Page 15 - DCOM103_COMMERCIAL_LAW

Commercial Law

Notes meaning of the agreement can be made certain by the circumstance and in that case, the
agreement can be treated as a valid contract. According to Section 29 of the Contract Act
says that Agreements, the meaning of which is not certain or capable of being made certain,
are void.
9. Possibility of performance: As per section 56, if the act is impossible of performance,
physically or legally, the agreement cannot be enforced by law. There must be possibility of
performance of the agreement. Impossible agreements like one claims to run at a speed of
1000km/hour or Jump to a height of 100 feet, would not create a valid agreement. All such
acts which are impossible of performance would not create a valid contract and cannot
treated as a valid contract. In essence, there must be possibility of performance must be
there to create a valid contract.
10. Legal formalities: The contract act does not insist that the agreement must be in writing, it
could be oral. But, in some cases the laws strictly insist that the agreement must be in writing
like agreement to sell immovable property must be in writing and should be registered
under the Transfer of Property Act, 1882. These agreement are valid only when they fulfi ll
the formalities like writing, registration, signing by the both the parties are completed. If
these legal formalities are not completed, it cannot be treated as a valid contract.
These elements should be present in a contract to make it a valid contract. If any one of them is
missing we cannot treat that agreement as a valid contract.

Case Study Robinson Contract

obinson, a college football player, signed a contract on December 2 with the Detroit
Lions, a pro football club. The contract was a standard form that contained a clause
Rstating, “This agreement shall become valid and binding upon each party only when
and if it shall be approved by the League Commissioner.” In late December, Robinson
informed the Detroit Lions that he would not be playing for them because he had signed
on with the Dallas Cowboys. On January 12 Commissioner approved the contract. Detroit
th
then sued Robinson for breach of contract.
Question
Was there ever a contract between Robinson and the Detroit Lions? Why or why not?
Answer: When Robinson signed the contract it was subject to the approval of the
Commissioner. This was an express condition precedent and by Robinson signing, he has an
implied good faith effort to allow the Commissioner the opportunity to accept. Robinson’s
power of revocation was temporarily suspended while he was waiting to be approved by the
Commissioner. His later revocation is considered a antipatory repudiation. Subsequently,
when the Commissioner approved the contract, it was binding and Robinson’s repudiation
can be considered a material breach by the Detroit Lions.
Source: http://www.askmehelpdesk.com/corporate-law/case-study-breach-contract-11531.html

1.5 Distinction between Void Agreement and Voidable Contract

The following points of distinction are worth noting:
1. Legality. A void agreement is without any legal effect and hence cannot be enforced by
either party. A voidable contract, on the other hand, can be enforced by the party at whose
option it is voidable.

8 LOVELY PROFESSIONAL UNIVERSITY