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Questions and Answers
What is the term for the person who makes an offer in contract formation?
What is the term for the person who makes an offer in contract formation?
What does 'consensus ad idem' refer to in the context of a valid agreement?
What does 'consensus ad idem' refer to in the context of a valid agreement?
An agreement concerning a social outing does not become a contract because it lacks what element?
An agreement concerning a social outing does not become a contract because it lacks what element?
If two parties involved in an agreement have different understandings of the subject matter, what will be the effect on the agreement?
If two parties involved in an agreement have different understandings of the subject matter, what will be the effect on the agreement?
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What is required for an agreement to be considered a legally enforceable contract?
What is required for an agreement to be considered a legally enforceable contract?
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Which of these is an example of an agreement that is NOT a legally enforceable contract?
Which of these is an example of an agreement that is NOT a legally enforceable contract?
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All contracts are agreements, but all agreements are NOT necessarily contracts because:
All contracts are agreements, but all agreements are NOT necessarily contracts because:
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What is a key characteristic that distinguishes a business agreement from a social agreement?
What is a key characteristic that distinguishes a business agreement from a social agreement?
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An agreement that restricts a person's ability to marry is considered:
An agreement that restricts a person's ability to marry is considered:
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In the case of Carew Co Ltd. v North Bengal, the agreement between two sugar manufacturers to allocate zones for procuring sugarcane was deemed:
In the case of Carew Co Ltd. v North Bengal, the agreement between two sugar manufacturers to allocate zones for procuring sugarcane was deemed:
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If an agreement lacks clarity about the subject matter, such as failing to specify the type of oil in a sale, the agreement is:
If an agreement lacks clarity about the subject matter, such as failing to specify the type of oil in a sale, the agreement is:
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An agreement to perform an impossible task, such as bringing a dead person back to life, is:
An agreement to perform an impossible task, such as bringing a dead person back to life, is:
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Which is generally true regarding the form of a contract under the Indian Contract Act?
Which is generally true regarding the form of a contract under the Indian Contract Act?
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Under what circumstance is mere silence considered to be fraudulent?
Under what circumstance is mere silence considered to be fraudulent?
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Which of the following is considered a valid contract?
Which of the following is considered a valid contract?
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An agreement to restrict a person from engaging in their trade or profession is generally considered:
An agreement to restrict a person from engaging in their trade or profession is generally considered:
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Lalit sells a horse to Bablu knowing it is unsound, but says nothing. Is this considered fraud?
Lalit sells a horse to Bablu knowing it is unsound, but says nothing. Is this considered fraud?
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Apple and Banana are traders, Apple has information that would affect Banana's willingness to contract. Is Apple bound to inform Banana?
Apple and Banana are traders, Apple has information that would affect Banana's willingness to contract. Is Apple bound to inform Banana?
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Which of these correctly identifies the legal status of a wagering agreement?
Which of these correctly identifies the legal status of a wagering agreement?
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Bheem says to Ajay, 'If you do not deny it, I shall assume that the horse is sound.' Ajay says nothing. Is this an instance of fraud?
Bheem says to Ajay, 'If you do not deny it, I shall assume that the horse is sound.' Ajay says nothing. Is this an instance of fraud?
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Under what circumstance is a contract void due to bilateral mistake?
Under what circumstance is a contract void due to bilateral mistake?
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Which of the following exemplifies physical impossibility in a contract?
Which of the following exemplifies physical impossibility in a contract?
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According to the material, what are the rights of an aggrieved party in cases of fraud?
According to the material, what are the rights of an aggrieved party in cases of fraud?
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What is a unilateral mistake?
What is a unilateral mistake?
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A company issues a prospectus with false information about its wealth. A share broker purchases shares. What recourse does the share broker have according to the material?
A company issues a prospectus with false information about its wealth. A share broker purchases shares. What recourse does the share broker have according to the material?
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What is the key distinction between fraud and misrepresentation?
What is the key distinction between fraud and misrepresentation?
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Under what circumstance, is a unilateral mistake allowed as a defense to avoid a contract?
Under what circumstance, is a unilateral mistake allowed as a defense to avoid a contract?
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According to the content, what happens when a person makes a unilateral mistake about the nature of the contract they are signing?
According to the content, what happens when a person makes a unilateral mistake about the nature of the contract they are signing?
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If a person makes a false statement believing it to be true, is it an instance of fraud or misrepresentation?
If a person makes a false statement believing it to be true, is it an instance of fraud or misrepresentation?
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If someone intends to contract with 'Backbone', but mistakenly contracts with 'Chin', when would the contract be considered void?
If someone intends to contract with 'Backbone', but mistakenly contracts with 'Chin', when would the contract be considered void?
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Which option best describes a legal impossibility?
Which option best describes a legal impossibility?
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According to the provided content, what was the legal outcome in the Foster v. example, when an old man of poor sight endorsed a bill of exchange whilst thinking it was a guarantee?
According to the provided content, what was the legal outcome in the Foster v. example, when an old man of poor sight endorsed a bill of exchange whilst thinking it was a guarantee?
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In which scenario are damages for loss of reputation typically recoverable?
In which scenario are damages for loss of reputation typically recoverable?
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What is the primary determinant when assessing damages for inconvenience and discomfort?
