(USEFUL FOR UNION AND STATE CIVIL SERVICES, JUDICIAL

SERVICES AND OTHER EQUIVALENT EXAMS.)

Including Objective Questions with Explanations

By
Abhinav Misra

UPKAR PRAKASHAN, AGRA–2

© Publishers

Publishers
UPKAR PRAKASHAN
(An ISO 9001 : 2000 Company)

2/11A, Swadeshi Bima Nagar, AGRA–282 002

Phone : 4053333, 2530966, 2531101
Fax : (0562) 4053330, 4031570
E-mail : care@upkar.in
Website : www.upkar.in
Branch Offices
4845, Ansari Road, Daryaganj, 1-8-1/B, R.R. Complex (Near Sundaraiah Park,
New Delhi–110 002 Adjacent to Manasa Enclave Gate), Bagh Lingampally,
Phone : 011–23251844/66 Hyderabad–500 044 (A.P.), Phone : 040–66753330

● The publishers have taken all possible precautions in publishing this book, yet
if any mistake has crept in, the publishers shall not be responsible for the same.
● This book or any part thereof may not be reproduced in any form by
Photographic, Mechanical, or any other method, for any use, without written
permission from the Publishers.
● Only the courts at Agra shall have the jurisdiction for any legal dispute.

ISBN : 978-93-5013-014-8
Price : 55.00
(Rs. Fifty Five Only)
Code No. 932

Printed at : UPKAR PRAKASHAN (Printing Unit) Bye-pass, AGRA

 Contents

● Main Sections…………………………………………………...……………… 3–5

Part-1 : General………………………………………………..……………… 6–7
Part-2 : Agreement, Contract and Proposal……………………………… 8–11
Part-3 : Acceptance…………………………………………...……………… 12–16
Part-4 : Consideration…………………………………………...…………… 17–19
Part-5 : Capacity to Contract …………………………………………..…… 20–22
Part-6 : Factors Vitiating Consent………………………………………… 23–29
Part-7 : Legality of Object………………………………………………..… 30–36
Part-8 : Contingent Contract…………………………………………...…… 37–40
Part-9 : The Performance of Contracts…………………………………… 41–53
Part-10 : Certain Relations Resembling Those Created by Contract… 54–56
Part-11 : The Consequences of Breach of Contract……………..…… 57–60
Part-12 : Indemnity and Guarantee…………………………………….…… 61–66
Part-13 : Bailment……………………………………………………………… 67–70
Part-14 : Agency…………………………………………………..…………… 71–73
● Miscellaneous Exercise……………………………………..………………… 74–83
The Indian Contract Act, 1872
 Main Sections
Preliminary 25. Agreement without consideration, void,
unless it is in writing and registered or is a
promise to compensate for something done
1. Short title, extent, commencement.
or is a promise to pay a debt barred by limita-
2. Interpretation clause. tion law.
Chapter I 26. Agreement in restraint of marriage, void.
3. Communication, acceptance and revocation 27. Agreement in restraint of trade, void. Saving
of proposals. of agreement is not to carry on business of
4. Communication when complete. which goodwill is sold.
5. Revocation of proposals and acceptance. 28. Agreement in restraint of legal proceedings,
6. Revocation how made. void. Saving of contract to refer to arbitra-
7. Acceptance must be absolute. tion dispute that may arise, saving of
contract to refer questions that have already
8. Acceptance by performing conditions or arisen.
receiving consideration.
29. Agreement void for uncertainty.
9. Promises, express and implied.
30. Agreement by way of wager, void. Excep-
Chapter II tion in favour of certain prizes for horse
10. What agreements are contracts. racing. Section 294A of the Indian Penal
11. Who are competent to contract. Code not affected.
12. What is sound mind for the purpose of con- Chapter III
tracting. 31. ‘Contingent contract’ defined.
13. ‘Consent’ defined. 32. Enforcement of contracts contingent on an
14. ‘Free consent’ defined. event happening.
15. ‘Coercion’ defined. 33. Enforcement of contracts contingent on an
16. ‘Undue influence’ defined. event not happening.
17. ‘Fraud’ defined. 34. When events on which contract is contingent
18. Misrepresentation defined. to be deemed impossible, if it is the future
contract of living person.
19. Voidability of agreements without free con-
sent. 35. When contracts become void, which are con-
tingent on happening of specified event
19A. Power to set aside contract induced by
within fixed time.
undue influence.
36. Agreements contingent on impossible event
20. Agreement void where both parties are
void.
under mistake as to matter of fact.
21. Effect of mistake as to law. Chapter IV
22. Contract caused by mistake of one party as 37. Obligations of parties to contract.
to matter of fact. 38. Effect of refusal to accept offer of perfor-
23. What consideration and objects are lawful, mance.
and what not. 39. Effect of refusal of party to perform promise
24. Agreement void, if considerations and wholly.
objects unlawful in part. 40. Person by whom promise is to be performed.
4 | The Indian Contract Act, 1872

