Lecture 5 - Agreements considered void , Quasi contracts , Kinds of quasi cntracts , Contingent PDF

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Agreements considered void , Quasi contracts , Kinds of quasi cntracts , Contingent contract , Performance of contingent contract ....

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Agreements Expressly Declared Void Void Agreement: 

An agreement not enforceable by law is said to be void.



A void agreement does not give rise to any legal consequences and is void ab-initio (from the beginning).

Agreements Expressly Declared Void The agreements that are expressly declared to be void are as follows; 1.

Agreements in Restraint of Marriage Every individual enjoys the freedoms to marry a person of his choice. An agreement which prevents a major person from marrying is called an agreement in restraint of marriage. The law, regards marriage as the right of every person. EXAMPLES A agrees with B that she will not marry C. it is a void agreement.

2.

Agreements in Restraint of Trade

“Every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void.”

EXAMPLES A promises to pay Rs.60 lacs to B, if he will close his business. It is a void contract.

Law has given some exceptions in special situations regarding a) Seller of Good will b) Partnership Agreement c) Trade Combinations

3.

Agreements in Restraint of Legal Proceedings Every person has freedom to enforce his legal rights. If an agreement which prevents the parties to go to the court in case of breach of contract, is void agreement. It means an agreement by person cannot change the provisions of any law. EXAMPLES A promises B that if he will not go to court for a remedy of breach of a contract then A will give him Rs.1,00,000/-. This is void agreement. Exceptions: There are some Restrictions regarding the legal proceedings as well. E.g: The contract for referring the arbitrator instead of going to court is not void.

4.

Uncertain Agreements “Agreements, the meaning of which is not certain, or capable of being made certain, are void” the terms of an agreement must be clear complete and certain. EXAMPLES A agrees to sell to B a car out of 20 cars in his show room. It is not clear which car is to be sold. The agreement is void for uncertainty.

5.

Wagering Agreements Wager means a bet. A wager is an agreement to pay money or money’s worth on the happening of specified uncertain event. It is a chance of wining or losing. This chance depends on an uncertain event. Each party has equal chance to win or lose the bet. If one party wins but other does not lose, it is not a wagering contract.

Legal Implicaion: According to Section 30, wagering agreements are void. In case of breach of such agreements, nothing can be recovered through court.

6.

Agreement Contingent on impossible Events “Contingent agreements to do or not do anything depending upon happening of an impossible event, are void, whether the impossibility of the event is known or not to the parties to the agreement at the time when it is made.” EXAMPLES A agrees to pay B Rs. 5000 if he shows him a white crow.

7.

Agreements to do impossible Acts “An agreement to do an act impossible in itself is void.” EXAMPLES A agrees with B to pluck stars from the sky. The agreement is void.

Contingent Contract: Definition “A contingent contract is a contract to do or not to do something’s, if some event, collateral to such contract does or does not happen,” Collateral Event 

The collateral event means connected event.



The collateral event is not the part of the consideration but in fact, a part of the contract.

EXAMPLES A contract to pay B Rs. 5000 if B will get admission in Hailey College.

Performance of Contingent Contracts The rules regarding the performance of contingent contracts are as under; 1.

Happening of an Event “Contingent contracts to do or not to do anything if an uncertain future event happens cannot be enforced by law unless and until that event has happened. EXAMPLE A contract to pay B a sum of money when B marries C. C dies without being married to B. the contract becomes void.

2.

Non- Happening of an event When performance depends on non- happening of an event the contract shall not be performed unless the happening of that becomes impossible.

3.

Depending on Future Conduct The future conduct of any person is considered impossible, if it becomes impossible to perform it in the given circumstances. It can be better explained by the following example: EXAMPLE A agrees to pay B a sum of money if B marries C, but C marries D. The marriage of B to C must now be considered impossible, although it is possible that D may die and C may afterwards marry B.

4.

Happening of an event within a fixed Time It means that a contract, contingent on the happening of an event within a fixed time becomes void if, at the expiration of the time, such event has not happened or if before the time fixed, such event becomes impossible. EXAMPLE A promises to pay B a sum of money if a certain ship returns within a year. The contract may be enforced. If the ship returns within the year, and becomes void if the ship is burnt within the year.

5.

Non-Happening of an event Within a Fixed Time “Contingent contracts to do or not to do anything if a specified uncertain event does not happen within a fixed time may be enforced by law when the time fixed has expired and such event has not happened, or before the time fixed has expired, if it becomes certain that such event will not happen,”

EXAMPLE A promises to pay B a sum of money if a certain ship does not return within a year. The contract may be enforced if the ship does not return within the year, or is burnt within the year.

6.

Happening of an impossible event It means if the performance is made dependent on an event, which is already impossible, the contract is void whether or not the fact is known to the parties.

EXAMPLE A agrees to pay B Rs. 10,000/- if he will pluck stars from the sky.

QUASI CONTRACT Quasi Contracts are based on the principle of equity and justice. It simply states that no body shall be allowed to become rich at the cost of another. In such contracts there is no face to face agreement. However, the law imposes the obligations of a contract.

The rights and obligations in these contracts arise out of law and not from the contract. Kinds of Quasi Contracts

The following are the kinds of Quasi contracts.

1.

Supply of Necessaries “If a person, incapable of entering into a contract, or anyone whom he is legally bound to support, is supplied by another person with necessaries suited to his conditions in life; the person who has furnished such supplies is entitled to be reimbursed from the property of such incapable person.”

EXAMPLES A supplies B, a minor with necessaries suitable to his conditions in life. A is entitled to recover from B’s property. 2.

Payment by an interested person A person who is interested to the payment of money, which another is bound by law to pay, pays it, he is entitled to recover from the other. If he has no interest in paying, he cannot claim back.

EXAMPLES (a) A pays arrears of rent of his neighbor B to avoid a dispute between B and his landlord. A cannot recover from B as he has no interest in payment. (b) A was the owner of a warehouse. B imported goods and kept them in A’s warehouse without paying the custom duty. The custom authorities demanded the custom duty from A and he had to pay. Here B was bound by law to pay, a can recover from B. ( Brook’s Wharf Vs Goodman Bros.)

3.

Liability to pay for Non – Gratuitous Acts Where a person lawfully does something for another person, or delivers anything to him, without any intention of doing so gratuitously, and the

other person accepts and enjoys the benefit thereof, the latter must compensate the former or restore to him the thing so delivered.

EXAMPLES Where a coolie takes the luggage at the railway station without asking, and the passenger does not object to it, then he is bound to pay as the work was not done gratuitously.

4.

Responsibility of 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,”

5.

Liability under Mistake or Under Coercion “A person to whom money has been paid, or anything delivered, by mistake or under coercion, must repay or return it to the person who paid it by mistake or under coercion. EXAMPLES A and B jointly borrow Rs.1000 from C. A alone pays the amount to C. B, does not know that A has paid the amount, also pays Rs. 1000 to C. C is bound to repay the amount to B....