Business Law and Practice MBA Professional Bangladesh University of professional

Business Law & Practice (BUS-7302) by Ibrahim Tareq
Contract Act, 1872
Definition and Nature of Contract = (An Agreement + Enforceability)
Section 2(h): "An agreement enforceable by by law is a contract."
Section 2(a): Proposal or Offer - "Expression of willingness to do or abstain
from doing something with a view to obtaining assent."
Section 2(b): Acceptance - Acceptance must match the offer.
Section 2(d): Definition of Consideration. Something in return’ is called
consideration
Section 2(i) contract is voidable at the option of the party whose consent was
not free
Section 2(j): void contract as one that ceases to be enforceable by law.
Section 9 Distinguishes between express and implied promises. A promise is
considered express if it is made in words, and implied if it is made otherwise
than in word
Competency and Capacity
Section 10: Competency, free consent, lawful consideration, and lawful
object are essential for a valid Contract. Vitiating factors are factors that
operate to invalidate a contract that was otherwise formed validly.
Section 11: Persons incompetent to contract (Minors, unsound mind, or
disqualified by law).
Section 12: Sound mind - Must understand and judge rationally the effects of
the contract.
Void and Voidable Agreements
Certain contracts are expressly declared void. These include the following:
(S11, 25—30,56)
Section 13: Definition of Consent
Section 14: Free Consent - absence of coercion, undue influence, fraud,
misrepresentation, or mistake
Section 15: Coercion - committing or threatening unlawful acts
Section 16: Undue Influence - misuse of power in fiduciary relationships -

Section 17: Fraud - intentional deception
Section 18: Misrepresentation - unintentional false statements
Section 19: Damages If the contract was induced by fraud, the aggrieved
party may seek compensation for any loss suffered due to entering the
contract. Case Law: Derry v. Peek (1889).
Section 20-22: Mistake - circumstances where contracts are void –
Section 23: Unlawful Consideration or Object
Section 25: Agreements without consideration are void unless: (Exceptions
to No Consideration, No Contract)
• (Sec. 25(1)) Made on account of natural love and affection.
• (Sec. 25(2)) Voluntary compensation for past services
• (Sec. 25(3)). Time-barred debt promises
Section 26: Restraint of marriage agreements are void.
Section 27: Restraint of trade agreements are void, except goodwill sales.
Section 28: Restraint of legal proceedings agreements are void.
Section 29: Voidagreements dueto uncertain terms.
Section 30: Wager agreements are void.
Section 38 – Effect of Refusal to Accept Offer of Performance
(Related to Actual Breach) "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, and does not thereby lose his rights under the contract."
Section 39 – Effect of Refusal of Party to Perform Promise Wholly
(Related to Anticipatory Breach) "When a party to a contract has refused to perform, or
disabled himself from performing, his promise in its entirety, the promisee may put an
end to the contract, unless he has signified, by words or conduct, his acquiescence in its
continuance."
Section 56: Agreements requiring an impossible act are void.
Section 62 – Effect of Novation, Rescission, and Alteration
Novation: Replace an existing contract with a new contract, either between the same
parties or involving new parties.
Rescission: Cancel the existing contract by mutual agreement, thereby releasing all
parties from future obligations.
Alteration: Make changes to the terms of the original contract with mutual consent,
without completely replacing it.
Section 63 – Promisee’s Power to Dispense with or Remit Performance: This section
gives the promisee (the party entitled to receive performance) the right to:
• Remission: Accept less than what was originally agreed upon.
• Extend time for performance.

• Forgo or waive performance entirely.
Section 64: Right to Rescind Upon rescission, both parties are discharged
from their obligations
Section 64 & 65Restitution: If a contract is rescinded, any benefit received
under the contract must be restored to the other party. E.g If money was
advanced as consideration, it must be refunded
Section 68: Liability for necessaries supplied to minors or unsound persons.
Damages (Section 73) - the aggrieved party is entitled to compensation for
any loss or damage that: (i) naturally arises in the usual course of things from
the breach (general damages); or (ii) was within the contemplation of the
parties when the contract was made (special damages)
Liquidated Damages (Section 74)
Where the contract stipulates a pre-estimated sum or penalty for breach, it
permits recovery of that amount without proof of actual loss.
Implied Conditions, Sale of Goods Act (SOGA), 1930
Section 2(7): Goods - Movable property except actionable claims and money.
Conditions and Warranties
Section 12: Distinction between condition and warranty.
Section 12(2): Definition of Condition
Section 12(3): Definition of Warranty
Section 14: Seller's implied rights (Title, Quiet Possession, Free from
encumbrance).
(Section 14 (a)) Condition as to title (defective title) Rowland vs Divall (1923)
(Section 14 (b)) Quiet possession of goods.
(Section 14 (c)) Time when the contract is made.
Section 15: Goods must correspond to their description. woolen gloves
Section 16: Implied condition of fitness or merchantability.
If the following conditions are satisfied, an implied condition is deemed to
exist that the supplied goods will be reasonably fit for the purpose those are
wanted for –
(i) The buyer, expressly, should make known to the seller the particular
purpose for which the goods are required; and
(ii) The buyer should rely on the seller’s skill or judgment; and

(iii) The goods sold must be of a description which the seller deals in the
ordinary course of his business, whether he be the manufacturer or
not.
Section 17: Implied conditions in sale by sample. Grant v. Australian Knitting
Mills
The implied conditions are –
i. That the bulk shall correspond with the sample in quality
ii. That the buyer shall have a reasonable opportunity of comparing the
bulk with the sample.
iii. That the goods shall be free from any defect, rendering them
unmerchantable.
Section 42 the buyer is deemed to have accepted the goods when they:
o intimate to the seller that they have accepted them;
o after delivery, do any act inconsistent with the seller's
ownership; or retain the goods for a reasonable time without
informing the seller of rejection.
Companies Act, 1994
law that governs incorporated domestic entities in Bangladesh.
Section 2(1)(d): company’ means ‘a company formed and registered under
this Act or an existing company
Section 2(1)(q) a private company as one that restricts the transfer of its shares, limits
its members to 50 (excluding employees), and prohibits public invitations to subscribe
for its shares or debentures. This essentially means a private company operates with a
closed group of shareholders and does not offer its shares to the general public.
Section 2(1)(r) a company that is not a private company, meaning it is not subject to
the restrictions outlined for private companies regarding share transfer, maximum
number of members, and public invitations for share subscriptions. Essentially, a public
company can offer shares to the public and is often listed on a stock exchange
Section 4: Definition and Features of a Partnership
Section 222: Liability for conducting business with insufficient members –
Section 231 conversion of a private limited company (at least seven
members) into a public limited company. It outlines the process for altering

