2. CONTRACTCONTRACT
A contract is an agreement made betweenA contract is an agreement made between
two or more parties which the law willtwo or more parties which the law will
enforce.enforce.
““ A Contract is an agreement enforceable byA Contract is an agreement enforceable by
law. ” sec 2(h)law. ” sec 2(h)
CONTRACT = AGREEMENT + ENFORCEABILITYCONTRACT = AGREEMENT + ENFORCEABILITY
3. AGREEMENTAGREEMENT
““ Every promise and every set of promises,Every promise and every set of promises,
forming consideration for each other. ”forming consideration for each other. ”
sec 2(e)sec 2(e)
Agreement = Offer + AcceptanceAgreement = Offer + Acceptance
4. CONSENSUS AD IDEMCONSENSUS AD IDEM
The essence of an agreement is theThe essence of an agreement is the MeetingMeeting
of the Mindsof the Minds of the parties in full and finalof the parties in full and final
agreement .agreement .
An agreement, to become a contract, mustAn agreement, to become a contract, must
give rise to agive rise to a Legal ObligationLegal Obligation ..
OBLIGATIONOBLIGATION
5. An OfferAn Offer
““When one person signifies to another hisWhen one person signifies to another his
willingness to do or to abstain from doingwillingness to do or to abstain from doing
anything, with a view to obtaining the assentanything, with a view to obtaining the assent
of that other to such act or abstinence, he isof that other to such act or abstinence, he is
said to make a proposal.” – Sec 2(a)said to make a proposal.” – Sec 2(a)
6. An AcceptanceAn Acceptance
““When a person to whom the proposal isWhen a person to whom the proposal is
made signifies his assent thereto, themade signifies his assent thereto, the
proposal is said to be accepted.” – Sec 2(b)proposal is said to be accepted.” – Sec 2(b)
7. Some vital points :Some vital points :
All contracts are agreements but allAll contracts are agreements but all
agreements are not contracts.agreements are not contracts.
A legal obligation having its source in anA legal obligation having its source in an
agreement only will give rise to a contract.agreement only will give rise to a contract.
Law of contracts creates rights inLaw of contracts creates rights in personampersonam
nor rights innor rights in remrem ..
8. Agreement Vs ContractAgreement Vs Contract
An agreement is a promise or set of promises (s). A contract is
essentially an agreement, i.e., a promise or set of promise (s).
Differences
Enforceability –
An agreement may or may not be enforceable at law. For example,
social agreements are generally not enforceable while business
agreements are enforceable at law.
A contract is an agreement which is enforceable at law.
Effect –
An agreement is not always a binding on the concerned parties.
A contract is always concluded and binding on the concerned parties,
Scope –
All agreements are not contracts.
All contracts are agreements.
9. ESSENTIALS OF VALID CONTRACTESSENTIALS OF VALID CONTRACT
Offer and acceptanceOffer and acceptance
Intention to create legal relationshipIntention to create legal relationship
Lawful considerationLawful consideration
Capacity of partiesCapacity of parties
Free and genuine consentFree and genuine consent
Lawful objectLawful object
Agreement not declared VoidAgreement not declared Void
Certainty & possibility of performanceCertainty & possibility of performance
Legal formalitiesLegal formalities
10. CLASSIFICATION OF CONTRACTSCLASSIFICATION OF CONTRACTS
Classification according toClassification according to validityvalidity ::
Valid Contract -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
Void contract -Void contract - Section 2(j) defines: A contract which ceases to be enforceable by law becomes
void, when it ceases to be enforceable.”
Voidable contract-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.”
Unenforceable contract -Unenforceable contract - An unenforceable contract is one which is valid in itself, but is not
capable of being enforced in a court of law because of some technical defect such as absence of
writing, registration, requisite stamp, etc., or time barred by the law of limitation.
Classification according toClassification according to formationformation
Express contract -Express contract - Where both the offer and acceptance constituting an agreement enforceable
at law are made in words spoken or written, it is an express contract.
Implied contract -Implied contract - Where both the offer and acceptance constituting an agreement enforceable at
law are made otherwise than in words i.e., by acts and conduct of the parties, it is an implied
contract.
11. Classification according toClassification according to performanceperformance
Executed contract – a contract where both the parties have duly fulfilled theirExecuted contract – a contract where both the parties have duly fulfilled their
obligations in the contract.obligations in the contract.
