Notes on the Indian Contract Act, 1872, Sections 1–75 — formation, validity, performance, discharge, restitution, breach, and remedies.
What this section answers: The statute, its scope, and where Contract-I fits.
Keep separate: Act structure is context, not a substitute for doctrine.
यह section क्या समझाता है: यह section Indian Contract Act की बनावट, उसके दायरे और Contract-I में उसके स्थान को समझाता है।
मुख्य अंतर: Act की structure केवल पृष्ठभूमि है; वह substantive doctrines का स्थान नहीं लेती।
Indian Contract Act, 1872 को केवल sections की सूची की तरह न पढ़ें। Contract-I में Sections 1–75 एक लगातार legal journey बनाते हैं: पहले proposal और acceptance से promise बनता है; फिर capacity, free consent, lawful consideration और lawful object यह तय करते हैं कि agreement enforceable है या नहीं; उसके बाद performance, discharge, restitution और remedies आते हैं।
Sale of Goods और Partnership के विषय बाद में अलग statutes में चले गए, इसलिए पुराने 266 sections देखकर यह न मानें कि Contract-I में पूरे original Act का अध्ययन एक साथ करना है। इस page का focus Sections 1–75 की conceptual chain है।
| Item | Detail |
|---|---|
| Act No. | 9 of 1872 |
| Assent | 25 April 1872 |
| In force from | 1 September 1872 |
| Original sections | 266 |
| Extent | Whole of India |
Parts II (Sale of Goods) and IV (Partnership) were later repealed and replaced by the Sale of Goods Act, 1930 and the Indian Partnership Act, 1932 respectively. The J&K Reorganisation Act, 2019 extended the Act to the whole of India, removing the earlier exclusion.
Act structure, scope and statutory map. Continue to the connected section.
Act की structure, scope और statutory map। संबंधित section पर जाएँ।
What this section answers: The progression from proposal to enforceable contract.
Keep separate: Name the exact link at which a transaction fails.
यह section क्या समझाता है: यह section proposal से enforceable contract बनने तक की पूरी कड़ी समझाता है।
मुख्य अंतर: हर problem में ठीक वह link पहचानें जहाँ transaction असफल हुआ।
Proposal सामने वाले से assent माँगता है। Acceptance मिलने पर proposal promise बनता है। Promises जब एक-दूसरे के लिए consideration बनते हैं तो agreement बनता है। Agreement तभी contract है जब law उसे enforce करे। इसलिए हर problem में सीधे “contract है या नहीं” न लिखें; पहले पूछें कि chain किस link तक पहुँची।
यदि offer ही नहीं था तो acceptance का प्रश्न नहीं उठेगा। यदि assent था लेकिन party minor थी, defect capacity में है। यदि consent coercion से बना, agreement voidable हो सकता है। यदि object unlawful है, formation पूर्ण दिखने पर भी enforcement रुक सकता है।
Almost everything in the first thirty sections hangs off one progression, and it is worth being able to write it out cold:
Hence the golden rule: all contracts are agreements, but all agreements are not contracts.
A shop displays a phone marked ₹20,000. Ananya picks it up and pays. It feels like one single act, but the Act sees five distinct stages:
Change one fact and the chain breaks at an identifiable point. If Ananya is fifteen, it fails at Section 11 capacity. If the cashier says “₹20,000 only if you also buy a case”, that is a counter-offer under Section 7, not acceptance. If the phone was stolen, the object is unlawful under Section 23. Being able to name which link failed is the whole skill.
Proposal, promise, agreement, contract and voidness. Continue to the connected section.
Proposal, promise, agreement, contract और voidness का संबंध। संबंधित section पर जाएँ।
What this section answers: The Section 2 vocabulary used throughout the Act.
Keep separate: Similar labels can produce different legal consequences.
यह section क्या समझाता है: यह section पूरे Act में बार-बार आने वाली Section 2 की vocabulary समझाता है।
मुख्य अंतर: मिलते-जुलते labels के legal consequences अलग हो सकते हैं।
Definitions केवल याद करने के लिए नहीं हैं। Proposal में willingness के साथ दूसरे का assent प्राप्त करने का उद्देश्य चाहिए। Promise accepted proposal है। Consideration act, abstinence या promise हो सकता है और promisor की desire पर होना चाहिए। Agreement promises का legally relevant combination है, जबकि contract वही agreement है जिसे law enforce करता है।
Void agreement आरम्भ से enforceable नहीं है। Voidable contract तब तक operative रह सकता है जब तक protected party उसे avoid न करे। Void contract पहले contract हो सकता था, पर बाद में unenforceable हुआ। इन तीन स्थितियों को answer में मिलाना remedy को भी गलत कर देता है।
| Clause | Term | Substance |
|---|---|---|
| 2(a) | ProposalProposal | Signifying willingness to do or abstain, with a view to obtaining assentकिसी कार्य को करने या न करने की willingness इस उद्देश्य से बताना कि सामने वाले का assent प्राप्त हो |
| 2(b) | PromisePromise | A proposal, when accepted, becomes a promiseProposal accept होने पर promise बनता है |
| 2(d) | ConsiderationConsideration | An act, abstinence or promise, done at the desire of the promisorPromisor की desire पर किया गया act, abstinence या promise |
| 2(e) | AgreementAgreement | Every promise and set of promises forming consideration for each otherऐसा promise या promises का set जो एक-दूसरे के लिए consideration बनता है |
| 2(g) | Void agreement | An agreement not enforceable by law |
| 2(h) | ContractContract | An agreement enforceable by lawऐसा agreement जिसे law enforce करता है |
| 2(i) | Voidable contract | Enforceable at the option of one party but not the other |
| 2(j) | Void contract | A contract that ceases to be enforceable |
Section 2 definitions as a problem-solving vocabulary. Continue to the connected section.
Section 2 definitions को problem-solving vocabulary की तरह समझना। संबंधित section पर जाएँ।
What this section answers: When a communication gives another person the power to conclude a bargain.
Keep separate: Offer versus information, quotation, advertisement, tender and counter-offer.
यह section क्या समझाता है: यह section बताता है कि कोई communication कब दूसरे व्यक्ति को assent से bargain पूरा करने की legal power देता है।
मुख्य अंतर: Offer को information, price quotation, advertisement, tender और counter-offer से अलग रखें।
हर price tag offer नहीं होता। Offer वह communication है जिसमें maker चाहता है कि दूसरे का assent अकेले bargain को पूरा कर दे। Shop display, catalogue या सामान्य advertisement अक्सर invitation to offer होते हैं, क्योंकि seller stock, eligibility, payment और pricing error जाँचने के बाद order accept करता है।
General offer दुनिया के सामने हो सकता है, पर उसे वही व्यक्ति accept करता है जिसे offer का knowledge हो और जो उसकी conditions के response में act करे। Counter-offer original offer को accept नहीं करता; वह नया offer बनाता है। Problem में document का नाम नहीं, communication का legal effect देखें।
Section 2(a) asks whether one person has signified a willingness to do or abstain from doing something with a view to obtaining the other person's assent. The final words do the real work. A statement is an offer only when assent alone is intended to conclude the bargain.
Offer केवल information, negotiation या bargaining शुरू करने का invitation नहीं है।
A shop display, catalogue, menu or ordinary advertisement usually invites customers to make offers. That arrangement lets the seller check stock, age restrictions, pricing mistakes and other conditions before accepting. The separating question is: could every person who responded insist that a contract had already formed? If the answer would expose the maker to unlimited or unintended liability, the statement is probably an invitation to offer.
सहज धारणा को उलटकर देखें: price दिखाने वाला व्यक्ति हर बार offer नहीं कर रहा होता।
| Communication | Usual legal character | What completes the bargain? |
|---|---|---|
| Goods displayed in a self-service shop | Invitation to offer | The customer's offer is accepted at the checkout |
| Ordinary advertisement of goods | Invitation to offer | The seller accepts an order |
| Clear reward advertisement | General and unilateral offer | A person with knowledge of the offer performs its conditions |
| Request for tenders | Usually an invitation to offer | The inviting party accepts a tender; a standing offer may then arise |
| Bid at an auction | Offer | Acceptance occurs in the legally recognised manner for the auction |
| Reply changing price, quantity or another material term | Counter-offer | The original offer does not survive as an offer capable of later acceptance |
A college asks suppliers to quote a price for 100 desks. Supplier A quotes ₹3,000 per desk. The college replies, “We accept 80 desks at that price.” Supplier A then agrees.
The trap is to follow business labels such as “quotation” or “acceptance”. Contract law follows what the communication does, not what its heading says.
For every alleged offer, ask three questions in that order: Was the maker ready to be bound by assent alone? Were the terms sufficiently certain? Was the proposal communicated to the person said to have accepted it?
A general offer may be addressed to the world, but it is accepted only by a person who knows of it and performs its conditions. Ask: was the act done in response to the offer, or would it have happened anyway?
General offer का अर्थ knowledge के बिना acceptance नहीं है।
An offer gives another person the legal power to conclude the bargain by assent; an invitation to offer merely opens the door to negotiation.
Offer दूसरे व्यक्ति को assent देकर bargain पूरा करने की legal power देता है; invitation to offer केवल negotiation का रास्ता खोलता है।
A website lists a limited-edition book at an obvious pricing error and provides an “Add to cart” button. What fact would matter most before deciding whether the listing was an offer?
Examine the language and transaction design to decide whether the seller intended the listing itself to be finally binding on a customer's click, or merely invited an order that remained subject to acceptance. The label or button alone is not decisive.
Offer, invitation to offer and finality. Continue to the connected section.
Offer, invitation to offer और finality का अंतर। संबंधित section पर जाएँ।
What this section answers: How assent is communicated, completed and revoked.
Keep separate: Postal communication versus instantaneous communication.
यह section क्या समझाता है: यह section assent की communication, completion और revocation समझाता है।
मुख्य अंतर: Postal communication और instantaneous communication के rules अलग रखें।
Acceptance absolute और unqualified होना चाहिए। Terms बदलने वाला reply acceptance नहीं, counter-offer है। Section 4 में communication की completion proposer और acceptor के विरुद्ध अलग समय पर हो सकती है; इसी कारण postal acceptance में asymmetry आती है।
Telephone, live electronic communication या अन्य instantaneous medium में postal rule mechanically लागू न करें। पूछें कि acceptance कब और कहाँ received या heard हुई। Revocation effective होने के लिए केवल भेजना पर्याप्त नहीं हो सकता; relevant party के विरुद्ध communication कब complete हुई, यह Section 4 और Section 5 से तय करें।
Section 4 sets out when communication is complete, and the asymmetry between proposer and acceptor is the examinable point:
| Type | Complete against proposer | Complete against acceptor |
|---|---|---|
| Proposal | — | When it comes to the knowledge of the person to whom made |
| Acceptance | When put into course of transmission (i.e. posted) | When it comes to the knowledge of the proposer |
| Revocation | When put into course of transmission | When it comes to the knowledge of the person to whom made |
Section 7 requires acceptance to be absolute and unqualified — a counter-offer is not an acceptance. Section 6 lists how a proposal is revoked: notice, lapse of time, failure of a condition precedent, or death/insanity of the proposer where the acceptor knows of it before accepting.