the company's Articles of Association to remove the restrictions that define a
private company and filing a prospectus or statement in lieu of prospectus
with the Registrar of Joint Stock of Companies and Firms (RJSC)
Section 232: Conversion of Public Company into Private Company
Partnership Act 1932
Section 4: relation between persons who have agreed to share the profits of
a business carried on by all or any of them acting for all
Law of Agency (The Contract Act, 1872)
Section 182: Agency- Relation between Agent and Principal
Section 183: Who may be a Principal
Section 184: Who may be an Agent
Section 186-187: Creation of Agency An agent's authority can be express
(clearly stated) or implied (understood from the circumstances).
I. Express,
II. Implied,
• Estoppels (Kashinath Das v. Nisakar Rout)
• Necessity (Great Northern Railway Co. vs. Swaffield (1874) LR 9 Exch
132)
• Ratification
Agent's Duties:
Section 211: The agent has a duty to follow the principal's instructions or the
custom of the business when no specific instructions are given.
Sections 215 & 216: They are also obligated to disclose any conflicts of
interest and to act solely in the principal's interest.
Termination of Agency:
Section 201: Agency can be terminated by revocation of authority by the
principal, renunciation by the agent, completion of the business, death or
insanity of either party, or by the principal becoming insolvent.
Enforcement of Contracts:

Section 226: Contracts entered into by an agent on behalf of the principal
have the same legal effect as if the principal had entered into them
personally.
Intellectual Property Laws
Copyright Act, 2000 (Act No. XXVIII of 2000) + Copyright Rules, 2006; partially
repealed/revised by Copyright Act, 2023
Bangladesh Patents Act, 2022 (Act No. V of 2022) and the Bangladesh
Industrial Designs Act, 2023
Trademarks Act, 2009 & Trademarks Rules, 2015
Geographical Indication (Registration and Protection) Act, 2013
Majority Act, 1875
Section 3: A person domiciled in Bangladesh under the age of 18 is a minor.
Doctrine of Caveat Emptor
The maxim of caveat emptor means “let the buyer beware”. It is the duty of
the buyer to be careful while purchasing goods of his requirement and, in the
absence of any enquiry from the buyer, the seller is not bound to disclose
every defect in goods. Buyer must exercise care while purchasing unless:
Seller misrepresents or conceals defects. Goods do not match description or
sample. Goods are unfit for a disclosed purpose. Minors are not estopped
from asserting infancy (Mohori Bibee v. Dharmodas Ghose).
Case Laws: Case law is the law created by the courts
Balfour v. Balfour (1919)
Issue: Domestic agreements between spouses.
Decision: No legal intent in social/domestic agreements; they are not
enforceable as contracts.
Merritt v. Merritt (1970)
Issue: Separation agreements between estranged spouses.
Decision: Legal intent in agreements post- separation makes them

enforceable contracts.
Taylor v. Portington (1855)
Issue: Uncertain contract terms.
Decision: Contracts with vague or ambiguous terms are void.
Carlill v. Carbolic Smoke Ball Co. (1892)
Issue: Advertisement as an offer.
Decision: A unilateral offer in an advertisement is enforceable if conditions
are fulfilled.
Lalman Shukla v. Gauri Dutt
Issue: Knowledge of an offer for reward.
Decision: Acceptance requires prior knowledge of the offer; no contract
without it.
Mohori Bibee v. Dharmodas Ghose (1903)
Issue: Facts: A minor took a loan from a moneylender and later refused to
repay, arguing that he was underage at the time of the contract.
Decision: Contracts with minors are void, and they cannot be estopped from
claiming infancy. This case firmly established that a minor cannot be forced
to return benefits received under a void contract, unless the benefit is still in
their possession.
Stocks v. Wilson (1913) – A minor was required to return property still in
their possession.
Kundan Bibee v. Sree Narayan
Issue: Ratification of a minor's contract.
Decision: Contracts entered during minority cannot be ratified after attaining
majority unless new consideration is added.
Rajlukhy Debee v. Bhootnath
Issue: Natural love and affection as consideration.
Decision: Agreements must demonstrate natural love and affection to be
valid if no other consideration exists.
Chinayya v. Ramayya
Issue: Consideration from a third party.
Decision: Consideration can move from a third party as long as the
contracting parties agree.
Rowland v. Divall (1923)
Issue: Breach of implied title in a sale.
Decision: Buyer can claim repudiation and damages if the seller does not

have a valid title to the goods.
Grant v. Australian Knitting Mills
Issue: Merchantability of goods.
Decision: Seller is liable for harm caused by unmerchantable goods sold
under implied terms.
Harvey v. Facey
Issue: Lowest price as an offer.
Decision: Stating a price in response to an inquiry is not an offer, but an
invitation to negotiate.
Fisher v. Bell (1961)
Issue: Display of goods as an offer.
Decision: Displaying goods in a shop window is an invitation to treat, not an
offer.
Ramsgate Victoria Hotel Co. v. Montefiore
Issue: Reasonable time for acceptance of an offer.
Decision: Offers lapse after a reasonable time unless stated otherwise, based
on circumstances.
Vijay Minerals v. Bikash Deb
Issue: Adequacy of consideration.
Decision: Courts do not evaluate the adequacy of consideration if it holds
some legal value.
Hyde v. Wrench
Issue: Counteroffers and original offers.
Decision: A counteroffer destroys the original offer; it cannot be accepted
later.
Brogden v. Metropolitan Railway Co.
Issue: Uncommunicated acceptance.
Decision: A contract is incomplete without communication of acceptance.
Neale v. Merrett
Issue: Unqualified acceptance.
Decision: Conditional or altered acceptance is not valid acceptance.
Kedarnath Bhattacharji v. Gorie Mahommed
Issue: Promised subscription for charity.
Decision: Enforceable if liability is incurred based on the promise; otherwise,
not recoverable.
Abdul Aziz v. Masum Ali

Issue: Promise for charity without liability.
Decision: Promise is not enforceable if no action was taken based on it.
Chapter 1
Q1. All contracts are agreements but all agreements are not contracts
✅ What is an Agreement?
An agreement is formed when two or more parties come to a mutual
understanding about something. It can be oral or written, formal or
informal.
Example: You agree to have dinner at your friend’s house. This is an
agreement based on trust and social understanding.
✅ What is a Contract?
A contract is a legally enforceable agreement. It includes all the elements of
an agreement, plus additional conditions that make it binding in the eyes of
law. These elements include:
1. Offer and acceptance
2. Intention to create legal relations
3. Lawful consideration (something of value exchanged)
4. Capacity to contract
5. Lawful object
Example: You agree to buy a laptop from your friend for $500. This is a
contract because:
• There's offer and acceptance (you offer $500, your friend accepts)
• Both intend to create a legal obligation
• There's consideration (money for the laptop)
• Both have legal capacity
• The purpose is lawful

