Page 21 - DCOM103_COMMERCIAL_LAW

Commercial Law

Notes State whether the following statements are true or false:

5. According to Section 15 “All agreements are contracts if they are made by the free consent
of the parties competent to contract, for a lawful consideration and with a lawful object,
and are not hereby expressly declared to be void”.

6. The objective of the agreement must be lawful. Any act prohibited by law will not be valid
and such agreements cannot be treated as a valid contract.
7. Section 24 to 30 specify certain types of agreement which have been expressly declared
void.
8. An agreement must be supported by a consideration of something in return.

1.10 Review Questions

1. What is a contract? Why must you, as a manager, know as to what constitutes a contract?
2. What tests would you apply to ascertain whether an agreement is a contract?

3. Are there any essentials of a contract so as to make it enforceable by law?
4. “All agreements are not contracts but all contracts are agreements”. Comment.
5. Explain what do you understand by ‘void’, ‘voidable’, ‘illegal’ and ‘valid’ contracts. Briefl y
refer to the rights of parties under such agreements.

6. Enumerate some of the contracts which are expressly declared to be void by the Indian
Contract Act, 1872.
7. How safe are oral contracts?

8. “There are some contracts and documents which are required to be not only in writing
and signed by the parties, but in addition, required to be registered with some competent
authority or the other”. Discuss.
9. Over a cup of coffee in a restaurant, A invites B to a dinner at his house on a Sunday. B hires
a taxi and reaches A’s house at the appointed time, but A fails to perform his promise. Can
B recover any damages from A ?
[Hint: No, Balfour vs. Balfour).
10. State whether there is any contract in the following cases:
(a) A engages B for 11 certain work and promises to pay such remuneration as shall be
fixed by C. B does the work.

(b) A and B promise to marry each other.
(c) A takes a seat in a public vehicle.
(d) A invites B to a card party. B accepts the invitation.

[Hint: (a) There is a contract between A and B and A is bound to pay the remuneration as

shall be fixed by C. If C does not fix, or refuses to fix the remuneration, A is bound to pay

a reasonable remuneration. (b) and (c) There is a contract between A and B. (d) There is no
contract.]
11. A forced B to enter into a contract at the point of pistol. What remedy is available to B. if he
does not want to be bound by the contract ?
[Hint: He can repudiate the contract as his consent is not free.]

14 LOVELY PROFESSIONAL UNIVERSITY