UNIT I

Essential elements of a valid contract. Essentials of a valid offer. Essentials of valid consideration. Stranger to consideration. No consideration- No contract explain and give exceptions. Discuss the provisions of law relating to contract by minor. Agreements Opposed To Public Policy. Free consent. Legality of object and consideration 1. ESSENTIAL ELEMENTS OF A VALID CONTRACT 1. All contracts are agreements but an agreement are not contracts Discuss? (OR) Essential elements of valid contract? Ans. Indian contract Act (I A), 1872, sec 2 defines a contract us an agreement enforceable by law. From the above definitation, the features of contract can be classified as 1. Agreement 2. Legal obligation. 1. Agreement: According to Sec2 (e), Every promise or every set of promises forming consideration for each other is called an Agreement. Therefore, AGREEMENT = OFFER + ACCEPTANCE CONTRACT =AGREEMENT+ENFORCEABILITY AT LAW FEATURES OF AN AGREEMENT: 1. Plurality of the parties 2. Consensus ad-idem 3. Legal obligation 1. Plurality of the parties; for every agreement, there should be minimum two parties because one person alone cannot enter into an agreement with himself. 2. Consensus ad-idem; the minds of both the parties must be in ad-idem, i.e., both the parties must think of the same subject matter the same time and in the same sense. 3. Legal obligation; an agreement, to become a valid contract, it should end in legal relations. Agreements without legal obligation will not be able to construct a contract. These agreements are purely domestic arrangements. 1

For EX. Agreement between husband and wife, father and daughter, etc.), they will not be able to form any legal obligation between the parties. BALFOWR (Vs) BALFOUR - 1919 Point Decided is A husband promised to pay his wife a household allowance of 30 every month. Later the parties separated and the husband failed to pay the amount. The wife sued for the allowance.Held, agreements such as these were outside the realm of contract altogether. All contracts are agreements but all agreements are not contr4act only those we agreements which result in legal obligations can become valid contracts An agreement to become a valid contract, it must fulfill to essential elements of a valid contract according to sec 10 of ICA, 1872. Essential Elements of a Valid Contract: Offer and acceptance Legal relationship Consensus ad-idem Free consent. Capacity or competency of parties Lawful object Lawful consideration Certainty and possibility of performance Agreements not declared to be void Legal formalities 1. Offer and Acceptance; In order to create a valid contract, there must be an agreement between tow parties. An agreement involves a valid offer by one party and valid acceptance of the same by the other party. The most important aspect of a valid proposal is that it should be voluntary. It should not be an answer to a question or a replay to an enquiry and it should be communicated. CASE: HARVEY (vs.) FACEY. The most important aspect of a valid acceptance is that it should be given by the promise only but not by any body else. So an acceptance given by a third party will not create a promise. CASE: BOULTON (vs.) JONES. 2. Legal relationship; the parties must intend their agreement to result in legal relations. This means that the parties must intend that if one of them falls to perform his promise, he shall be answerable for that failure in law the lending case on this point is Rose and Frank Co. vs. Cromption Bros (1925) Point decided is Two firms entered into a written contract for the sell and purchase of tissue paper the agreement contained a clause to the effect that this arrangement is not, nor is this memorandum written, goods were not delivered, the buyers brought an action for non-delivery. It was held that there is no contract as the parties never intended to create leglrealationship. 2

3. Consensus-ad-idem; the minds of both the parties must be ad-idem. In other words, the tow parties must have agreed about the subject matter of the contract at the same time and in the same sense. EX: A, who owns two horses named Rajhans and Hansraj, is selling horse Rajhans to B.B thinks he is purchasing horse Hansraj.There fore no consensus ad idem and consequently no contract. 4. Free Consent (Permission or Willingness); an agreement must have been made by free consent of the parties. Consent may not be free either on account of mistake in the minds of the parties or an account of the consent being obtained by some unfair means like coercion, fraud, misrepresentation or undue influence. In case of mutual mistakes, the contract would be void, while in case the consent is obtained by unfair means, the contract would be void able. CASE: RANGANAYAKAMA (vs.) ALWAR CHETTY 5. Competency of parties: The parties to the agreement must be competent to contract. If either of the parties to the contract is not competent to contract the contract is not void. According to sec11, following are the persons who are competent to contract. a) Who are of the age of majority according to the law to which they are subject? b) Who are of sound mind c) Who are not disqualified from contracting by any law to which they are subject? 6. Lawful object; the object of an agreement must be lawful. Object has nothing to do with consideration. It means the purpose or design of the contract. Thus, when one hires a house for sue as a gambling house; the object of the contract is to run a gambling house. The object of the contract is to run a gambling house. The object is said to be unlawful ifa) b) c) d) e) It is forbidden by law, It is of such nature that if permitted it would defeat the provision of any law, It is fraudulent. It involves an injury to the person for property of any other; The court regards it as immoral and opposed to public policy.

7. Law full consideration; All contracts must be supported by consideration. Gratuitous promises are not enforceable by law. An agreement made for an unlawful consideration is void. Lawful consideration requires both, the presence of consideration and the lawfulness of consideration. The consideration may be past, present, or future. Consideration must be real. The consideration should also be real. 3

8. Certainty and possibility of performance; the terms of the contract must be precise and certain. It cannot be left vague. A contract may be void on the grounds of uncertainty. EX. A agress to sell to B a hundred tons of oil. There is nothing whatever to show what kind of oil was intend. The agreement is void for uncertainty. EX: A agrees with B to discover treasure by magic. it is not enforceable. 9. Agreements not declared to be void; the agreement must not have been declared to be expressly void. Agreements mentioned in Sec24-30 have been expressly declared to be void. They include agreements in restraint of marriage, agreements in restraint of legal proceedings, agreements in restraint of trade and agreements by way of wager. 10. Legal formalities; an oral contract is a perfectly valid contract, except in those cases where writing, registration, etc. is required by some statue. In India, writing is required in cases of sale, mortgage, lease and gift of immovable property, negotiable instruments, memorandum and articles of association of a company, etc. Registration is required in cases of documents. Coming within the scope of sec 17 of the Registration Act. EX: Time barred debt a promissory note with inadequate stamps. Therefore, all the elements mentioned above must be present order to make a valid contract. If any one of them is absent, the agreement does not become a contract. Void and Voidable Contracts; Void Contract; A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable. It is a contract without any legal effects and is a nullity. A contract may be valid at the time when it is made but, it may become void subsequent to its formation. Thus, a contract with one who had been an alien fried, but later on becomes an alien enemy would be a case of a void contract. EX: When a war breaks out between the importing country and the exporting country. Voidable Contract: An agreement which is enforceable by law at the option of one or more of the parties thereto, but not at the option of other or others is a voidable contract. A contract is said to be voidable where the consent to a contract is not a free or genuine consent and it would be open to the party, whose consent has been so obtained to avoid the contract, if he so desires. EX: A promises to sell his car to B for Rs.2, 000.His consent is obtained by use of force. The contract is voidable at the option of A. He may avoid the contract or elect to be bound by it. Distinction between Voidable Contract and Void Contract: 1. A valid agreement has from the very beginning, no legal effects. It is enforceable at law. A voidable contract is one which one of the parties may affirm or reject at his option. It is void and enforceable till it is repudiated or rescinded. 4