🔍 Key Difference: Intention to Create Legal Relations
This is where most non-contractual agreements fall short. Social or domestic
agreements usually don’t carry the intention to be legally bound, which is
why they do not become contracts.
Back to your example:
• You agreed to have dinner at your friend’s house.
• There's no legal consequence if either of you cancel.
• Hence, it's an agreement, not a contract.
Q1.1 Explain 3 law with example
• No man is punishable except for breach of law
• No man is above the law
• The result of statutes and judicial decisions determine the rights
of private persons.
1. No man is punishable except for breach of law
Meaning: A person cannot be punished unless they have violated a
specific law. There must be a clearly defined legal offense and due legal
procedure.
Example:
Suppose someone is arrested just because they criticize the government.
If no law prohibits that criticism (and freedom of speech is protected), then
punishing that person is unlawful.
Only if they violate a valid law (e.g., inciting violence), then legal action can
be taken.
Principle: Protects individuals from arbitrary or unfair punishment.
2. No man is above the law
Meaning: Everyone is equal before the law, whether a common citizen
or a government official. Status or power does not provide immunity from
legal accountability.

Example:
If a minister or celebrity commits a crime like tax evasion or assault, they
must face legal consequences just like any other citizen.
Their position or influence does not give them the right to break the law.
Principle: Ensures equality, fairness, and prevents abuse of power.
3. The result of statutes and judicial decisions determine the rights of
private persons
Meaning: The legal rights and duties of individuals are not based on
personal views or customs, but on written laws (statutes) and judicial
decisions (precedents).
Example:
Imagine a dispute over a property boundary.
The decision in court will be based on:
• What the land law statute says
• What previous court judgments have decided in similar cases
So, your right to property is defined and protected by law, not just tradition
or opinion.
Principle: Promotes certainty, predictability, and justice in society.
In Summary:
Rule of Law Meaning Example
No man is punishable
except for breach of
law
You can’t be punished
without breaking a
specific law
Arresting someone without
legal cause is unjust
No man is above the
law
Everyone is equal under
the law
A politician who breaks the
law must be punished like
any citizen
Rights are based on
statutes and court
decisions
Your legal rights come
from written laws and
judgments
Property rights settled
through land laws and
court rulings
Q2. Essential Elements of a Contract
1. Offer and acceptance
2. Intention to create legal relationship

3. Lawful consideration
4. Capacity of parties
5. Free consent
6. Lawful object
7. Writing and registration
8. Certainty
9. Possibility of performance
10. Agreement not Expressly Declared Void
Chapter 2
Q3. Rules Regarding a Valid Offer
1. An offer may be ‘express’ or ‘implied’.
2. An offer must contemplate to give rise to legal consequences and be
capable of creating legal relations.
3. The terms of the offer must be certain and not lose or vague.
4. An invitation to offer is not an offer.
5. An offer may be ‘specific’ or ‘general’.
6. An offer must be communicated to the offeree.
7. An offer should not contain a term the non-compliance of which would
amount to acceptance.
8. An offer can be made subject to any terms and conditions
An invitation to treat is not an offer
o Goods displayed in a shop window is ITT- Fisher v Bell
o Mere statement of a price is ITT- Harvey v Facey (what is the lowest
price you can sell the Bumper Hall pen?)
An offer must be communicated to the offeree
o Lalman Shukla vs Gauri Dutt
No burden to inform decision about the offer
An offeror cannot say that if acceptance is not communicated up to a certain
date, the offer would be presumed to have been accepted. If the offeree

does not reply, there is no contract, because no obligation to reply can be
imposed on him, on the ground of justice.
Q4. List of Invitations to Treat (ITT)
1) Advertisements (General)
2) Display of Goods in Shops
3) Price Quotations
4) Auction Announcements
5) Tenders and Requests for Bids
6) Job Advertisements
7) Public Transport Timetables and Ticket Pricing
8) Menu Listings in Restaurants
9) Bank Loan and Mortgage Offers
10) Online E-commerce Listings
11) Catalogues and Brochures
Q5. Lapse and Revocation of Offer
1. An offer lapses after stipulated or reasonable time.
2. An offer lapses by not being accepted in the mode prescribed, or if no
mode is prescribed, in some usual and reasonable manner.
3. An offer lapses by rejection.
4. An offer lapses by the death or insanity of the offeror or the offeree
before acceptance.
5. Revocation can be by non-fulfillment of a condition.
6. An offer lapses by subsequent illegality or destruction of subject matter
An offer lapses by rejection
An offer lapses if it is rejected by the offeree.
The rejection may be express or implied.
Implied rejection is one:
(a) where either the offeree makes a counter offer or
(b) where the offeree gives a conditional acceptance.

An offer may be conditional but acceptance must always be unconditional
An offered to sell his house to B for tk. 50,000. B said that he accepted the
offer if he was appointed as General Manager of A’s factory. B’s acceptance
is a ‘conditional acceptance’ which amounts to rejection of A’s offer and
there is no contract.
Q6. Legal Rules Regarding a Valid Acceptance
1. Acceptance must be given only by the person to whom the offer is
made.
2. Acceptance must be absolute and unqualified. (Neale vs Merrett)
3. Acceptance must be expressed in some usual and reasonable manner,
unless the proposal prescribes the manner in which it is to be accepted.
(Brogden vs Metropolitan Rly Co- Mental acceptance is not an
acceptance. So, Silence cannot amount to acceptance)
4. Acceptance must be communicated by the acceptor. Powell vs Lee
5. Acceptance must be given within a reasonable time and before the
offer lapses and/or is revoked.
6. Acceptance must succeed the offer.
7. Rejected offers can be accepted only, if renewed. Hyde vs Wrench
Communication of an acceptance
Ben accepts Adam’s offer by letter sent by post 9th instant. The letter
reaches A on 11th instant. The communication of the acceptance is
complete:
o as against Adam, when the letter is posted, i.e., 9th, and
o as against Ben, when the letter is received by A, i.e on 11th.
Effect of delay or loss of letter of acceptance in postal transit
So far as the offeror is concerned, he is bound by the acceptance the
moment the letter of acceptance is posted, although the letter is delayed or
wholly lost through an accident of the post and the letter never in fact
reaches him.