Executory contract – a contract where the work is not wholly performed or inExecutory contract – a contract where the work is not wholly performed or in
which something still remains to be done.which something still remains to be done.
Unilateral contract –Unilateral contract – a contract wherein at the conclusion of the contracta contract wherein at the conclusion of the contract
there is an obligation yet to be performed on the part of one party only.there is an obligation yet to be performed on the part of one party only.
Bilateral contract -Bilateral contract - a contract where there is obligation on the part of botha contract where there is obligation on the part of both
to do or to refrain from doing the particular thing. These are similar toto do or to refrain from doing the particular thing. These are similar to
executory contracts.executory contracts.
Classification according toClassification according to English LawEnglish Law
Formal contractFormal contract
Simple contractSimple contract
CLASSIFICATION OF CONTRACTSCLASSIFICATION OF CONTRACTS
12. Free ConsentFree Consent
Sec 13 defines “consent” as “Two or moreSec 13 defines “consent” as “Two or more
persons are said to consent when they agreepersons are said to consent when they agree
upon the same thing in the same.upon the same thing in the same.
Coercion (sec 15)Coercion (sec 15)
Undue Influence (sec 16)Undue Influence (sec 16)
Fraud (sec 17)Fraud (sec 17)
Misrepresentation (sec 18)Misrepresentation (sec 18)
Mistake (sec 20 & 21)Mistake (sec 20 & 21)
13. Coercion (sec 15)Coercion (sec 15)
Coercion is the commitment of threatening to commit any act forbiddenCoercion is the commitment of threatening to commit any act forbidden
by the Indian penal code or unlawful detaining or threatening to detainby the Indian penal code or unlawful detaining or threatening to detain
any property to the prejudice of any person whatever with the intentionany property to the prejudice of any person whatever with the intention
of causing the person to enter into an agreement.of causing the person to enter into an agreement.
Effect of coercionEffect of coercion ::
An agreement under coercion is voidable at the option of the partyAn agreement under coercion is voidable at the option of the party
whose consent was so obtained.whose consent was so obtained.
14. Undue Influence (sec 16)Undue Influence (sec 16)
A contract is said to be induced by undue influence where the relations subsisting between theA contract is said to be induced by undue influence where the relations subsisting between the
parties are such that one of the parties is in a position to dominate the will of the other and usesparties are such that one of the parties is in a position to dominate the will of the other and uses
that position to obtain an unfair advantage over the otherthat position to obtain an unfair advantage over the other ..
Ability to dominate the will of other party :Ability to dominate the will of other party :
Such a will is said to exists where a person -Such a will is said to exists where a person -
Holds a real and apparent authority over the other eg, Income tax authority andHolds a real and apparent authority over the other eg, Income tax authority and
assessee, police and accusedassessee, police and accused
Stands in a fiduciary relation (relation of trust and confidence)Stands in a fiduciary relation (relation of trust and confidence)
Eg. Solicitor and client, spiritual guru and devotee, husband and wifeEg. Solicitor and client, spiritual guru and devotee, husband and wife
Makes a contract with a person whose mental capacity is temporarily or permanentlyMakes a contract with a person whose mental capacity is temporarily or permanently
affected by reason of age, illness or mental or bodily distressaffected by reason of age, illness or mental or bodily distress
The following relationships raise the assumptions of undue influence :The following relationships raise the assumptions of undue influence :
• Parent and childParent and child
• Guardian and wardGuardian and ward
• Trustee and beneficiaryTrustee and beneficiary
• Religious advisors and devoteesReligious advisors and devotees
• Doctor and patientDoctor and patient
• Solicitor and clientSolicitor and client
• Fiancé and fiancéeFiancé and fiancée
15. Fraud (sec 17)Fraud (sec 17)
Fraud means and includes any of the following actsFraud means and includes any of the following acts
committed by a party to a contract or connivance or by hiscommitted by a party to a contract or connivance or by his
agent with the intent to deceive or to induce a person toagent with the intent to deceive or to induce a person to
enter into a contract .enter into a contract .
The suggestion that a fact is true when it is not true and theThe suggestion that a fact is true when it is not true and the
person making the suggestion does not believe it to be true.person making the suggestion does not believe it to be true.