What is the primary determinant when assessing damages for inconvenience and discomfort?
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What does the term 'liquidated damages' refer to in contract law?
What does the term 'liquidated damages' refer to in contract law?
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In the case of the surveyor 'Table' and 'Chair', what type of damages would 'Chair' most likely be awarded?
In the case of the surveyor 'Table' and 'Chair', what type of damages would 'Chair' most likely be awarded?
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What is a key characteristic of liquidated damages?
What is a key characteristic of liquidated damages?
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If 'Preety' caused damage to the Railway, what kind of damages would the Railway likely be eligible to claim from her?
If 'Preety' caused damage to the Railway, what kind of damages would the Railway likely be eligible to claim from her?
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Besides damages for inconvenience and loss of reputation, which of these are claimable in the event of a breach of contract?
Besides damages for inconvenience and loss of reputation, which of these are claimable in the event of a breach of contract?
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What does it mean when damages that are 'difficult of assessment' can still get claimed?
What does it mean when damages that are 'difficult of assessment' can still get claimed?
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In the Alwar Shetty (1889) case, what was the primary factor that invalidated the young girl's consent?
In the Alwar Shetty (1889) case, what was the primary factor that invalidated the young girl's consent?
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In the case of Muthta v. Muthu Karuppa (1927), what made the release deed voidable?
In the case of Muthta v. Muthu Karuppa (1927), what made the release deed voidable?
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According to the provided text, what is the legal implication of a threat to commit suicide in the context of contract law?
According to the provided text, what is the legal implication of a threat to commit suicide in the context of contract law?
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In the case of ChikhamAmiraju v. Seshamma (1917), what was the basis for invalidating the release deed?
In the case of ChikhamAmiraju v. Seshamma (1917), what was the basis for invalidating the release deed?
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What does the text define as 'duress' in the context of coercion?
What does the text define as 'duress' in the context of coercion?
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In the case of Xavier kidnapping David's son, why is the promissory note not enforceable?
In the case of Xavier kidnapping David's son, why is the promissory note not enforceable?
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According to Section 19, what is the primary effect of coercion on an agreement?
According to Section 19, what is the primary effect of coercion on an agreement?
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If a person has paid money under coercion, what legal obligation do they have?
If a person has paid money under coercion, what legal obligation do they have?
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Study Notes
Offer and Acceptance
- An offeror makes an offer, and the offeree accepts it.
- Consensus ad idem (similarity of minds) is crucial; both parties must agree on the same thing.
- If there's a difference in understanding (e.g., offer for one house, acceptance for another), the agreement is void.
- An agreement must be enforceable by law to be a contract.
Agreements and Contracts
- Not all agreements are contracts. Social agreements (e.g., going for a stroll) lack the intent to create legal obligations.
- Business agreements typically intend to create legal obligations.
- Certain agreements are expressly declared void by the Indian Contract Act (Sections 24-30), including those in restraint of trade or legal proceedings.
Certainty and Possibility
- Contract wording must be clear and unambiguous. Uncertainty renders an agreement void.
- An agreement must be possible to perform; impossible contracts are unenforceable.
Legal Formalities
- Contracts don't need to be written, but certain agreements, like those for immovable property, require written and registered form.
Types of Contracts (Validity)
- Valid Contract: Meets all legal requirements, enforceable.
- Void Contract: Does not have legal effect from the start either because of lack of consensus or some other factors.
Coercion
- Coercion: Involves the use or threat of violence (or threats to property) to force someone into an agreement.
- Threats of suicide constitute coercion.
- An agreement made under coercion is voidable (can be cancelled).
- If money or property was exchanged under coercion, it must be returned.
Fraud
- Fraud: A dishonest act with intent to induce a person into a contract.
- Mere silence, even about important facts, isn't necessarily fraud unless special circumstances exist (duty to speak or silence equivalent to speech).
- Examples: a seller concealing a horse's unsoundness vs. buyer explicitly relying on seller's silence for assuming soundness
- Fraud makes the contract voidable.
Misrepresentation
- Misrepresentation: False statement believed to be true (or unknowingly false), making the contract voidable.
- Parties may not use unilateral mistake as a defense, except in specific cases where mistake is fundamental (e.g., mistake about the person or the nature of a contract.).
Bilateral Mistake and Impossibility
- Physical impossibility: A contract is void if performance isn't possible (e.g., a cancelled procession).
- Legal impossibility: A contract is void if it demands an illegal action.
Unilateral Mistake
- Unilateral mistake: A mistake by one party, typically not a valid defence for avoiding a contract.
- Exceptions exist for fundamental and material mistakes. If one party knows of the mistake of the other party, the contract is void
Damages in Breach of Contract
- Loss of reputation damages: Generally not recoverable (except for a banker who dishonours a cheque)
- Inconvenience and discomfort damages: Recoverable for physical hardship
- Difficulty of assessment; mitigation of damages; cost of decree: Other factors in assessing damages.
- Liquidated damages: Pre-agreed damages in case of contract breach. This is a valid estimate, rather than a penalty.
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Description
Explore the fundamental principles of contract law, including offer and acceptance, the necessity of consensus, and the enforceability of agreements. Understand how legal obligations differ between social and business agreements as well as the significance of clarity in contract wording.