So far as the acceptor is concerned, he is not bound by the letter of
acceptance till it reaches the offeror.
Contracts over the Telephone
- Each party is able hear the voice of the other. There is instantaneous
communication of offer and acceptance, rejection and counter offer.
- The contract is complete only when the acceptance is received by the
offeror also applies to contracts made over the telephone.
- If the acceptance is not in fact communicated to the offeror because the
telephone suddenly goes ‘dead’, there will be no contract.
- No question of revocation arises in such instantaneous communication.
Chapter 3
The person making the promise is called the promisor. The person to whom
he makes the promise is a promisee.
Q7. RULES REGARDING CONSIDERATION
1.Desire of the promisor is essential
2.Consideration may be past, present or future
o Physically impossible. (section 23)
o Legally impossible (section 25)
o Uncertain Consideration
o Illusory Consideration
3.Consideration must be something of value or must be real
4.The Consideration must not be illegal, immoral, or opposed to public policy
5.Consideration need not be adequate
6.Doctrine of Constructive Consideration
7.Promise to charities
8. Consideration may move from the promisee or any other person
(Beneficiary Rule) (Chinayya vs Ramayya)
Q8. Consideration must be sufficient but need not be adequate.

The benefit or detriment must be legally sufficient. All that is required is
some sort of economic value. Courts are not concerned with whether the
consideration represents a “good deal” even if the consideration holds
economic value. If there is some value to the agreement, it is legally
enforceable. “In Vijay Minerals Vs Bikash Deb, the Court said it would not go
into the question of adequacy of consideration when considering whether an
agreement is binding or not”.
Q9. NO CONSIDERATION NO CONTRACT - EXCEPTION TO THIS RULE
General rule is that “a promise without consideration is void”. However,
there are some exceptional cases where a contract is enforceable even when
there is no consideration.
1. Natural love and affection: An agreement without consideration is valid
under section 25 (1) only if the following requirements are complied
with
o The agreement is made by a written document
o The document is registered according to the law relating to registration
in force at the time
o Made on account of natural love and affection
o Between parties standing in a near relation to each other.
2. Voluntary compensation for past services.
A promise made without any consideration is valid if, “it is a promise to
compensate wholly or in part, a person who has already voluntarily
done something for the promisor - Sec. 25 (2). It must be written.
3. Completed gift.
A gift (which is not an agreement) does not require consideration in
order to be valid. “As between the donor and the donee, any gift
actually made will be valid and binding even though without
consideration”.
4. Contribution to charity. Kedarnath Bhattacharji v. Gorie Mahommed
Q10. Following relations are said to be near
• Husband and wife (Poonoo bibi vs Fayez Bukon)

• Relation between siblings
• Relation between in-laws and daughter-in-law or son-in-law (Bhiva vs
Shivaram)
• Parents-children
Chapter 4
Q11 When breach of Condition is to be treated as breach of Warranty
o Voluntary waiver by buyer
o Acceptance of goods by buyer
Chapter 5
Incompetent Person
A person is incompetent to contract if he is –
o a minor, according to the law to which he is subject,
o of unsound mind, and
o disqualified from contracting by any law to which he is subject.
Q12. Rules regarding Minor’s agreements:
1) An agreement by a minor is absolutely void and inoperative as against
him
2) Beneficial agreements are valid contracts
3) The rule of estoppel does not apply to a minor. (Estoppel means, if a
person makes a statement that misleads another person). Mohori
Bibee v/s Dharmodas Ghose
4) Minor and Insolvency
5) Specific performance
6) Minor partner
7) Contract by minor and adult jointly
8) The law of restitution (ss. 64 & 65)
9) Minor’s liability for necessaries, and Law of Restitution (section 68)
10) Minor as a shareholder of a company

Chapter 6
Feature Company Limited by Shares Company Limited by Guarantee
Liability of
Members
Limited to the unpaid amount on
shares
Limited to a nominal guaranteed
amount
Purpose
Typically formed for profit-
making businesses
Typically formed for non-profit
purposes
Members’
Contributions
Shareholders contribute capital
through purchasing shares
Members contribute a fixed
guarantee amount
Ownership
Owned by shareholders who
may receive dividends and profit
No ownership of shares;
members don’t profit from the
company
Example
ABC Limited (electronic gadget
company)
XYZ Charity Limited (non-profit
organization)

Intellectual Property Law (IPL): Challenges of Enforcing IPR in Bangladesh
Introduction:
Intellectual Property Rights (IPR) are legal rights granted to creators for their
inventions, literary and artistic works, symbols, names, and images. In Bangladesh,
while the legislative framework exists, enforcement of IPR faces several practical
challenges.
Key Challenges:
1. Weak Enforcement Mechanisms:
o Despite having laws like the Copyright Act 2000, Patent & Design Act
1911, and Trademarks Act 2009, implementation is poor.
o Limited coordination between enforcement agencies (e.g., police,
customs, and judiciary).
2. Lack of Awareness:
o Many business owners and individuals are unaware of their IPR or the
legal consequences of infringement.
o Limited IP education among law enforcement, consumers, and even
judiciary members.
3. Judicial Delays and Backlogs:
o Courts in Bangladesh face significant delays due to a heavy caseload.
o IP disputes may take years to resolve, discouraging victims from
seeking legal redress.
4. Limited Technical Expertise:
o Enforcement authorities and judges often lack technical and legal
training specific to IPR matters, especially in digital and patent law.
5. Counterfeit and Piracy Issues:
o Markets are flooded with counterfeit products (e.g., branded clothing,
medicines, software), with minimal checks and controls.
o Online piracy is on the rise, and cyber-IP law enforcement is still
underdeveloped.
6. Cross-border Infringement and Globalization:
o Enforcement becomes complicated when IP violations involve foreign
parties.
o Bangladesh has yet to fully align with global standards like TRIPS
enforcement provisions.
7. Corruption and Lack of Political Will:
o Corruption in law enforcement and administrative systems hampers