The active concealment of a fact by a person having knowledgeThe active concealment of a fact by a person having knowledge
or belief of the factor belief of the fact
A promise made without any intention of performing itA promise made without any intention of performing it
Any other act aimed to deceiveAny other act aimed to deceive
Any such act of omission as the law specially declares to beAny such act of omission as the law specially declares to be
fraudulentfraudulent
16. FraudFraud
There should be a suggestion as to a factThere should be a suggestion as to a fact
The fact suggested should not be trueThe fact suggested should not be true
The suggestion should have been made by the person who does notThe suggestion should have been made by the person who does not
believe it to be truebelieve it to be true
The suggestion should have been made by the person with an intentionThe suggestion should have been made by the person with an intention
of inducing the other party to enter into the contractof inducing the other party to enter into the contract
Contracts of Uberrimae Fidei :Contracts of Uberrimae Fidei :
Contracts on which law imposes a special duty to act with utmost faith toContracts on which law imposes a special duty to act with utmost faith to
disclose all material information. eg. Contracts of insurance, Companydisclose all material information. eg. Contracts of insurance, Company
prospectus inviting public to subscribe for shares, contract of sale ofprospectus inviting public to subscribe for shares, contract of sale of
land, contract of family arrangementsland, contract of family arrangements
Effects of fraud:Effects of fraud:
Voidable contractVoidable contract
17. Misrepresentation (sec 18)Misrepresentation (sec 18)
Misrepresentation is the innocent or unconscious presentation of wrongMisrepresentation is the innocent or unconscious presentation of wrong
facts by one party which are taken into account by the other party beforefacts by one party which are taken into account by the other party before
entering into a contract.entering into a contract.
Sec 18 defines misrepresentation to be existingSec 18 defines misrepresentation to be existing
When a person positively asserts that a fact is true when his informationWhen a person positively asserts that a fact is true when his information
does not warrant it to be, though he believes it to be so .does not warrant it to be, though he believes it to be so .
The misrepresentation should be made before the conclusion of theThe misrepresentation should be made before the conclusion of the
contract and with the intention of inducing the other party to act upon itcontract and with the intention of inducing the other party to act upon it
The other party should have acted upon the misrepresentationThe other party should have acted upon the misrepresentation
Consequences :Consequences :
The aggrieved party may avoid or rescind the contract or accept theThe aggrieved party may avoid or rescind the contract or accept the
contract while insisting that he shall be placed in the position in which hecontract while insisting that he shall be placed in the position in which he
would have been if the representation made had been true.would have been if the representation made had been true.
18. Mistake (sec 20 and 21)Mistake (sec 20 and 21)
Mistake may be of two types :Mistake may be of two types :
Mistake of LawMistake of Law
Ignorance of law is no excuseIgnorance of law is no excuse
(ignorantia juris non-excusat)(ignorantia juris non-excusat)
Mistake of law :Mistake of law :
Mistake of the law of the countryMistake of the law of the country
Mistake of foreign lawMistake of foreign law
Mistake of private rightsMistake of private rights
Mistake of factMistake of fact
Mistake of foreign law and mistake of private rightsMistake of foreign law and mistake of private rights
are treated as mistake of facts and may be declaredare treated as mistake of facts and may be declared
as void.as void.
19. Bilateral MistakeBilateral Mistake
Bilateral MistakeBilateral Mistake
As per sec 20 where both the parties to an agreementAs per sec 20 where both the parties to an agreement
are under a mistake as to the matter of fact essentialare under a mistake as to the matter of fact essential
to the agreement . Such a contract is declared asto the agreement . Such a contract is declared as
void.void.
An agreement is void on ground of mistake if :An agreement is void on ground of mistake if :
• The mistake is mutualThe mistake is mutual
• The mistake relates to a matter of fact essential to theThe mistake relates to a matter of fact essential to the
agreement.agreement.
Bilateral mistake may be :Bilateral mistake may be :
Mistake as to subject matterMistake as to subject matter
Mistake as to the possibility of performanceMistake as to the possibility of performance
20. Mistake as to subject matter :Mistake as to subject matter :
Mistake regarding existenceMistake regarding existence
Mistake regarding identityMistake regarding identity
Mistake regarding titleMistake regarding title
Mistake regarding priceMistake regarding price
Mistake regarding quantityMistake regarding quantity
Mistake regarding qualityMistake regarding quality
Mistake as to possibility of performanceMistake as to possibility of performance
21. Mistake of factMistake of fact
Unilateral mistake :Unilateral mistake :
Where one of the parties to the contract is under aWhere one of the parties to the contract is under a
mistake it is called Unilateral mistake. The one sidedmistake it is called Unilateral mistake. The one sided
mistake with regard to either the subject matter, termsmistake with regard to either the subject matter, terms
of contract or legal implications of the contractof contract or legal implications of the contract
Effect :Effect :
Sec 22 provides that a contract is not voidable merelySec 22 provides that a contract is not voidable merely
because it is caused by one of the parties to it beingbecause it is caused by one of the parties to it being
under a mistake of fact.under a mistake of fact.
