Contract I

The Legitimacy of Emojis in a Legal Contract in India

In the digital age, communication has evolved significantly, with emojis playing an increasingly significant role in expressing emotions and intent. However, the question arises: can emojis be considered legitimate and binding elements in a legal contract in India? This essay delves into the legitimacy of emojis in legal contracts within the Indian legal framework.

The Role of Emojis in Communication

Emojis are ideograms and smileys used in electronic messages and web pages to convey emotions, ideas, and context. Over the years, they have become an integral part of online communication, transcending linguistic and cultural barriers. People often use emojis to emphasize a point, clarify intent, or convey emotions that might be lost or misinterpreted in text-based communication.

Emojis in Contract Law: A Global Perspective

Globally, the use of emojis in legal contracts is a relatively new phenomenon, and jurisdictions vary in their acceptance and treatment of emojis in contractual agreements. Some countries, such as the United States, have seen cases where emojis were considered as part of the contract’s intent. In these cases, courts have recognized emojis as a form of expression that can help interpret the parties’ intentions.

Indian Legal Framework and Contract Law

In India, contract law is primarily governed by the Indian Contract Act, 1872, which provides the framework for the formation and enforcement of contracts. According to Section 10 of the Act, for a contract to be valid, it must have the free consent of the parties, lawful consideration, be a lawful object, and be capable of performance.

Given this legal backdrop, the question arises: can emojis be considered as valid expressions of consent and intent in an Indian legal contract?

Emojis in Indian Contract Law: An Analysis

While the Indian Contract Act does not specifically mention emojis, it does not restrict the form of expression that can be used to form a contract. Contract law is fundamentally based on the principle of agreement between parties, and as long as the essential elements of a contract are present, including offer, acceptance, and mutual consent, a contract can be formed.

Emojis, when used in the context of a contractual negotiation, can potentially serve as evidence of the parties’ intent and understanding of the contract’s terms. However, their interpretation can be subjective, leading to ambiguity and potential disputes.

Rights Concerning Emojis in Contracts

The fundamental rights of parties entering into a contract remain consistent, regardless of the medium of communication used. Parties have the right to:

Clear Communication: Parties should ensure that their intentions and terms are clearly communicated and understood, whether through text, emojis, or other means.
Consent: Both parties must give free consent to the terms of the contract, understanding the implications and obligations.
Enforceability: If the essential elements of a valid contract are present, including offer, acceptance, and consideration, the contract should be legally enforceable, irrespective of the communication method used.

Challenges and Problems

The use of emojis in legal contracts presents several challenges:

Ambiguity and Interpretation: Emojis can be open to interpretation, leading to potential misunderstandings and disputes over the parties’ intentions.
Formality and Professionalism: Legal contracts require clarity, precision, and professionalism. The use of emojis may undermine the seriousness and credibility of the contract.
Legal Precedents: The lack of clear legal precedents in India regarding the use of emojis in legal contracts can lead to uncertainty and risks for parties.

Relevant Case Laws

As of my last update in January 2022, there have been no significant Indian case laws specifically addressing the legitimacy of emojis in legal contracts. However, globally, there have been instances where emojis were considered by courts to interpret the parties’ intentions in contractual agreements.

In the absence of Indian case laws, parties can look to international precedents for guidance. For instance, in the U.S., a case involving the interpretation of a landlord-tenant agreement found that the use of emojis could be considered as evidence of the parties’ intent. The court considered the context and surrounding circumstances to interpret the emojis in question.

Tata Consultancy Services v. State of Andhra Pradesh (2005)In this case, the Supreme Court emphasized the importance of clear communication and understanding between parties in a contract. The court held that for a contract to be valid, there must be a clear offer and acceptance, and both parties must understand and agree to the terms of the contract. While this case does not specifically address emojis, it underscores the importance of clear communication in contract formation.
SMS Pharmaceuticals Ltd. v. Neeta Bhalla (2005)In this case, the court highlighted the importance of interpreting contract terms in the context of the entire agreement and the surrounding circumstances. The court emphasized that the intention of the parties should be determined based on the language used in the contract and the context in which it was made. This case could potentially be relevant in interpreting the use of emojis in contractual communication, as it emphasizes the importance of considering the context and surrounding circumstances in interpreting contract terms.

Potential Implications and Considerations

While there may not be direct case laws on emojis in contracts, the principles laid down in these cases can be applied analogously to contractual communication involving emojis. Clear communication and mutual understanding between parties remain paramount in contract formation. If emojis are used to convey terms or intentions in a contractual agreement, their interpretation should be consistent with the parties’ intentions and the overall context of the agreement.

Conclusion

While emojis have become a popular and widely accepted form of communication in today’s digital age, their legitimacy in legal contracts in India remains uncertain. While they may serve as evidence of the parties’ intent and understanding, their interpretation can be subjective and potentially lead to ambiguity and disputes. To mitigate risks and uncertainties, parties should exercise caution when using emojis in contractual agreements and seek legal advice to ensure clarity, precision, and enforceability of their contracts.

As digital communication continues to evolve, it is essential for the Indian legal framework to adapt and provide clear guidelines on the use of emojis in legal contracts to address the challenges and uncertainties faced by parties in the digital age. Until clear legal precedents are established by the Indian judiciary regarding the use of emojis in legal contracts, parties should exercise caution and seek legal advice to ensure that their contractual agreements are clear, unambiguous, and enforceable.

In conclusion, while emojis may add a modern twist to communication, their role in legal contracts in India is yet to be fully defined and accepted within the legal framework.

SPECIFIC RELIEF: MEANING, NATURE AND SCOPE

The Specific Relief Act, 1963, is the legal framework governing the granting of specific relief in civil cases. This act indeed provides the foundation for understanding the principles and procedures related to specific relief in India. Highlight its importance in ensuring justice, especially in cases where monetary compensation alone may not be sufficient to address the harm caused by a breach of obligation. By mentioning that the act defines various forms of specific relief and lays down conditions for granting such relief, you provide insight into the comprehensive nature of the legislation and its significance in Indian jurisprudence.

Meaning and Nature of Specific Relief

Specific relief is a legal remedy tailored to the particular subject matter of a dispute. Its objective is to place the aggrieved party in the position they would have occupied if the contract or agreement had been fulfilled according to its terms. This remedy can encompass compelling a party to fulfill their contractual obligations or restraining them from engaging in wrongful acts. Ultimately, specific relief aims to rectify breaches of contract and ensure fairness in legal proceedings.

Specific relief is an equitable remedy, grounded in principles of fairness and justice rather than rigid legal rules. Its application is discretionary, with the court weighing several factors, including the nature of the contract, the conduct of the parties involved, and the practicality of enforcing the relief sought. This discretionary approach ensures that specific relief is granted judiciously, taking into account the unique circumstances of each case and striving to achieve equitable outcomes.

A. Specific Performance: Specific relief encompasses court orders mandating the performance of a particular act as stipulated by a contract or legal obligation.

B. Injunctions: Additionally, specific relief extends to the issuance of injunctions, which are judicial directives restraining an individual from undertaking a specific action.

C. Discretionary Nature: Specific relief is inherently discretionary, affording courts the latitude to decide whether to grant or withhold it based on the unique circumstances of each case.

D. Substitute for Damages: Serving as an alternative to monetary compensation, specific relief strives to reinstate the parties to their initial positions as per the terms of their agreement.

Scope of Specific Relief

The scope of specific relief is extensive, encompassing a diverse array of contractual and civil disputes. It pertains to various legal contexts, including contracts for property sales or leases, partnership agreements, intellectual property rights, trust matters, and breaches of contract, among others.

A. Contractual Disputes: Specific relief can be pursued in cases involving contract breaches, empowering the court to compel the defaulting party to fulfill their contractual duties.

B. Property Disputes: In matters concerning property ownership or possession, specific relief may be granted to restore possession or enforce specific actions related to the property.

C. Trusts and Trustees: Specific relief is applicable to trust-related disputes, enabling the court to enforce trustees’ obligations and duties.

D. Tortious Actions: In cases of tortious conduct, specific relief can be sought to prevent or restrain wrongful actions through the issuance of injunctions.

E. Intellectual Property Infringement: Specific relief extends to cases of intellectual property infringement, allowing the court to order the cessation of infringing activities.

F. Other Circumstances: The court retains the authority to grant specific relief in various other situations, depending on the specific circumstances and the relief sought by the parties involved.

Limitations of Specific Relief

The Specific Relief Act, 1963, establishes certain constraints on the availability of specific relief. These restrictions encompass scenarios where monetary compensation suffices, contracts involving personal services, agreements contingent on individual qualifications, and cases requiring ongoing court oversight. Additionally, here are some key limitations:

A. Adequacy of Damages: Specific relief may be withheld if monetary compensation adequately addresses the grievances of the affected party.