IPR enforcement.
o IP protection is not a high priority in national policy, despite its
importance to economic development.
Recommendations:
• Capacity building of IP offices, enforcement agencies, and judiciary.
• Public awareness campaigns on IP rights and responsibilities.
• Digital IP enforcement mechanisms to combat online infringement.
• Policy reforms to streamline IP litigation and dispute resolution.
• International cooperation and alignment with global standards (e.g.,
TRIPS, WIPO treaties).
Conclusion:
While Bangladesh has made progress in establishing legal frameworks for IP
protection, the real challenge lies in effective enforcement. Addressing
institutional, procedural, and awareness-related gaps is crucial for safeguarding
innovation and promoting foreign investment.
Great Northern Railway Co. v. Swaffield (1874) LR 9 Exch 132
Facts of the Case:
• Swaffield, the defendant, sent a horse via the Great Northern Railway to a
particular station.
• Upon arrival, there was no one present to receive the horse.
• To prevent harm or inconvenience, the railway company placed the horse in
a nearby stable for safekeeping.
• The company later sued Swaffield to recover the costs of stabling the
horse.
Legal Issue:
Was the defendant (Swaffield) liable to reimburse the railway company for the
expenses incurred in taking care of the horse, despite no express agreement to
pay for such services?
Final Judgment:

The court held in favor of the railway company.
Swaffield was liable to pay the reasonable costs of keeping the horse safe.
Reasoning:
• The court applied the principle of agency of necessity.
• It ruled that the railway company acted reasonably and in good faith to
protect the owner’s property when immediate instructions could not be
obtained.
• As such, the railway company was deemed to have acted as an agent of
necessity for Swaffield and was entitled to reimbursement for the
expenses incurred.
Legal Significance:
• This case is a key precedent for the doctrine of agency by necessity.
• It establishes that in emergencies, where property must be protected and
the owner is not reachable, a party acting reasonably can recover expenses
even without prior consent.
• It’s important in commercial and transport law where goods or property
may need to be safeguarded due to unforeseen circumstances.
Cutter v. Powell (1795) 6 Term Rep 320
Facts of the Case:
• Cutter, a sailor, entered into a contract with Powell to serve on a ship sailing
from Jamaica to Liverpool.
• The agreement specified that payment would be made in a lump sum
upon completion of the entire voyage.
• Before the ship arrived in Liverpool, Cutter died during the voyage.
• Cutter’s widow attempted to recover a portion of the agreed wages for
the work her husband had completed before his death.
Legal Issue:
Was Cutter (through his widow) entitled to part payment for the services
partially performed, despite the contractual obligation requiring full
performance of the voyage?

Final Judgment:
The court ruled in favor of Powell, the employer.
It held that no payment was due because the contract was entire and
indivisible—the agreed wages were contingent on full performance, which did
not occur.
Reasoning:
• The court applied the entire obligations rule, which means that full
completion of the contracted task is a condition precedent to payment.
• Since Cutter did not complete the voyage, the condition for earning the
full wage was not fulfilled.
• The contract did not provide for partial payments in the event of
incomplete performance.
Legal Significance:
• This case is a foundational authority on the principle of entire obligations
in contract law.
• It demonstrates the strict nature of performance-based contracts, where
partial performance may not entitle a party to any remuneration.
• However, due to the harshness of this outcome, later case law and
doctrines (e.g., quantum meruit, divisible contracts, or substantial
performance) have been developed to mitigate such results in modern
commercial law.
Grant v. Australian Knitting Mills Ltd (1936) AC 85
Facts of the Case:
• Dr. Grant purchased woolen undergarments (long underwear) from a
retailer.
• The undergarments were manufactured by Australian Knitting Mills Ltd.
• After wearing them, Dr. Grant developed dermatitis (a skin condition),
which was later found to be caused by excess sulphur left in the garments
due to a manufacturing defect.
• He filed a suit against the manufacturer and the retailer for negligence,
seeking compensation for his injuries.
Legal Issue:

• Was the manufacturer liable for the harm suffered by the consumer (Dr.
Grant), even though there was no direct contract between the
manufacturer and the buyer?
• Does the case fall under the principle of negligence in product liability?
Final Judgment:
The Privy Council held in favor of Dr. Grant, ruling that the manufacturer was
liable in negligence for failing to ensure that the product was safe for consumer
use.
Reasoning:
• The court applied the principle established in Donoghue v. Stevenson
(1932), which set out the “neighbour principle”—a manufacturer owes a
duty of care to the ultimate consumer.
• The manufacturer breached this duty by failing to remove harmful
chemical residue from the undergarments.
• The presence of sulphur was not detectable by the consumer, making this a
clear case of negligence in manufacturing.
• The court found a causal link between the defect and Dr. Grant’s injury.
Legal Significance:
• This case expanded the law of negligence and product liability.
• It reinforced that manufacturers have a duty of care to ensure products
are reasonably safe for end-users, even in the absence of a direct contract.
• Grant v. Australian Knitting Mills is considered a landmark case for
consumer protection and the evolution of tort law, especially regarding
defective goods.
Salomon v. Salomon & Co. Ltd (1896) AC 22 (House of Lords)
Facts of the Case:
• Mr. Aron Salomon was a sole proprietor of a successful boot-making
business.
• He converted his business into a limited company under the Companies
Act 1862, forming Salomon & Co. Ltd.
• The company had seven shareholders (the statutory minimum at the time):
Salomon himself, his wife, and five children.

• Salomon sold the business to the company for £39,000, receiving
debentures (secured debt) worth £10,000 and shares for the rest.
• The company later went into liquidation.
• The company’s unsecured creditors argued that Salomon should be
personally liable for the debts, claiming the company was a mere sham or
agent for Salomon.
Legal Issue:
• Is a company formed in compliance with statutory requirements a separate
legal entity, even if it is effectively controlled by one person?
• Can the corporate veil be lifted to hold Mr. Salomon personally liable for
the debts of the company?
Final Judgment:
The House of Lords held in favor of Salomon.
It ruled that Salomon & Co. Ltd was a separate legal person, and Salomon was
not personally liable for its debts.
Reasoning:
• The court emphasized the doctrine of separate legal personality: once a
company is incorporated, it has its own legal identity, distinct from its
shareholders or directors.
• Salomon complied with all legal formalities under the Companies Act.
• The company was not a sham; it was duly registered and legally valid.
• Creditors who lent money to the company were presumed to understand
they were dealing with a limited liability entity.
Legal Significance:
• This is a landmark case in corporate law, establishing the foundational
principle of corporate personality and limited liability.
• A company is distinct from its shareholders, even if all shares are owned
by one person.
• The case reinforced the importance of the corporate veil, which protects
individuals from personal liability for the company’s debts and obligations.
• It remains a key precedent in company law, business structure planning,
and risk management.
•