In the following cases unilateral mistake will render aIn the following cases unilateral mistake will render a
contract void :contract void :
• Identity of persons contracted withIdentity of persons contracted with
• Nature of contract or character of document that is beingNature of contract or character of document that is being
signedsigned
22. Void AgreementsVoid Agreements
Agreements by incompetent parties (sec 11)Agreements by incompetent parties (sec 11)
Agreements made under a mutual mistake of fact (sec 20)Agreements made under a mutual mistake of fact (sec 20)
Agreements the object or consideration of which is unlawfulAgreements the object or consideration of which is unlawful
(sec 23)(sec 23)
Agreements the object or consideration of which is unlawfulAgreements the object or consideration of which is unlawful
in part (sec 24)in part (sec 24)
Agreements made without consideration (sec 25)Agreements made without consideration (sec 25)
Agreements in restraint of marriage (sec 26)Agreements in restraint of marriage (sec 26)
Agreements in restraint of trade (sec 27)Agreements in restraint of trade (sec 27)
Agreements in restraint of legal proceedings (sec 28)Agreements in restraint of legal proceedings (sec 28)
Agreements the meaning of which is uncertain (sec 29)Agreements the meaning of which is uncertain (sec 29)
Agreements by way of wager (sec 30)Agreements by way of wager (sec 30)
Agreements to do impossible acts (sec 56)Agreements to do impossible acts (sec 56)
23. Restitution (sec 64 & 65)Restitution (sec 64 & 65)
Restitution implies restoration or return.Restitution implies restoration or return.
Sec 65 gives a right of restitution under twoSec 65 gives a right of restitution under two
circumstances :circumstances :
When an agreement is discovered to be voidWhen an agreement is discovered to be void
When a contract after its formation becomesWhen a contract after its formation becomes
subsequently voidsubsequently void
Sec 65 does not apply to persons who are whollySec 65 does not apply to persons who are wholly
incompetent to enter into contract.incompetent to enter into contract.
Sec 65 does not apply to agreements which wereSec 65 does not apply to agreements which were
known to be void when they were entered into.known to be void when they were entered into.
24. Performance of ContractPerformance of Contract
A contract is entered into with the object that it willA contract is entered into with the object that it will
be performed.be performed.
The parties to a contract must either perform orThe parties to a contract must either perform or
offer to perform their respective promises unlessoffer to perform their respective promises unless
such performance is dispensed with or excused.such performance is dispensed with or excused.
(sec 37)(sec 37)
Performance may be :Performance may be :
Actual PerformanceActual Performance
Attempted performance – when one of the parties toAttempted performance – when one of the parties to
the contract offers to perform the contract but thethe contract offers to perform the contract but the
other party does not accept it, there is an attemptedother party does not accept it, there is an attempted
performance.performance.
25. TenderTender (an attempted performance)(an attempted performance)
Section 38 specifies that where a promisor has made an offer of
performance to the promisee, and the offer has not been accepted, the
promisor is not responsible for non-performance, nor does he thereby
lose his rights under the contract.
Certain essentials of a valid tender:
It must be unconditional
It must be made at proper time and place.
It must be made by the person who is able and willing.
In case of tender of goods it must be for the quality/quantity of
goods agreed upon.
In case of tender of goods reasonable opportunity must be given
to the promisee to examine the goods.
It must be made to the promisee or his authorized agent.
26. Time and place of performanceTime and place of performance
Where no time for performance is fixed and the performance is to beWhere no time for performance is fixed and the performance is to be
done without any request of the promisee, the promise is to bedone without any request of the promisee, the promise is to be
performed within a reasonable time.performed within a reasonable time.