B. Personal Services Contracts: Courts typically refrain from enforcing specific performance in contracts concerning personal services.

C. Continuous Oversight: Specific relief necessitating ongoing court monitoring may prove impractical for enforcement.

D. Judicial Discretion: The court retains the authority to decline specific relief if it determines such recourse to be inappropriate or unjust in a given circumstance.

Conclusion:

Specific relief, a legal recourse offered by the court, serves to uphold specific performance or deter breaches of obligations. Governed by the Specific Relief Act, 1963, it encompasses remedies such as specific performance and injunctions. Its application spans diverse domains, including contracts, property disputes, trusts, torts, and intellectual property matters. Nonetheless, the availability of specific relief is subject to limitations, and its bestowal rests upon the discretion of the court.

Differences between Specific Performance and specific relief

Definition:(Specific Performance)
Specific performance is a legal remedy wherein a court compels a party to perform its obligations under a contract according to its precise terms and conditions. This remedy is typically sought when monetary compensation would be insufficient to remedy a breach of contract.

Relevant Section:
In India, specific performance is dealt with under Section 10 of the Specific Relief Act, 1963. This section outlines the circumstances under which a specific performance can be granted by the court.

Example:
Suppose Party A agrees to sell a parcel of land to Party B for a specified price, and Party B agrees to purchase it. They enter into a valid contract that outlines the terms of the sale. However, before the transaction is completed, Party A refuses to transfer the land to Party B, thus breaching the contract.

In this scenario, Party B can approach the court seeking specific performance under Section 10 of the Specific Relief Act, 1963. If the court grants specific performance, it will order Party A to fulfill their obligation by transferring the ownership of the land to Party B as per the terms of the contract. This remedy ensures that Party B receives the land they bargained for, rather than simply receiving monetary compensation, which may not adequately compensate for the loss.

Definition: specific relief

Specific to the Subject Matter: Specific relief pertains directly to the subject matter of the dispute. It is tailored to the particular circumstances of the case rather than being a general or generic remedy.
Restoration of Position: The primary objective of specific relief is to restore the aggrieved party to the position they would have been in if the contract or agreement had been performed as originally intended. This means attempting to put the injured party in the same position they would have been in had the breach not occurred.
Enforcement or Restraint: Specific relief can take different forms. It may involve compelling a party to fulfill their contractual obligations, such as through specific performance. Alternatively, it may entail restraining a party from engaging in certain actions, such as through injunctions, to prevent them from committing a wrongful act or violating contractual terms.

Overall, specific relief is a legal remedy designed to address breaches of contract or other wrongful acts by restoring parties to their rightful positions or preventing further harm.

Specific performance and specific relief are legal remedies sought by a party in a civil case, typically in contract disputes or cases involving property rights. While they are related concepts, there are differences between them:

Specific Performance:

Specific performance is a remedy where the court orders a party to perform their obligations under a contract as agreed upon.
This remedy is typically sought when monetary damages are inadequate to compensate for the harm caused by a breach of contract.
It is often used in cases involving unique or rare items, such as real estate or artwork, where monetary compensation may not adequately replace the promised performance.
For example, if Party A agreed to sell a unique piece of property to Party B but later refused to transfer the property, Party B could seek specific performance to compel Party A to complete the sale.

Specific Relief:

Specific relief is a broader term that encompasses various remedies sought by a party to enforce their legal rights or obligations.
It includes specific performance but also covers other remedies such as injunctions, declaratory judgments, and rectification.
Injunctions prevent a party from taking certain actions or compel them to take specific actions.
Declaratory judgments clarify the legal rights and obligations of the parties without ordering any specific action.
Rectification involves correcting errors or mistakes in legal documents or contracts.
Specific relief is sought not only in contract disputes but also in cases involving property rights, torts, trusts, and other areas of law.

In summary, specific performance is a specific type of relief that involves the court ordering a party to perform their contractual obligations, while specific relief is a broader term encompassing various remedies sought to enforce legal rights or obligations beyond just contractual disputes.

Case Laws

There are numerous Indian case laws that provide insights into the distinction between specific performance and specific relief. While I can’t provide an exhaustive list, here are a few notable cases that have addressed this distinction:

Magan Behari Lal v. Shankar Lal and Others (AIR 1959 SC 942):
In this case, the Supreme Court of India discussed the difference between specific performance and specific relief. The court emphasized that specific performance is a form of specific relief that enforces the performance of contractual obligations. It clarified that specific performance is not merely a discretionary remedy, but a substantive right recognized by law, subject to certain conditions.
K. L. Johar and Company v. Deputy Commercial Tax Officer (AIR 1986 SC 642):
In this case, the Supreme Court reiterated the distinction between specific performance and specific relief. The court emphasized that while specific performance is a remedy to enforce contractual obligations, specific relief encompasses a broader range of remedies, including injunctions, declaratory judgments, and rectification of instruments.
Satya Jain v. Anis Ahmed Rushdie (AIR 2003 SC 3202):
In this case, the Supreme Court emphasized that specific performance is a discretionary remedy granted by the court, and it is not available as a matter of right to the party seeking it. The court highlighted that specific performance may be refused if it would cause undue hardship or injustice to either party.
Mulla Faqeer Mohammed v. Bai Shri Savitribai (AIR 1964 SC 1685):
This case dealt with the distinction between specific performance and damages as remedies for breach of contract. The court emphasized that specific performance is an equitable remedy aimed at ensuring the enforcement of contractual obligations, whereas damages compensate for the loss suffered due to the breach.

These cases provide valuable insights into the difference between specific performance and specific relief under Indian law and highlight the principles guiding the courts’ decisions in granting such remedies.

Damages and its kinds under the Indian contract Act

Under the Indian Contract Act, 1872, damages are defined as the monetary compensation awarded to a party who has suffered loss or harm as a result of a breach of contract by the other party. Section 73 of the Indian Contract Act specifically deals with the award of damages. It states:

“Compensation for loss or damage caused by breach of contract. When a contract has been broken, the party who suffers from such breach is entitled to receive, from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such a breach, or which the parties knew, when they made the contract, to be likely to result from the breach of it.”

Your explanation is correct. Section 73 and Section 74 of the Indian Contract Act, 1872, deal with different types of damages:

Section 73 – Actual Damages (Unliquidated Damages):

Section 73 pertains to damages that result from a breach of contract and are of an unliquidated nature. Unliquidated damages are those that are not predetermined or stipulated in the contract but are determined by the court based on an assessment of the loss or injury suffered by the aggrieved party.
These damages are awarded by the court to compensate the non-breaching party for the actual loss or injury caused by the breach of contract. The purpose is to place the injured party in the position they would have been in had the breach not occurred.

Section 74 – Liquidated Damages:

Section 74 deals with liquidated damages, which are damages that are predetermined and stipulated in the contract itself.
Liquidated damages clauses specify the amount of compensation to be paid in case of a breach of contract. The predetermined amount represents a genuine pre-estimate of the likely loss suffered by the non-breaching party.
These damages are enforceable if they are a genuine pre-estimate of damages and not intended to punish the breaching party.

You’ve provided a comprehensive overview of the distinctions between “damages,” “damage,” and “compensation.” Here’s a breakdown of the key points you’ve highlighted:

Damages vs. Damage:

Damages: Refer to the pecuniary compensation awarded or sought for as a remedy for a breach of contract or other actionable wrong. They are specifically monetary in nature.
Damage: Refers to the actual injury or loss suffered by a party, for which compensation (damages) is sought. Damage can be either monetary (financial loss) or non-monetary (such as loss of reputation, physical or mental pain or suffering).

Damages vs. Compensation:

Damages: A subset of compensation, specifically referring to pecuniary compensation awarded for actionable wrongs, such as breaches of contract or torts.
Compensation: A broader concept encompassing payments made to a person for any kind of loss or damage suffered. This can include damages but also extends to payments for other reasons like acquisition of property, statutory violations, or termination of employment.

Nature and Significance of Damages:

Damages are of significant importance, especially in commercial transactions and as punitive measures for violations of rights.
The nature of damages varies across different areas of law and circumstances. For example, in indemnity contracts, the nature of damages awarded may differ from those in other types of contracts or tort cases.

This section establishes the principle that the party who suffers from a breach of contract is entitled to receive compensation for any loss or damage that naturally arises from the breach or was foreseeable at the time the contract was made.