2. The defect in the case of voidable contract is curable and may be condoned. But, a void agreement is void and its defects are incurable. 3. In the case of a void agreement, even the third party cannot acquire any right from person claiming under such contract while in the case of a voidable contract, a third party can acquire a valid title from a person claiming under such a contract. 4. Since a void agreement is unenforceable at law, there does not arise any question of compensation on account of the non-performance of the agreement. But in case of a voidable contract, a person is entitled to compensation for loss or damages suffered by him on account of non-performance of the contract. 5. A voidable contract does not affect the collateral transaction. But, where the agreement is void on account of illegality of the object, the collateral transaction will also become void.

OFFER:
An offer is a proposal by one party to another to enter into a legally binding agreement with him. A person is said to make a proposal. When one person signifies to another his willingness to do or to obtain from doing anything with a view to obtaining the assent of that to such act or abstinence-Sec 2(a). The person making the proposal is called the proposes or offer or and the person to whom the proposal is made is called the offence. Eg. A offers to sell his motorcycle to B for 3000/- B agrees to pay A 3000/- for the motor cycle. Here A is called offeror or promisor and B the offeree or promise. How an offer is made; An offer may be either express or implied from the conduct of the parties. An Express Offer is one which may be made by words spoken or written. Thus, where A offers to sell his pen to B for 10/- it is an express offer. An Implied Offer is one which may be gathered from the conduct of the party or the circumstances of the case. Thus, stepping into a local bus & consuming eatables at a self service restaurant, both create implied promises to pay for the benefits enjoyed. To Whom an Offer can be Made:An offer may be specific or general. Where an offer is made to a definite person or body of persons, it is called a Specific Offer. A Specific offer can usually be accepted only by the person or persons to whom it is made. On the other hand, when an offer is addressed to the whole world, it is called a General Offer. A general offer can be accepted by any one. The leading case on this point is

CARILL (vs.) CAR BOLIC SMOKE BALL Co. (1893) Facts- A Carbolic Co advertised in a news paper, a reward of 100/- to anyone who contracted influenza after taking its medicine. The plaintiff Mrs. Carill used the medicine and still contracted influenza. Held- she could recover the amount as she has accepted the offer. Points decided1. An offer may be made to the world at large in general. 2. A contract is made only with that person who comes forward and performs the conditions of the offer. 3. In a general offer, the communication of acceptance is not necessary.

Essentials of a valid offer;

1. 2. 3. 4. 5. 6. It must be capable of creating legal relations It must be certain, definite and not vague. It must be communicated to the offeree It must be made with a view to obtaining the assent of the other party. Special terms or conditions in an offer must also be communicated. It should not contain a term, the non-compliance of which would amount to acceptance. 7. Lapse of an offer. 8. Invitation to offer is not an offer. 9. Cross offers counter offers. 10. Offer may be expressed or implied. 1. Offer must be capable of creating legal relations: The offeror must intend the creation of legal relations. He must intend that if his offer is accepted, a legally binding agreement shall result. Eg. A accepts an invitation to dine at Bs place on a certain date but fails to turn up on the appointed date. A cannot be sued for breach of a contract, because in contracts regulating social or domestic arrangements, the presumption is that parties do not intend legal consequences to follow form the breach of a contract. 2. Offer must be certain, definite and not vague: No contract can come into existence if the terms of the offer are vague and indefinite. To constitute a valid agreement, it is essential that the proposal must be so certain, that the rights and obligations of the parties arising out of the contract can be exactly fixed. The Leading Case-Taylor vs. porting ton (1855) A agreed to take Bs house on rent for three years at the rent of 85 per annum provided the house was put into through repair and the drawing rooms were decorated to present style. It is a vague term, because the term present style may mean one thing to A and another to B.Hence,the agreement was void on the ground that the terms of offer were vague and uncertain. Point decided is when the terms of an offer are uncertain and vague agreement is void. 6

3. Offer must be communicated to the offeree; There can be no offer by a person to himself. It must always be communicated to the offeree. If there is no communication of an offer, there is no acceptance resulting in the contract. Thus, if A writes a letter to B offering to sell his watch for 200/- but never post the letter and keeps it in the pocked, it is not an offer and B can never accept it. Further, a person cannot accept an offer which he does not know has been made. If B had found As lost dog, but had not seen the advertisement offering the reward and had proceeded to return the dog to out of goodness of heart, B would not able to claim the reward, since he could not held to accept an offer of which he was unaware. The Leading Case Lalman Shukla (vs). Gauri Dutt -1913 D sent his servant P to trace his missing nephew sent his servant P to trace his missing nephew in the meantime announced a reward for providing information about the missing boy.P, in ignorance of the announcement traced the boy and informed D.P later on came to know of the reward and he claimed it. His claim was dismissed on the ground that he was ignorant of the offer. It was further held that it was the duty of the servant to search for the boy. Point decided is offer must be communicated and there can be no acceptance unless there is knowledge of the offer. 4. Offer must be made with a view to obtaining get the assent (acceptance) of the other party:- An offer must be distinguished from mere expression of intention. An offer or proposal to do or obtain from doing anything must make with a view to obtaining the assent of the other party to whom offer is made. Mere enquiry is not an offer. CASE: HARRIES (vs.) NICKERSON: N advertised in the newspaper to effect sale of his goods on a particular day at a particular place travelled a long distance to bid for the things. On arrival, he found that the sale was cancelled. He sued N for breach of contract. It was held that advertisement was merely expression of an intention and not an offer which could be accepted by travelling to the place of indented sale. 5. Special terms or conditions in an offer must also be communicated: The offeror is free to lay down any terms and conditions in his offer,and if the other party accepts the offer then he would be bound by those terms and conditions.The important point is that there are some special terms and conditions they should also be duly communicated. CASE-PARKER (vs.) SOUTH EASTERN RAILWAY CO (1877) P deposited his bag at the cloak room at a railway station and received a ticket for containing on its face the words see back. On the back of the ticket there was a condition that, the company will not be responsible for any package exceeding the value of to 10.A notice to the same effect was hung up in the cloak room.Ps bag was lost and he claimed the actual value of the lost bag,24,10s.The claim was negative and done only10 was awarded. That P did read the conditions was his fault as the railway company had done what was reasonably expected of it. 7