Rakesh in Jaipur posts an offer to Meera in Lucknow on 1 March. She posts her acceptance on 5 March. He posts a revocation on 4 March, which reaches her on 7 March. Her acceptance reaches him on 8 March. Is there a contract?
| Date | Event | Effect under Section 4 / Section 5 |
|---|---|---|
| 5 Mar | Meera posts acceptance | Complete as against Rakesh the moment it is posted |
| 7 Mar | Revocation reaches Meera | Too late — Section 5 allows revocation only before acceptance is complete against the proposer |
| 8 Mar | Acceptance reaches Rakesh | Complete as against Meera; she could have revoked until this moment |
There is a contract. The asymmetry is deliberate: it gives the acceptor a window in which the deal is binding on the offeror but not yet on her. Note what this turns on — not fairness, but the precise moment each communication becomes “complete” against each party.
Now make it a phone call instead. Bhagwandas Kedia applies: the contract forms where and when the acceptance is heard. If the line drops mid-sentence and Rakesh does not hear her, there is no acceptance at all — and no postal-rule protection to fall back on.
Acceptance, communication and revocation. Continue to the connected section.
Acceptance, communication और revocation की timing। संबंधित section पर जाएँ।
What this section answers: Why apparent agreement does not always belong in law.
Keep separate: Social context versus objective legal seriousness.
यह section क्या समझाता है: यह section समझाता है कि apparent agreement हर बार law में enforceable क्यों नहीं होता।
मुख्य अंतर: Social arrangement और objectively serious legal undertaking को अलग रखें।
Court यह नहीं पढ़ता कि party के मन में secretly क्या था। Words, conduct, setting, writing, money, property consequences और surrounding circumstances से objective intention निकाला जाता है। Domestic setting legal intention के विरुद्ध संकेत दे सकती है और commercial setting उसके पक्ष में, पर दोनों rebuttable contexts हैं।
Intention और consideration अलग filters हैं। Consideration पूछता है exchange क्या था; intention पूछता है parties उस arrangement को legal consequences देना चाहती थीं या नहीं। एक arrangement में consideration जैसा exchange दिख सकता है, फिर भी context बता सकता है कि वह केवल social understanding था।
Section 2(h) defines a contract as an agreement enforceable by law, and Section 10 identifies the statutory conditions of enforceability. The doctrine of intention helps distinguish a serious legal undertaking from a social, domestic or purely honour-based arrangement that the parties did not mean a court to police.
रोज़मर्रा की भाषा में agreement का दायरा उस agreement से व्यापक है जिसे law enforce करता है।
The law does not ask secretly what each person felt. It asks objectively what the words, conduct and surrounding circumstances would communicate. Domestic and social settings often point away from legal intention; commercial settings often point towards it. Neither is an irrebuttable rule.
“If you design the poster by Friday, I will pay you ₹5,000.”
The doctrine does not turn on friendship versus business as rigid categories. It turns on whether a reasonable observer would understand legal consequences to have been intended.
Consideration asks what was exchanged at the promisor's desire. Intention asks whether the arrangement was meant to carry legal consequences. Ask separately: what is the bargain, and was this bargain meant to be legally enforceable?
Intention और consideration एक बात नहीं हैं।
Read words, setting, seriousness and consequences. No single factor is conclusive, but together they show how a reasonable person would understand the undertaking.
Offer and acceptance show apparent assent; intention asks whether that assent belongs in law rather than only in life.
Offer और acceptance apparent assent दिखाते हैं; intention पूछता है कि वह assent केवल जीवन-व्यवहार का हिस्सा है या law का भी।
Objective intention and enforceability. Continue to the connected section.
Objective intention और enforceability का संबंध। संबंधित section पर जाएँ।
What this section answers: What supports a promise and who may enforce it.
Keep separate: Source of consideration versus standing to sue.
यह section क्या समझाता है: यह section समझाता है कि promise को legal support क्या देता है और उसे enforce कौन कर सकता है।
मुख्य अंतर: Consideration किससे आया और suit कौन कर रहा है, ये अलग questions हैं।
Section 2(d) में consideration promisor की desire पर होना चाहिए। यह promisee या किसी अन्य person से आ सकता है और past, present या future हो सकता है। लेकिन benefit मिल जाना अपने-आप consideration नहीं बनाता; देखें act किसने request किया था। Adequacy आवश्यक नहीं, पर consideration real, lawful और legally recognisable होना चाहिए।
Privity अलग प्रश्न है: suit कौन कर सकता है? Indian law में consideration third person से आ सकता है, फिर भी contract का stranger ordinarily enforce नहीं कर सकता, जब तक trust, family arrangement, assignment, agency या statutory route जैसी recognised basis न हो। Answer में “consideration कौन लाया?” और “enforce कौन कर रहा है?” अलग-अलग लिखें।
Section 2(d) recognises an act, abstinence or promise done at the desire of the promisor. It may be done by the promisee or any other person, and it may have been done, be being done, or be promised for the future. This statutory language makes the Indian rule wider than the traditional English statement that consideration must move from the promisee.
Consideration उस exchange को पहचानता है जो promise को bargain बनाता है।
| Question | Rule | Diagnostic example |
|---|---|---|
| At whose desire? | The act must be done at the promisor's desire | A voluntary act done without a request is not ordinary consideration for a later promise, subject to Section 25 |
| From whom? | The promisee or any other person | A third person may furnish consideration under Section 2(d) |
| When? | Past, present or future | Indian law can recognise an act already done at the promisor's desire |
| How much? | Need not be economically adequate, but must be real and lawful | A bad bargain is not invalid merely because values differ |
| What form? | Act, abstinence or promise | Forbearance from exercising a legal right can be consideration |
Courts do not ordinarily rescue a competent party from a bargain merely because the exchange was unequal. But the alleged consideration must still be legally real, possible and lawful. Gross inadequacy may also be evidence when the court examines whether consent was produced by undue influence, fraud or another vitiating factor.
Adequacy और legal reality अलग questions हैं।
The bargain idea explains why consideration and intention perform different jobs. Consideration marks the exchange; intention marks legal seriousness. Section 25 then supplies defined situations in which a promise may be enforceable even without ordinary consideration.
| Section 25 route | Essential conditions |
|---|---|
| Natural love and affection | Near relationship, writing, registration, and a promise made on account of natural love and affection |
| Past voluntary service | A promise to compensate a person who has already voluntarily done something for the promisor, or something the promisor was legally compellable to do |
| Time-barred debt | A written and signed promise to pay wholly or partly a debt barred by limitation |
| Completed gift | The section preserves the validity of a gift already made as between donor and donee |
A person may furnish consideration without being the promisee, but a person who is not a party to the contract ordinarily cannot sue upon it. Do not merge these propositions. Section 2(d) answers where consideration may come from; the doctrine of privity addresses enforcement by a stranger to the contract.
Privity अलग question पूछता है: promise को enforce करने का अधिकार किसे है?
| Recognised route | Why the claimant may enforce |
|---|---|
| Trust or charge | The claimant enforces the beneficial interest, not merely a stranger's expectation |
| Family settlement or marriage arrangement | Courts may recognise the beneficiary's position under the arrangement |
| Acknowledgement or estoppel | A promisor's conduct may prevent denial of an acknowledged obligation in an appropriate case |
| Assignment | The assignee claims through a valid transfer of contractual rights |
| Agency | The principal may sue or be sued on a contract made through an authorised agent |
| Statutory route | A statute may confer an enforceable right despite ordinary privity |
A transfers land to B. In return, B promises A that B will pay ₹10,000 each month to C.
The correct answer therefore cannot stop after saying “consideration may move from a third person”. That answers only the first question.
If the act was previously done at the promisor's desire, it can fall within Section 2(d). If it was voluntarily done without that desire, ordinary consideration is absent and enforceability must be tested under the specific route in Section 25(2). Ask first: who requested the earlier act?
Past consideration और past voluntary act एक ही बात नहीं हैं।
Desire, source, time, reality, legality. Then ask a separate sixth question: who is suing? The first five analyse consideration; the sixth exposes the privity issue.
Offer and acceptance identify the promise; intention places it in the legal sphere; consideration identifies the exchange; privity identifies who may enforce it.
Offer और acceptance promise को पहचानते हैं; intention उसे legal sphere में रखता है; consideration exchange को पहचानता है; privity बताता है कि उसे enforce कौन कर सकता है।
D promises to pay P because P repaired D's roof last month. What two facts must be separated before deciding whether the promise is enforceable?
First ask whether P repaired the roof at D's desire. If so, the act may be past consideration under Section 2(d). If P acted voluntarily without D's request, ordinary consideration is absent and the promise must be tested against Section 25(2), including whether the act was voluntarily done for D and whether the promise truly compensates it.
Consideration, Section 25 and privity. Continue to the connected section.
Consideration, Section 25 और privity का अंतर। संबंधित section पर जाएँ।
What this section answers: How pre-drafted and electronic terms become part of a bargain.
Keep separate: Electronic medium versus valid formation.
यह section क्या समझाता है: यह section समझाता है कि pre-drafted और electronic terms bargain का हिस्सा कैसे बनते हैं।
मुख्य अंतर: Electronic medium और valid contract formation को अलग रखें।
Signature objective assent का मजबूत evidence है, पर fraud, misrepresentation या अन्य vitiating factors अलग inquiry हैं। Unsigned ticket, notice या hyperlink वाले terms के लिए देखें कि reasonable notice formation से पहले या उसी समय दिया गया था या नहीं। Payment के बाद receipt में पहली बार आया exclusion clause ordinarily बहुत देर से आता है।
Section 10A electronic medium को अकेले unenforceability का कारण नहीं बनने देता। यह defective bargain को valid नहीं बनाता। Click-wrap, browse-wrap या email exchange में भी certainty, capacity, free consent, lawful object और actual assent आवश्यक हैं। पहले formation का moment fix करें, फिर देखें disputed term उस समय incorporated थी या नहीं।
Many contracts are offered on pre-drafted terms: transport tickets, insurance policies, software subscriptions and online purchases. Contract law still asks the familiar questions. Were the terms presented as contractual terms? Was reasonable notice given before or when the contract formed? Did the other party objectively assent?