Hadley v. Baxendale (1854) 9 Exch 341
Facts of the Case:
• Hadley owned a flour mill in Gloucester. A crankshaft in the mill broke,
halting operations.
• He engaged Baxendale, a carrier, to deliver the broken shaft to engineers
in Greenwich for replacement.
• Baxendale delayed delivery by several days, although he had promised
next-day delivery.
• As a result, Hadley’s mill remained inoperative longer, causing a loss of
profits.
• Hadley sued Baxendale for breach of contract, seeking damages for lost
profits.
Legal Issue:
Can a party claim damages for loss of profits as a result of a breach of contract,
if the loss was not communicated or foreseeable at the time of the contract?
Final Judgment:
The court ruled in favor of Baxendale, the carrier.
It held that Hadley was not entitled to damages for lost profits because the
carrier had not been made aware that delay would result in such a loss.
Reasoning:
The court laid down a key rule on remoteness of damages:
Damages can only be recovered if:
1. They arise naturally (i.e., according to the usual course of things), or
2. They were reasonably contemplated by both parties at the time the
contract was formed.
In this case:
• Baxendale did not know the mill would remain closed until the crankshaft
was delivered.
• Since the loss was not foreseeable or disclosed, the damages were
considered too remote.
Legal Significance:
• This case established the foreseeability test for consequential damages in

contract law.
• It is a foundational precedent on the limitation of liability and the
doctrine of remoteness of damages.
• It highlights the importance of clear communication and disclosure of
special circumstances during contract formation.
• Still widely cited in both common law jurisdictions and commercial
contract disputes.
Routledge v. Grant (1828) 130 ER 920
Facts of the Case:
• Grant, the defendant, offered to sell his house to Routledge, the plaintiff.
• The offer stated that it would remain open for six weeks.
• However, before the six weeks were over, Grant withdrew the offer.
• Routledge tried to accept the offer after its withdrawal, believing he had
the full six weeks.
Legal Issue:
Can an offeror withdraw an offer before the expiry of a fixed period if the offer
has not yet been accepted by the offeree?
Section Involved (Under Indian Law):
Section 5 of the Indian Contract Act, 1872
"A proposal may be revoked at any time before the communication of its
acceptance is complete as against the proposer."
Final Judgment:
The court ruled in favor of Grant, holding that:
• An offer can be withdrawn at any time before it is accepted.
• The promise to keep the offer open for six weeks was not supported by
consideration, and therefore not binding.
• Since Routledge had not accepted the offer before the withdrawal, there
was no contract.
Legal Principle Established:
• An offer does not become irrevocable simply because it includes a time
limit.

• Revocation is valid as long as it occurs before acceptance and is
communicated to the offeree.
• To make an offer irrevocable for a period, there must be a separate
binding agreement (option contract) supported by consideration.
Significance:
• Routledge v. Grant is a key case in understanding the revocability of
offers.
• It supports the principle that a mere statement to keep an offer open is
not enforceable unless consideration is provided.
• It aligns with Section 5 of the Indian Contract Act and basic contract law
principles in common law jurisdictions.
Carlill v Carbolic Smoke Ball Co (1893) 1 QB 256
Facts of the Case:
• The Carbolic Smoke Ball Co. published an advertisement stating that it
would pay £100 to anyone who used their smoke ball product as directed
and still contracted influenza.
• They also claimed to have deposited £1,000 in a bank to show their
sincerity.
• Mrs. Carlill, the plaintiff, used the product as instructed and still caught
influenza.
• She claimed the £100 reward, but the company refused, arguing that there
was no binding contract.
Legal Issue:
• Was the advertisement a binding offer or merely an invitation to treat?
• Did Mrs. Carlill's use of the smoke ball amount to acceptance of the offer?
• Was there sufficient consideration and intention to create legal relations?
Relevant Legal Provisions (Indian Context):
• Section 2(a) of the Indian Contract Act, 1872 – Definition of a
proposal/offer
• Section 2(b) – Acceptance of offer
• Section 2(d) – Consideration
• Section 10 – Essentials of a valid contract

Final Judgment:
The Court of Appeal held in favor of Mrs. Carlill, stating:
• The advertisement was a unilateral offer made to the public.
• Mrs. Carlill accepted the offer by performing the required conditions
(using the smoke ball).
• There was consideration, as she used the product and gave up her time
and comfort.
• The deposit of £1,000 showed the company’s intention to be legally
bound.
Legal Principles Established:
1. Unilateral Contracts: A public advertisement can constitute a binding
unilateral offer if it is clear, definite, and shows intent.
2. Acceptance by Conduct: A contract can be accepted without
communicating acceptance if performance of conditions is all that is
required.
3. Consideration: Using the product as directed was sufficient consideration
to make the promise enforceable.
4. Intention to Create Legal Relations: The deposit of money in a bank
indicated the company’s serious intent.
Significance of the Case:
• A landmark case in contract law, especially in offer and acceptance.
• Clarified that advertisements can be binding offers in cases of unilateral
contracts.
• Reinforces the importance of clear communication, performance of
conditions, and consideration in forming valid contracts.
Lalman Shukla v. Gauri Dutt
Citation: ILR (1913) 40 All 489 (Allahabad High Court)
Facts of the Case:
• Gauri Dutt, the defendant, sent his servant Lalman Shukla to search for his
missing nephew.
• After sending Lalman, Gauri Dutt issued a public notice offering a reward
to anyone who found and returned the boy.

• Lalman found the boy and brought him back, unaware of the reward offer
at the time of performing the task.
• Later, when he came to know about the reward, he demanded it.
• Gauri Dutt refused, and Lalman filed a case to claim the reward.
Legal Issue:
• Is knowledge of an offer a prerequisite for acceptance in contract law?
• Can a person accept and claim a reward if they perform the required act
without knowledge of the offer?
Relevant Legal Sections (Indian Contract Act, 1872):
• Section 2(a): Definition of Proposal
• Section 2(b): Acceptance
• Section 10: Essentials of a Valid Contract
Final Judgment:
The Allahabad High Court ruled against Lalman Shukla, holding that:
• A valid acceptance requires knowledge of the offer.
• Since Lalman was unaware of the reward at the time he performed the act,
there was no valid contract.
• Mere performance without knowledge of the offer does not amount to
acceptance.
Legal Principles Established:
1. Knowledge of Offer is Essential: One must be aware of an offer to accept
it and form a valid contract.
2. No Contract Without Acceptance: There was no mutual consent or
agreement, which is fundamental for a contract.
3. Reward Contracts: To claim a reward, the claimant must act in reliance on
the offer.
Significance of the Case:
• A leading Indian case on the formation of contracts and offer-
acceptance rules.
• Differentiates between mere performance and performance with
intention to accept.
• Reiterates the principle that acceptance must mirror the terms of the

offer and must be communicated (or inferred) through action with
knowledge.