6. Offer should not contain a term the non-compliance (with act reply) of which th would amount to acceptance:- one cannot say while making the offer that if the offer is not accepted before a certain date, it will be presumed to have been accepted. Ex. A writes to B, I offer to sell my house for 40,000/-. It I do not receive a reply by Monday next, I shall assume that you have accepted the offer. There will be no contract if b does not reply. 7. Lapse of an offer: - An offer lapses: a) If either offeror or offeree dies before acceptance b) If it is not accepted within 1) the specified time, or 2) a reasonable time, if no time is prescribed. What is a reasonable time depends on the circumstances. c) If the offeree does not make a valid acceptance, eg makes a counter offer or conditional acceptance. 8. An invitation to offer is not an offer: An offer must be distinguished from an invitation to treat or as it is sometimes called an invitation to offer. In the case of an invitation to offer, there is no intention on the part of the person sending out the invitation to certain the assent of the other person to such invitation. His aim is to merely circulate information if his readiness to negotiate business with anybody, who, an such information comes to him. Such invitations are not offers in the eyes of law and do not become promises on acceptance. The display of goods in a shop with price tags attached is an invitation to offer. Catalogues containing description of goods held for sale at the prices quoted are not offers. A price list is not an offer to sell the goods at the listed prices. It is an attempt to induce offers and not an offer in itself. The display of goods on the shelves of the self service shop is merely an invitation to offer, and the customer makes an offer to buy when he carries the goods to the cashier. The leading case Harvey Vs Facey-1893 Harvey sent a telegram to facie stating will you sell us the estate of Bumper Hall pen for sum of 900 against. Harvey sent another telegram to facie stating we agree to buy Bumper Hall pan for sum of 900 asked by you. Please send us your title deeds in order that we may get early possession. But facie did not send any replay to the last telegram sent by Harvey. Hence Harvey filed case against Facie claiming the Bumper Hall pen estate. The court held that there was no concluded contract. 9. Cross offers counter offers: Cross offers: Identical offers made by person in ignorance of each other are known as cross offers. They do not make a contract. EX: H wrote to T offering to sell 800 tons of iron at 69s. On the same day T wrote to H offering to buy 800 tons at 69s.This is a cross offer and hence does not constitute a contract. 8

Counter Offer: - A counter offer is a rejection of the original offer and making a new offer. This new offer is a counter offer. A person who makes a counter offer and subsequently changes his mind and wishes to accept the original offer cannot do so as the first offer lapses and he cannot treat it as still offer. The leading case: Hyde Vs Wrench -1840 A offered to sell a farm for 1,000. X said he would give 950.A refused and X then said he would give 1, 000, and when he decided to his original offer tried to obtain specific performance. Held there was no contract as Xs offer to pay 950 was a refusal of the offer and a counter-offer; and that when he later said he would pay 1,000,he was making a new offer, which would have to be accepted by A before a binding contract could come into existence. Point decided; - A Counter offer is a rejection of original offer. 10. Offer may be expressed or implied. A proposal can be made either in words spoken or in words written. Such proposal is called an express proposal. It can also made by the action of the parties. Such proposal is known as implied proposal.

Revocation of offer:
Q. When does an offer come to an end? A. Revocation (come back) of offer arises only if these has been no acceptance of the after by the time of revocation. An offer may come to an end by revocation or lapse or rejection. According to sec6 of the Act a proposal may be revoked in any of the following ways:Modes of revocation of offer:1. By notice of revocation. 2. By lapse of time. 3. By non-fulfillment of condition precedent 4. By death or insanity. 5. By counter offer. 6. By the non-acceptance of the offer according to the prescribed or usual made. 7. By subsequent illegality A. By notice of revocation: offer may be revoked by a communication of a notice of revocation by the ofference to the other party. An offer made in writing may be revoked by words of mouth. The notice of revocation may not always be express. A notice of revocation to be effective must be communicated to the offeree. B. By lapse of time: A proposal will come to an end by the lapse of time prescribed in such proposal for its acceptance or, if no time is so prescribed, by the lapse if reasonable le time. What is a reasonable time is a question of fact depending upon the circumstances of each case. 9

C. By non-fullment of condition precedent; A proposal is revoked when the acceptor fails to fulfill a conditions precedent to the acceptance of the proposal. Thus X may offer to sell certain goods to Y on a condition that Y pays a certain amount before a certain date. The proposal is revoked if Y fails to pay the required amount within given time. D. By death or insanity; A proposal is revoked by the death or insanity of the proposer if the fact of this death or insanity comes to the knowledge of the acceptor before acceptance. E. By counter offer; An offer comes to an end when the offeree makes a counter offer. Where an offer is accepted with some modification in the terms of the offer or with some other condition not forming part of the offer, such qualified acceptance amounts to a counter offer. An offer once rejected cannot be revived. Ex. An offer to sell his house to B for 1000/- B replies offering to pay 950/- A refuses subsequently, B writes accepting the original offer has lapsed. F. By the non-acceptance of the offer according to the prescribed or usual made: The offer will also stand revoked if it has not been accepted according to the made prescribed. G. By subsequent illegality: An offer lapses if it becomes illegal after it is made and before it is accepted. Thus, where an offer is made to sell to bag of wheat for 2500/- and before it is accepted, a law prohibiting the sale of wheat by private individuals is enacted; the offer comes to an end.