Standard-form contract bargaining का समय बचाता है, पर hidden terms को अपने-आप binding सिद्ध नहीं करता।
A person who signs a contractual document is ordinarily bound even without reading it, subject to recognised vitiating factors. Where there is no signature, incorporation depends heavily on reasonable and timely notice. A term revealed only after payment is ordinarily too late to shape the contract already made.
| Form | Act showing possible assent | Central question |
|---|---|---|
| Signed paper | Signature | Was the document contractual, and is any recognised vitiating factor established? |
| Ticket or notice | Taking or using it | Was reasonable notice given before or at formation? |
| Click-wrap | Selecting “I agree” | Were the terms available and was assent presented clearly? |
| Browse-wrap | Use of a site said to imply assent | Was the notice sufficiently prominent to support objective assent? |
| Email exchange | Definite electronic acceptance | Were essential terms settled, and when and where was acceptance received? |
Section 10A of the Information Technology Act, 2000 provides that a contract is not unenforceable solely because proposals, acceptances or revocations were expressed electronically. It validates the medium, not a defective bargain. Capacity, free consent, lawful consideration, lawful object and the remaining requirements of the Contract Act still apply.
An online service charges a yearly fee. The exclusion term is: (a) beside the “I agree” box before payment; (b) behind a clearly identified terms link beside that box; or (c) first shown in the receipt sent after payment.
Version (c) has the clearest timing defect because the term appears after formation. Versions (a) and (b) still require analysis of clarity, notice, assent and any statutory controls. “It was somewhere on the website” is not the legal test.
Section 10A removes electronic form as a reason for refusing enforcement. It does not cure uncertainty, minority, coercion, illegality or lack of assent. Ask: would the same bargain satisfy contract law if it were on paper?
Electronic form का अर्थ automatically enforceable होना नहीं है।
Document, notice, timing, assent, control. Identify the document, test notice, fix the time of formation, find objective assent, then apply statutory and common-law controls.
The medium may change from paper to screen, but formation still depends on communicated terms and objective assent.
Medium paper से screen हो सकता है, पर formation अब भी communicated terms और objective assent पर निर्भर है।
Notice, assent and electronic formation. Continue to the connected section.
Notice, assent और electronic formation। संबंधित section पर जाएँ।
What this section answers: Who can give legally binding assent.
Keep separate: Minor as promisor versus minor as beneficiary or recipient of necessaries.
यह section क्या समझाता है: यह section बताता है कि legally binding assent कौन दे सकता है।
मुख्य अंतर: Minor को promisor, beneficiary और necessaries पाने वाले व्यक्ति के रूप में अलग-अलग analyse करें।
Section 11 majority, sound mind और legal disqualification की जाँच करता है। Minor का agreement void from inception है; उसे केवल voidable न लिखें। फिर भी minor beneficiary हो सकता है, agent के रूप में act कर सकता है, और necessaries के लिए Section 68 property से reimbursement की अलग व्यवस्था करता है।
Section 12 permanent label नहीं लगाता। Relevant moment contracting का है: क्या व्यक्ति contract समझ सकता था और अपने interests पर उसका effect लेकर rational judgment बना सकता था? Usually unsound person lucid interval में contract कर सकता है; usually sound person temporary incapacity के दौरान नहीं।
Section 11 requires majority, sound mind and freedom from a legal disqualification. Section 12 asks whether, at the time of contracting, the person could understand the contract and form a rational judgment about its effect on personal interests.
Capacity decision-making ability को protect करती है; यह नहीं मापती कि bargain समझदारी वाला था या नहीं।
| Issue | Rule | Consequence |
|---|---|---|
| Minor's agreement | Void from the beginning | The minor cannot ordinarily be bound as promisor |
| Minor as beneficiary | Capacity rule protects rather than disables | A beneficial right may be enforced for the minor |
| Ratification after majority | A void agreement is not revived merely by later approval | A fresh promise requires a fresh legal basis |
| Estoppel | A plea about age does not ordinarily validate a void agreement | The capacity rule cannot be bypassed by relabelling enforcement |
| Sound mind | Tested at the moment of contracting | A usually unsound person may contract in a lucid interval; the reverse also follows |
| Legal disqualification | Depends on the applicable law | The specific disqualification defines the contractual limit |
A minor may receive a benefit and may act as an agent, while personal contractual liability remains restricted. Necessaries supplied to a person incapable of contracting are addressed separately by Section 68: reimbursement is from that person's property, not an ordinary personal promise to pay.
The separating question is not merely “did the minor receive something?” Ask whether enforcement binds the minor as promisor, protects a beneficial right, or invokes the distinct restitutionary rule for necessaries.
Voidable would mean the agreement operates until the protected party avoids it. Mohori Bibee treats the minor's agreement as void from inception. Ask: was there a competent contracting party at formation?
Minor का agreement केवल voidable नहीं होता।
Age, understanding, judgment, disqualification. For soundness of mind, freeze the facts at the moment of contracting rather than attaching a permanent label to the person.
Formation asks whether assent occurred; capacity asks whether the law recognises that person as able to give binding assent.
Formation पूछता है कि assent हुआ या नहीं; capacity पूछती है कि law उस व्यक्ति को binding assent देने में सक्षम मानता है या नहीं।
A person who is usually of sound mind signs during a medically established period in which the transaction could not be understood. Does the usual condition decide the issue?
No. Section 12 focuses on capacity at the time of contracting. The issue is whether the person then understood the contract and could form a rational judgment about its effect.
Capacity, minority and soundness of mind. Continue to the connected section.
Capacity, minority और soundness of mind। संबंधित section पर जाएँ।
What this section answers: Whether assent matched and what produced it.
Keep separate: Coercion, undue influence, fraud, misrepresentation and mistake.
यह section क्या समझाता है: यह section पूछता है कि assent वास्तव में मिला या नहीं और वह किस कारण बना।
मुख्य अंतर: Coercion, undue influence, fraud, misrepresentation और mistake को facts के अनुसार अलग classify करें।
पहले देखें parties same thing को same sense में समझीं या नहीं। उसके बाद पूछें consent free थी या coercion, undue influence, fraud, misrepresentation या mistake से caused थी। केवल bargain unfair दिखना पर्याप्त नहीं; legally recognised cause identify करें।
Coercion pressure या forbidden act से जुड़ता है। Undue influence relationship, domination और unfair advantage की inquiry है। Fraud में deliberate या reckless deception है; misrepresentation में false assertion honestly believed हो सकती है। Bilateral essential mistake Section 20 में agreement को void कर सकती है, जबकि unilateral mistake ordinarily Section 22 के कारण पर्याप्त नहीं। Remedy classification के बाद लिखें।
Section 13 asks whether the parties agreed upon the same thing in the same sense, or consensus ad idem. Section 14 assumes consent exists and asks whether coercion, undue influence, fraud, misrepresentation or mistake prevented it from being free.
Consent और free consent अलग questions का उत्तर देते हैं।
| Doctrine | Separating question | Usual statutory effect |
|---|---|---|
| Coercion, S.15 | Was consent caused by a forbidden act, threat, or unlawful detention of property? | Voidable under S.19 |
| Undue influence, S.16 | Could one party dominate the other's will and use that position to obtain an unfair advantage? | Voidable; S.19A permits terms on setting aside |
| Fraud, S.17 | Was there knowing or reckless deception, active concealment, or another act fitted to deceive? | Voidable under S.19; damages may arise |
| Misrepresentation, S.18 | Was the false assertion made without intent to deceive? | Voidable under S.19, subject to its proviso |
| Bilateral mistake, S.20 | Were both parties mistaken about an essential fact? | Void |
| Mistake of Indian law, S.21 | Was the mistake about law in force in India? | Not voidable merely for that reason |
| Unilateral mistake, S.22 | Was only one party mistaken about a fact? | Not voidable merely for that reason |
Consensus ad idem means agreement to the same thing in the same sense. The phrase is useful only if it directs attention to an objective mismatch about the transaction, rather than becoming a substitute for analysing the facts.
| consensus | agreement |
| ad | to |
| idem | the same thing |
Section 17 ordinarily requires more than mere silence. The result changes where there is a duty to speak or where silence is equivalent to speech. The analysis therefore begins with context: relationship, prior statement, half-truth, active concealment and whether later events made an earlier representation misleading.
Silence अपने-आप fraud नहीं है, लेकिन कुछ contexts में silence legally meaningful हो सकता है।
Suresh sells land to Dinesh. Change only the cause of Suresh's assent:
The classification turns on the mechanism that produced assent, not simply on whether the bargain later appears unfair.
| Fraud | Misrepresentation | Mistake |
|---|---|---|
| Deception or recklessness is central | Statement is false but honestly believed | Parties proceed on an erroneous assumption |
| Ordinary diligence proviso does not excuse active fraud | S.19 proviso may matter where truth was discoverable with ordinary diligence | Bilateral essential mistake makes the agreement void |
| Rescission and a possible damages route | Rescission or insistence on represented performance under S.19 | No contract to enforce under S.20 |
A low price does not by itself prove coercion, fraud or undue influence. Ask: what legally recognised factor caused consent? Inadequacy may support an inference in context, especially under undue influence, but it does not replace the statutory elements.
Unfairness evidence हो सकती है, पर अपने-आप universal doctrine नहीं है।
Pressure, ascendancy, deception, innocent error, shared mistake. Match the facts to the cause before discussing the remedy.
Capacity asks who can assent; consent asks whether assent matched; free consent asks what produced it; the remedy follows only after that classification.
Capacity पूछती है कौन assent दे सकता है; consent पूछता है assent वास्तव में मिला या नहीं; free consent पूछता है assent किस कारण बना; remedy इस classification के बाद आती है।
A seller honestly repeats an incorrect survey measurement. The buyer could have found the correct figure in an ordinary inspection. Which two stages should the answer address?
First classify the honest false assertion as possible misrepresentation under Section 18. Then apply Section 19 and its ordinary-diligence proviso to decide whether the contract is voidable on those facts. Do not jump directly from falsity to fraud.
Consent, free consent and classification of defects. Continue to the connected section.
Consent, free consent और defects की classification। संबंधित section पर जाएँ।
What this section answers: Why a formed bargain may still be legally rejected.