How does an “Invitation to Treat” differ from an actual “Offer” and what are its
implications on the contractual obligations of individual parties?
How does an “Invitation to Treat” differ from an actual “Offer” and what are its
implications on the contractual obligations of individual parties?
An offer is a clear and definite statement of the offeror’s willingness to enter into a
binding contract on specified terms, which becomes legally enforceable once
accepted by the offeree. It is the final declaration of readiness to be legally bound
by the terms set out.
In contrast, an invitation to treat is merely a preliminary communication that
expresses a willingness to negotiate or invites others to make an offer. It does not
show an intention to be legally bound and therefore cannot be accepted to form a
contract.
Distinction Between Offer and Invitation to Treat
Aspect Offer Invitation to Treat
Nature
Final expression of
willingness to contract.
Preliminary step inviting offers or
negotiations.
Legal
Intention
Shows an intention to be
legally bound if accepted.
No intention to be bound; merely invites
offers.
Legal
Effect
Acceptance leads to a
binding contract.
Cannot be accepted; does not lead to a
contract by itself.
Who
Makes It
The party initiating the
contractual commitment.
Usually made by a seller, advertiser, or
auctioneer to attract interest.
Examples
“I will sell you this car for
u00a35,000.”
Display of goods in a shop (Fisher v Bell
[1961]), advertisements (Partridge v
Crittenden [1968]).

Implications on Contractual Obligations
• Offer: Once accepted, a legally binding contract is formed. The offeror and
offeree are both obligated to perform their respective duties under the
contract. Failure to do so could lead to legal liability for breach.
• Invitation to Treat: Since it is not an offer, it carries no contractual
obligations. It is simply a call for offers. The party making the invitation is not
bound to accept any offers received.
•
Judicial Perspective
Courts often rely on the intention of the parties, as inferred from the context and
circumstances, rather than the precise wording used. Even if a statement is labeled
an “offer,” it may be treated as an invitation to treat if it lacks a clear intent to be
bound, and vice versa.
QUESTION 2
Analyze the case “Williams v Roffey Bros and Nicholls (Contractors) Ltd (1990) 1
All ER 512” and discuss all the legal issues regarding:
a) Promises to accept less from a debtor
b) Promises to pay more in return for extending time to repay the debt
Case Summary: Williams v Roffey Bros & Nicholls (1990)
Facts: Roffey Bros, building contractors, were contracted to renovate a block of flats
and subcontracted carpentry work to Williams. Later, Williams experienced financial
difficulties and was at risk of not completing the work on time. To avoid delay
penalties under the main contract, Roffey Bros promised to pay Williams additional
money to finish on time. Williams continued working but did not receive the
promised extra payment. He sued.
Issue: Was the promise to pay extra money enforceable, given that Williams was
already contractually obligated to complete the work?

Judgment: The Court of Appeal held that Roffey Bros received a "practical benefit"
from the continued performance by Williams (i.e., avoiding penalties and
disruption), which was sufficient consideration to support the new promise.
Therefore, the promise was enforceable even without new or additional obligations
from Williams.
Legal Analysis:
a) Promises to Accept Less from a Debtor
• Traditionally, under the rule in Foakes v Beer (1884), a creditor’s promise to
accept a lesser sum than owed is not enforceable unless supported by fresh
consideration.
• Part payment of a debt is not good consideration for a promise to forgo the
balance.
• However, courts may enforce such promises in equity under the doctrine of
promissory estoppel (see Central London Property Trust v High Trees House
Ltd), where:
o A clear promise is made,
o The debtor relies on the promise, and
o It would be inequitable to go back on it.
In Williams v Roffey, although it focused on paying more, it challenged the rigid
approach of Foakes v Beer by emphasizing practical benefits rather than traditional
forms of consideration.
b) Promises to Pay More in Return for Extended Time
• Under traditional rules (e.g., Stilk v Myrick), promising more money for the
same performance was not binding due to lack of consideration.
• However, in Williams v Roffey, the court innovated by recognizing that if the
promisor obtains a practical benefit (such as timely completion, avoiding
penalties, avoiding hiring someone else), then that benefit can be valid
consideration.
• Thus, a promise to pay more can be enforceable if:

o There is no duress or economic coercion,
o There is a genuine commercial advantage (practical benefit),
o The promisor voluntarily agrees to pay more.
Conclusion:
Williams v Roffey Bros is a landmark case that modernized the doctrine of
consideration, especially in the context of commercial agreements. While it does
not overrule Foakes v Beer, it creates a more flexible approach where courts may
enforce modified contracts if a practical benefit is present. The distinction between
promises to accept less (still governed strictly by Foakes) and promises to pay more
(where Williams applies) remains crucial in determining enforceability.
QUESTION 3
Jeff is the director of a successful business who specializes in selling refrigerators.
Jeff’s supplier of refrigerator parts, Freeze4lyfe, are in some financial difficulties.
Jeff, being the diligent businessman that he is, sees this as a golden opportunity.
His business owes Freeze4lyfe £200,000, but this isn’t payable until next year. He
is aware that Freeze4lyfe may be willing to accept a lesser amount now in order to
get out of their difficulties. He contacts Freeze4lyfe and offers them £80,000 and 2
new refrigerators to waive the debt. Freeze4lyfe reluctantly accept the offer and
waive the debt. Discuss whether this is a valid remission by Freeze4lyfe and
whether this settles the debt between the parties.
Legal Principles Involved:
1. Part Payment of Debt – Foakes v Beer (1884):
The general rule is that part payment of a debt does not discharge the full
debt unless supported by fresh consideration. A creditor’s promise to accept
less is not enforceable unless the debtor offers something additional or
different.

