Contract Law Model Question Paper - I

Contract Essentials

• Valid contracts require offer, acceptance, intention to create legal relations, capacity, consideration, and lawful object.
• A valid offer must be clear, definite, communicated, and capable of acceptance; acceptance must be unconditional.

Minor's Contract

• Minors (below 18 years) lack the capacity to enter into contracts; however, contracts for necessaries are enforceable.
• Contracts made by minors are generally voidable.

Exceptions to Consideration Rule

• Certain contracts are enforceable without consideration, including:
  • Promise in writing or signed.
  • Contract based on past consideration.
  • Agreements in the form of gifts.

Coercion in Consent

• Consent is coerced when obtained through threats, force, or unlawful pressure.

Wagering Agreements

• Wagering agreements depend on an uncertain event and are unenforceable by law.
• Examples of non-wagering agreements include insurance contracts and gambling activities regulated by law.

Quasi Contracts

• Established under the Indian Contract Act, examples include:
  • Payment made for necessaries supplied to a person incapable of entering into a contract.
  • Providing services in an emergency where a person is unable to consent.

Breach of Contract Remedies

• Remedies for breach of contract include:
  • Damages: Awarded for losses incurred.
  • Specific performance: Court orders fulfillment of the contract.
  • Injunction: Prevention of actions contrary to the contract.

Surety Discharge

• Sureties can be discharged through:
  • Payment or performance by the principal debtor.
  • Revocation of consent by the creditor.
  • Frustration of contract.

Bailor's Rights and Duties

• A bailor has the right to:
  • Return of the goods after the purpose is fulfilled.
  • Indemnity for costs incurred in the bailment.
• Duties include:
  • Disclose defects in goods being bailed.
  • Take reasonable care of the bailed goods.

Contract of Pledge Essentials

• A pledge involves:
  • Delivery of goods for securing a loan.
  • Possession of the goods must be with the pledgee.

Agency Termination

• Agency can be terminated by:
  • Mutual agreement between principal and agent.
  • Expiry of the term specified in the agreement.
  • Completion of the purpose for which the agency was created.

Sale vs Agreement to Sell

• Sale: Immediate transfer of ownership of goods.
• Agreement to Sell: Transfer of ownership occurs at a future date or upon fulfillment of conditions.

Implied Conditions and Warranties (Sale of Goods Act)

• Implied conditions include:
  • Title: Seller must have the right to sell the goods.
  • Description: Goods must match the described form.
• Warranties ensure goods are of satisfactory quality and fit for the purpose intended.