10

CONSIDERATION
Introduction / Meaning: whenever a party to an agreement promises to something, he must get something in return. This something in return is called consideration. It may be used in the sense of Quid-Proque i.e., something in return. An agreement without consideration, subject to certain exceptions is void. Consideration may not be always in the form of money, it may take form of money, goods, services, a promise to marry etc. Definitation: Sec2 (d) When at the desire of the promisor, the promise any other person has done or abstained from during something, such as or promise is called consideration for the promise. Essentials of valid consideration: 1. It must more at the desire of the promisor 2. It may move from the promisse or any other person 3. It may be past, present or future. 4. It need not be adequate 5. It must be real 6. It must be lawful 7. It must be something which the promisor is not already bound to do. 8. There should be one consideration for one agreement 9. Consideration is very essential in every contract 10. Consideration may be any form: 1. It must move at the desire of the promisor: the first essential characteristic of consideration is that the act or abstinence must have been done at the desire of the promisor. It follows that any act performed at the desire of a third party, cannot be a consideration. The desire of the promisor may be express or impled. CASE: DURGA PRASAD (VS) BALDEO (1880) B spent some money on the improvement of a market at the desire of the collector of the district.In consideration of this D who was using the market promised to pay some money to B.Held,the agreement was void being without consideration as it had not moved at the desire of D. 2. It may move from the promissee or any other person: the second important feature of the definition of consideration in Sec2 (d) is that the act which is to constitute a consideration may be done by the promise or any other person. It means that as long as there is a consideration for a promise, it is immaterial who has given it. It may have move from the promise, or if the promisor has no objection, form any other person. The leading case Chinnaya(vs) Ramaya (1982) An old lady, by a deed of gift, made over certain property to her daughter D, under the direction that she should pay her aunt (sister of the old lady), a certain sum of money annually. The same day D entered into an agreement with P to pay her the agreed amount. 11

Later, D refused to pay the amount on the plea that no consideration had moved From P to D. Held was entitled to maintain suit as consideration had moved from the old lady, sister of P, to the daughter Point decided consideration may move from the promise or any other person 3. Consideration may be past present or future: consideration may be past, present or future . Past consideration: when the consideration for a present promise was given before the date of the promise, it is said to be past consideration. Present consideration: when the consideration for a promise is given simultaneously with the promise, it is called present consideration. Future consideration; A future or executary consideration is a promise to do or give something in return in future for the promise then made. It is also called a promise for the promise. 4. It need not be adequate; It is no where laid down that consideration should be adequate to the promise. What is required is that there must be some consideration for the promise. Adequacy is for the parties to decide at the time of making the agreement. Inadequacy of consideration is no ground for refusing the performance of the promise, unless it is evidence of fraud. It should be of some value in the eyes of law. Even a smallest consideration is sufficient provided it has some value. If a man gets what he contracted for the court will not inquire whether it was an equivalent to the promise which he gave in return. EX: A agrees to sell his watch worth Rs.1000 to B for Rs.10.The agreement is contract not withstanding the inadequacy of consideration, provided there exist free consent. 5. Consideration must be real: Though consideration need not be adequate, if it must be real and not illusory. Thus, a promise to do that which a person is by law bound to do, does not amount to consideration. Consideration has also to be competent. If it is physically impossible, vague do legally impossible, the contract cannot be enforced. Thus, a promise by a man to make two parallel lines meet is no good consideration. A. Physical impossibility: EX: P promises to G to run at a speed of 200 kilometers an hour if Q pays him Rs.5000. Ps promise is physical impossible of performance B.Legal impossibility: X who owes Rs.1000 to Y promises to pay Rs.200 to Z,the servant of Y,who in return promises to discharge X from the debt. This is legally impossible because Z cannot give discharge for a debt due to Y, his master. 12

C.Uncertain consideration: Ex: A engages B for doing a certain work and promises to pay a reasonablesum.There is no recognized method of ascertaining the reasonable remuneration. The promise is uncertain and hence unenforceable .D.Illusory consideration: EX: Two of the crew of a ship deserted it half way through a voyage. The captain thereby promised to divide the salary of the deserters among the rest of the crew if they worked the vessel home.Held; they could not recover the amount as the consideration was illusory. They were already under an obligation to bring the vessel home. 6. Consideration must be lawful; the consideration for an agreement must be lawful. An agreement is void, if it is based on unlawful consideration. The consideration of an agreement is lawful unless: It is forbidden by law; It is of such a nature that if permitted; it would defeat the provision of any law; It is fraudulent Involves or implies injury to the person or property of another The court regards it as immoral opposed to public policy.

7. It must be something which the promissory is not already bound to do: Consideration must be something more than what the promise is already bound to do. In other words a promise to do what one is already bound to do, either by general law or under an existing contract, is not a good consideration for a new promise. 8. There should be one consideration for one agreement. Every agreement should have one consideration. Demanding extra consideration or second consideration from the same agreement becomes invalid. Similarly one agreement should be based on one codsideration.Two or more agreements cannot be based on a single consideration. CASE: RAMACHANDRA CHINTAMANI (VS) KALU RAJU(1877). In this case, an Advocate agreed to complete a case for a consideration of Rs.1000.Later he demanded extra consideration for obtaining the judgment in a short period for which the client agree but the court of law held that the second consideration cannot be claimed. 9. Consideration is very essential in every contract: Consideration is a very important feature in every contract. A promise cannot become an agreement without consideration and an agreement cannot become a contract without a lawful consideration. 10. Consideration may be any form: Consideration is denoted as something in the legal definition. Later it is explained as an act or abstinence or a promise.However,it may be any form such as payment of cash, delivery of goods, doing something, not doing something, making a profit, bearing a loss, rendering services,. 13

Q) A stranger is consideration can sue, but a stranger to contract

cannot sue comment?

A) Stranger to a Contract: It is a general law of contract that a person who is not a party of the contract cannot sue on it. This means that unless there is a privity of contract, a party cannot sue on a contract. Privity of contract means the relationship existing between the parties to a contract. It means that no one but, the parties to a contract can be bound by it or be entitled under it. Therefore, it is clear that a stranger to a contract cannot sue for the contract. Dunlop Pneumatic Tyre Co. Vs Selfridges & Co. 1915 Point decided is: a contract cannot be enforced by a person who is not a party to it, even though it is made for his benefit.