2. Pinnel’s Case (1602):
Part payment before the due date, at a different place, or accompanied by a
new element (like goods or services) may constitute valid consideration.
3. Promissory Estoppel – Central London Property Trust v High Trees House Ltd
(1947):
A creditor may be estopped from claiming the balance if:
o There is a clear promise to accept less,
o The debtor relies on that promise,
o It would be inequitable to go back on it.
Application to the Scenario:
• Jeff owes £200,000, not due until next year.
• He offers £80,000 + 2 refrigerators, and Freeze4lyfe accepts.
• Freeze4lyfe later waives the remaining debt.
Key Legal Considerations:
1. Is There Valid Consideration?
o The £80,000 is part of the existing debt and thus not sufficient
consideration on its own.
o However, the 2 new refrigerators may count as fresh consideration if
they have tangible economic value.
o Also, the fact that payment is made earlier than due may support a valid
agreement (Pinnel’s Case).
2. Commercial Pressure or Duress?
o If Freeze4lyfe accepted the deal under economic duress, the agreement
could be invalidated.
o However, if the agreement was voluntarily accepted, even reluctantly,
and there was no unlawful pressure, it may stand.
3. Estoppel?

o If Freeze4lyfe represented clearly that the debt was waived and Jeff
relied on it to his detriment, they may be estopped from later claiming
the balance.
Conclusion:
• The agreement between Jeff and Freeze4lyfe may be enforceable, provided
the 2 refrigerators constitute sufficient additional consideration.
• Additionally, since the debt was paid before it was due, and the creditor
accepted the variation, it might satisfy the rule from Pinnel’s Case.
• However, if Freeze4lyfe can prove economic duress or lack of genuine
agreement, the waiver may not be valid.
• On balance, if the transaction was entered voluntarily and the refrigerators
are of real value, this could amount to a valid remission and settle the debt.
QUESTION 4
a) Critically evaluate the distinction between fraud and misrepresentation under
the Contract Act 1872. How do these vitiating factors affect the enforceability of
contracts? Support your answer with relevant case laws and judicial
interpretations.
Distinction Between Fraud and Misrepresentation:
Aspect Fraud Misrepresentation
Definition
As per Section 17 of the Contract Act
1872, fraud means a willful act
committed with intent to deceive
another party.
As per Section 18, misrepresentation is an
innocent or negligent false statement
believed to be true by the person making it.

Aspect Fraud Misrepresentation
Intention
Made knowingly, without belief in
its truth or recklessly.
Made innocently, with belief in its truth.
Element of
Deceit
Yes – involves intention to deceive. No – absence of intent to deceive.
Right to
Rescind
The contract is voidable, and the
aggrieved party can claim damages.
The contract is voidable, but damages are
not generally awarded unless negligence is
proven.
Burden of
Proof
Lies on the party alleging fraud –
must prove the deceit.
Easier to establish – only needs to prove the
statement was false.
Examples
A sells a horse saying it is healthy,
knowing it has a disease.
A sells a car, honestly believing it’s accident-
free when it’s not.
Effect on Enforceability of Contracts:
• Fraud and misrepresentation are both vitiating factors, which make a
contract voidable at the option of the aggrieved party.
• If a contract is entered due to fraud, the party may rescind the contract and
claim compensation for any loss.
• In case of misrepresentation, the party may rescind, but cannot claim
compensation unless negligence is proven.
Relevant Case Laws:
1. Derry v Peek (1889):
Defined fraud as a false representation made knowingly, or without belief in
its truth, or recklessly.
Held: No fraud if the belief in the statement was honest.
2. Horsefall v Thomas (1862):
Fraud does not render a contract voidable unless the misrepresentation
actually induces the contract.
3. With v O’Flanagan (1936):
A misrepresentation can arise by not disclosing a change in circumstances,
making earlier truthful statements false.

b) Distinguish between the remedies available for fraud and misrepresentation
under the Contract Act 187
Remedies for Fraud:
1. Rescission of the Contract:
The aggrieved party can cancel the contract (Section 19).
2. Damages/Compensation:
Under Section 19 and 73, the party can claim compensation for losses suffered
due to deceit.
3. Restitution:
Restore both parties to their original position as if the contract never existed.
Remedies for Misrepresentation:
1. Rescission:
The contract may be rescinded under Section 19, if the misrepresentation
induced the contract.
2. No Damages (Generally):
Damages are not available unless it is shown that the misrepresentation was
negligent or became fraudulent.
3. Specific Performance:
If rescission is not possible, the court may order the contract to be enforced in
a way that is fair.
Conclusion: Fraud and misrepresentation both affect the validity of a contract, but differ mainly
in terms of intent and remedies. Fraud involves deceit and allows for compensation, while
misrepresentation, being innocent, generally only allows for rescission. Both are treated
seriously under the Contract Act 1872 to protect parties from unjust contractual obligations.
QUESTION 5
Critically explain the distinction between void and voidable contracts under the
Contract Act, 1872. You must explain these concepts using practical examples and
refer to specific statutory provisions to write your answer.

Definition and Legal Basis
Under the Indian Contract Act, 1872, contracts are classified based on their validity.
Two key types are void and voidable contracts.
Void Contract – Section 2(g)
A void contract is one that ceases to be enforceable by law. It was either invalid
from the beginning or becomes void due to certain circumstances.
Voidable Contract – Section 2(i)
A voidable contract is one which is enforceable by law at the option of one party,
but not at the option of the other. If the aggrieved party chooses to rescind it, the
contract becomes void.
Key Differences Between Void and Voidable Contracts
Aspect Void Contract Voidable Contract
Legal Status Not enforceable by law.
Enforceable unless rescinded by the
aggrieved party.
Consent
No valid consent (e.g.,
illegal object or
uncertainty).
Consent is obtained through coercion,
fraud, misrepresentation, etc.
Rights of
Parties
No legal obligations exist.
The aggrieved party may enforce or
cancel the contract.
Effect No legal relationship arises.
A legal relationship exists until it is
rescinded.
Examples
Agreement to do an illegal
act, contract with a minor.
Contract signed under undue
influence or fraud.
Statutory
References
Section 2(g), 23, 24, 56 Section 2(i), 19, 19A

Practical Examples
Void Contract:
• Example: A agrees to sell heroin to B. This agreement is void ab initio (from
the beginning) under Section 23, as the object is unlawful.
• Example: A contract with a minor is void as minors are not competent to
contract (Section 11).
Voidable Contract:
• Example: A threatens B at gunpoint to sell his land. B signs the contract under
duress. This contract is voidable at the option of B under Section 15
(coercion).
• Example: A makes a contract with B based on false statements. B may rescind
the contract due to fraud (Section 17).
Judicial Interpretations
1. Mohori Bibee v Dharmodas Ghose (1903):
The Privy Council held that a contract with a minor is absolutely void, not
merely voidable.
2. Ranganayakamma v Alwar Setti (1889):
A contract entered into under coercion (tying a woman’s remarriage to a
contract) was held voidable.
Conclusion
The distinction between void and voidable contracts is vital to understanding
contractual rights and remedies. Void contracts are inherently invalid and provide
no legal remedy, while voidable contracts are valid unless the aggrieved party
chooses to avoid them. The Indian Contract Act, 1872, ensures fairness by allowing
parties to escape obligations formed under coercion, fraud, or misrepresentation,
while maintaining certainty by invalidating unlawful or impossible agreements.

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