lecture-02 - Learning Outcomes LESSON 2 KINDS OF CONTRACTS...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Learning Outcomes By the end of the lecture we should be able to answer the following questions: · The different types of contracts with respect to performance, enforceability, validity and formation Introduction First of all we will study [I] Kinds of contracts from the point of view of Enforceability · Valid contract · Voidable contract. · Void contract · Unenforceable contract · Illegal or unlawful contract From the point of view of enforceability a contract may be valid, voidable, void, unenforceable or illegal. 1. Valid contract. According to section 2(i), it is”an agreement enforceable by law”, an agreement becomes enforceable by law when all the essential elements of a valid contract as were enumerated in the last lesson are present. If one or more of these elements is/are missing the contract is either void, voidable, illegal or unenforceable. 2. Voidable contract. According to section 2(i), “an agreement which” is enforceable by law at the option of one or more of the parties thereto, but not at the option of the other or others, is a voidable contract.” Thus, a voidable contract is one which is enforceable by law at the option of one of the parties only. Until it is avoided or rescinded by the party entitled to do so by exercising his option in that behalf, it is a valid contract. Usually a contract becomes voidable when the consent of one of the parties to the contract is obtained by coercion, undue influence, misrepresentation or fraud. Such a contract is voidable at the option of the aggrieved party i.e., the party whose consent was so caused (secs. 19 and 19A). but the aggrieved party must exercise his option of rejecting the contract (i) within a reasonable time, and (ii) before the rights of third parties intervene, otherwise the contract cannot be repudiated. Illustration. a)A : threatens to shoot B if he does not sell his new Bajaj scooter to A for Rs. 2,000. B agrees. The contract has been brought about by coercion and is voidable at the option of B. b)A. intending to deceive B. falsely represents that five hundred quintals of indigo are made annually at A’s factory, and thereby induces B to buy the factory. The contract has been caused by fraud and is voidable at the option of B. other circumstances under which a contract becomes voidable. The Indian contract act has laid down certain other situations also under which a contract becomes voidable. For example. (i) When a contract contains reciprocal promises, and one party to the contract prevents the other from performing his promises, then the contract becomes voidable at the option at the party so prevented (sec. 53). Illustration. A. Contracts with B that A shall whitewash B’s house for Rs. 100. A. is ready and willing to execute the work accordingly, but B prevents him from doing so. The contract becomes voidable at the option of A.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 09/27/2011 for the course BUS 100 taught by Professor Sherry during the Spring '11 term at Faculty of English Commerce Ain Shams University.

Page1 / 10

lecture-02 - Learning Outcomes LESSON 2 KINDS OF CONTRACTS...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online