41. Effect of accepting performance from third Chapter VI

person.
73. Compensation for loss or damage caused by
42. Devolution of joint liabilities. breach of contract. Compensation for failure
43. Anyone of joint promisors may be compe- to discharge obligation resembling those
lled to perform. Each promisor may compel created by contract.
contribution. 74. Compensation for breach of contract where
44. Effect of release of one joint promisor. penalty stipulated for.
45. Devolution of joint rights. 75. Party rightfully rescinding contract, entitled
46. Time for performance of promise, where no to compensation.
application is to be made and no time is Chapter VII
specified.
124. ‘Contract of indemnity’ defined.
56. Agreement to do impossible act. Contract to
do act afterwards becoming impossible or 125. ‘Contract of guarantee’, ‘surety’, ‘principal
unlawful. debtor’ and creditor.
Compensation for loss through non-per- 127. Consideration for guarantee.
formance of act known to be impossible or 128. Surety’s liability.
unlawful. 129. Continuing guarantee.
57. Reciprocal promise to do things legal, and 130. Revocation of continuing guarantee.
also other things illegal. 131. Revocation of continuing guarantee by
58. Alternative promise, one branch being ille- surety’s death.
gal. 133. Discharge of surety by variance in terms of a
59. Application of payment where debt to be dis- contract.
charged is indicated. 134. Discharge of surety by release or discharge
60. Application of payment where debt to be dis- of principal debtor.
charged is not indicated. 137. Creditor’s forbearance to sue does not dis-
61. Application of payment where neither party charge surety.
appropriates.
138. Release of one co-surety does not discharge
62. Effect of novation, rescission, and alteration other.
of contract.
140. Rights of surety on payment or performance
63. Promisee may dispense with or remit perfor-
mance of promise. 141. Surety’s right to benefit of creditors securi-
ties.
64. Consequences of rescission of a voidable
contract. 142. Guarantee obtained by misrepresentation,
65. Obligation of person, who has received invalid.
advantage under void agreement, or contract 143. Guarantee obtained by concealment, invalid.
that becomes void. 145. Implied promise to indemnity surety.
Chapter V Chapter IX
68. Claim for necessaries supplied to person 148. Bailment, bailor and bailee defined.
incapable to contracting, or on his account.
149. Delivery to bailee how made.
69. Reimbursement of person paying money due
by another, in payment of which he is 150. Bailor’s duty to disclose faults in goods
interested. bailed.
70. Obligation of person enjoying benefit of 152. Bailee when not liable for loss, etc., of thing
non-gratuitous act. bailed.
71. Responsibility of finder of goods. 153. Termination of bailment by bailee’s act
72. Liability of person to whom money is paid, inconsistent with conditions.
or thing delivered by mistake or under 154. Liability of bailee making unauthorised use
coercion. of goods bailed.
 The Indian Contract Act, 1872 | 5

