g*.*.*************************"********************* 53
Variance between print and writing. 54
********************************************************
As to the law relating to Registra*t*io**n*.*.************************************************* 54
S. 11 Who are competent to contract.. 55
************ ********************************
Competency to Co*n*t*r*a*c*t*.*.*.***************************************************************** 55
"To *C**o*n**tr*a**c*t*.******************************"*********************************************
Infancy.. 55
********************************************************************"***************************
Ageof majority... asasnassnags* S5
"Law to which he1SSubjeet 56
*********1 ********* *** ************
56
Minor's agree**m**e*n**t.*****************************************************************************
Agreementonbehalfof m**i*n*o**r.*.********************************************** 57
Fraudulent Representatio*n*.*.*********************************************************** 57
58
Estoppel..************************* ********************
59
EXecutea Conuacts. ********************************************
Mortgages and sales in favour of min*o*r*s*.********************************************** 59
Lease to *m**i*n*o*r*s**.***************************************************************************** 51
..
Giftstominors.. 61
.................*.***************************************
Minor-Partner*s*h**ip**..************************************************************************** 61
61
Minor-Insu*ra**n*c**e*.*.****************************************************************************
XX Contents
Minor-Suretybond. ..... .... ........ .. .......s....n ..........sa..sssasss.......aan.a......... 61
Minor-Joint docume*n**t*s*.*..*******************************************************************
62
Ratification.. ****************
Paymentofdebtincurredduring minority. 52
**************
2
SpecificPerformance..*************************************************************************
. Nec*e*s*s**a*r*ie**s*.*.*.*****************"***********************************************6*3*
"Ofsoundmind" ******** ************************. 53
Persons otherwise "disqualified from contra*c*t*in**g*.*.*****************************
S. 12 What is a sound mind for the purposes of contracting. 64
4
Test ofSoundnes*s*o*f***m**in**d*.*.*.**********************************************************
Burden*o*f*p**r*o*o**f**.*.*.******************"******************************************6*6*****
Contract in lucid interval. 56
. ++e***..*a*nsssn*************************
S.13 Consent" defined..
56
***********************************************************************
Apparent and real consent .
Ambiguity..
*********************************************************************************s***
Fundamentalerror... 67
******" *************************************************.
As tothenatureofthetransaction(nonestfactum).
Consenatnedstoppel.
************************************************************************
8
Errorastothepersonof the other p**a*r*t*y***.*..*****************************************
As tothesubject-matteroftheagreement.
******** *************
S. 14 "Free consent" defined. 70
*************************************************************
Freeconsent.... 70
S.15 Coercion" defined.. 70
***************** *************************************
.Extent of"coercion'"underthe Act..
Act forbidden by thePenal C**o**d*e*.*.**************************************************
Unlawfuldetaining*o*f*p*r*o**p*e**rt*y**.************************************************2***
To theprejudiceSoOfa*n**y*p**e*r*s*o**n*.*.*************************************************1*2*
Causing any person to enter into an agreeme*n**t.*.*********************************
12
Dure*s**s*.*.***************************.*.*.*****************************************************************
S. 16 "Undue Influence" defined.. 74
.The doctrine ofundue influence in Englandand Ind**ia**.*.************************* 15
Sub-s. 1: Undue influence gene*r*a**ll*y*.*.************************************************* 75
Sub-s. 2: Different formsofinfluence 76
**************************************************
.Mentaldistress. 18
*** ****************************************************************
Proof ofundue in*fl*u*e**n*c*e**.*..********************************************************* 19
Transaction with parda-nishin women. ********************************************* 19
Who is a parda-n*is**h*i*n*.*.******************************************************************
Sub-s. 3: Rule of*e*v**id**e*n**c*e*.*************************************************************
"Unconscionable bargains"
************************"***********************************************
Lapseof time and lim*i*ta**ti*o*n**.*..*********************************************************** 32
S. 17 "Fraud" defined 32
Ingredientsof fraud. ********************************.*.******.***************************************** 33
Fraudin *g*e*n**e*r*a**l.*.**********************************************************************. 3
Sub-ss.3, 4,5. 84
********************************************************************************************
Acts and omissions specially declared to be fraudulent . ************ 84
Mere non-dis**c*lo**s*u**re**.*.***************************************************************8*5*