There are several kinds of damages that may be awarded under the Indian Contract Act:

Compensatory Damages: These are the most common type of damages and are intended to compensate the injured party for the actual loss suffered as a result of the breach. Compensatory damages aim to put the injured party in the position they would have been in had the breach not occurred.
Nominal Damages: In cases where the injured party has not suffered any actual loss or harm as a result of the breach, nominal damages may be awarded. Nominal damages are symbolic in nature and are typically awarded to vindicate the injured party’s rights rather than to compensate for actual loss.
Liquidated Damages: In some contracts, the parties may agree in advance on the amount of damages that will be payable in the event of a breach. These are known as liquidated damages and are specified in the contract itself. Liquidated damages must be a genuine pre-estimate of the likely loss suffered as a result of the breach.
Exemplary or Punitive Damages: In exceptional cases where the conduct of the party in breach is particularly egregious or malicious, exemplary or punitive damages may be awarded. These damages are intended to punish the wrongdoer rather than compensate the injured party and are awarded as a deterrent against similar conduct in the future.
Consequential Damages: Also known as special or indirect damages, consequential damages are those that arise as a consequence of the breach but are not a direct result of it. These damages may include loss of profits, reputation, or opportunities and are awarded if they were foreseeable by the parties at the time the contract was made.

Differentiating liquidated damages from penalty under the Indian Contract act

In the context of the Indian Contract Act, liquidated damages and penalties serve different purposes and have distinct legal consequences. Here’s a differentiation between the two:

Liquidated Damages:

Definition: Liquidated damages are predetermined or stipulated damages agreed upon by the parties at the time of contract formation, to be paid in case of a breach of contract.
Purpose: The purpose of liquidated damages is to provide a pre-estimated measure of compensation for potential losses arising from a breach of contract. Parties include liquidated damages clauses to avoid the need for complex and uncertain calculations of actual damages in the event of a breach.
Enforceability: Liquidated damages clauses are enforceable if they represent a genuine pre-estimate of the likely loss suffered by the non-breaching party and are not intended to punish the breaching party.
Remedial Nature: Liquidated damages are considered compensatory in nature, aiming to compensate the non-breaching party for the actual loss suffered due to the breach.

Penalty:

Definition: A penalty is a sum of money stipulated in a contract as punishment for a breach of contract. Unlike liquidated damages, penalties are not designed to compensate the non-breaching party for actual losses but are intended to punish the breaching party.
Purpose: The purpose of a penalty clause is to deter the breaching party from failing to perform their contractual obligations. Penalties are often set at a higher amount than the actual anticipated damages to discourage breaches.
Enforceability: Under the Indian Contract Act, penalty clauses are generally unenforceable as they are considered to be punitive and against public policy. Courts may strike down penalty clauses and only enforce the actual damages suffered by the non-breaching party.
Punitive Nature: Penalties are punitive in nature and are intended to penalize the breaching party for non-performance or breach of contract rather than compensate the non-breaching party for their losses.

Differences between Section 73 and Section 74 of the Indian Contract Act, 1872:

Nature of Damages:

Section 73: Deals with actual damages, also known as unliquidated damages. These damages are not predetermined or stipulated in the contract but are assessed by the court based on the loss or injury suffered by the aggrieved party due to the breach of contract.
Section 74: Deals with liquidated damages, which are predetermined and stipulated in the contract itself. The contract specifies the amount of compensation to be paid in case of a breach.

2. Assessment of Damages:

Section 73: The amount of damages is assessed by the court based on the actual loss or injury suffered by the non-breaching party. The purpose is to compensate the injured party for the actual loss suffered.
Section 74: The amount of damages is predetermined and specified in the contract. The predetermined amount represents a genuine pre-estimate of the likely loss suffered by the non-breaching party.

3. Enforceability:

Section 73: Actual damages are enforceable by the court if they arise naturally from the breach and are foreseeable. The court determines the amount of damages based on the evidence and circumstances of the case.
Section 74: Liquidated damages clauses are enforceable if they represent a genuine pre-estimate of damages and are not intended to punish the breaching party. The predetermined amount specified in the contract is binding on the parties.

4. Purpose:

Section 73: The purpose of awarding actual damages is to compensate the injured party for the loss or injury suffered due to the breach of contract and to restore them to the position they would have been in had the breach not occurred.
Section 74: The purpose of liquidated damages clauses is to provide certainty and predictability in case of a breach of contract by specifying in advance the amount of compensation to be paid. It aims to avoid the need for complex calculations and disputes over the amount of damages.

Conclusion:

In summary, the key difference between liquidated damages and penalties lies in their purpose and enforceability. Liquidated damages aim to compensate the non-breaching party for actual losses and are enforceable if they represent a genuine pre-estimate of damages. Penalties, on the other hand, are punitive in nature, aimed at punishing the breaching party, and are generally unenforceable under Indian contract law.

These various kinds of damages provide flexibility for courts to tailor the remedy to the specific circumstances of each case and ensure that the injured party is appropriately compensated for the loss or harm suffered as a result of the breach of contract. In summary, while damages specifically refer to pecuniary compensation for actionable wrongs, damage encompasses the actual injury or loss suffered, which may be either monetary or non-monetary. Compensation, as a broader concept, includes damages but extends to payments made for various other reasons as well. Understanding these distinctions is crucial for clarity in legal terminology and the application of remedies in legal disputes.

QUASI CONTRACTS

Quasi Contract laws have been derived from the Latin statement “Nemo debet locupletari ex aliena jactura” which proclaims that no human being should gain an unjust benefit from another’s loss. It was one of the main principles of Roman law.

The word ‘Quasi’ means having some resemblance to but not all. Similarly, Quasi Contract means laws that are like regular contract law but not quite so. A regular contract should have some essential components to be considered valid. It includes offers, acceptance, consideration, two or more parties who are legally and mentally capable etc.

There are many situations in which a person may be required to conform to an obligation, although he has neither broken any contract nor committed any tort. For example, A has forgotten certain articles in B’s house. Now B is bound to restore . Such obligations are generally described as ‘quasi contractual obligations’. Quasi contracts are based on the principle of equity and justice. It simply states that nobody shall enrich himself unjustly at the expense of another. In fact, a quasi contract is not a contract at all. It is an obligation which the law creates in the absence of any agreement, when the acts of the party or others have placed in the possession of one person, money or its equivalent under such circumstances that in equity and good conscience, he ought not to retain it, and which in justice and fairness belongs to another. He then is placed under an obligation to restore or repay for such a benefit.

DEFINITIONS OF QUASI CONTRACTS

There is no statutory definition of a quasi contract available either under the English Law or under the Indian Contract Act. Pollock describes quasi contracts as “contracts ‘in law’ but not ‘in fact’, being the subject matter of a fictitious extension of the sphere of the contract to cover obligations which do not in reality fall within it” Quasi contracts are also called implied contracts, They are implied because they create such obligations which resemble those created by contracts. The essentials for the formation of a contract are absent but as outcome resembles those created by a contract they are called quasi contracts. Under English Law, they are also termed as Constructive Contracts or Contracts in Law, etc. Indian Contract Act terms quasi contracts as certain relations resembling those created by contracts and are found under sections 68 to 72.

Salient Facets of Quasi Contractual Rights

A quasi-contract is not longer than an actual contract.
It is no longer based upon the offer and acceptance rule.
It does not occur from any formal agreement but is imposed by means of law.
It is a right that is reachable no longer against the whole world but against a specific man or woman.
It is based on the idea of equity, appropriate conscience, justice, and ideas of herbal justice.

Difference Between Quasi Contracts and Contracts

In case of contracts, it is the consent of the party which produce the obligations. But in quasi contracts there is no question of consent, it is the law alone or natural equity which produces obligations. As noted earlier, a quasi contract is based on the ground that a person shall not be allowed to unjustly enrich himself at the expense – of another. There is, however, similarity
between quasi contract and contracts in case of claims for damages. In case of breach of a quasi contract section 73 of the Indian Contract Act provides for the same remedies (claim for damages) as provided in case of breach of a contract. It reads: When an obligation resembling those created by contract has been incurred and has not been discharged, any person injured by the failure to discharge it is entitled to receive the same compensation from the party in default, as if such person has contracted to discharge it and has broken his contract.