Keep separate: Void, illegal, severable, restrained, uncertain and wagering agreements.
यह section क्या समझाता है: यह section समझाता है कि formation पूरी होने के बाद भी bargain को law क्यों reject कर सकता है।
मुख्य अंतर: Void, illegal, severable, restrained, uncertain और wagering agreements को अलग रखें।
Section 23 consideration और object दोनों देखता है। Bargain forbidden by law हो सकता है, law को indirectly defeat कर सकता है, fraudulent हो सकता है, injury involve कर सकता है, या recognised doctrine के अनुसार immoral अथवा opposed to public policy हो सकता है। Personal dislike को public policy न बनाएं।
Section 24 mixed lawful-unlawful bargain की severability पूछता है। Section 25 consideration के सामान्य rule और defined exceptions देता है। Sections 26–30 marriage, trade, legal proceedings, uncertainty और wager के specific categories हैं। Void और illegal समान नहीं: illegality collateral transaction को भी प्रभावित कर सकती है।
Consideration is the price of the promise. Object is the purpose or design of the agreement. Either may make the agreement unlawful. Section 23 identifies six routes: the consideration or object is forbidden by law; would defeat the provisions of law; is fraudulent; involves or implies injury to person or property; or is regarded by the court as immoral or opposed to public policy.
Consent bargain बनाता है; Section 23 पूछता है कि bargain जिस purpose के लिए है, क्या law उसे मान्यता दे सकता है।
| Section 23 head | Diagnostic question | Illustration |
|---|---|---|
| Forbidden by law | Does law prohibit the promised act or purpose? | A promise to carry out an expressly prohibited transaction |
| Defeats a provision of law | Would enforcement achieve indirectly what a statute prevents directly? | A colourable arrangement designed to evade a mandatory rule |
| Fraudulent | Is the bargain designed to deceive another person or institution? | An arrangement to conceal assets from a lawful claimant |
| Injury | Does performance involve or imply injury to person or property? | A promise whose performance requires damage to another's property |
| Immoral | Does the recognised legal category apply on the facts? | The label must be supported by authority, not personal disapproval |
| Opposed to public policy | Would enforcement harm an established public interest? | Interference with justice or an unconscionable term within the applicable doctrine |
A bargain need not repeat the words of a statutory prohibition to be unlawful. If its practical design would make a mandatory rule ineffective, Section 23 prevents parties from accomplishing by contract what law refuses directly.
A conclusion that a bargain feels undesirable is not analysis. Identify the established public interest, the authority recognising it, and the connection between enforcement and that harm. Ask: which precise Section 23 head is engaged, and by what fact?
Public policy व्यक्तिगत morality नहीं है।
Section 23 balances freedom of contract with legal order. Courts therefore apply its text to the bargain's substance rather than allowing labels, intermediaries or indirect drafting to conceal an unlawful consideration or object.
Where part of a single consideration for one or more objects, or one or part of one of several considerations for a single object, is unlawful, the agreement is void. The practical question is whether the lawful promise is genuinely severable or whether the bargain is one inseparable exchange.
Section 24 पूछता है कि unlawful part को अलग किया जा सकता है या नहीं।
A agrees to pay B one undivided fee for preparing lawful accounts and fabricating false invoices. Because the single consideration purchases a combined lawful and unlawful performance, the court cannot invent two prices and enforce only the first. If the transactions were independently priced and genuinely separable, severability would require a closer analysis of the structure and the applicable law.
An agreement without consideration is void unless it satisfies the statutory conditions for natural love and affection, compensation for a voluntary act or an act the promisor was legally compellable to do, or a written and signed promise to pay a time-barred debt. The section also preserves a completed gift between donor and donee.
Section 25 bare promise के विरुद्ध rule बताता है और फिर उसके निश्चित statutory exceptions देता है।
| Section 25 route | Conditions that must travel together | Common trap |
|---|---|---|
| Natural love and affection | Near relationship, writing, registration, and promise made on that account | Relationship alone is insufficient |
| Voluntary act | Something already voluntarily done for the promisor, or something the promisor was legally compellable to do, followed by a promise to compensate | Do not confuse it with past consideration previously done at the promisor's desire |
| Time-barred debt | Debt barred by limitation plus a written and signed promise to pay wholly or in part | An oral acknowledgement does not satisfy this route |
| Completed gift | Gift already made | The saving does not enforce every future gratuitous promise |
Section 23 rejects an unlawful exchange; Section 24 tests a bargain mixed with unlawfulness; Section 25 asks whether a promise lacking ordinary consideration fits a statutory saving.
The Act does not leave every restriction or speculative bargain to a general fairness test. It identifies specific categories and gives each a distinct rule.
Sections 26–30 कुछ agreements को void घोषित करते हैं, भले ordinary formation steps पूरे दिखाई दें।
| Section | Category | Core statutory position | Separating question |
|---|---|---|---|
| 26 | Restraint of marriage | An agreement restraining the marriage of a person other than a minor is void | Does the promise restrain the choice to marry? |
| 27 | Restraint of trade | Every agreement restraining a lawful profession, trade or business is void to that extent, subject to the statutory goodwill exception and other law | Does the covenant restrain lawful economic activity, and does a recognised exception apply? |
| 28 | Restraint of legal proceedings | Agreements absolutely restricting enforcement through usual legal proceedings, or impermissibly limiting time or extinguishing rights, are void to the statutory extent, subject to stated savings | Does the clause regulate forum or arbitration lawfully, or destroy access, time, right or liability contrary to the section? |
| 29 | Uncertainty | An agreement whose meaning is not certain or capable of being made certain is void | Can an objective method, trade usage or agreed machinery make the term certain? |
| 30 | Wager | An agreement by way of wager is void, with the section's stated horse-racing exception | Do both parties merely stand to win or lose on an uncertain event without a genuine interest beyond the stake? |
A negative covenant supporting performance during the agreed term may operate differently from a restriction that prevents future trade after the relationship ends. The answer must identify the period, activity, contractual structure and recognised legal basis instead of applying the word “restraint” mechanically.
The trap is to call all four “against public policy.” The Act gives a more precise route for each.
In a wager, the uncertain event is the bargain: each side's only interest is the chance of winning or losing the stake. In a contingent contract, the event is collateral to a genuine transaction or interest. This distinction prepares the move from Section 30 to contingent contracts under Sections 31–36.
Wager और contingent contract दोनों uncertainty पर निर्भर होते हैं, लेकिन दोनों uncertainty को एक ही reason से allocate नहीं करते।
| Feature | Wager | Contingent contract |
|---|---|---|
| Interest in event | No genuine interest beyond winning or losing | A genuine transaction or interest exists apart from the event |
| Role of event | The event is the basis of the stake | The event is collateral to performance |
| Mutual chances | Each side stands to win or lose against the other | Rights depend on the event, but the transaction is not merely reciprocal betting |
| Legal treatment | Void under Section 30 | Governed by Sections 31–36 and enforceable when statutory conditions are met |
A person insures property in which the person has a legally recognised interest against a defined risk. The event is uncertain, but the transaction manages an existing interest and is not simply a stake on whether the event happens. By contrast, two strangers who agree that one will pay the other solely according to whether that property is damaged are using the event itself as the basis of reciprocal gain and loss.
Price risk, possible profit and even an intention to resell do not alone establish a wager. Examine the real transaction, intention concerning delivery, genuine commercial interest and whether the parties merely agreed to settle reciprocal chances on an event.
Speculation अपने-आप wager नहीं है।
23 purpose, 24 mixture, 25 no consideration, 26 marriage, 27 trade, 28 courts, 29 certainty, 30 wager. The sequence moves from general unlawfulness to specifically void agreements.
A formed agreement can still fail because its purpose is unlawful, its lawful and unlawful parts cannot be separated, consideration is absent without a statutory saving, or the Act places it in a specifically void category.
Formation पूरा होने के बाद भी agreement fail हो सकता है: purpose unlawful हो, lawful और unlawful parts अलग न हो सकें, statutory saving के बिना consideration absent हो, या Act उसे specifically void category में रखता हो।
A lends money to B knowing that B will use it to perform an agreement. What must be classified before deciding whether A can recover?
First classify the underlying agreement as lawful, merely void, or illegal. Then ask whether the loan is collateral and whether the lender's knowledge and purpose connect it to an unlawful object. A wager is void under Section 30 but not automatically illegal under Section 23; an agreement whose object is forbidden by law raises a different collateral-consequences analysis.
Forbidden by law; Defeats a provision of law; Fraudulent; Injury to person or property; Immoral; opposed to Public policy.
Object versus consideration. A pays B ₹50,000 to get a government job for A's nephew through B's “contacts”. The ₹50,000 is the consideration; procuring a public appointment by influence is the object. Either one being unlawful is enough — here it is the object, and the agreement is void.
Do not mix with the three Section 25 exceptions: a completed gift (explanation 1 to s.25); agency needing no consideration (s.185); gratuitous bailment; charitable subscriptions (enforceable only where the promisee incurred liability on the faith of the promise).
Forbidden by law (कानून द्वारा निषिद्ध); Defeats law (कानून को निष्प्रभावी करना); Fraudulent (कपटपूर्ण); Injury (व्यक्ति या सम्पत्ति को क्षति); Immoral (अनैतिक); Public policy के विरुद्ध।
Object बनाम consideration. A, B को ₹50,000 देता है ताकि B अपनी “पहुँच” से A के भतीजे को सरकारी नौकरी दिलाए। ₹50,000 consideration है; प्रभाव से सरकारी नियुक्ति दिलाना object है। दोनों में से कोई एक unlawful हो तो पर्याप्त है — यहाँ object unlawful है, इसलिए agreement void है।
Section 25 के तीन exceptions से इन्हें न मिलाएँ: पूर्ण हो चुका gift; agency के लिए consideration आवश्यक नहीं (s.185); gratuitous bailment; charitable subscription (तभी enforceable जब promisee ने promise के भरोसे liability उठाई हो)।
| Provision | What fails | Result | Hindi cue |
|---|---|---|---|
| S.10 read with S.14 | Consent not free | Voidable, not void (ss.19, 19A) | स्वतंत्र सहमति का अभाव → voidable |
| S.11 | Party is a minor | Void ab initio (Mohori Bibee) | अवयस्क → शून्य |
| S.12 | Unsound mind at the time of contracting | Void | विकृत चित्त → शून्य |
| S.20 | Bilateral mistake of essential fact | Void | दोनों पक्षों की तथ्य-भूल → शून्य |
| S.23 / S.24 | Unlawful object or consideration, wholly or in part | Void | अवैध उद्देश्य → शून्य |
| S.25 | No consideration, no statutory exception | Void | प्रतिफल नहीं → शून्य |
| Ss.26–30 | Marriage, trade, legal proceedings, uncertainty, wager | Void (26–28 “to that extent”) | विशेष रूप से शून्य घोषित |
| S.36 | Contingent on an impossible event | Void | असंभव घटना पर निर्भर → शून्य |
| S.56 (para 1) | Act impossible in itself | Void | स्वयं असंभव कार्य → शून्य |
Void-agreement map from class notes, 9 Oct. Note the trap in the first row: lack of free consent makes a contract voidable, not void.