Contents XXI
S. 18 "Misrepresentation" defined..
***
35
Misrepresentation. *****ssanusne**************************************************************
PrinciplesofEnglish lawasto misrepresentation.. ********** 86
6
***S**u*b**-*s*.**I.*.*.*****************.***********************************************************************
Sub-s.2. B6
***********************************************************************************.**************
7
*******S**u**b*-*s*.**3**.************************************************************************************
Misrepresentationof tactor law... osssosssssnn***************************
Fraudandmisrepresentation distinguished.. 88
Fraud, Misrepresentation and nonest factum distinguish*e**d*.*.*.***************** 88
S. 19 Voidability of agreements without free consent*.*.******** 88
Scopeof th*e**s*e**c*t*io**n*.*.*********************************************************************8**9
9
Otherremedies.
Burdenofproof .**** ** ****************************************************89
Exception : Means of discovering Iuul.************************************************ 89
.Loss ofrighttorescind. 91
Explanation: as to "causing consenf"... 92
****************************************************
Rescissionof voidable *c**o*n*t*r*a*c**ts**..**************************************************92
SpepceifirciOrmance... eossnesnens**************** 92
****
S. 19A Power to set aside contract induced by undue influence .. 92
*****
Contractinducedbyundueinfluence.. 93
*************************************************
Who can raise th*e*****p*l*e*a*.*.*.************************************************************* 94
Heirsandlegalrepresentativesofdeceasedcontractingparty.. S94
S. 20 Agreement void where both parties are under mistake as to
matter o*f****fa**c*t*.*.*******************************************************************9**4**
.M***is*t*a**k*e***o*f***f*a*c**t.*****************************************************************9*4*******
Common and mutualm**is**ta**k*e***.*..******************************************"**************94
Mistakeof fact.. 95
5
Mistake essential to agreement..
********************************* ****
Specific Perf*o*r*m**a**n*c*e**.***********************************************************************97
7
Rectification..
**********************
97
Compensatio**n*.*.********************************************************************************
S. 21 Effect of mistakes as to law.. 97
********************************************************************
Effect ofmistake o*f***l*a*w**.*..***********************************************************91
8
Mistakeo*f*fo**r*e*i*g*n****l*a*w**.*..**************************************************************
S.22 Contract caused by mistake of one party as to matter of fact. 98
S.23 What considerations and objects are lawful and what not... 98
9
Unlawful C..***annennnes**********************************************senen**********
(Ist Clause)
"ForbiddenbyLaw . 100
eosnnassnne*********************
: n.n e.37ni ritt912t às.2.:
(2ndClause)
.
"Defeat theprovisionsofany law".... T.102
itibe1.Legislativeenactment. 102
2. Rules of Hindu and Mahomedan la**w*.********************************** 105
3. Otherrules of law in force in India. 106
XXii Contents
ievi?sterva7tq9tail/
(3ndClause)
**"*F**r*a*u*d**u*l*e*n**t"**.*.****************************************************************1*0*6*******
(4th Clause)
Injury tothepersonorpropertyof ano*th**e*r*"*.*.*********************************** 106
(Sth Clause)
Imnmoral... 106
wssssanss
Opposedto public **p*o*l*i*c*y*"*.*.******************************************************107
1. Trading with enemy. 108
...
2. Stifling prosecution.. **************i******************************************* 109
Champerty and Maintenance".. **"" 110
*************
4.Interference withcourseof justice.. ************************ 111
5. Marriage procurement con*tr*a**c*t*s*.*.********************************************** 112
6. Agreement tending to create interest against duty . ************** 112
7. Sale of public offices. 113
***********************************************************************
8. Agreements tending to create monopolie*s************************************** 113
Agreemenntotto bid... 113
10. Suicide*..****************************************************************************** 113
11. Unconscionable agreements... ** 114
.