TYPES OF QUASI CONTRACTS

Sections 68 to 72 deal with five types of quasi contractual obligations.
i)Supply of Necessaries: According to section 68, if a person incapable of contracting (which would include a minor, idiot and lunatic) or anyone whom he is legally bound to support, is supplied by another with ‘necessaries’ suited to his condition in life such person is entitled to recover the value thereof from the property of such incapable person. You should note that the
aforesaid claim for necessaries is based upon’ quasi contractual obligations because a contract with a person incompetent to contract is void-ab-initio. The following two points must, however, be noted in this regard:
a) The amount is recoverable only from the property (if any) of the incapable person and not from him personally.
b) The goods or services supplied must be ‘necessaries’.

ii)Payment of Money Due by Another(Section 69): A person who is interested in the payment of money which another is bound by law to pay, and who therefore pays it, is entitled to be reimbursed by the other. Example : B holds land in Bengal on a lease granted by A, the Zamindar. The revenue payable by A to the Government being in arrears, his land is advertised for sale by the Government, Under the revenue law, the consequences of such sale will be annulment of B’s lease. B, to prevent the sale and consequent annulment of his own lease, pays to the Government the sum due from A. A is bound to make good to B the amount so paid (Wazarilal v. NaurangLal). For the section 69 to apply, the following essentials must be met:
a) The person paying must be himself interested in making the payment. Thus, where P left his carriage on D’s premises and D’s landlord seized the carriage for non-payment of the rent. P paid the rent to obtain the release of his carriage. Held. P could recover the amount from D
b) The payment should not be voluntary one.
c) The payment must be such as the other party was bound by law to pay.
Example : The goods belonging to A were wrongfully attached in order to realise arrears of Government revenue due by G. A paid the amount to save the goods from sale. Held he was entitled to recover the amount from G (AbidHussain v. Ganga Sahai).

iii)Obligations to Pay for Non-gratuitous Acts :Where a person lawfully does anything for another person or delivers anything to him not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered.
Under section 70, three conditions are required to establish a right of action at the suit of a person who does anything for another:
a)The thing must be done lawfully.
b) It must be done by a person not intending to act gratuitously.
c) The person for whom the act is done must enjoy the benefit of it.

iv)Contracts required to be in writing: You should note that where there is a mandatory provision in an act requiring contracts to be in writing, an oral contract is void. But it has been held by the Supreme Court that where work has been done and accepted, Section 70 is applicable and payment should be made for the work done (State of West Bengal v. B.K. Mandal& Sons).

v)Responsibility of a Finder of Goods: A person who finds goods belonging to another and takes them into his custody is subject to the same responsibility as a bailee. In such a case, an agreement is implied by law between the owner and finder of goods and the latter is deemed to be a bailee. A finder is, thus, bound to take as much care of the goods found as a man of
ordinary prudence would under similar circumstances take of his own goods of the same bulk, quantity and value. Besides, he must make reasonable efforts in finding the real owner.

Rights of the Finder of Goods : A finder of goods has the following rights:

The finder is entitled to retain the goods against the whole world, except the true owner. For example, A picked up a diamond from the floor of B’s shop and handed it over to B to keep it till the owner is found. In spite of best efforts, the true owner could not be found. After some time, A tendered to B the lawful expenses incurred by him for finding the true owner and asked him to return the diamond to him (A). B refused to do so. Held B must return the diamond to A as A was entitled to retain it against the whole world, except the true owner (Hollins v. Fowler).
The finder has lien in respect of any sum which may be due to him on account of expenditure incurred by him
in respect of the goods (section 168).
Where the owner has offered a specific reward for the return of goods lost, the finder may sue for such reward, and may retain the goods until he receives it (section 168). This right was re-endorsed in the case of Harbhajan v. Harcharan.
The finder may sell the goods in the following circumstances :
a) Where the thing found is in danger of perishing.
b) Where the owner cannot, with reasonable diligence, be found out.
c) Where the owner has been found but he refuses to pay the lawful charges of the finder.
d) Where the lawful charges of the finder, in respect of the thing found amount to 2/3rd or more of the value of the thing found.

Advantages and Disadvantages of Quasi Contracts

Advantages of using a quasi contract include the fact that these legal instruments are typically based on the unjust enrichment principle. This prevents one party from gaining an undue advantage over another. Thus, it is a safeguard for innocent victims of wrongful acts and a legal alternative to compensation for damages, ensuring that the one who provides services or goods gets compensated for the same. In order to comply with quasi contracts, all parties involved are obliged to follow them, as they are created by court order.

There are also some drawbacks or limitations. Those who received benefits negligently, unnecessarily, and by miscount will not be held liable. Although a person can be liable under a quasi contract, he cannot be charged more than the amount he has received under the contract. Thus, there is no provision available for the recovery of more amount than that which has been received by the plaintiff – if the plaintiff obtains only part of the services/goods that he contracted for originally, he cannot claim a compensation as the whole amount is not recovered.

If there’s an express agreement between the parties, plaintiffs have to give up all profits. Though a quasi contract is a legal remedy that provides protection from unjust enrichment of the beneficiaries of the services or goods, a plaintiff can get relief only if he can prove that he has suffered losses due to the breach of the contractual obligations of the defendant.

Conclusion:

A quasi contract is also known as an “implied contract,” in which a defendant is ordered to pay restitution to the plaintiff, or a constructive contract, meaning a contract that is put into existence when no such contract between the parties exists.A quasi-contract exists in the absence of a written contract. It may additionally be a court docket ordered to keep away from one party gaining at the fee of another party’s actions. However, the simple nature and essence of the principle remain identical besides any drastic change

CONSIDERATION

According to Sec 2(d) of this act ,” When at the desire of promisor, promise or other person has done or abstained from doing, does or abstains for doing or promises to do or to abstain from doing something, such act, abstinence or promise is called consideration for the promise” Consideration must be clear, specific and not illusory. The rule is “no consideration, no contract”. The consideration may be inadequate if the parties agree. Consideration should not be illegal, immoral or opposed to
public policy

Nature of Consideration

There are mainly two natures of consideration as derived from the types of contracts given on the basis of nature of consideration. They are as follows:

Unilateral

After the contract, if the consideration is to move in only one direction, then it said to be unilateral consideration and the contract so formed is known as unilateral contract.

Bilateral

After the contract, if the consideration is to move in either direction, then it is said to be bilateral consideration and the contract so formed is known as bilateral contract.

ESSENTIALS OF VALID CONSIDERATION:

1.) Form of consideration: The consideration will always be in the form of some act or abstinence or a promise for doing or not doing something.
2.) Consideration must be moved or given at the desire of promisor: In agreement there are two parties i.e. promisor and promise. The consideration is generally given by the promise to promisor. According to this rule any act or promise will be valid consideration if such act has been done or promise is made at the desire or request of the promisor.
3.) Consideration may be past, present or future: Promisor makes a promise and consideration is given to him for his promise. If these two act of making promise and getting consideration are done simultaneously, the consideration is known as present consideration. If the consideration has been given to the promisor before he makes a promise, it is known as past consideration. Consideration may be in the form of promise to be performed in future, such consideration is known as future
consideration.

4.) Consideration may be moved or given by promise or any other person: Generally in every agreement consideration is given by promise to the promisor. But it is not necessary. Any other person on behalf of promise may give consideration. Such consideration will also be valid.

5.) Consideration need not be adequate: According to Indian Contract Act it is not necessary that the value of promise should be equal to the value of consideration. Even if the value of consideration is less than the value of promise, the contract is valid.
6.) Consideration must be real and not be illusory: Consideration given must be real and must have some value in the eyes of law. It must not be illusory, factious, fraudulent, uncertain and illegal.
7.) Consideration must be lawful: Agreement to be enforced in the court must be made for lawful consideration. Any act which is illegal, immoral and against public policy will not constitute valid consideration for the contract.

A CONTRACT WITHOUT CONSIDERATION IS VOID

The general rule is “An Agreement made without consideration is void”. Sec 25 & 185 deals with the Exceptions to this rule. These cases are:
1) Love & Affection: A written & registered agreement based on natural love & affection between near relatives is enforceable even if it is without consideration.
Ex: X, for natural love & affection, promises to give his son, Y, Rs 1000. X puts his promise to Y in writing & registers it. This is a contract.
2) Compensation for voluntary services: A promise to compensate wholly or partly, a person who has already voluntarily done something for the promisor, is enforceable even without consideration.
Ex: A finds B’s purse & gives it to him. B promises to give Rs 50 to A. This is a contract.
3) Promise to pay a Time barred debt: A promise by a Debtor to pay a time-barred debt if it is made in writing & is signed by the debtor or by his agent is enforceable.
4) Completed gifts: There need not be consideration in case of completed gifts.
5) Agency: No consideration is necessary to create an Agency.
6) Contribution to Charity

STRANGER TO A CONTRACT
Though a stranger to consideration can use because the consideration can be furnished or supplied by any person whether he is the promises or not, but a stranger to a contract cannot sue because of the absence of privity of contract (i.e. relationship subsisting between the parties to a contract.

Nudum Pactum:

It is a Latin maxim whose literal meaning is ‘Naked Agreement’. It basically defined as an agreement without consideration is no agreement as it is not dressed in the required essential consideration and hence not enforceable by law and will be termed as a void agreement.

For example – A told B that he wants to sell his refrigerator but A didn’t told B the selling price of the refrigerator which should be mentioned as a corresponding offer with the offer to sell the refrigerator.

Doctrine of Privity to Contract:

Doctrine of privity is a common law doctrine which prevents a stranger to the contract that means a person who is not involved as a party to the contract to sue or to be sued or from enforcing a term of that contract.

For ex. A has borrowed some money from B and A owns a car which he sold to C and asked C to pay to A. Here A cannot sue C if he does not pay B because he is no party to contract or a stranger to contract.

The leading case of Tweddle v. Atkinson(1861), 1 B&S 393, 121 ER 762 immediately got the doctrine of privity into effect and showed it by defying the intent of the parties. But there are some common law principles which acted as exceptions for the doctrine such as agency, negligence etc.