Class notes (9 Oct) से void-agreement map। पहली पंक्ति का trap याद रखें: free consent का अभाव contract को voidable बनाता है, void नहीं।
Lawful object and specifically void agreements. Continue to the connected section.
Lawful object और specifically void agreements। संबंधित section पर जाएँ।
What this section answers: Which restraints the Act strikes down, how far, and which exceptions survive.
Keep separate: personal freedom (s.26), economic freedom (s.27), and access to courts (s.28).
यह section क्या समझाता है: Act कौन-से restraints को void करता है, किस सीमा तक, और कौन-से exceptions बचे रहते हैं।
मुख्य अंतर: व्यक्तिगत स्वतंत्रता (s.26), आर्थिक स्वतंत्रता (s.27) और न्यायालय तक पहुँच (s.28) को अलग रखें।
Section 26 विवाह की स्वतंत्रता की रक्षा करता है: किसी वयस्क व्यक्ति के विवाह पर रोक लगाने वाला agreement void है, चाहे रोक पूर्ण हो या आंशिक। Section 27 व्यापार, पेशे या व्यवसाय की स्वतंत्रता की रक्षा करता है: ऐसा agreement “उस सीमा तक” void है; एकमात्र statutory exception goodwill की बिक्री है। Indian law में English “reasonable restraint” test लागू नहीं होता।
Section 28 न्यायालय तक पहुँच की रक्षा करता है। 1997 के संशोधन के बाद दो प्रकार के clauses void हैं: (a) जो usual legal proceedings से अधिकार लागू करने पर पूर्ण रोक लगाएँ या limitation से कम समय-सीमा तय करें; (b) जो एक तय अवधि के बाद अधिकार ही समाप्त कर दें। Arbitration clauses और bank guarantees से जुड़े exception 3 बचे रहते हैं। किसी एक competent court को चुनने वाला jurisdiction clause void नहीं है।
Sections 26–28 apply after formation looks complete. The parties may have agreed freely, with consideration, and still the Act refuses enforcement because the promise surrenders something the law treats as belonging to public order rather than private bargaining. Sections 27 and 28 strike the restraint “to that extent”, so the rest of the contract can survive.
तीन स्वतंत्रताएँ जिन्हें निजी सौदा नहीं बेच सकता: किससे विवाह करें, कैसे कमाएँ, और न्यायालय जाएँ या नहीं।
| Section | Freedom protected | Rule | Statutory exception | Lead authority |
|---|---|---|---|---|
| 26 | Marriage (personal) | Agreement in restraint of marriage of any person other than a minor is void | None; minors fall outside the section | Lowe v. Peers; Rao Rani v. Gulab Rani |
| 27 | Profession, trade, business (economic) | Void to the extent of the restraint, whether total or partial | Sale of goodwill, within reasonable local limits | Madhub Chunder; Superintendence Co. v. Krishan Murgai |
| 28 | Access to courts (judicial) | Absolute bar, curtailed limitation, or extinguishment of rights after a period — void to that extent | Arbitration (future or existing disputes); bank/FI guarantees (Exception 3) | Hakam Singh; Sujir Ganesh Nayak |
“Every agreement in restraint of the marriage of any person, other than a minor, is void.” Two points are examined repeatedly. First, Indian law voids partial restraints too — a promise not to marry for five years, or not to marry outside a named community, is caught. There is no reasonableness test. Second, the words “other than a minor” do not mean that restraining a minor's marriage is suspect; they mean the opposite. An agreement that a minor will not marry while a minor is outside s.26 — and child marriage is itself prohibited by the Prohibition of Child Marriage Act, 2006.
“किसी अवयस्क के अतिरिक्त किसी भी व्यक्ति के विवाह पर रोक लगाने वाला हर agreement void है।” भारत में आंशिक रोक भी void है — पाँच वर्ष तक विवाह न करने का वचन भी। “अवयस्क के अतिरिक्त” का अर्थ यह है कि अवयस्क के विवाह को रोकने वाला agreement s.26 के दायरे से बाहर है; बाल विवाह स्वयं Prohibition of Child Marriage Act, 2006 के अंतर्गत निषिद्ध है।
A trust promises Meena, 22, a ₹5 lakh scholarship on condition that she does not marry until she completes a five-year course, and that she refunds it if she does. The refund condition restrains the marriage of an adult. Under s.26 it is void; the partial, time-limited nature of the restraint does not save it in India.
“Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void.” Indian courts have refused to import the English rule that a reasonable partial restraint is valid (Madhub Chunder, above). The analysis therefore turns on timing and on the single statutory exception.
“जिस agreement से किसी को वैध पेशा, व्यापार या व्यवसाय करने से रोका जाता है, वह उस सीमा तक void है।” Indian courts ने English “reasonable restraint” नियम नहीं अपनाया। इसलिए analysis समय (contract के दौरान या बाद) और एकमात्र statutory exception पर टिकता है।
| Restraint | Usual result | Authority |
|---|---|---|
| Negative covenant during employment (do not work for a rival while employed by us) | Not hit by s.27 — it supports performance of the existing contract | Niranjan Shankar Golikari v. Century Spinning, AIR 1967 SC 1098 |
| Exclusivity during a franchise or distribution term | Ordinarily valid for the same reason | Gujarat Bottling Co. v. Coca Cola Co., (1995) 5 SCC 545 |
| Non-compete after employment ends | Void under s.27, however reasonable in time or area | Superintendence Co. of India v. Krishan Murgai, (1981) 2 SCC 246 |
| Post-term right of first refusal binding a professional | Void as a restraint after the relationship ended | Percept D'Mark (India) v. Zaheer Khan, (2006) 4 SCC 227 |
| Seller of goodwill agreeing not to compete | Valid if limited to specified local limits that the court finds reasonable, while the buyer carries on the business | Exception 1 to s.27 |
| Partners and outgoing partners | Valid within limits set by statute | Indian Partnership Act, 1932, ss.11(2), 36(2), 54, 55(3) |
Arjun, a software engineer, signs: (1) “While employed, you will not work for any competitor”; (2) “For two years after leaving, you will not join any competitor in India.” Clause 1 survives (Golikari). Clause 2 is void to that extent (Krishan Murgai). The employment contract itself survives. A separate duty not to misuse the employer's confidential information is analysed as confidentiality, not as a ban on working.
Before 1997, courts drew a fine line: a clause shortening the time to sue was void, but a clause providing that the right itself ended after a period was valid (National Insurance Co. v. Sujir Ganesh Nayak & Co., (1997) 4 SCC 366, applying the pre-amendment law). Insurers used the second form freely. The Indian Contract (Amendment) Act, 1997 closed that gap by adding clause (b). Exception 3 was added in 2013 for bank and financial-institution guarantees.
1997 से पहले: मुकदमा करने का समय घटाने वाला clause void था, पर अधिकार ही एक अवधि के बाद समाप्त करने वाला clause valid माना जाता था (Sujir Ganesh Nayak)। 1997 के संशोधन ने clause (b) जोड़कर यह अंतर समाप्त किया। 2013 में banks और financial institutions की guarantees के लिए Exception 3 जोड़ा गया।
| Clause | What it strikes | Example clause |
|---|---|---|
| 28(a), limb 1 | Absolute restriction on enforcing contractual rights through the usual legal proceedings in the ordinary tribunals | “No party may ever sue on this agreement.” |
| 28(a), limb 2 | Limiting the time within which rights may be enforced (shorter than the Limitation Act) | “Any suit must be filed within 6 months of loss.” |
| 28(b) (1997) | Extinguishing rights, or discharging liability, on expiry of a specified period | “All claims stand extinguished 12 months after the event.” |
| Exception | Saves |
|---|---|
| 1 | A contract to refer future disputes on a subject or class of subjects to arbitration |
| 2 | A written contract to refer a question that has already arisen to arbitration, and existing arbitration law |
| 3 (2013) | A written term in a bank or financial-institution guarantee extinguishing rights after a specified period of not less than one year from the specified event |
Clause restricts going to court?
|
v
Is it an arbitration agreement (Exc. 1 or 2)? --yes--> valid
| no
v
Bank / FI guarantee, written, period >= 1 year (Exc. 3)? --yes--> valid
| no
v
Only chooses one of several competent courts? --yes--> valid (Hakam Singh)
| no
v
Absolute bar / shorter time / extinguishment --> void to that extent
Time-limiting clauses fall within s.28(a), not 28(b). Clause (b), added by the 1997 amendment, deals with clauses that extinguish rights or discharge liability after a period. Notes that label “limits the time” as 28(B) mix the two limbs.
समय सीमित करने वाले clauses s.28(a) में आते हैं, 28(b) में नहीं। 1997 में जोड़ा गया clause (b) उन clauses से संबंधित है जो एक अवधि के बाद अधिकार समाप्त करते हैं या liability से मुक्त करते हैं।
26 — Shaadi, 27 — Vyapaar, 28 — Adaalat. Marriage, trade, court. Then add 29 — uncertainty, 30 — wager, and the whole run of specifically void agreements is in order.
26 — शादी, 27 — व्यापार, 28 — अदालत। फिर 29 — अनिश्चितता, 30 — बाज़ी (wager)।
Void to that extent under s.28(a), because it shortens the period available under the Limitation Act. If drafted as “all rights stand extinguished after 12 months”, it is void under s.28(b) for any agreement after the 1997 amendment.
Yes, if the court finds 3 km a reasonable local limit. This is the sale-of-goodwill exception to s.27.
If Mumbai courts have jurisdiction, the clause merely selects one of several competent forums and does not restrain legal proceedings (Hakam Singh; A.B.C. Laminart).
Marriage, trade and courts as protected freedoms. Continue to contingent contracts.
विवाह, व्यापार और न्यायालय — संरक्षित स्वतंत्रताएँ। Contingent contracts पर जाएँ।
What this section answers: How a collateral uncertain event controls enforceability.
Keep separate: Contingent contract versus wager.