Stranger to consideration:
A stranger to a contract cannot sue on it, but a stranger to consideration can sue for it consideration. If the contract is made for the benefit of the stranger as if the consideration is falling on the stranger. A stranger can sue for consideration in the following cases: 1. In case of trust, the beneficiary may enforce the contract; even though he is a stranger to the contract, creating trust. A stranger can sue when he is beneficiary under an obligation, amounting to a trust, arising out of the contract. Case; Amirullah vs. Central Govt. 1959 A sent an ensured parcel to B by post. The parcel was misplaced and did not reach the addressee. B filed a suit for compensation for non-delivery of the parcel. Point decided; it was held that B was entitled to have compensation as a trust had been created in favour of the addressee. 2. Where the provision is made in a marriage settlement. Where an agreement is made in a connection with marriage and a provision is made for the benefit of a person, he may take advantage of that agreement, although he is not a party to it. Case; Khwaja Mohd Khan vs. Hussaini Begum1910: D agreed with ps father that he would pay to P, 500/- p.m. as kharh-i-pandon, if P marries ds son. The allowance was stopped sometime after the celebration of marriage. P sued D, her father-in-law, for the arrears of allowance. Point decided; it was held that P could recover the money, even though she was not a party to the contract. 3. Where a provision is made in a partition or family arrangement for maintenance, or marriage expenses of female members, such members, though not parties to the agreement, can sue, for the agreement consideration. 14

Case Daropti vs. Jaspat Rai 1905 Bs wife left him because of his cruelty. He then executed an agreement with her father promising to treat her properly, or if he is failed to do so, to pay her monthly maintenance and to provide her with dwelling subsequently, she was again treated by D and also driven out. Point decided; she was entitled to enforce the promise made by D to her father. Case Shuppuammal vs. Subramanyam 1910 Two brothers, in a partition deed, agreed to pay 300/- in equal shares to their mother for maintenance. The brothers subsequently refused to pay the amount. Point decided; on a suit, it was held that, the brother could enforce the promise, even though she was a stranger to the contract. 4. Where a charge is created in favour of a stranger on a specific immovable property, a stranger to a contract can sue for that property. 5. Where the promisor by his conduct, created privity of the contract with the stranger, the stranger can sue for consideration. Ex; if a admits to C that he had received money from B for payment to C, he constitutes himself as the agent of C, who can successfully recover the amount from A. 6. Contract entered into by an agent can be enforced by the principal.

Q) No consideration- No contract explain and give exceptions

When a party to an agreement promises to do something, he must get something in return. This Something in return is called consideration. Note; Introduction and Definition same as for consideration. No Consideration No Contract Importance of consideration: Consideration is the foundation of every contract. It is the sign and symbol of every bargain. A promise without consideration is null and void. It is called a naked promise or a Nudun-Pactum. According to the meaning and definition of consideration, whenever a party promises to do something, he should get something in return, where this something in return can be called as consideration. Therefore, from the above illustrations, it is clear that without consideration, there wont be any contract. So, one can say that No consideration-No contract. Sec 25 of ICA supports this context and provides that agreement without consideration is void. No consideration-No contract- Exceptions: Every agreement, to be enforceable at law, must be supported by void consideration. An agreement made without consideration is void and enforceable, except in certain cases. Sec 25 specifies the cases where an agreement even though made without consideration will be valid. They are as follows. 15

1. Natural Love and affection Sec 25/11: an agreement made without consideration will be valid if it is in writing and registered and is made on account of natural love and affection between parties standing in a near relation to each other. An agreement without consideration will be valid provided: a) It is expressed in writing b) It is registered under the law for the time-being. c) It is made on account of natural love and affection. d) It is between the parties standing in a near relation to each other. Ex; A from natural love and affection, promises to give his Sons, Rs. 1000/- A puts his promise to B in writing and registers it. This is a valid contract. Ex. A by registered agreement, on account of love and affection, for his brother B, undertook to discharge a debt due by B to C. actually, A did not fulfill the promise. So, B paid the debt. It was held that B could recover the amount of debt from A. Venkatswamy vs. Ranga Swamy 1903 Point decided; agreement made on account of natural love and affection. But not supported by consideration is valid. Compensation for services rendered (Sec 25(2); an agreement made without consideration may be valid, if it is a promise to compensate wholly or in part, or person who has already voluntarily alone something for the promisor. To apply this rule, the following essentials must exist. The act must have been done voluntarily. It must be a legal obligation of the promisor The promise must be in existence at the time when the art was done. Ex; A finds Bs purse and gives it to him. B promises to give A, 500/-. This is a contract. 2. Time-barred debt; A promise to pay a time-barred debt is also enforceable. But, the promise must be in writing and must be signed by the promisor or his agent. This promise may be to pay the whole or part of the debt. An oral promise to pay a time-barred debt is enforceable. Ex; D owes C, Rs. 1000/- but the debt is barred by the limitation act. D signs a written promise to pay C Rs.500 on account of the debt. This is a contract. 3. Completed Gifts; no consideration No contracts shall not affect validity on any gifts, actually made between the donor and the donee. Thus, if a person gives certain properties to another according to the provisions of the Transfer of property Act, he cannot subsequently demand the property back, on the ground that there was no consideration. 4. Agency; it is given in sec 185 which says that no consideration is needed to create an agency. Ex. A father choosing his minor son as his agent without paying commission or salary is a valid agency. 16

Capacity of Parties Minor

Q) Parties to a contract must be competent to contract-explain. (OR) Q) Discuss the provisions of law relating to contract by minor? A) Capacity means competence of the parties to enter into a valid contract. One of the essential conditions which make an agreement as a contract is that all the parties to it must have capacity to enter into a contract. Sec 11 of the contract act deals with the competence of parties and provides that every person is competent to contract who is of the age of majority according to the law and who is of sound mind, and is not disqualified from contracting by any law to which he is subject. According to sec 11, the following persons are incompetent to contract Minor Persons of unsound mind Persons disqualified by any law to which they are subject. Contracts entered into by persons mentioned above are void. Minor. An infant or a minor is a person who is not a major. According to the Indian majority Act, 1875 a minor is one who has not completed his /her 18 years of age. A minor has an immature mind and cannot think what is good or bad for him. Minors are often exploited and their properties stolen. As such, he must be protected by law from any exploitation or ill-design. Rules regarding minors agreement; Agreement void-ab-inito No ratification Minor can be a promise or beneficiary. No estoppel against minor No specific performance. Liability for mistake No insolvency. Partnership. Minor can be an agent. Minor cannot bind parent or guardian. Joint contract by minor and adult. Liability for necessaries. 1. Agreement void-ab-intio; according to sec11, it made it perfectly clear that a minor is not competent to contract and that a contract by a minor is void-ab-inito. Mohri Bibi vs. Dharmodas Ghose 1903: Point decided; an agreement with a minor is absolutely void 17