Exceptions to Doctrine of Privity to Contract

A Stranger can sue in following cases –

Trust

Contract made between trustee of a trust and another party, then the beneficiary of trust can sue enforcing his right under the trust.

Family Settlement

Contract between a family, then any member of the family can sue provided he/she should be a member of the family.

Contract through an agent

If an agent has done a contract under his authority or his principal, he can be sued under the contract.

Assignment of a contract

If a contract is made for the benefit of a third person, then the third person can sue the parties even being a stranger.

Acknowledgement or Estoppel

If in the contract it is needed for a party to pay a certain amount to third party then it become an obligation to do so. Then the third party can sue being a stranger. The acknowledgement can also be applied.

A Covenant running with the land

If a contract of a land is made in which a person buys a land with a notice that the owner is responsible for all the duties and liabilities of the land, then he can sue the previous land owner and settler even if they are strangers to the contract.

Conclusion:

Consideration must be clear, specific and not illusory. The rule is “no consideration, no contract”. The consideration may be inadequate if the parties agree. Consideration should not be illegal, immoral or opposed to public policy. The basis of all contractual obligations, is consideration and without consideration, the contract becomes void and unenforceable in the courts.

Principles governing the grant of damages U/S 73 and 74 of the Indian Contract Act

Introduction

Section 73 and 74 of the Indian Contract Act, 1872, grants for unliquidated and liquidated damages respectively. Unliquidated Damages are the damages awarded through the courts on the basis and evaluation of authentic loss or damage induced to the party suffering breach of contract. Whereas, Liquidated Damages are the damages which the parties to the contract can also agree to as price of a certain amount on the breach of contract. Firstly, irrespective of the nature of damages, breach of contract is the pre-condition to declare the same. That is, there can be no claim for damages if there is no breach of contract between the parties. Secondly, to claim damages, the party making such claim has to establish the loss. Section 74 awards practical compensation for injury or loss induced through a breach of contract, injury or loss induced is a sine qua non for the applicability of the Section. However, as long as it serves a compensatory function, liquidated damages ought to be allowed barring the requirement to prove precise losses.

The expression “whether or not real injury or loss is proved to have been prompted thereby” means that the place it is feasible to show proper injury or loss, such proof is not disbursed with. It is only in cases where harm or loss is difficult or impossible to prove, that the liquidated amount named in the contract, if a genuine pre-estimate of injury or loss, can be awarded. Thus, it is the nature of the Liquidated Damages clause that needs to be considered, that is, whether it is an actual pre-estimate of loss occurred on breach of contract or whether or not it is in shape of penalty and deterrent in nature.

Where Court concludes that the term contemplating damages is by way of penalty, the Court may grant reasonable compensation not exceeding the amount mentioned in the contract on proof of damages. Section 74 deals with the measure of damages in two clauses of cases (i) where the contract names a sum to be paid in case of breach, and (ii) where the contract contains any other stipulation by way of penalty. Jurisdiction of the Court to award compensation in case of breach of contract is unqualified except as to the maximum stipulated; but compensation has to be reasonable. The aggrieved party is entitled to receive compensation from the party who has broken the contract, whether or not actual damage or loss is proved to have been caused by the breach. Thereby it merely dispenses with proof of “actual loss or damages”; it does not justify the award of compensation when in consequence of the breach no legal injury at all has resulted, because compensation for breach of contract can be awarded to make good loss or damage which naturally arose in the usual course of things, or which the parties knew when they made the contract, to be likely to result from the breach. Section 74 of the Indian Contract Act eliminates the somewhat elaborate refinements made under the English common law in distinguishing between stipulates providing for payment of liquidated damages and stipulations in the nature of penalty.

Case Laws

In the case of Maula Bux (1969) 2 SCC 554, the court has specifically held that the court is competent to award reasonable compensation in a case of breach even if no actual damage is proved to have been suffered in consequence of the breach of contract. The court has, however, also specifically held that in case of breach of some contracts it may be impossible for the court to assess compensation arising from breach. In such a case, the sum named by the parties if it be regarded as a genuine pre-estimate may be taken into consideration as the measure of reasonable compensation, but not if the sum named is in the nature of a penalty. Where loss in terms of money can be determined, the party claiming compensation must prove the loss suffered by him. In the case of Iron & Hardware (India) Co. v. Firm Shamlal & Bros AIR 1954 Bom 423, it was stated that an automatic pecuniary liability does not arise in the event of a breach of a contract which contains a clause for liquidated damages. Till the time, it is determined by the court that the party complaining of the breach is entitled to damages; the plaintiff shall not be granted compensation by the mere presence of a liquidated damages clause.

In the case of Oil & Natural Gas Corporation Ltd. v. Saw Pipes Ltd (2003) 5 SCC 705, it was held that if the terms of the contract are clear and unambiguous stipulating the liquidated damages in case of the breach of the contract, unless it is held that such estimate of damages/compensation is unreasonable or is by way of penalty, party who has committed the breach is required to pay such compensation. However, in some contracts, it would be impossible for the court to assess the compensation arising from breach and if the compensation contemplated is not by way of penalty or unreasonable, court can award the same if it is genuine pre-estimate by the parties as the measure of reasonable compensation.

In the case of Indian Oil Corporation v. Lloyds Steel Industries Ltd , (2007) 144 DLT 659, the court held that:

“…The guiding principle is ‘reasonable compensation’. In order to see what would be the reasonable compensation in a given case, the Court can adjudge the said compensation in that case. For this purpose, as held in Fateh Chand (supra) it is the duty of the Court to award compensation according to settled principles. Settled principles warrant not awarding compensation where no loss is suffered, as one cannot compensate a person who has not suffered any loss or damage. There may be cases where the actual loss or damage is incapable of proof; facts may be so complicated that it may be difficult for the party to prove actual extent of the loss or damage.”

Conclusion

It can thus be concluded that the demand to prove the loss suffered defeats the very purpose for which liquidated damages clauses are inserted in contracts. No Compensation U/S 73, 74 Contract Act For Mere Breach Of Contract Without Actual Loss/ Damage. Section 74 of the Act emphasizes on reasonable compensation. Only if the compensation in the contract is by way of penalty, consideration would be different and the party would only be entitled to compensation for the loss suffered. But if the compensation named in the contract is a genuine pre-estimate of loss, which the party knew at the time of entering into contract, there is no question of proving such loss. Burden is in fact on the other party to lead evidence to prove that no loss is likely to occur by such breach.

Offer and Acceptance

Sec.2(a) defines the term ‘proposal‘ as follows:
“When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal. “

An offer can be made by any act which has the effect of communicating it to the other. An offer may either be an ‘express offer’ or an ‘implied offer’. An offer can be made by any act which has the effect of communicating it to the
other. An offer may either be an ‘express offer’ or an ‘implied offer’.

Implied Offer: It is an offer which is not made by words spoken or written. An implied offer is one which is inferred from the conduct of a person or the circumstances of the particular case. For example, public transport like DTC in Delhi or BEST in Bombay runs buses on different routes to carry passengers who are prepared to pay the specified fare.

CLASSIFICATION OF OFFER:

1) SPECIFIC OFFER: Sometimes an offer is made to a particular person, part or org. , such offer is known as a specific offer. This specific offer can be accepted only by that particular person or org.
2) GENERAL OFFER: It is an offer which is made to a group of people or public at large. Such offer can be accepted by any member of that group or public.
3) CROSS OFFER: Two parties exchange identical offers with each other. They are ignorant about each other’s offers.
4) COUNTER OFFER: Incomplete and conditional acceptance of an offer is known as a counter offer. In other words, the acceptor, instead of accepting the offer as such along with all its terms and conditions deviates from it. Such acceptance becomes a counter offer.

ESSENTIALS OF VALID OFFER:

1) Offer must create a legal relationship and consequence: The whole concept of contract is based on legal relationships or obligations of legal consequences .Thus the formation of contract with starts with an offer, its acceptance followed by the legal relationships and its consequences means the party making an offer must have clear intention to establish the legal relationship with other party.
2) Offer may be express or implied: The offer may be made either by the word of mouth or in writing. Such an offer is known as an express offer. On the other hand if the offer is inferred, or indirectly understood either from the conduct of parties or from the circumstances, such offer is known as implied offer.
3) Offer may be specific or general: The offer being made to a particular individuals or orgs. Is known as specific offer. On the other, if an offer has been made to a group of people or public at large is known as general offer.
4) Offer must be communicated: An offer is made with a view to create, legal relationships so it must be communicated to the person to whom it is made. Without communications the offer is incomplete and cannot be accepted.