यह section क्या समझाता है: यह section समझाता है कि collateral uncertain event enforceability को कैसे control करता है।
मुख्य अंतर: Contingent contract और wager को अलग रखें।
Contingent contract में uncertain event promised performance से collateral होता है। यदि event होना condition है, enforcement उसके होने तक रुकी रहती है और event impossible होने पर contract void हो सकता है। यदि event न होना condition है, enforcement तब आती है जब उसका होना impossible हो जाए या fixed time समाप्त हो।
Wager में event ही stake का आधार है और parties का genuine interest जीत-हार से आगे नहीं होता। Contingent contract में genuine transaction या interest मौजूद रहता है। हर future uncertainty को contingent contract न कहें; delivery itself promised performance हो सकती है, collateral event नहीं।
Section 31 requires a contract to do or not do something if an event collateral to the contract happens or does not happen. The event controls enforceability; it is not merely the stake for which both parties gamble.
Contingent contract वास्तविक contract है जिसकी performance किसी collateral uncertain event पर निर्भर है।
| Section | Event | When enforceable or void |
|---|---|---|
| 32 | Event must happen | Enforceable only when it happens; void when it becomes impossible |
| 33 | Event must not happen | Enforceable when happening becomes impossible |
| 34 | Future conduct of a living person | Impossible when that person does something making the contemplated conduct impossible within any definite time or otherwise |
| 35 | Event within fixed time | Happening condition fails on expiry or prior impossibility; non-happening condition matures on expiry or prior impossibility |
| 36 | Impossible event | Agreement is void whether or not parties knew of impossibility |
A promises to pay B if a named ship arrives by 30 June. If the ship arrives in time, the condition under Section 32 is satisfied. If it sinks before that date, arrival becomes impossible and the contract becomes void. If payment is promised if the ship does not arrive by 30 June, the promise becomes enforceable when the date passes without arrival, or earlier if arrival becomes impossible.
The event must be collateral. In an ordinary promise to deliver goods next week, delivery is the promised performance itself. Ask: is the uncertain event outside the reciprocal promises, or is it simply what a party promised to do?
Future uncertainty हर contract को contingent नहीं बनाती।
Happening waits; non-happening waits for impossibility; fixed time adds a clock; impossible from the start is void.
Section 30 rejects a wager; Sections 31–36 regulate a genuine bargain whose enforceability is suspended behind a collateral event.
Section 30 wager को void मानता है; Sections 31–36 उस genuine bargain को regulate करते हैं जिसकी enforceability collateral event पर रुकी होती है।
Collateral events and enforceability. Continue to the connected section.
Collateral events और enforceability। संबंधित section पर जाएँ।
What this section answers: What performance requires and what a valid tender changes.
Keep separate: Offered performance versus completed performance.
यह section क्या समझाता है: यह section performance की requirements और valid tender का legal effect समझाता है।
मुख्य अंतर: Offered performance और completed performance को अलग रखें।
Section 37 का starting point actual performance या valid offer of performance है। Tender unconditional, proper time और place पर, complete obligation के लिए और verification का reasonable opportunity देते हुए होना चाहिए। केवल “मैं तैयार था” कहना tender नहीं है।
Section 39 में whole promise perform करने से refusal या self-disablement दूसरे पक्ष को contract terminate करने का option दे सकता है, जब तक वह continuance में acquiesce न करे। Personal skill वाला promise promisor को स्वयं करना पड़ सकता है; अन्य promises competent person कर सकता है। Third party performance accept करने पर same promise फिर promisor से enforce नहीं किया जा सकता।
Section 37 binds parties to perform or offer to perform their promises unless performance is dispensed with or excused. Representatives ordinarily remain bound after death, except where the promise depends on personal skill, confidence or qualification.
Contract law की पहली अपेक्षा performance है, compensation नहीं।
| Rule | Diagnostic question | Effect |
|---|---|---|
| S.38 tender | Was the offer unconditional, at proper time and place, and did it give a reasonable opportunity to verify ability and willingness? | A valid refused tender protects the promisor from responsibility for non-performance while preserving contractual rights |
| S.39 refusal | Did a party refuse or disable itself from performing the promise wholly? | The other party may terminate unless it acquiesces in continuance |
| S.40 personal performance | Was personal skill or confidence central? | The promisor must perform personally; otherwise a competent person may perform |
| S.41 third-party performance | Did the promisee accept performance from a third person? | The promisee cannot afterwards enforce the same promise against the promisor |
A must deliver 500 labelled units at B's warehouse on 1 July. A arrives during working hours with the complete conforming quantity and offers inspection; B refuses entry. That can be a valid tender. Arriving with 300 units, demanding advance payment not required by the contract, or offering delivery at another city is not the same legal act.
The goods or money do not magically transfer. The rule concerns responsibility for non-performance and preservation of rights. Analyse what was offered, whether conditions were proper, and which obligation remains.
Refused tender actual performance नहीं है।
Sections 37–41 identify the primary duty, the legal quality of an attempted performance, and who may render or accept it.
Performance, tender and refusal. Continue to the connected section.
Performance, tender और refusal। संबंधित section पर जाएँ।
What this section answers: Who must perform, who may claim, and when and where performance is due.
Keep separate: Promisee rights versus contribution among joint promisors.
यह section क्या समझाता है: यह section बताता है कि performance कौन करेगा, claim कौन कर सकता है, और performance कब व कहाँ due है।
मुख्य अंतर: Promisee के rights और joint promisors के आपसी contribution को अलग रखें।
Joint promisors होने पर promisee का claim automatically बराबर हिस्सों में सीमित नहीं होता। Section 43 के अनुसार, contrary contract न हो तो promisee किसी एक या अधिक joint promisors से whole performance माँग सकता है; contribution का adjustment promisors के बीच होता है।
Sections 46–50 समय, place और manner को व्यवस्थित करते हैं। Time specified न हो तो reasonable time fact का question है। Place fixed न हो तो promisor को reasonable place appoint कराने की पहल करनी पड़ सकती है। Promisee द्वारा sanctioned manner में performance obligation satisfy कर सकती है।
Sections 42–45 govern devolution, joint liability, contribution, release and joint rights. Section 43 permits the promisee, absent a contrary contract, to compel any one or more joint promisors to perform the whole promise, leaving contribution to be adjusted among promisors.
Multiple promisors होने से promisee के विरुद्ध promise अपने-आप बराबर हिस्सों में नहीं बँटता।
A, B and C jointly promise to pay D ₹90,000. D may compel A to pay the whole, unless the contract provides otherwise. A may then seek contribution from B and C. If C cannot contribute, the loss is shared as Section 43 requires among those able to contribute. Releasing one joint promisor under Section 44 does not discharge the others, nor does it automatically free the released promisor from responsibility to co-promisors.
| Sections | Question | Rule |
|---|---|---|
| 46 | No time specified | Performance within a reasonable time, a question of fact |
| 47 | Specified day, no application required | Promisor may perform during usual business hours at the proper place |
| 48 | Promisee must apply for performance | Promisee applies at a proper place and within usual business hours |
| 49 | No place fixed | Promisor must ask the promisee to appoint a reasonable place and perform there |
| 50 | Mode or time prescribed or sanctioned by promisee | Performance in that authorised manner satisfies the promise |
Who owes, who may claim, when, where, how. These five questions organise Sections 42–50.
Section 44 prevents release of one joint promisor from automatically discharging the others. Keep the promisee's claim separate from contribution among co-promisors.
Joint liability, contribution, time and place. Continue to the connected section.
Joint liability, contribution, time और place। संबंधित section पर जाएँ।
What this section answers: How readiness, order, prevention and time govern exchanged promises.
Keep separate: A contractual date versus time being of the essence.
यह section क्या समझाता है: यह section exchanged promises में readiness, order, prevention और time की भूमिका समझाता है।
मुख्य अंतर: Contract में date होने और time being of the essence होने को अलग रखें।
Simultaneous reciprocal promises में एक party दूसरे की readiness और willingness के बिना अपनी return performance demand नहीं कर सकती। Express order हो तो वही चलेगा; अन्यथा transaction की nature बताएगी किस promise को पहले perform होना है।
यदि एक party facilities रोककर performance prevent करती है, वह उसी failure का लाभ नहीं ले सकती। Section 55 में contractual date और time being of the essence अलग बातें हैं। Language, transaction की nature, delay consequences और conduct देखें। Late performance accept करने पर compensation preserve करने के लिए relevant notice भी महत्वपूर्ण हो सकता है।
Sections 51–54 determine readiness, order and prevention in reciprocal promises. Sections 55–58 then address time, impossibility and legal versus illegal branches of reciprocal arrangements.
Reciprocal exchange में कोई party अपनी वह performance रोके रखकर return performance हमेशा demand नहीं कर सकती जो दूसरी performance को trigger करती है।
| Section | Rule | Separating question |
|---|---|---|
| 51 | No duty to perform unless the reciprocal promisee is ready and willing | Were the promises to be performed simultaneously? |
| 52 | Express order governs; otherwise the nature of transaction supplies the order | Which performance logically must come first? |
| 53 | Party preventing performance cannot insist on it; contract is voidable at the prevented party's option with compensation | Who caused the non-performance? |
| 54 | Default in the promise that should be performed first blocks a claim to the reciprocal performance and may attract compensation | Which first obligation was a condition of the other? |
| 55 | Late performance may make contract voidable if time was essential; otherwise compensation may follow; acceptance without notice affects late-performance compensation | Was time essential, and what happened when late performance was accepted? |
| 57–58 | Legal promises may be separated from specified illegal alternatives where the statutory structure permits | Is the legal branch independently enforceable? |
A must install machinery at B's factory; B must first provide safe access and shut down the relevant line. If B fails to provide access, B has prevented performance under Section 53 and cannot simply sue A for failing to install. The facts must identify the promised sequence rather than treating every missed date as A's breach.
Read the language, nature of the transaction, consequences of delay and conduct. Then apply Section 55. Also ask whether late performance was accepted and whether notice preserving a compensation claim was given.
Contract में date लिखी होना अपने-आप time को essence नहीं बनाता।
Reciprocal promises are a sequence: readiness, order, prevention, first default, time, and the legal effect of each branch.
Reciprocal promises, prevention and time. Continue to the connected section.
Reciprocal promises, prevention और time। संबंधित section पर जाएँ।
What this section answers: When a supervening event discharges performance by law.
Keep separate: Force majeure clause versus frustration under Section 56.