155. Effect of mixture, without bailor’s consent, 188. Extent of agent’s authority.
of his goods with bailee’s. 189. Agent’s authority in an emergency.
156. Effect of mixture, without bailor’s consent, 190. When agent cannot delegate.
when the goods can be separated. 191. Sub-agent defined.
159. Restoration of goods lent gratuitously.
193. Agent’s responsibility for sub-agent
162. Termination of gratuitous bailment by appointed without authority.
death.
195. Agent’s duty in naming such person.
163. Bailor entitled to increase or profit from
goods bailed. 196. Right of person as to acts done for him
without his authority, effect of ratification.
164. Bailor’s responsibility to bailee.
165. Bailment by several joint owners. 197. Ratification may be expressed or implied.
166. Bailee not responsible on redelivery to 198. Knowledge requisite for valid ractification.
bailor without title. 199. Effect of ratifying unauthorized act form-
167. Right of third person claiming goods ing part of a transaction.
bailed. 201. Termination of agency.
168. Right of finder of goods, may sue for 204. Revocation where authority has been partly
specific reward offered. exercised.
169. When finder of thing commonly on sale
may sell it. 205. Compensation for revocation by principal
or renunciation by agent.
170. Bailee’s particular lien.
172. Pledge, pawnor and pawnee defined. 206. Notice for revocation or renunciation.
173. Pawnee’s right to retainer. 207. Revocation and renunciation may be
175. Pawnee’s right to extraordinary expenses expressed or implied.
incurred. 208. When termination of agent’s authority
176. Pawnee’s right where power makes takes effect as to agent and as to third
default. persons.
177. Defaulting pawnor’s right to redeem. 210. Termination of sub-agent’s authority.
178. Pledge by mercantile agent. 211. Agent’s duty in conducting principal’s
178A. Pledge by person in possession under business.
voidable contract. 212. Skill and diligence required from agent.
179. Pledge where pawnor has only a limited 214. Agent’s duty to communicate with princi-
interest. pal.
182. Agent and principal defined. 217. Agent’s right of retainer out of sums
183. Who may employ agent. received on principal’s account.
184. Who may be an agent. 218. Agent’s duty to pay sums received for
185. Consideration not necessary. principal.
186. Agent’s authority may be expressed or 219. When agent’s remuneration becomes due.
implied. 221. Agent’s lien on principal’s property.
 PART–1

General
This Act is known as the Indian Contract Act, finds trace of the boy and brings his home.
1872, it extends to the whole of India except the The plaintiff found the missing boy and
state of Jammu & Kashmir, it came into force on sent a telegram to his father according to
the first day of September, 1872. It contains : advertisement, plaintiff was entitled to
amount offered.
(a) 11 Chapters
(vi) Harvey Vs Facey, 1893 AC 552, in this A
(b) 266 Sections
telegraphed to B, writing “will you sell me
(c) Largest Chapter—Chapter X your Bumper Hall Pen, please telegraph the
(Section 182 to Section 238) lowest cash price.” B replied “the lowest
price for pen 900 Ponds.” Again sent
Main Cases telegram “I agree to buy Bumber Hall Pen.”
(i) Mohta Alloy and Steel Works Vs Mohta It was not a contract, it was only a invita-
Finance and Leasing Co. Ltd., 1987. In this tion to treat.
S. C. held “an agreement is regarded as a (vii) Mcpherson Vs Appana, AIR 1951 S.C. 184.
contract when it is enforceable by law.” This is also a case on invitation to treat.
(ii) Balfour Vs Balfour, 1919, KB in this Lord (viii) Bhagwan Das Vs Girdhari Lal 1966, 1SCR
Atkin explained the principle of intention to 656, it is a case on External manifestation
contract and held “there are agreements in words of Shah Jan agreement does not
between parties which do not result in result from a mere state of mind, there must
contract are not contracts because parties be some external act by speech, writing or
did not intend that they shall be attended by act.
legal consequences.” (ix) Brogden Vs Metropolitan Railway Co.,
(iii) McGregor Vs McGregor, 1888, it is a case 1877. According to this manifestation may
of a binding engagement between a hus- be in form of express words, written or
band and wife. spoken or by signified through conduct.

(iv) Carlill Vs Carbolic Smoke Ball Co. 1893. (x) Adams Vs Lindsell, 1818, K. B., is a case
In this a Smoke Ball Co. offered to pay 100 on “when parties are at a distance and
ponds to any person, whose influenza contracting through post. Then anyone is
caused by cold increased after using ball not bound till any certain period.
according to printed directions. The plain- (xi) Hyde Vs Wrench, 1840, is a case on counter
tiff used the balls but she nevertheless proposals.
subsequently suffered from influenza. She
was held entitled to recover the promised (xii) Currie Vs Misa, 1875 CR in this definition
reward. of contract is given; according to this, a
valuable consideration in the sense of the
(v) Har Bhajan Lal Vs Harcharan Lal, AIR law, may consist either in some right,
1925, All 539—In this a boy ran away from interest or benefit accruing to the one party
his home, his father offered by adver- or some forbearance, loss and detriment
tisement to pay Rs. 500, to the person who given by other.
 The Indian Contract Act 1872

30%
OFF

Publisher : Upkar Prakashan ISBN : 978935013014 8 Author : Abhinav Misra

Type the URL : http://www.kopykitab.com/product/4 4 93

Get this eBook