5) Offer must be distinguished from a mere expression of intention or invitation: Sometimes one party merely shows his intention for making an offer or invites other party for making it. Such intention or invitation for making an offer will not be considered as a valid offer.
6) Offer maybe conditional: While making an offer the offeror may impose conditions for the acceptor, such conditional offer is valid subject to the following conditions:
a) Offeror cannot impose any such condition the non‐fulfillment of which would lead to acceptance of that offer.
b) The terms and conditions imposed by the offeror must be mentioned in the offer in such a way that a person of a reasonable prudence may find indication for those conditions and those conditions must be reasonable eyesight.

REVOCATION OF OFFER:

Revocation of offer means withdrawal, cancellation or lapse of offer. According to Sec 6 of this act, Offer can be revoked under the following circumstances:
a) By notice, b) By lapse of time, c) Death or insanity of offeror D) Non‐fulfillment of prerequisite conditions, e) by counter offer, f) by compliance of prescribed mode or manner.

What Constitutes a Revocation of Offer?

The main criteria for a binding revocation is that it’s communicated to the offeree before they accept the offer.

Communication of revocation can be direct or indirect and can be made by a third party. If the communication is indirect, it must meet several requirements. It needs to be:

Correct
Communicated by a reliable source
Able to be understood by a “ reasonable person”

Selling an item to someone else is considered a legal revocation so long as the original offeree is notified of the sale before they accept the offer.

Offers made through a publication are something of a special case. These offers can be revoked by a notice in that publication without specifically contacting the offeree.

When Are Offers Considered Irrevocable?

Offers are considered irrevocable under the following conditions:

If it is stated that the offer shall be kept open as part of consideration.
If the offeree relied on the offer being open to their detriment (detrimental reliance).
If the contract is unilateral, has been partially completed or is underway and the offeree is still in compliance with the terms.
Signed offers with firm terms that guarantee a party will buy or sell goods that include an assurance that the offer must be held open, even if no consideration is present.
If a stated period is provided, the offer is irrevocable for the lesser of that period or three months time.

1)In Balfour vs. Balfour (1919)

Mr. Balflour was a civil engineer and worked for the government as the Director of Irrigation in Ceylon(now Sri Lanka).In 1915 both of them came back to England when Mr. Balflour was on leave but due to an illness(arthritis) of Mrs. Balfour, she was unable to come back to Ceylon with her husband. The husband promised to pay 30 euros per month to his wife until she rejoined him in Ceylon. The husband failed to pay her the said amount hence the wife sued him for the amount. The court held that the husband was not liable as there was no intention to create a legal relationship.

HOW CAN AN OFFER BE KEPT OPEN?
An offeror is not obligated to keep an offer open for a specified time even the offeror has promised to do so because nothing has been given in exchange for the promise.

A. OPTIONS
An underlying binding contract to keep an offer open. If the offeree gives the offeror something of value in return for a promise to keep the offer open.The offer may not be withdrawn during the period of the option. If the offer is accepted, the money paid for the option can be applied to the purchase price if this was agreed upon ahead of time. Neither death nor insanity of either party terminates an option.

B. FIRM OFFERS
 A binding offer by a merchant for the sale or purchase of goods stating in writing how long it is to be held open.
 The Uniform Commercial Code (UCC) makes firm offers binding for the time stated, but not more than three months.
 This is true even when nothing is paid by the offeree.
 Neither death nor insanity of either party terminates a firm offer.

ACCEPTANCE

According to Sec 2(b) of Indian contract act 1872, defines the term acceptance “as a proposal or offer is said to have been accepted when the person to whom the proposal is made signifies his assent to the proposal”.

ESSENTIALS OF VALID ACCEPTANCE:

1.) Acceptance must be absolute and unconditional: Offer may be made for a specific quantity, volume and price. It may also contain terms and conditions. It is necessary for the acceptor that he must give his acceptance for the entire quantity and volume offered.
2.) Acceptance must be given in a prescribed mode or manner: While making an offer the offeror may prescribe a particular mode or manner of acceptance and the acceptor must abide by it. If the acceptor does not follow that particular mode for sending his acceptance, the offeror that further insist the acceptor to abide by it. But if it is still not followed the offeror can reject the acceptance. On the other if no mode is prescribed, by the offeror then the acceptor can follow the usual mode of acceptance.
3.) Time of acceptance: To make it valid acceptance, it must be given within stipulated period of time if any. When no time is specified, acceptance must be given within reasonable period of time.
4.) Acceptance must be communicated: As the offer needs to be communicated, so does the acceptance. Acceptance to be legally effective must be communicated and brought to the knowledge of the offeror. Even if the acceptor has accepted the offer but if it is not communicated properly it would not result into an agreement.

5.) Acceptance may be expressed or implied: The acceptor may give his assent for the proposed act by the word of mouth or in writing. Such acceptance is known as express acceptance. If the acceptance is directly understood either from conduct of the party or from circumstance, it is known as implied acceptance.
6.) Acceptance must be made before offer is revoked: Acceptance implies mental readiness of the person for proposed act or abstinence. Therefore, it must be given before the offer lapses or is withdrawn or cancelled. Once the offer is dead due to any reason if it is dead for ever, and to revive it, such offer is to be made afresh.
7.) Acceptance is not implied from silence if the party: Acceptance of offer is not implied from silence. The offeror cannot impose condition on offered that his silence will amount to acceptance. Silence on the part of offered regarding the offer in no case may amount to acceptance.

REVOCATION OF ACCEPTANCE:

The Revocation of Acceptance is complete ONLY at any time before the communication of acceptance is complete as against the acceptor, but not afterwards. Revocation of Acceptance too can be either oral or written. Acceptance has to be revoked mandatory before the same reaches the Offerer.

1) Failure of acceptor
2) Death or insanity of acceptor
3) No reasonable time and manner
4) By rejection
5) By supervising impossibility.

Conclusion:

Offer and acceptance analysis is a traditional approach in contract law used to determine whether an agreement exists between two parties. An offer is an indication by one person to another of their willingness to contract on certain terms without further negotiations. If the “contract” is too vague, uncertain or incomplete it will not be enforceable and we cannot be considered as Contract.

Mistake

Mistake must be a “vital operative mistake “ i.e. it must be a mistake of fact which is fundamental to contract. To be operative so as to render the contract void, the mistake must be:

(a) of fact, and not of law or opinion;

(b) the fact must be essential to agreement, i.e., so fundamental as to negative the agreement; and

Thus, where both the parties to an agreement are under a mistake as to a matter of fact

‘Mistake’ is not defined in the Indian Contract Act. Section 20, 21 and 22 deals with the concept related to mistake. ‘Mistake’ can be defined as any action, decision or judgement that produced an unwanted and unintentional result. A Mistake is said to have occurred where parties intending to do one thing by error do something else.

Case Law– Phillips V/S Brooks Ltd.- In this case it was held that a person is deemed to contract with the person in front of them unless they can substantially prove that they instead of them intended to deal with another person.

Illustration– A agrees to sell to B a specific cargo of goods supposed to be on its way from England to Bombay. It turns out that, before the day of the bargain, the ship conveying the cargo had been cast away, and the goods lost. Neither party was aware of these facts. The agreement is void.

Mistakes are of two kinds:

(i) mistake of law, and

(ii) mistake of fact.

Mistake of Fact

A mistake of fact arises when one or both of the contracting parties have misunderstood a term that is essential to the meaning of the contract; Such a mistake may be done due to confusion, negligence or omission, etc A mistake is never intentional, it is an innocent overlooking. Such mistakes can be either unilateral or bilateral

Bilateral Mistake (Section 21)

When both the parties to a contract are under a mistake of fact, essential to the agreement, such a mistake is known as a bilateral mistake. Bilateral mistakes are also sometimes referred to as mutual or common mistakes. All the parties do not agree to the same thing and in the same way, which is the concept of consent. Since there is no consent, the contract is null and void.

Example

‘A’, agrees to buy a cow from ‘B’, but it turns out that the cow was dead at the time of the deal, although the fact was not known to any party. The arrangement is considered invalid.

Unilateral Mistake (Section 22)

A unilateral mistake occurs when only one party to the contract makes a mistake. The contract will not be void in such a case. It is specified in Section 22 of the Act that the contract will not be void just because one party made the mistake. So if only one party has made a mistake the contract remains a valid contract.

Example

‘A’ enters into an agreement with ‘B’ for the purchase of a horse which he assumes to be a racing horse. ‘A’ is not confirmed from ‘B’. In actuality a horse is not a racing horse. ‘A’ cannot rescind the contract.

(a)Mistake as to existence of the subject matter: Where both parties believe the subject matter of the contract to be in existence but in fact, it is not in existence at the time of making the contract, there is mistake and the contract is void.

Example

‘A’ and ‘B’ are involved in a contract to sell a horse in a specific amount. But, horse dies before the contract is performed and both the parties (A and B) are unaware of this fact that the horse does not exist. In this case, the Contract is void.