यह section क्या समझाता है: यह section समझाता है कि supervening event कब performance को law द्वारा discharge करता है।
मुख्य अंतर: Force majeure clause और Section 56 की frustration को अलग रखें।
Section 56 initial impossibility और supervening impossibility या unlawfulness को address करता है। “Impossible” केवल physical impossibility तक सीमित नहीं, लेकिन event को bargain की legal या practical foundation नष्ट करनी चाहिए। Delay, inconvenience, cost increase या reduced profitability अकेले ordinarily पर्याप्त नहीं हैं।
पहले contract में force majeure clause पढ़ें। यदि clause event और consequence allocate करती है तो contractual route और Section 32 central हो सकते हैं। Section 56 law द्वारा discharge है। Self-induced event या preventable failure पर frustration का सहारा नहीं मिलता। Contract void होने पर Section 65 restitution भी देखें।
Section 56 makes an agreement to do an act impossible in itself void. It also makes a contract void when a later event, which the promisor could not prevent, makes performance impossible or unlawful. “Impossible” is applied to the foundation and practical object of the bargain, but mere expense, delay or commercial hardship is not enough.
Frustration किसी legally qualifying supervening event से discharge है; bad bargain से judicial relief नहीं।
| Situation | Likely route | Question |
|---|---|---|
| Event covered by an agreed force-majeure clause | Contract and Section 32 | What event, consequence, notice and relief did parties specify? |
| Initial impossibility | First paragraph of Section 56 | Was the promised act impossible from the outset? |
| Later impossibility or unlawfulness | Second paragraph of Section 56 | Did an unpreventable event destroy the foundation or make performance unlawful? |
| Known or reasonably knowable impossibility unknown to promisee | Third paragraph of Section 56 | Does compensation follow from the promisor's knowledge? |
| Price rise or reduced profitability | Ordinarily not frustration alone | Was the risk allocated, and can performance still occur? |
Force majeure is principally contractual risk allocation. Frustration under Section 56 operates by law. Ask first whether the parties wrote a clause that covers the event and specifies its consequence.
Force majeure और frustration synonyms नहीं हैं।
Clause, event, foundation, prevention, hardship, consequence. Read the clause, identify the event, test the foundation, ask whether it was preventable or self-induced, exclude mere hardship, then state discharge and restitution.
A supplier's imported raw material becomes much more expensive after foreign regulation changes, but supply remains possible. What must the answer examine before alleging frustration?
Examine any force-majeure or price-allocation clause first, including its defined events and remedies. Then ask whether performance became legally or practically impossible in the Section 56 sense, rather than merely more expensive. Commercial hardship alone does not establish frustration.
Performance remains the rule; frustration is a narrow discharge where an unallocated supervening event destroys the bargain's legal foundation, not its profitability.
Performance rule है; frustration narrow discharge है जहाँ unallocated supervening event bargain की legal foundation नष्ट करता है, profitability नहीं।
Impossibility, risk allocation and frustration. Continue to the connected section.
Impossibility, risk allocation और frustration। संबंधित section पर जाएँ।
What this section answers: Which debt is reduced when several debts exist.
Keep separate: Debtor choice, creditor choice and the statutory default.
यह section क्या समझाता है: यह section बताता है कि कई debts होने पर payment किस debt को reduce करती है।
मुख्य अंतर: Debtor की choice, creditor की choice और statutory default का सही क्रम रखें।
Multiple debts में पहले debtor को choice है: payment के साथ debt indicate किया तो creditor उसी पर apply करेगा। Debtor silent हो तो Section 60 creditor को lawful debt actually due पर appropriation की choice देता है, जिसमें time-barred debt भी शामिल हो सकता है।
दोनों silent हों तो Section 61 law का default देता है: debts time order में और equal standing होने पर proportionately reduce होते हैं। याद रखें: debtor, फिर creditor, फिर calendar।
The Act gives the first choice to the debtor, the next choice to the creditor, and a default rule to law.
जब कई debts हों, appropriation पूछता है कि payment किस debt को कम करता है।
| Section | Who controls? | Rule |
|---|---|---|
| 59 | Debtor | If the debtor indicates a debt, the payment must be applied accordingly |
| 60 | Creditor | If the debtor gives no indication, the creditor may apply it to any lawful debt actually due, including a time-barred debt |
| 61 | Law | If neither appropriates, payment applies in order of time; equal-standing debts receive proportionate application |
D owes C three separate sums. D transfers ₹20,000 stating “invoice 14.” C must apply it there. If D says nothing, C may appropriate it within Section 60. If both remain silent, Section 61 supplies chronological and proportionate rules.
Debtor, creditor, calendar. Sections 59, 60 and 61 in three words.
Appropriation by debtor, creditor and law. Continue to the connected section.
Debtor, creditor और law द्वारा appropriation। संबंधित section पर जाएँ।
What this section answers: Why the original contractual duty no longer remains enforceable.
Keep separate: Novation, alteration, remission, restoration and prevention.
यह section क्या समझाता है: यह section समझाता है कि original contractual duty enforceable क्यों नहीं रही।
मुख्य अंतर: Novation, alteration, remission, restoration और prevention को अलग रखें।
Novation में valid new contract original को replace करता है। Rescission by agreement parties की mutual cancellation है। Alteration agreed material change है। Section 63 promisee को performance remit करने, time extend करने या दूसरी satisfaction accept करने की statutory power देता है; इसे English consideration rule से confuse न करें।
Section 64 voidable contract rescind होने पर restoration से जुड़ा है। Section 65 agreement discovered void या contract becoming void होने पर advantage restore कराता है। Section 67 उस extent तक promisor को excuse कर सकता है जहाँ promisee ने facilities देने से neglect या refusal किया।
Performance is the normal route, but duties may also end through agreement, impossibility, breach, operation of law or another recognised ground. Sections 62–67 focus on substituted agreements, remission, restoration and facilities for performance.
Discharge पूछता है कि original duty अब enforceable क्यों नहीं रही।
| Doctrine | Statutory position | Key distinction |
|---|---|---|
| Novation, S.62 | Parties substitute a new contract; the original need not be performed | Requires a valid substitution, possibly changing parties or obligations |
| Rescission, S.62 | Parties agree to cancel the contract | Mutual cancellation differs from one party terminating for breach |
| Alteration, S.62 | Parties alter the contract; original terms yield to agreed terms | Material variation requires agreement |
| Remission, S.63 | Promisee may dispense with or remit performance, extend time, or accept another satisfaction | Indian statutory remission does not require fresh consideration in the English sense |
| Rescission of voidable contract, S.64 | Other party need not perform; rescinding party restores benefits received | Connects remedy to restitution |
| Void agreement or contract becoming void, S.65 | Person receiving advantage must restore it or compensate | Restitution follows discovered voidness or supervening voidness |
| Neglect of facilities, S.67 | Promisor is excused to the extent non-performance was caused by promisee's neglect or refusal | Focus on causal prevention |
D owes C ₹100,000. If C and D replace that obligation with a new enforceable settlement, Section 62 may operate through novation or alteration. If C simply accepts ₹80,000 in full satisfaction or extends time, Section 63 may apply. Calling both events “waiver” hides the statutory route.
Section 64 follows rescission of a voidable contract. Section 65 addresses an agreement discovered to be void or a contract that becomes void. Classify the status and the event before ordering restoration.
Sections 64 और 65 interchangeable नहीं हैं।
Section 62 replaces or cancels duties by agreement; Section 63 relaxes performance at the promisee's choice; Sections 64–65 unwind benefits; Section 67 excuses failure caused by the promisee.
Discharge by agreement and restitutionary consequences. Continue to the connected section.
Agreement से discharge और restitutionary consequences। संबंधित section पर जाएँ।
What this section answers: Why statute may require restoration without an agreement.
Keep separate: Restitutionary value versus contractual expectation.
यह section क्या समझाता है: यह section समझाता है कि agreement न होने पर भी statute restoration क्यों करा सकता है।
मुख्य अंतर: Restitutionary value और contractual expectation को अलग रखें।
Quasi-contract वास्तविक consensual contract नहीं है। Sections 68–72 ऐसे benefits और payments पर obligation लगाते हैं जिन्हें बिना legal basis retain करना उचित नहीं। Section 68 necessaries के लिए incapable person की property से reimbursement देता है; personal contractual liability नहीं।
Section 70 में act lawful, non-gratuitous और voluntarily enjoyed होना चाहिए। Unwanted service थोपकर payment claim नहीं बनाया जा सकता। Section 71 finder को bailee जैसी duties देता है। Section 72 mistake या coercion से दिए money या thing की return माँगता है।
Sections 68–72 impose obligations resembling contractual duties because one person has received a legally relevant benefit at another's expense. Liability comes from statute and restitution, not from offer, acceptance or consensus ad idem.
Quasi-contract वहाँ शुरू होता है जहाँ agreement absent है।
| Section | Situation | Statutory response |
|---|---|---|
| 68 | Necessaries suited to the condition in life of a person incapable of contracting, or someone legally supported by that person | Supplier is reimbursed from the incapable person's property |
| 69 | Person interested in payment pays money another is legally bound to pay | Payer is entitled to reimbursement |
| 70 | Lawful non-gratuitous act or delivery whose benefit another enjoys | Beneficiary must compensate or restore the thing |
| 71 | Finder of goods takes goods into custody | Finder has responsibilities of a bailee |
| 72 | Money paid or thing delivered by mistake or under coercion | Recipient must repay or return it |
Section 70 requires a lawful act, absence of gratuitous intent, and voluntary enjoyment of the benefit. A person cannot force an unwanted service on another and manufacture a payment claim.
Law unjust retention को reverse करता है, हर uncompensated kindness को नहीं।
There may be no contract to breach. Ask whether the claimant seeks the value of a benefit lawfully conferred and enjoyed, rather than the profit expected from an unenforceable bargain.
Section 70 breach के damages नहीं देता।
Necessaries, interested payer, non-gratuitous benefit, finder, mistake. That is Sections 68–72 in order.
Contract enforces an agreed exchange; quasi-contract restores a benefit where statute supplies the obligation despite absence of agreement.
Contract agreed exchange को enforce करता है; quasi-contract agreement absent होने पर भी statute द्वारा बनाई obligation के आधार पर benefit restore कराता है।
Sections 68–72 and benefit-based obligations. Continue to the connected section.
Sections 68–72 और benefit-based obligations। संबंधित section पर जाएँ।
What this section answers: Which breach losses are legally compensable.
Keep separate: Causation, remoteness, proof and mitigation.