Facts of the case; A, a minor, borrowed 20000/- from B and as a security for the same, executed a mortgage in his favour. He became a major a few months later and filed a suit for the declaration that the mortgage executed by him during his minority was void & should be cancelled. It was held that a mortgage by a minor was void & B was not entitled to repayment of money. 2. No Ratification; an agreement with minor is completely void. A minor cannot ratify the agreement even an attaining majority because a void agreement cannot be ratified. A person, who is not competent to authorize an act, cannot give it validity y ratifying it. Thus, where a minor borrowed a sum of money by executing a single promote for it and after attaing majority, executed a second promote in respect of the original loan plus interest thereon, a suit upon the second promote is not valid. 3. Minor can be a promise or a beneficiary; it a contract is beneficial to a minor, it can be enforced by law him. There is no restriction on a minor from being a beneficiary like being a payee or a promise in a contract. Thus, a minor is capable of purchasing immovable property and he may sue to recover the possession of the property upon tender of the purchase money. Similarly, a minor, in whose favour, a promissory note has been executed can enforce it. The General American Insurance Co. Ltd. vs. Madan Lal Sonu Lal. Facts of the case- X a minor insured his gooda with an insurance Co. the goods were damaged. X filed a suit for claim. The Insurance Co. took plea that the person on whose behalf the goods were insured was a minor. The court rejected the plea and allowed the minor to recover the insurance money. where a minor, by misrepresenting his age, his induced the other party to enter into a contract with him, he cannot be made liable on the contract. There can be no estoppel against a minor. In other words, a minor is not stopped from pleading his in fancy in order to avoid a contract. Facts of the case; an infant represents fraudulently that he is of age and there by induces another to enter into a contract with him. Then, in an action founded on the contract, the infant is not estoppel from setting up infancy. The court may, however, require the minor to compensate the other party on the ground of equity. This is based on the rule that a minor can have on the ground of equity. Fraudulent misrepresentation as to age by an infant will operate against him in certain cases. If a minor obtains property or goods by misrepresenting his age, he can be compelled to restore it, but only so long as the same is traceable in his possession. 4. No specific performance; a minors contract being absolutely void, there can be no question of the specific performance of such contract. A guardian of a minor cannot blind the minor by an agreement for the purchase of immovable property, so that minor cannot ask for the specific performance of the contract which the guardian had no power to enter into. 18

5. Liability for torts; a minor is liable in tort. Thus, where a minor borrowed a horse for riding only, he was held liable when he lent the horse to one of his friends, who jumped and killed the horse. Similarly, a minor was held liable for his failure to return certain instruments which he had hired and then passed on to a fried. But, a minor cannot be made liable for a breach, of contract by framing the action on tort. You cannot convert a contract into a tort to enable you to sue on infant. 6. No insolvency: A minor cannot be declared insolvent even though there is dues payable from the properties of the minor. 7. Partnership; A minor being incompetent to contract cannot be a partner in a partnership firm. But, under Sec 30 of the Indian partnership Act, he can be admitted to the benefits of partnership. 8. Minor can be an agent; A minor can act as an agent. But, he will not be liable to his principal for his act. A minor can draw deliver and endorse negotiable instruments without himself being liable. 9. Minor cannot blind parent or guardian; in the absence of authority, express or implied, an infant is not capable of binding his parent or guardian, even for necessaries. 10. Joint contract by minor and adult; in such a case, the adult will be liable on the contract, but not the minor. 11.Liability for necessaries; the case of necessaries supplied to a minor or to any person whom such minor is legally bound to support is governed by sec 68 of the ICA. A claim for necessaries supplied to a minor is enforceable at law. But, a minor is not liable for any price that he may promise and never for more than the value of necessaries. There may promise and never for more than the value of necessaries. There is no personal liability of the minor, but only his property is liable. A minor is also liable for the value of necessaries supplied to his wife. Persons disqualified from contracting by any other law; it refers to statutory disqualifications imposed on certain persons in respect of their capacity to contract; Alien enemies Foreign sovereigns and ambassadors Insolvents Convict Corporations Married Women Professional persons 19

FREE CONSENT
Consent: It means acquiescence or act of assenting to an offer. Section 31:Two or more persons are said to consent when they agree upon the same thong in the same sense. Consent is said to be free when it is not caused by 1. Coercion 2. Undue influence. 3. Fraud. 4. Misrepresenation 5. Mistake. 1. COERCION :( section- 15): Coercion means forcibly compelling a person to enter into a contract, the consent of the party is obtained by use of force or under a threat. The act defines coercion as: A. The committing or treating to commit, any act forbidden by the Indian penal code, OR B. The unlawful detaining or threatening to detain, any property, to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement. EX: X threatens to shoot Y if he does not lend him Rs.5000 and Y lends the money. It amounts to coercion. 1. Committing any act forbidden by the IPC: The IPC has forbidden the Indian citizens from committing a number of offences, like murder, suicide, kidnapping, unlawful detentions, stopping a dead body from cremation. So when a person obtained of a party to a contract by committing any of these acts, the consent is said to have been by coercion. Such agreement becomes voidable. CASE: RANGANAYAKAMMA (VS) ALWER CHETTY (1889). A young girl of 13 years was forced to adopt a boy to her husband who had just died by the relatives of the husband who prevented the removal of his body for cremation until she consented. Consequently the adoption of the boy on the ground of coercion. 2. Threatening to commit any act forbidden by IPC: If a person obtains the consent of another to a contract by threating him that an act forbidden by the IPC would be commited,it also becomes equivalent to coercion, such agreement can also be avoided on the ground of coercion. CASE: AMIRAJU (VS) SESHAMMA (1917): A person held out a threat of committing suicide to his wife and son if they did not execute a release in favour of his brother in respect of certain properties. The wife and son executed the release deed under the threat.Held,the threat of suicide amounted to coercion. 20

3. Unlawful detaining or threatening to detain any property. When a person obtains the consent of another to a contract by detaining the property of any other person unlawfully, it will also become coercion. CASE; MUTHIA (VS) MUTHU KARUPPA (1927); An agent refused to hand over the account books of a business to the new agent unless the principal released him from all liabilities. The principal had to give a release deed as demanded.Held; the release deed was given under coercion and was voidable at the option of the principal. 4. Coercion may be committed anywhere in the world: The IPC applies to Indian land only. Any offence committed outside the Indian boundaries is not punishable under IPC.But coercion committed either in India or outside India can make the agreement voidable if a suit is filed in India. 5. Coercion may be direct or indirect: Coercion may be committed by one party of the contract against the other party or through a third party.Therefore, it can be director indirect. But as per British law of contracts it should be direct only but not indirect. It is known as Duress under that law.

