Contract-1 important questions and Answer
- R .K Choudhry
- Jan 11, 2024
- 4 min read
ONE WORD/ONE LINER QUESTIONS 2 Marks Each
1. When can an unsound mind enter into a Contract?
Answer 1 : Yes , A person who is usually of unsound mind , but occasionally of sound mind , may make a contract when he is of sound mind.
2. Mistake of one party as to the terms of the Contract renders the contract to be Valid, Void or Voidable?
Answer 2 :- Voidable
3. If one minor contracts with another minor to give him Rs.500 if he burns his own house, what kind of a Contract is this?
Answer 3 :-The contract is void.
4. The only exception as to a wagering contract being valid in India is?
Answer 4 :- Insurance.
5. A made a contract with B to beat up C. Is this contract valid, voidable or void?
Answer 5 :- void
SUBJECTIVE QUESTIONS [Within 100 Words] 5 Marks Each
1. Explain the difference between Fraud and Misrepresentation?
Answer 1 :- Fraud Misrepresentation
Fraud is define under section (17) of Indian Contract Act 1872 , it is provides that | Misrepresentation is define under section (18) of Contract Act 1872 |
Aspect | Fraud | Misrepresentation |
Definition | Deliberate, intentional act involving dishonesty | May involve innocently false statements or omissions |
Intent | The person committing fraud knowingly makes false statements with the intent to mislead the other party. | May occur without the intent to deceive |
Elements | – False representation of facts – Intent to deceive – Harm to deceived party – Reliance on false representation | – False statement or omission – Reliance on false representation – Connection to the contract |
Remedies | Contract is void, claim Damages or Legal action again the criminal penalties and imprisonment | Contract is voidable – Rescission – Restitution – Civil remedies, not criminal penalties |
Degrees of Deception | Involves a high degree of deception | May involve varying degrees of deception, from innocent to negligent |
Validity | Can render a contract voidable | Can also make a contract voidable |
Disclosure | Actively conceals the truth or knowingly makes false statements | May result from negligence or genuine belief in a statement |
Legal Consequences | Considered a more serious offense and may lead to criminal charges | Primarily a civil matter with limited legal consequences |
2 Why is restraint of Marriage a ground for invalidity of a Contract?
Answer 2 :- Agreements that restrict marriage are prohibited under English law since they harm the moral wellbeing of the populace as well as the country's population growth. The Court of King's Bench established a precedent in Lowe v. Peers in 1768. In that case, the defendant made a sealed promise to marry only the promise, subject to the requirement that he pay her 1000 pounds within three months of marrying someone else.
She was under no obligation to marry him," the Court said, adding that it was neither a vow to marry her or to marry anyone else. Because the contract was just restricted and contained no promises to carry on either side, the court declared it to be invalid.
A bet between two men that one of them would not get married within a given period of time was ruled invalid in Hartley v. Rice because it gave one of the parties a financial stake in the man's single status.
Furthermore, brokage contracts or commitments made with the intention of obtaining or bringing about marriage are prohibited by English law for a number of societal reasons.
As per Chitty's assertion, it is against public policy to enter into a contract that aims to restrict or prohibit a party from getting married, or to discourage marriage by leaving an individual unclear about their ability to marry. English law, however, differs from Indian law as expressed in the Indian Contracts Act, 1872, in that it does not consider agreements that partially restrict marriage to be void.
But decades earlier, the Law Commission had recommended to the government that the Act be changed to remove the pertinent portion. Later on, this was covered.
The Indian Contract Act, 1872, was primarily created by the British imperial authority, which was in charge of the nation at the time, to regulate contractual transactions between two or more parties in India. Every agreement that restricts marriage, with the exception of those that restrict the marriage of minors, is null and void, according to Section 26 of the Indian Contract Act of 1872.
The Contract Act was the first law enacted in India that specifically declared void any arrangement of that kind that would have prevented either party from marrying the other as they saw fit. The main goal of this clause was to guarantee that citizens would not lose their freedom to choose who they married. which, as a result of a contractual agreement made at any moment, is a fundamental component of a civil society and has both social and personal value.
A contract of betrothal and a marriage brokerage agreement are not the same as an agreement in restraint of marriage.
Contracts that pay a third party for negotiating, obtaining, or bringing about a marriage are known as marriage brokerage agreements, as opposed to agreements in restriction of marriage. It should be mentioned that, as indicated in The Hindu Law of Pre-Independence India, marriage broking was common, at least among Hindus.
2. Explain in brief, Derry v. Peak?
Answer 2 :- CASE Derry v Peek [1889] 14 App Cas 337, 374
·In a company prospectus the defendant stated the company had the right to use steam powered trams as oppose to horse powered trams. However, at the time the right to use steam powered trams was subject of approval of the Board of Trade, which was later refused. The claimant purchased shares in the company in reliance of the statement made and brought a claim based on the alleged fraudulent representation of the defendant.
Held Court :-
The statement was not fraudulent but made in the honest belief that approval was forthcoming. Lord Herschell defined fraudulent misrepresentation as a statement which is made either:-
i) knowing it to be false,
ii) without belief in its truth, or
iii) recklessly, careless as to whether it be true or false
3. Give 5 examples of Voidable Contracts.
Answer 3 :- Voidable contract is define under section 2(i) of India Contract 1872 : “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.
Example:- A Contract entered into out of coercion undue 🔞 , influence, fraud, mis prestation, mistake etc. is said to voidable.
Example:- A person ‘A’ agrees to pay a sum of Rs. 10,0000 to a person B for an antique chair. This contract would be valid, the only problem is that person B is a minor and can’t legally enter a contract.
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