यह section क्या समझाता है: यह section समझाता है कि breach से हुए कौन-से losses के लिए law compensation देता है।
मुख्य अंतर: Causation, remoteness, proof और mitigation को क्रम से analyse करें।
Section 73 में पहले breached obligation identify करें। फिर causation पूछें। उसके बाद remoteness: loss usual course में naturally उठा या special circumstance formation के समय communicated थी? फिर occurrence और amount का proof, reasonable mitigation और सही monetary measure देखें।
Mitigation breaching party के प्रति independent duty नहीं; recoverable loss की सीमा है। Claimant को reasonable steps लेने हैं, heroic या disproportionate risk नहीं। Contractual compensation claimant को performance position के निकट लाने के लिए है, punishment या windfall के लिए नहीं।
Section 73 allows compensation for loss or damage that naturally arose in the usual course from the breach, or which the parties knew at formation was likely to result. It excludes remote and indirect loss. Its explanation requires account to be taken of means available to remedy the inconvenience caused by non-performance.
Compensation contractual expectation को protect करता है, लेकिन केवल legally connected loss के लिए।
| Step | Question | Purpose |
|---|---|---|
| Breach | Which obligation was not performed, and when? | Fixes the contractual wrong |
| Causation | Did the breach cause this claimed loss? | Separates breach loss from unrelated loss |
| Remoteness | Did loss arise naturally, or was the special risk known at formation? | Sets legal limits on recoverability |
| Proof | What evidence establishes occurrence and amount? | Prevents compensation based on assertion alone |
| Mitigation | What reasonable means were available to reduce the loss? | Prevents avoidable accumulation |
| Measure | What sum places the claimant, so far as money can, in the performance position? | Keeps damages compensatory |
A fails to deliver ordinary goods. B buys substitutes at a reasonably higher market price: the difference is a natural candidate for compensation. B also claims exceptional factory losses caused by a special just-in-time dependency never disclosed to A. That second claim requires proof that the special circumstance and likely consequence were within the parties' contemplation at formation.
It limits recoverable loss. The claimant need take reasonable steps, not heroic, risky or disproportionate ones. Ask what reasonable substitute or protective action was actually available after breach.
Mitigation breaching party के प्रति owed duty नहीं है।
Breach, cause, foreseeability, proof, mitigation, measure.
Section 73 compensates proved, caused and non-remote loss, reduced by reasonable opportunities to avoid it.
Section 73 proved, caused और non-remote loss की compensation देता है, reasonable avoidance opportunities को घटाकर।
Section 73 compensation and remoteness. Continue to the connected section.
Section 73 compensation और remoteness। संबंधित section पर जाएँ।
What this section answers: How Indian law treats named sums and penalties.
Keep separate: Contractual ceiling versus automatic recovery.
यह section क्या समझाता है: यह section समझाता है कि Indian law named sums और penalties को कैसे treat करता है।
मुख्य अंतर: Contractual ceiling और automatic recovery को अलग रखें।
Section 74 में contract में लिखी sum या penalty maximum ceiling देती है। Court reasonable compensation award करता है; clause का label अकेले result तय नहीं करता। Breach, legal injury, proof की possibility और amount की reasonableness analyse करें।
जहाँ loss readily prove हो सकता है, evidence देना महत्वपूर्ण है। जहाँ exact quantification inherently difficult है, genuine pre-estimate guidance दे सकता है। फिर भी named amount automatic entitlement नहीं और contractual ceiling से अधिक recovery नहीं हो सकती।
When a contract names a sum payable on breach or contains a stipulation by way of penalty, Section 74 permits reasonable compensation not exceeding the amount named or penalty stipulated. The court does not simply choose between mechanically enforcing a “liquidated damages” label and striking down a “penalty” label.
Named sum reasonable compensation की ceiling है, automatic award नहीं।
| Question | Why it matters |
|---|---|
| Was there a breach by the party against whom the clause is invoked? | Section 74 responds to breach, not mere contractual displeasure |
| Did legally cognisable loss or injury result? | Compensation is not punitive enrichment |
| Can the loss be proved? | Proof should be offered where reasonably possible |
| Was the named sum a genuine pre-estimate in a setting where exact quantification is difficult? | It may assist the reasonable-compensation inquiry |
| What is the contractual ceiling? | Recovery cannot exceed the amount named or penalty stipulated |
A construction contract names ₹10 lakh for delay. The claimant must still establish breach and the basis of compensation. If comparable delay loss can readily be proved, evidence matters. If exact quantification is inherently difficult and the sum is a genuine estimate, the clause may guide the court, but ₹10 lakh remains a ceiling rather than an automatic entitlement.
Start with Section 74: breach, reasonable compensation and the ceiling. The wording “liquidated damages” or “penalty” informs analysis but does not replace the statute.
पुराने English label test को पूरा Indian rule मानकर import न करें।
Section 73 measures ordinary compensation; Section 74 controls compensation where the parties named a sum or stipulated a penalty.
Section 73 ordinary compensation मापता है; Section 74 वहाँ compensation control करता है जहाँ parties ने sum name किया या penalty stipulate की।
Reasonable compensation under Section 74. Continue to the connected section.
Section 74 के अंतर्गत reasonable compensation। संबंधित section पर जाएँ।
What this section answers: What follows rightful rescission and when value of work may be recovered.
Keep separate: Expectation compensation versus quantum meruit.
यह section क्या समझाता है: यह section rightful rescission के बाद compensation और किए गए work की value की recovery समझाता है।
मुख्य अंतर: Expectation compensation और quantum meruit को अलग रखें।
Section 75 rightfully rescinding party को non-fulfilment से caused damage की compensation देता है। Future performance रुक सकती है, लेकिन पहले से caused loss मिटता नहीं। Causation, remoteness और mitigation फिर भी लागू रहते हैं।
Quantum meruit का अर्थ work की reasonable value है। यह हर breach पर full contract price पाने का shortcut नहीं। Accepted benefit, divisibility, wrongful prevention, Section 65 या Section 70 जैसी legal basis identify करें। Voluntarily abandoned indivisible performance को केवल नया label देकर recover नहीं किया जा सकता।
Section 75 entitles a person who rightfully rescinds a contract to compensation for damage sustained through non-fulfilment. It connects termination rights, including those arising from refusal under Section 39, with compensation.
Rightful rescission future performance समाप्त करता है, लेकिन पहले से caused loss को मिटाता नहीं।
The phrase means “as much as deserved.” A claim may arise where work has been accepted under Section 70, where a contract becomes void and restoration is due, where divisible work is accepted, or where wrongful prevention makes payment for performance rendered appropriate. The precise statutory or doctrinal route must be identified.
Quantum meruit का अर्थ work की value के लिए payment है, हर broken contract पर promised profit नहीं।
| quantum | as much |
| meruit | as deserved or earned |
| Situation | Possible basis | Limit |
|---|---|---|
| Non-gratuitous benefit voluntarily enjoyed without contract | Section 70 | Reasonable compensation or restoration, not expectation profit |
| Agreement discovered void or contract becomes void | Section 65 | Restore advantage received or compensate for it |
| One party wrongfully prevents completion after accepting part performance | Value of earned performance, depending on facts and divisibility | No recovery for voluntarily abandoned incomplete performance |
| Rightful rescission produces loss | Section 75 with Section 73 principles | Compensation remains subject to causation, remoteness and mitigation |
A designer completes and delivers two accepted stages of a divisible project. The client then wrongfully prevents further work. The analysis separates compensation for breach from reasonable payment for accepted work already rendered. The designer cannot automatically claim the entire contract price without accounting for unperformed stages and avoided cost.
Identify the benefit, acceptance, statutory route, divisibility and reason performance stopped. A party who freely abandons an indivisible obligation cannot simply rename the contract price as restitution.
Damages prove करना कठिन हो तो quantum meruit हर बार universal alternative नहीं बनता।
Rightful exit, caused loss, value conferred, route identified.
Section 75, rescission and quantum meruit. Continue to the connected section.
Section 75, rescission और quantum meruit। संबंधित section पर जाएँ।
What this section answers: How legal classification determines the available response.
Keep separate: Voidness, rescission, restitution and breach compensation.
यह section क्या समझाता है: यह section समझाता है कि legal event की classification से सही remedy कैसे तय होती है।
मुख्य अंतर: Voidness, rescission, restitution और breach compensation को अलग रखें।
Remedy list से answer शुरू न करें। पहले classify करें: agreement void था, voidable था और rescind हुआ, contract बाद में void हुआ, valid contract breach हुआ, या agreement के बिना statutory benefit retain हुआ। हर category अलग response खोलती है।
Voidable contract में Sections 19, 19A और 64 relevant हो सकते हैं। Discovered voidness या supervening voidness में Section 65। Agreement के बिना benefit के लिए Sections 68–72। Ordinary breach में Section 73, named sum या penalty में Section 74, और rightful rescission में Section 75। सही classification आधा answer स्वयं बना देती है।
A good problem answer does not begin with a list of damages. It first decides whether the agreement was void, voidable, discharged, breached, rescinded or never contractual at all.
Obligation के साथ क्या हुआ, इसे classify करने के बाद ही remedy चुनें।
| Legal event | Primary response | Connected provisions |
|---|---|---|
| Voidable contract rescinded | Restoration plus any available consequential remedy | Ss. 19, 19A, 64 |
| Agreement discovered void or contract becomes void | Restoration or compensation for advantage | S.65 |
| No contract, but statutory benefit retained | Reimbursement, compensation, repayment or restoration | Ss. 68–72 |
| Ordinary breach | Compensation for caused, non-remote loss | S.73 |
| Named sum or penalty on breach | Reasonable compensation within ceiling | S.74 |
| Rightful rescission following non-fulfilment | Compensation for resulting damage | S.75 |
A government department uses construction delivered under a formally invalid arrangement. The contractor claims the full expected profit plus contractual delay damages. What classification comes first?
First determine whether an enforceable contract exists. If not, contractual expectation and delay damages do not follow merely from use. Test the statutory requirements of Section 70 for compensation based on the non-gratuitous benefit lawfully conferred and voluntarily enjoyed. Keep restitutionary value separate from profit expected under an unenforceable bargain.
Formation identifies the promise, validity decides whether law recognises it, performance tests what was due, discharge explains why duty ended, and remedies respond to the precise legal event that remains.
Formation promise को पहचानता है; validity तय करती है कि law उसे मान्यता देता है या नहीं; performance जाँचती है कि क्या due था; discharge बताता है duty क्यों समाप्त हुई; remedies बचे हुए precise legal event का उत्तर देती हैं।
The complete formation-to-remedy sequence. Continue to the connected section.
Formation से remedy तक पूरी sequence। संबंधित section पर जाएँ।