The question what is a reasonable time is in each particularThe question what is a reasonable time is in each particular
case, a question of fact.case, a question of fact. Sec 46Sec 46
When a promise is to be performed on a certain day and the promisorWhen a promise is to be performed on a certain day and the promisor
has undertaken to perform it without request by the promise then thehas undertaken to perform it without request by the promise then the
promisor can perform the obligation within the official hours of businesspromisor can perform the obligation within the official hours of business
on such day and at the place stated.on such day and at the place stated. Sec 47Sec 47
When a promise is to be performed on a certain day at the request ofWhen a promise is to be performed on a certain day at the request of
the promisee, the promisee must apply for performance at a properthe promisee, the promisee must apply for performance at a proper
place and within usual hours.place and within usual hours. Sec 48Sec 48
When a promise is to be performed without request by the promisee andWhen a promise is to be performed without request by the promisee and
no place is fixed for its performance it is the duty of the promiser tono place is fixed for its performance it is the duty of the promiser to
apply to the promisee to appoint a reasonable place for the performanceapply to the promisee to appoint a reasonable place for the performance
of the promise and to perform it at such place.of the promise and to perform it at such place. Sec 49Sec 49
The performance of the promise may be made in any manner or at anyThe performance of the promise may be made in any manner or at any
time which the promisee prescribes or sanctions.time which the promisee prescribes or sanctions. Sec 50Sec 50
27. Discharge of ContractDischarge of Contract
Discharge of contract means termination of rights and obligations arisingDischarge of contract means termination of rights and obligations arising
out of a contract.out of a contract.
By Act of the partiesBy Act of the parties
By Operation of lawBy Operation of law
A contract may be discharged in any of the following ways :A contract may be discharged in any of the following ways :
By Performance (sec 37)By Performance (sec 37)
By death (sec 37)By death (sec 37)
By tender (sec 38)By tender (sec 38)
By breach of contract (sec 39)By breach of contract (sec 39)
By impossiblity (sec 56)By impossiblity (sec 56)
By non existence of a state of thingsBy non existence of a state of things
By agreement :By agreement :
NovationNovation
RescissionRescission
AlterationAlteration
RemissionRemission
WaiverWaiver
MergerMerger
28. …………
Discharge by performanceDischarge by performance
Actual performanceActual performance
Discharge by deathDischarge by death
Contracts of personal nature comes to an endContracts of personal nature comes to an end
by the death of promisor.by the death of promisor.
Discharge by tenderDischarge by tender
The promisor is discharged if the promiseeThe promisor is discharged if the promisee
doesn't accept the performance.doesn't accept the performance.
29. …………
Discharge by breachDischarge by breach
Actual Breach – when the party refuses to perform the contract on theActual Breach – when the party refuses to perform the contract on the
date of contract. The promisee is discharged but not the promisor.date of contract. The promisee is discharged but not the promisor.
Anticipated Breach – It takes place before the date of actualAnticipated Breach – It takes place before the date of actual
performance.performance.
ExpressExpress
ImpliedImplied
Discharge by ImpossibiltyDischarge by Impossibilty
Impossibilty existing at the time of formation of contractImpossibilty existing at the time of formation of contract
Known to the parties – void ab initioKnown to the parties – void ab initio
Unknown to the parties – Void on the ground of mutual mistakeUnknown to the parties – Void on the ground of mutual mistake
Impossibilty arising subsequent to the formation of the contractImpossibilty arising subsequent to the formation of the contract
By death of partyBy death of party
By destruction of subject matterBy destruction of subject matter
Object becoming illegal or unlawfulObject becoming illegal or unlawful
Out-break of warOut-break of war
By non-existence of a state of things the continued existence of a stateBy non-existence of a state of things the continued existence of a state
formed the basis of contract.formed the basis of contract.
30. Discharge by agreement :Discharge by agreement :
Novation : A novation takes place when parties to a contract agreeNovation : A novation takes place when parties to a contract agree
to substitute a new contract in place of an old one either between theto substitute a new contract in place of an old one either between the
old parties or the new parties with the consent of the parties to theold parties or the new parties with the consent of the parties to the
contract. (sec 62)contract. (sec 62)
Rescission : It means cancellation of all or some of the terms ofRescission : It means cancellation of all or some of the terms of
contract or one party fails to perform the contract and other partycontract or one party fails to perform the contract and other party
rescinds the contract.rescinds the contract.
Alteration : Changing material terms of the contract eg. Ate or amt toAlteration : Changing material terms of the contract eg. Ate or amt to
be paid.be paid.
Bilateral alterationBilateral alteration
Unilateral alterationUnilateral alteration
Remission – Exempting the party to perform the contract. It mayRemission – Exempting the party to perform the contract. It may
be full or partial.be full or partial.