Waiverofillegality.. 114
VoidAgreements
S.24. Agreementsvoid, ifconsiderationsandobjectsunlawful in part.. 115
Entireordivisibleagreements... 115
issnseanea
S. 25. Agreement without consideration void, unless.. 116
***** ****"
it is in writingandregistered. 116
**************************************
or is a promise to compensate for something don*e**.********************" 116
...
or is a promise to pay a debt barred by limitation law. 116
*************
117
Consi*d*e*r*a**ti*o*n**.*..******************************************************************************
Forbearanceandcompromise as consideratio*n*.*.*.*.**************************** 117
Promisetoperformexistingduty . 15 118
*********** ********************************
Transferof immovable property.. 119
Negotiableinstruments. **************a* +****a *************** 119
19
Consideration dispensed *w**i*th**.*.*******************************************************
(a) Registeredwriting ***************** ******************************** 119
(b) Compensation for voluntary serv*ic*e**.*.************************************* 120
) Promisetopayatime-barreddebt... **********************" 121
122
********D*e**b*t*.*.**********************************************************************************************
Explanation2.. 122
*************************************************************************************
S.26 Agreementin restraint of marriage void. 123
*****************************
S.27 Agreement in restraint of trade void. ** ****** 123
Savings of agreement not to carry on business of which goodwill
is sold. 123
Agreementinrestraintoftrade. 124
Contents XXii
Restraintduringtermof service. ********************************************** 125
Restraintoperatingbeyondtermof service.. 125
****************************************
Public policy... * *************** 126
Agreementnot inrestraintof trade. 126
*************ssa** ***************************
Tradceombination.s 126
*******************************************************************
To thaetxtent"
127
****E**x*c*e**p*t*io**n**I*.*.*.****************************************s*******.**** 127
Reasonableness of limits******************************* C 127
S.28 Agreements in restraint of legal proceedings void.. 128
*************
2
Saving of contract to refer to arbitration dispute that may
arise E 128
*******
Saving of contract to refer questions that have already arisen... 29
Saving of a guarantee agreement of a bank or a financial
institution. 129
Agreement in restraintoflegal procBe*e*d**in**g*s*.*.*.********************************** 130
Agreementstorefertorefereeor arbitrator.. 130
**************************************
Agreementson jurisdic**ti*o*n**.*..*******************************************************1*3|1
"Rights under or inrespect of any contract. . 132
Limitation of time toenforcerightsundera contrac*t*.ssemeee****************| 132
134
**************************************************************************
Exception 1& 2.. 134
**********************************************ssseenenne**************** ****sen
***E**x*c**e*p**ti*o*n****3*.*.*********************************************************************1**3*4******
S. 29 Agreements void for uncertainty. 135
****************************************************
Construction of c*o*n**t*ra**c*t*.*.**************************************************************** 135
Ambiguous contracts. **************************************************| 135
S.30 Agreements by way of wager void. 136
137
Exception in favour of certainprizes forhorseracing.
Section 294-A of the Indian Penal Code not affected... 137
****************
Wageringcontracts... . 137
*********************************************************
What*i*s*a**w**a*g**e*r**.*********************************************************************1*3*7**
ReformsinEnglishLaw(GamblingAct, 2005)... 38
***********************
Contracts "By wayof****w**a*g*e**r*"*..******************************************************1**38
Court toascertainrealnatureandmutual intention.. 138
*** ****************
.Teji Mandtriansaction. 139
*****************************nenneea**msnnsnen*ssansannene*
Agreements between Pukka Adatia and his constituenlttsd.**** **************** 140
Agreemecnotlslateratwolagerincgontracts.. .
140
143
Insurance pollcies**oonasanns*ssssnannnan**sssesennnnn************************.
Promissory note for debt due on a wagering contract.*.************************* 143
Award on debt on wagering contract... ******************************* 143
Suit to recover dep**o*S**i*t.*.********************************************************************** 143
Lottery. *n****************************************************************************************** 144