2. Undue influence (section -16)

Undue influence is the improper use of any power possessed over the mind of the other contracting party. It is also referred to as EQUITABLE FRAUD. It creates a mental or moral fear as against physical fear created by coercion. ESSENTIALS: 1. The relation subsisting between the parties should be such that one of them is in a position to dominant the will of the other, and 2. The dominant party should have used that position to obtain an unfair advantage over the other. PRESUMPTIONS: 1. Where he holds a real or apparent authority over the other. 2. Where he stands in a fiduciary relation (a position of active confidence)to the other. 3. Where he makes a contract with a person whose mental capacity is temporarily or permanently affected by reason of age, illness or mental distress or bodily distress. Thus, the following relationships are said to raise a presumption of undue influence. 1. Parent and child. 2. Doctor and patient. 3. Lawyer and client 4. Guardian and ward. 5. Trustee and beneficiary. 21

Ex:A having advanced money to his son,B,during his minority, obtains upon Bs coming of age, by misuse of parental influence, a bond from B for a greater amount than the sum due in respect of the advance. A employs undue influence. CASE: RANEE ANNAPURNI (VS) SWAMINATH (1910). A poor Hindu widow was persuaded by a money-lender to agree to pay 100 percent rate of interest on money lent by him to her. She needed the money to establish her right to maintenance.Held, it was a case of undue influence and the court reduced the rate of interest. The following conditions are to be satisfied to prove that a consent in a contract was obtained by undue influence. 1. Existence of previous relationship. 2. One party standing in dominating position. 3. Taking undue advantage. 4. Agreement appearing to be unreasonable. 5. Agreements with pardanashin women.

3. FRAUD (section-17):
Fraud means and includes any of the following acts committed by a party to a contract. 1. The suggestion, as to a fact, of that which is not true, by one who does not believe it to be true. 2. The active concealment of a fact by one having knowledge or belief of the fact. 3. A promise made without any intention of performing it. 4. Any other act fitted to deceive 5. Any such act or omission as the law specially declares to be fraudulent. Therefore, the following acts are considered as fraudulent acts under the law of contracts. 1. False suggestion: When a person gives untrue statement about the subject matter of the contract knowing that his statement is untrue and obtains consent of other party, the consent can be said to have been obtained by fraud. Ex: A person quoted the age of his son as 24 years while entering into a marriage agreement where as the age was more than 40 years.Therefore.the brides father filed a suit to avoid the agreements on the ground of fraud. The court of law allowed it. 2. Active concealment of facts: When a person obtains the consent of another to a contract by hiding some important facts about the subject matter, which are very essential for giving consent, it also become fraud. 3. A promise made without any intention of performing it: When a person obtains consent of another person to an agreement promising to do something where as he does not have any intention to do it, it also to be fraud. Ex:An English merchant promised his personal secretary, an Indian lady that he would marry her. Later she came to know that he was already married in England. So she filed a suit to avoid the agreements on the ground of fraud. 22

4. Silence is not a fraud: Mere silence of a person regarding facts of a contract will not become fraud except in the following two circumstances. 1. When the silence is equivalent to speech, which is equivalent to fraud. 2. When it was the duty of the person to speak out but he did not do so. EX; A was selling a mad horse in a village market and his son B came to buy the horse.It becomes the duty of A to disclose the defect of the horse to B to whom he stands in a fiduciary relation. If he does not speak out, it becomes fraud. 5. Any act specially declared as fraud: Various laws in India have declared different acts as fraudulent, If a person does any one of such acts, to obtain consent of a party to a contract, it becomes fraud such as: Issue of shares by directors of a company without issuing prospectus. Selling immovable property without disclosing all the facts about the property. Taking up a life insurance policy hiding any information about health of the insured. Entering into marriage agreements, hiding vital facts about the bride or bride groom. CONSEQUENCE OF FRAUD: 1. He can rescind the contract. 2. He can sue for damages.

MISREPRESENTATION (section-18):
It means misstatement of a fact material to the contract. It is a false representation made innocently, before or at the time of the contract, without any intention of deceiving the other party. Consent to an agreements obtained by misrepresentation is not real and free. Misrepresentation means and include; 1. When a person positively asserts that a fact is true when his information does not warrant it to be so, though the believes it to be true. 2. When there is any breach of duty by a person which brings an advantage to the person committing it by misleading another to his prejudice. 3. When a party causes, however innocently, the other party to the agreement to make a mistake as to the substance of the thing which is the subject of the agreements. REQUIREMENTS OF MISREPRESNTATION: 1. It must be a representation of a material fact 2. It must be made before the conclusion of the contract with a view to inducing the other party to enter into the contract. 3. It must be made with the intention that it should be acted upon by the person to whom it is addressed. 4. It must actually have been acted upon and must have induced the contract. 5. It must be wrong but the person who made it honestly believed it to be true. 6. It need not be made directly to the plaintiff. 23

EX: A told his wife within the hearing of their daughter that the bridegroom proposed for her was a young man. The bridegroom, however,was over 60 years. The daughter gave her consent to marry him believing the statement by her father.Held,the consent was vitiated by misrepresentation and fraud>

Mistake
The term mistake is used in law of contract to mean-improper understanding about the agreement. When an agreement is made with a mistake regarding terms and conditions of agreement, there will be no consent between the parties. So the agreement becomes totally void. The mistake can be reclassified into various types as follows. I.MISTAKE OF LAW A. Indian law. B.Foregin law II.MISTAKE OF FACTES A. Bilateral mistake. 1. Subject matter a.Existance. b.Identity. c.Quality. d.Quantity. e.Price. 2. Possibility of performance. a. Physical possibility. b.Legal possibility. B.Unilaterl mistake

24

Legality of Object and Consideration

According to Sec 23 of ICA, an agreement of which the object or consideration is unlawful is void. Object means purpose or design of the contract. Both, the object and consideration of agreement must be lawful, otherwise, the agreement would be void. The word lawful means permitted by law. Sec 23 of the contract Act, speaks of 3 things; 1. Consideration for the agreement 2. Object for the agreement. 3. Agreement. The consideration or the object of an agreement is unlawful in the following cases; 1. 2. 3. 4. 5. 6. If it is forbidden by law. If it is of such a nature that if permitted, it would defeat the provisions of any law. If it is fraudulent. If it is involves or implies injury to the person or property of another. If the court regards it as immoral. If the court regards it as being opposed to public policy.