Waiver – Refers to the giving up or foregoing certain rights . ItsWaiver – Refers to the giving up or foregoing certain rights . Its
same as remissionsame as remission
Merger – When inferior rights of a person under a contract mergeMerger – When inferior rights of a person under a contract merge
with the superior rights under a new contract, the contract withwith the superior rights under a new contract, the contract with
inferior rights will come to an end.inferior rights will come to an end.
31. Remedies for breach of contractRemedies for breach of contract
Right of rescissionRight of rescission
Right to claim compensation or damagesRight to claim compensation or damages
Ordinary damagesOrdinary damages
Special damagesSpecial damages
Vindictive or exemplary damagesVindictive or exemplary damages
Nominal damagesNominal damages
Damages for personal inconvenience and discomfortDamages for personal inconvenience and discomfort
Quantum MeruitQuantum Meruit
Special performanceSpecial performance
Injunction orderInjunction order
RestitutionRestitution
Cancellation or rectificationCancellation or rectification
32. CASE STUDYCASE STUDY
‘‘A’ applies to a banker for a loan at a timeA’ applies to a banker for a loan at a time
where there is stringency in the money market.where there is stringency in the money market.
The banker declines to make the loan exceptThe banker declines to make the loan except
at an unusually high rate of interest. A acceptsat an unusually high rate of interest. A accepts
the loan on these terms. Whether the contractthe loan on these terms. Whether the contract
is induced by undue influenceis induced by undue influence
33. SOLUTIONSOLUTION
Section 16 of the Indian Contract Act, 1872, states that aSection 16 of the Indian Contract Act, 1872, states that a
contract is said to be induced by undue influence where thecontract is said to be induced by undue influence where the
relations subsisting between the parties are such that therelations subsisting between the parties are such that the
parties are in a position to dominate the will of the otherparties are in a position to dominate the will of the other
In the given problem, A applies to the banker for a loan atIn the given problem, A applies to the banker for a loan at
a time when there is stringency in the money market. Thea time when there is stringency in the money market. The
banker declines to make the loan except at an unusuallybanker declines to make the loan except at an unusually
high rate of interest. A accepts the loan on these terms. Thishigh rate of interest. A accepts the loan on these terms. This
is a transaction in the ordinary course of business, and theis a transaction in the ordinary course of business, and the
contract is not induced by undue influence. As betweencontract is not induced by undue influence. As between
parties on an equal footing, the court will not hold a bargainparties on an equal footing, the court will not hold a bargain
to be unconscionable merely on the ground of high Interestto be unconscionable merely on the ground of high Interest
and therefore, there is no undue influenceand therefore, there is no undue influence..
34. CASE STUDYCASE STUDY
Sohan induced Suraj to buy his motorcycle saying that itSohan induced Suraj to buy his motorcycle saying that it
was in a very good condition. After taking the motorcycle,was in a very good condition. After taking the motorcycle,
Suraj complained that there were many defects in theSuraj complained that there were many defects in the
motorcycle. Sohan proposed to get it repaired and promisedmotorcycle. Sohan proposed to get it repaired and promised
to pay 40% cost of repairs After a few days, the motorcycleto pay 40% cost of repairs After a few days, the motorcycle
did not work at all. Now Suraj wants to rescind the contract.did not work at all. Now Suraj wants to rescind the contract.
Decide giving reasonsDecide giving reasons
35. SOLUTIONSOLUTION
According to Section 18 of the Indian Contract Act,According to Section 18 of the Indian Contract Act,
1872,misrepresentation is there1872,misrepresentation is there
The aggrieved party, in case of misrepresentation by theThe aggrieved party, in case of misrepresentation by the
other party, can avoid or rescind the contract [Section 19,other party, can avoid or rescind the contract [Section 19,
Indian Contract Act, 1872]. The aggrieved party loses theIndian Contract Act, 1872]. The aggrieved party loses the
right to rescind the contract if he, after becoming aware ofright to rescind the contract if he, after becoming aware of
the misrepresentation, takes a benefit under the contract orthe misrepresentation, takes a benefit under the contract or
in some way affirms it. Accordingly in the given case Surajin some way affirms it. Accordingly in the given case Suraj
could not rescind the contract, as his acceptance to the offercould not rescind the contract, as his acceptance to the offer
of Sohan to bear 40% of the cost of repairs impliedlyof Sohan to bear 40% of the cost of repairs impliedly
amount to final acceptance of the saleamount to final acceptance of the sale