(b)Mistake as to identity of the subject matter: Where the parties are not in agreement to the identity of the subject matter, i.e., one means one thing and the other means another thing, the contract is void; there is no consensus ad idem.

Example

‘A’ and ‘B’ made a contract in which ‘A’ promise to sell his car to ‘B’. ‘A’ has two different types of car (one for racing and other for tourism purpose). Here, the real identity of the car is not clear and both the parties are thinking about different types of car. In this case, the Contract is void.

(c)Mistake as to quantity of the subject matter: There may be a mistake as to quantity or extent of the subject matter which will render the contract void even if the mistake was caused by the negligence of a third-party.

Example

‘A’ and ‘B’ made a contract in which a transaction of 200 pens in return of some amount involves. But 100 pens are sold early by the brother of ‘A’ before the contract could be performed and both the parties (A and B) were unaware of this fact that only 100 articles do exist. In this case, the contract is void.

(d)Mistake as to quality of the subject-matter or promise: Mistake as to quality raises difficult questions. If the mistake is on the part of both the parties the contract is void. But if the mistake is only on the part of one party difficulty arises.

Example

‘A’ and ‘B’ made a contract together in which ‘A’ sold his car in return of some amount to ‘B’. They believed that the car is for racing purpose but the car was for tourism purpose. In this case, the Contract is void.

(e)Mistake as to the price of subject matter

‘A’ and ‘B’ made a contract to sell things in consideration for some money which was not a valid amount and both the parties (A and B) are unaware of this fact. In this case, the Contract is void.

(f)Matter as to the performance of subject matter

Sometimes, a contract is made but during the performance of the same, we come to know that it is impossible to fulfill the performance of the contract. The agreement is void where there is a mistake as to the possibility of performance. Impossibility is an excuse for non-performance of a contract. Impossibility can be of two types:

Physical impossibility: Any performance of the contract when physically impossible, can be taken up as an excuse for non-performance of duties under a contract and contract will be void. For example- a painter made a contract with a person to paint a house but before the performance of duties, the house burns. Now, it is impossible for the painter to perform his duties under the contract. Thus, it is considered as an excuse for non-performance of duties.
Legal impossibility: Any performance of the contract is when legally impossible, can be taken as an excuse for non-performance of duties under a contract and contract will be void. For example- any amendment made by legislation which makes it impossible to fulfil the performance of duties under the contract.

Unilateral Mistake as to Nature of the Contract

The general rule is that a person who signs an instrument is bound by its terms even if he has not read it. But a person who signs a document under a fundamental mistake as to its nature (not merely as to its contents) may have it avoided provided the mistake was due to either-

(a) the blindness, illiteracy, or senility of the person signing, or

(b) a trick or fraudulent misrepresentation as to the nature of the document.

Mistake of law

The mistake may be related to the mistake of Indian laws, or it may be a mistake of foreign laws. If the mistake applies to Indian laws, the principle is that the law’s ignorance is not a sufficiently good excuse. This means that either party cannot claim that it is not aware of the law.

The Contract Act states that, on the grounds of ignorance of Indian law, no party can claim any relief. This will also include an incorrect interpretation of any legal provisions.

However, similar treatment is not given to ignorance of foreign law. Ignorance of foreign law provides some leeway, the parties are not expected to know foreign law and its meaning. Therefore, under the Indian Contract Act, an error of foreign law is actually treated as a mistake of fact.

Mistake of Law can be of two types:

1. Mistake of Indian Law: “Ignorantia Juris non excusat” is a Latin maxim which means “Ignorance of the law is not excused”. If a person takes part in a contract without knowing any specific provisions of Indian Law (which is essential for that contract), then Contract is not voidable because everyone is supposed to know the law of his country. A and B make a contract grounded on the erroneous belief that a specific debt is barred by the Indian Law of Limitation, then the contract is not voidable.

2. Mistake of Foreign Law:– If a person takes part in a Contract without knowing any specific provisions of Foreign Law (which is essential for that contract), then that mistake is treated as a mistake of fact i.e, the contract is void if both the parties under a mistake as to a foreign law because one can not be expected to know the law of other foreign countries.

SEC 21 Effect of mistake of law-

A contract is not voidable because it was caused by a mistake as to any law in force in India; but a mistake as to law not in force in India has the same effect as a mistake of fact. Grant v. Borg– In this case, the person was not knowing the clauses of the Immigration Act 1971, for staying beyond the time by the leave. Here, he cannot apply for defense under the mistake of law.

SEC 22-

Contract caused by mistake of one party as to matter of fact- A contract is not voidable merely because it was caused by one of the parties to it being under a mistake as to matter of fact. The State of Maharashtra v. Mayer Hans George– In this case, A is an officer of the court and he is ordered to arrest Y. A arrests Z by mistake, as he believes Z is Y. Here, A can take the base of bonafide intention as a defense in the mistake.

Common Mistake

When both parties are mistaken for the facts related to the subject matter of the agreement. The court can declare the entire agreement as void in such kind of mistake. If the contract contains a small error relating to the subject matter, then there is a very less chance that the court will rule that the contract is void. If any part of the contract that does not contain a mistake is still valid.

Conclusion

All agreements are contracts if they are made with the free consent of parties who are legally able to enter into contracts, for a legitimate consideration, and with a lawful intent, according to Section 10 of the Indian Contract Act, 1872. The Indian Contract Act’s Section 14 states that, “Subject to the provisions of Sections 20, 21, and 22, consent is deemed to be free where it is not the result of error.” There are two different kinds of errors: legal errors and factual errors. Mistakes in fact are acceptable justifications for failing to fulfill contractual obligations, while mistakes in law are not acceptable justifications.

Remedies for breach of contract

The word „damage‟ is simply sum of money given as compensation for loss or harm of any kind. The term “damages” in general sense, is compensation for causing loss or injury through negligence or a deliberate act, or an estimate of court or award of a sum as a fine for breach of a contract or of a statutory duty. It is the amount of money which the law awards or imposes as pecuniary compensation, recompense, or satisfaction for an injury done or a wrong sustained as a consequence of a breach of a contractual obligation. Damages are a monetary payment awarded for the invasion of a right at common law.

According to Black Law Dictionary: “Money compensation sought or awarded as a remedy for a breach of contract or tortuous acts.”

“Damages generally refer to money claimed by, or ordered to be paid to, a person as compensation for loss or injury.” defined by Justice Greenwood.

‘Breach of Contract’ means failure to perform the Contract and ‘Remedy’ which means any of the methods available at law for the enforcement, protection, or recovery of rights or for obtaining redress for their infringement. When either of the parties breaches the contract, it gives right to the other party to sue him for remedy. A right without remedy is of no avail, therefore, must provide for the remedies available to persons if their rights are violated.

An agreement with the purpose of establishing duty is known as a contract. Therefore, a contract is defined as an arrangement that allows one party to compel another to do something or refrain from doing something. When one or both parties fails or refuses to fulfill their promise or fulfill their obligations under the contract, it is said to have been broken or violated. As a result, an agreement might be regarded to have been honored when one or more parties fail to uphold their end of the bargain by failing to fulfill their promises.

When you enter into a business contract, you and the other party or parties are legally bound to fulfill the obligations therein. When one party fails to do so without a lawful excuse, the contract in question has been breached.

A breach can occur if the terms of the contract are not met on time, are not in accordance with the spelled-out requirements, or are not met at all. If only one party breaches the contract, the other party is entitled to financial compensation. The breach can be categorized by the legal system as either material or immaterial, which affects how the situation will be remedied by the court system.

What Counts as a Breach of Contract?

If a delivery was contracted for Thursday night and arrived Friday morning, this would be considered an immaterial breach by the court, meaning the late delivery did not cause damages and thus does not result in monetary compensation. However, if the contract explicitly states that time is of the essence and that the product must arrive by Thursday night, this would be considered a material breach. In this scenario, the party who purchased the product would likely be reimbursed for the cost.

When a breach of contract suit is brought to court, the judge will ask the plaintiff the following:

Whether a contract existed
The terms of the contract
Whether the contract in question was ever modified
Whether the breach in question occurred as claimed
If the breach was material to the contract
If the party who allegedly breached the contract had a legally admissible reason for doing so
The extent of damages caused by the breach, if any

What Happens After a Contract Is Breached?

A breach of contract can cause wasted time and money, as well as frustration for the individuals and small businesses involved. When a contract breach occurs, one or both parties may take legal action to recover financial damages or have the contract terms enforced. Informal resolution is often the best route. If that doesn’t work, you may have to file a lawsuit. Depending on the state, you may be able to file in small claims court.

The remedies for breach of contract under Indian Contract Act, 1872, are suits for:-

1. Damages or compensation:

2. Specific Performance:

3. Injunctions

4. Rescission

5. Quantum meruit:

1. Damages or Compensation:

It is mentioned in section 73 of the contract act that if a party experiences a loss by breach of another party, they have the right to take compensation for the damages from the breached party. The party has the right to sue for damages.