1. It is forbidden by law; if the consideration or object for a promise is such as is forbidden by law, the agreement is void. Te agreement is forbidden by law, if the legislature penalizes if or prohibits it. It is illegal and cannot become void even if the parties act, according to such agreement sec 26, 27, 28, and 30 of the contract Act deals with cases where the consideration or object of an agreement is considered unlawful. Ex; A promises to obtain for B, an employment in the public service and B promises to pay 100/- to A. the agreement is void as the consideration for it is unlawful. 2. If it is a such a nature that if permitted, it would defeat provisions of any law. A contract which seeks to exclude the application of a statutory provision to the parties is not valid. An agreement to give an annual allowance to the parents of an adopted Hindu boy in order to induce them to consent to the adoption is void. Ex; As estate is sold for arrears of revenue under the provisions of an Act of the legislature by which the defaulter is prohibited from purchasing the estate B, upon an understanding with a, becomes the purchaser, and agrees to convey the estate to a upon receiving from him, the price which B has paid. The agreement is void as it renders the transaction, in effect, a purchase by the defaulter and would so defeat the object of the law. Mohan vs. Narain 26

3. If it is fraudulent; agreements which are entered into to promote fraud are void. Thus, an agreement for the sale of goods for the purpose of smuggling them out of the country is void and the price of the goods so sold, cannot be recovered. Ex. A, B and C enter into an agreement for the division among them of gains acquired to be acquired by them by fraud. The agreement is void as its object is unlawful 4. If it involves or implies injury to the person or property of another; the object consideration of an agreement will be unlawful if it tends to injure the person or property of another. Thus, an agreement to pull down another house in unlawful. The word injury means Criminal or wrongful harm loss which ensures to a trader as a result of competition by a rival trader is not injury within the meaning of this clause. 5. If the court regards it as immoral; where the consideration or object of an agreement is such that the court regards it as immoral, the consideration is void. The word immoral a means inconsistent with what is right. Rent due in respect of a flat let to a prostitute for the purpose of her trade cannot be recovered. Similarly, money lent for the purpose of assisting the borrower to visit both and bring in prostitute cannot be recorded in a court of law. Ex. P advanced money to D, a married woman to enable per to obtain a divorce from her husband and P agreed to marry her as soon as she obtained a divorce. It was held that P was not entitled to recover back the amount as the agreement had for its object the divorce of D from her husband. Bai Vijli(vs) Nansa Nagar 1885 If the court regards it as being opposed to public policy; an agreement is unlawful if the court regards it as opposed to public policy. A contract which is opposed to public policy cannot be enforced by either of the parties to it. Any agreement which tends to promote corruption or injustice or is against the interest of the public is considered to be opposed to public. 6. Agreements Opposed To Public Policy; A. Trading with enemy B.Stifling prosecutions C.Maintenance and champerty D.Traffic relating to public officers E.Agreements tending to create interest opposed to duty F.Marriage and brokage agreements G.Agreements tending to create monopolies H.Agreements to influence elections to public officers I. Agreements in restraint of personal liberty J.Agreements interfering with marital duties. 27

1. Trading with enemy. Trading with enemy is clearly against public policy in so far as it helps the enemy to the detriment to the country. Besides it is against national honour to indulge in such acts in times of national emergency. But, where a contract is made during peace times and then war breaks out, one of the 2 things may result. Either the contract is suspended or it stands dissolved depending upon the intention of the parties. 2. Stifling Prosecutions; it is in public interest that criminals should be prosecuted and punished. Hence, an agreement to stifle a prosecution i.e., to prevent proceedings already instituted from running their normal course or to compromise a prosecution is illegal and void. It is not open to the parties to take the administration of justice out of the hands of the authorities and themselves determine what should be done. Thus, a promote executed as consideration for compounding of a compoundable offence is not void. 3. Maintenance and champerty ; Maintenance and champerty agreements are void as being opposed to public policy. Maintenance may be defined as an agreement whereby a person promises to maintain a suit in which he has no interest. Champerty is an agreement whereby a person agrees to share the results of litigation. Ex. G, an advocate entered into an agreement with his client which was embodied in his clients letter to him. The letter read, I hereby engage you with regard to my claim against the Baroda Theatres Ltd, for a sum of 9400/-. Out of the recoveries, you may take fifty percent of the amount received. The Supreme Court held that a contract of this kind was highly objectionable for a lawyer and void. 4. Traffic relating to public officers: Agreement concerning the sales of public officers is bad as they promote corruption. Sec 6(7) of the transfer of property act provides that a public office cannot be transferred nor can the salary of a public officer. Ex. A paid B, a public servant, a certain amount inducing him to retire from service, thus, is paving the way for A to be appointed in his place. The agreement was held to be void. Venkataramana(Vs) J.M. Lobo (1923) 5. Agreements tending to create interest opposed to duty; an agreement which tends to create an interest in favour of a person which would conflict with his duty is illegal on the ground that it is opposed to public policy. It is the essence of public policy that a servant must not be deterred from doing his duty. Thus, an agreement by a person is govt. service for the purchase of land situated within his circle is illegal as opposed to public policy. 6. Marriage or brokerage agreements; a marriage or brocage agreements is an agreement whereby a person promises for reward to procure the marriage of another. Such agreements are void being against public policy. Thus, if A pay B, a stranger, a certain sum of money to procure a wife for him, he cannot enforce the agreement as it is clearly against public policy. 7. Agreements tending to create monopolies; an agreement to create monopoly is void as opposed to public policy. There can be monopoly right given to one person to the exclusion of others, in matter like selling of vegetables. 28

8. Agreements to influence elections to public officers: Any agreement with voters tending to influence them by improper means and agreement with third persons to influence voters by indirect means are all invalid. Similarly, an agreement between rival candidates that one shall withdraw in consideration of a promise by the other to appoint him to office is void. Ex; A promises B, the owner of a newspaper, 500/- in consideration of the publication by B, in his news paper of false statements in regard to a candidate for election, B published them, the agreement is void as opposed to public policy. Ex. A borrowed money from a money lender and agreed that he would not without the lenders written consent, leave his job, or borrow money, dispose of his property or move from house. It was held that the contract was illegal as it unduly restricted the liberty of A. Horwood (vs) Millars Timber and Trading Co. 9. Agreements interfering with marital duties; Agreements which interference with the performance of marital duties are void, as being opposed to public policy. Thus, an agreement to lend money to a woman in consideration of her getting a divorce and marrying the lender is void.

29