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Unit 1: Law of Contract

Ousting the jurisdiction of all other courts except one. The restriction imposed upon the right Notes
to sue should be absolute in the sense that the parties are precluded from pursuing their legal
remedies in the ordinary tribunals. Thus, where there are two courts, both of which have

jurisdiction to try a suit, an agreement between the parties that the suit should be filed in one
of those courts alone and not in the other, does not contravene the provisions of s.28, as it is not
against public policy [Hakam Singh vs. Gammon (India) Ltd.; A.I.R. 1971 S.C. 740].
Limitation of time. Section 28 renders void another kind of agreement, namely, whereby an
attempt is made by the parties to restrict the time within which an action may be brought so as to
make it shorter than that prescribed by the Limitation Act, 1963.

Example: A clause in an agreement provides that no action should be brought after two
years. However, according to the Limitation Act, 1963, an action for breach of contract may be
brought within three years from the date of the breach. The clause in the agreement is void, as it
is opposed to the provisions of the Limitation Act, 1963.
1.6.3 Uncertain or Ambiguous Agreements (S.29)

Agreements, the meaning of which is not certain or capable of being made certain, are void.

Example: (i) A agrees to sell to B 100 tonnes of oil. There is nothing whatever to show what
kind of oil was intended. The agreement is void for uncertainty.
(ii) A, who is a dealer in coconut oil only, agrees to sell to B “100 tonnes of oil”. The nature of A’s
trade affords an indication of the meaning of the words, and that A has entered into a contract
for the sale of 100 tonnes of coconut oil.
(iii) A agrees to sell to B, “his white Maruti car for ` 1.35 lakhs or ` 1.25 lakhs”. There is nothing
to show which of the prices was to be given. The agreement is void.
(iv) A agrees to sell to B, “100 quintals of rice at a price fixed by C”. As the price is capable of

being made certain, there is no uncertainty to make the contract void.
1.6.4 Wagering Agreements (S.30)

“A wagering agreement”, says Sir William Anson, “is a promise to give money or money’s worth
upon the determination of an uncertain event”. Cockburn C.J. defined it as “A contract by ‘A’

to pay money to ‘B’ on the happening of a given event in consideration of ‘B’s promise to pay
money to ‘A’ on the event not happening.” Thus, a wagering agreement is an agreement under
which money or money’s worth is payable, by one person to another on the happening or non-
happening of a future, uncertain event. The essence of gaming and wagering is that one party
is to win and the other to lose upon a future event, which at the time of the contract is of an
uncertain nature – that is to say, if the event turns out one way A will lose but it turns out the
other way, he will win. An agreement by way of wager is void.

Example: (i) A and B bet as to whether it would rain on a particular day or not –
A promising to pay ` 100 to B if it rained, and B promising an equal amount to A, if it did not.
This agreement is a wager.
(ii) A and B agree to deal with the differences in prices of a particular commodity. Such an
agreement is a wager.

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