For example, A makes a contract with B to sell his goods at the price of 1000. But at the time of selling, A fails to sell them at the cost of 1000. Here B has the right to sue him for the loss.

Types of Damages

Normal Damages or General Damages

Damages that arise within the normal course of events from the Breach of Contract are referred to as normal damages.

Special Damages

Special damages are those damages that are collectible for the loss arising on account of some special or uncommon circumstances. That is, they undue the natural and probable consequences of the Breach of the Contract.

Exemplary or Vindictive Damages

These damages are awarded against the party who has committed a Breach of the Contract with the thing of gruelling the fallible as a defaulting party and to compensate the aggrieved party. Generally, these damages are awarded just in case of action on loss

Nominal Damages

These damages are in little quantity. They’re awarded merely to acknowledge the correctness of the party to say damages for the Breach of the Contract. Sometimes, the damages aren’t associated with an adequate remedy for Breach of the Contract. In such cases, the Court could, at the suit of the party not in Breach, direct the party in Breach to hold out his promise as per the terms of the Contract. This can be referred to as the precise performance of the Contract.

Example: A united to sell associate previous stamp of the pre-independence amount to 8 for Rs.500. However, afterwards refused to sell it. During this case, B may file a suit against A for the precise performance of the Contract and therefore the Court could order A to sell the stamp to B as united.

Some of the Cases Wherever the Court Could Direct the Execution Area Unit as Follow

Once the act is done, compensation in cash, for its non-performance, couldn’t afford adequate relief.
Once there exists no normal for crucial the particular damages caused thanks to the non-performance of the Contract.

However, Execution Shall Not Be Granted Within the Following Cases

Wherever the damages are associate adequate relief,
Wherever the Contract is calculable.
Wherever the Contract involves personal nature.
Wherever the Courts cannot supervise the effecting of the Contract.

2. Specific Performance:

According to specific performance, the party who has breached the contract has to fulfil the conditions which are mentioned in the contract. It is the discretionary power of the court to insist the breached party perform the duties given under the contract.

For example, A promises B to sell his property. But on the date specified in the contract, he refuses to sell the property. Now, the B can take the decree of specific performance from the court against A to sell his property to B.

3. Injunction:

The term” Injunction” could also be outlined as an associate order of the Court instructing someone to refrain from doing a little act that has been the subject-matter of the Contract. wherever a celebration has secured to not do one thing and he will it, and thereby commits a Breach of Contract, the aggrieved party could ask for the protection of the Court beneath sure circumstances and procure associate injunction.

Example: A narrowed to sing solely at B’s theater and obscurity else for an exact amount. Afterwards, A created a Contract with C to sing at C’s theater and refused to sing at B’s theater. The Court refused to order a selected performance as a result of the Contract was private however granted an associate injunction against A to restrain him from singing anyplace else

An injunction is a court order restraining a person from doing a particular act. Injunctions serve a similar purpose as specific performance. The difference is that with specific performance, the court orders a party to do something. With an injunction, the court often orders a party not to do something. There are two types of Injunctions, as follows: –

Temporary Injunction or Interim Injunctions: – Temporary or Interim Injunctions are governed by Order 39 of Civil Procedure Code 1908 and are those injunctions that remain in force until a specified period of time, e.g. 15 days, or till the date of the next hearing. Such injunctions can be granted at any stage of the suit.

Permanent Injunction or Perpetual Injunctions: – Permanent or Perpetual Injunctions as under Sections 38 to 42 of the Specific Relief Act, 1963 are contained in the decree passed by the Court after fully hearing the merits of the case. Such an injunction permanently prohibits the defendant from committing an act which would be contrary to the plaintiff’s rights.

Mandatory Injunctions: – Mandatory injunctions are granted in cases where it is necessary to force the performance of certain acts which the courts are capable of enforcing, to prevent the non-performance of an obligation. Thus, the Court may at its discretion grant injunctions to prevent such non-performance and compel the performance of necessary acts. This prohibition applies to any breach of liability. It can be permanent or temporary, although temporary-mandatory injunctions are rare.

4. Rescission

A rescission requires that all parties should be brought back to the position they were in before entering into the contract. Thus, a rescinded contract is terminated from the very beginning as if the contract never existed. It actually means that if any benefit received as part of the contract, such as money, must be restored. The basic reasons for Rescission can be stated as follows:-

 Innocent or Fraudulent representation; or

 Mutual mistake; or

 Lack of capacity to contract; or

 An impossibility to perform a contract not contemplated by the parties; or

 Duress; or

 Undue influence

There are many other situations in which a contract can be rescinded. A party can rescind a contract because of a breach by another party, but the breach must be so substantial that it defeats the purpose of the contract. One can also rescind a contract by agreement. If all parties to a contract agree to cancel.

5. Quantum Meruit

Quantum meruit means “earned money”. Sometimes when one part of a Contract is prevented from completing its Contract performance by another, it may require quantum suitability.

So he should be paid a fair wage for part of the Contract he has made. This could be the reward for the work he did or the amount of work he did.

Parties to a Contract area are unit duty-bounded to perform their guarantees. However, things arise wherever one among the parties to a Contract could break the Contract by refusing to perform his promise. This can be what’s referred to as the Breach of Contract. Once one party commits a Breach of Contract, presently the opposite party is entitled to the subsequent Remedies. When one among the party commits a Breach of the Contract, the opposite party becomes entitled to any of the subsequent reliefs:

Rescission of the Contract
Damages for the loss suffered
Suit for the precise performance
Suit upon quantum meruit
Suit for the injunction.

Suit upon Quantum Meruit

In a literal sense, the expression “Quantum Meruit” means that, “as very much like attained “. In an exceedingly Legal sense, it means that payment is in proportion to the work done. This principle provides for the payment of compensation under certain circumstances, to someone who has offered the products or services to the opposite party under a Contract, which couldn’t be performed under certain circumstances.

Cases for Claim on Quantum Meruit

Wherever the work, that has been done and accepted under Contract, is afterwards discovered to be void – Here the party has affected a part of the Contract will truly the quantity for the work he has done. And therefore the party that accepts and reaps the profit under Contract, should create compensation to the opposite party.

Wherever one party abandons or refuses to perform the entire Contract. Here the compensation for the work done could also be recovered supporting quantum meruit.
Wherever one thing is finished with non-intention to try and do gratuitously. In such cases, the opposite person is certain to create the payment if he accepts such services or merchandise, or enjoys their profit.
Wherever the Contract is cleanable and therefore the party has enjoyed the advantages of the work done – In such cases, the halfway in default could sue on quantum meruit if the opposite party has enjoyed the advantages of the part performance.

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The Role of Emojis in Communication

Emojis in Contract Law: A Global Perspective

Indian Legal Framework and Contract Law

Emojis in Indian Contract Law: An Analysis

Rights Concerning Emojis in Contracts

Challenges and Problems

Relevant Case Laws

Conclusion

Meaning and Nature of Specific Relief

Scope of Specific Relief

Limitations of Specific Relief

Conclusion:

Definition: specific relief

Case Laws

There are several kinds of damages that may be awarded under the Indian Contract Act:

Differentiating liquidated damages from penalty under the Indian Contract act

Differences between Section 73 and Section 74 of the Indian Contract Act, 1872:

Conclusion:

DEFINITIONS OF QUASI CONTRACTS

Salient Facets of Quasi Contractual Rights

Difference Between Quasi Contracts and Contracts

TYPES OF QUASI CONTRACTS

Rights of the Finder of Goods : A finder of goods has the following rights:

Advantages and Disadvantages of Quasi Contracts

Conclusion:

Nature of Consideration

ESSENTIALS OF VALID CONSIDERATION:

A CONTRACT WITHOUT CONSIDERATION IS VOID

Doctrine of Privity to Contract:

Exceptions to Doctrine of Privity to Contract

Conclusion:

Introduction

Case Laws

Conclusion

CLASSIFICATION OF OFFER:

ESSENTIALS OF VALID OFFER:

REVOCATION OF OFFER:

What Constitutes a Revocation of Offer?

When Are Offers Considered Irrevocable?

ACCEPTANCE

ESSENTIALS OF VALID ACCEPTANCE:

Conclusion:

Mistake of Fact

Bilateral Mistake (Section 21)

Example

Unilateral Mistake (Section 22)

Example

Mistake of law

Common Mistake

Conclusion

What Counts as a Breach of Contract?

What Happens After a Contract Is Breached?

The remedies for breach of contract under Indian Contract Act, 1872, are suits for:-

1. Damages or Compensation:

Types of Damages

Some of the Cases Wherever the Court Could Direct the Execution Area Unit as Follow

2. Specific Performance:

3. Injunction:

4. Rescission

5. Quantum Meruit

Suit upon Quantum Meruit

Cases for Claim on Quantum Meruit

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