 business is of the same type. Today we have one too many on online LinkedIn. We have got all this, we have we are so and so and we've got this kind of a business even professional teller tell you what all they can do. This is an invitation to fund sector business doesn't make any contract it is not an it is not an a proposal also and it invites somebody to make a proposal. Then when there is an auction an auction goes on is no contract only when the hammer puts down puts it down and when the parties agree that this is the highest price at which that was that product will go then that offer and the acceptance by the hammer makes it a contract. A tender very often we have contract of construction your contract of construction the roads etc and various commercial contracts where tenders are invited. Now this expression itself shows that this tender is an invitation to offer the parties who will subscribe to the tender who will send the tender in a sealed cover as per whatever the considerations and conditions laid down would make the offer it is for the tenderer then to accept. Generally in the contrast of the government the lowest tender has to be accepted but in contrast within private parties you may accept any tender there are various things that the tenderer would see that this person will has offered it in a particular time but this person has offered it for a lesser cost but he will take much longer time what is the point and he will accept the tender when that tender is accepted there is a contract not when the tender is invited. Then advertisements just like the statement of the lowest price all of these advertisements are not offers they are invitations to offer so people will read the advertisements and decide whether they will buy the product or not when you go online and you go on amazon you are seeing all the products of amazon these are their advertisements it's only an invitation to offer you click on it to make an offer then the company accepts it and you make the make the payment of the price the contract is complete and then the company will have to deliver the goods. Classified advertisements are much the same including the merit classified advertisements there is no contract it's only an invitation to the other spouse to make their offer based upon whatever are the advertisements. The real-life time table a very interesting case came up the real-life time table is also not a not a contract that the railway will have to take it at that time at that price only or even at that time that the railway would come it is always subject to change and in all of these there will be those little prints subject to change standing or open offers there are sometimes open offers that we have got this particular property or this particular goods and for anyone who makes a contract we are prepared to sell that also is only an invitation. Now the requirements of acceptance acceptance after an offer is made has to be unconditional unqualified and absolute how does that happen whatever the offer says and you click and you say yes nowadays and otherwise you pick up your phone and say yes I have accepted or you write in a letter that I am accepting it becomes a contract if there is a slightest change it is a counter offer and it is not a contract there are many cases where we have to find out whether there was a completed contract so that then we can see whether there was a breach of that contract and if a breach is ever then the other party would say quite often that there was no contract because we were supposed to do it on this date at this time sudden such a thing and we never did it so there are so many agreements especially for immobile properties not for movable properties very much because it is always completed by delivery of goods but immobile properties where time maybe of the essence or not of the essence will come to that also a little later where parties may even in writing set out certain terms and then there is correspondence now there are emails between parties which would show whether or not all the terms are unqualifiedly accepted if they are not and if the party wants a difference of price or some more time or any such thing the contract has not come into being so any verification modification qualifications of the amount is a counter offer demand for advance very often it happens that the party says that I wanted earnest money this amount was only an advance towards earnest but it was not an earnest money because unless we signed a particular agreement afterwards I would not have paid earnest money and then we could come to a conclusion that there was no contract then sometimes they want free delivery sometimes they don't want a particular rate of interest for all of those small things also contracts won't get completed now when there is an offer and there is no acceptance either oral writing or even implied then there is complete silence the other party is not bound by any obligation to accept that offer or of on the terms of that offer so silence is not an acceptance and does not make a contract acceptance must be of the whole offer not a part of the offer because nobody can accept the term favorable to him and reject the rest that we always say that we cannot blow hot and cold and the entire offer as it is must be accepted both parties must sign acceptance must be expressed in some reasonable manner or as prescribed by the promise or sometimes they say you can make an application you can make an application only in blue ink so if you make an application in black ink it is that that entire application gets eliminated because the proposer has said that this is one of the reasonable manners in which I want to have my offer accepted to make it a promise so if he says it must come by delivery by freight by train by wagon it must come that way if he says that the acceptance must be first by post it must come by post only and exactly as per what the proposal wants acceptance must then be communicated to the proposal we'll see when it gets communicated now there's most of acceptance as I've said you can do it on the telephone sitting on her in an office whenever written it is by agreements letters facts and now emails which is the most important which is the most usual way in which an agreement gets done unless there's a written contract it is implied in an auction it is a fall of the hammer then when there is an encashment of the check for example somebody sends a check that I am giving you a check for earnest of to keep it and you can catch the check it is an implied conduct that you have accepted to offer then it is also by performance acceptance by performance is seen in many of the specific performance suits so when they say that you have performed partly and then there is a breach and they want you to perform the other part of the contract quite often it happens in builders contracts construction contracts parties enter into this contract to let us say take one flat or a shop and both parties perform certain aspects the builder goes on building as per the wishes of that party make certain renovations and changes the flat purchase a mixed payment of prices the contract is implied then the reciprocal promises will have to be obligated there are obligations of reciprocal promises which will have to be performed and if they don't perform then either of the parties may then rest in the contract so whether there has been a proposal or an acceptance also is a matter of construction of the contract when the acceptance is conditional or qualified and I said there is no contract even immaterial additions to the contract may make it no contract even subsequent letters written as to how we are going to perform or whatever perhaps at times we will have to construe that the contract was not complete and the acceptance was not unqualified condition subsequent that if I will do that you must do this is also not required and it's also not accepted acceptance must be complete and then you can go out and say whatever else you might want otherwise it becomes a counter offer with our condition subsequent and acceptance subject to final approval very often we have these contracts today in the commercial world this is not an acceptance but it will be subject to the final approval of hod of the government department or whatever in that case when it is subject to final approval it becomes binding and it is subject to final approval but it is a fully legal agreement is when it is drawn up now the completion so it can be completed by word of mouth when it is a written contract it can be completed by posting the letter of acceptance now we have an email so when the email is sent the contract becomes complete and there is a written contract by that party by doing any act evidencing acceptance it makes it an implied contract by doing what is proposed so if suppose the proposer says that you can make payment of five percent and you make payment of five percent of the amount the contract is completed by performance then you will have to make payment of the 95 percent which is remaining now when does that happen the word of acceptance when it is spoken or when it is heard so when the acceptor says yes and the promissor hears it it becomes binding when the letter of facts or is posted or it is sent so far as the promissor is concerned it becomes binding when the letter facts or email is received by the promissor so far as the acceptor is concerned it becomes binding it's very interesting so when the acceptor sends it it doesn't become binding on the acceptor when the proposer receives it it becomes binding on the acceptor also because the proposer has now accepted taken it the act of acceptance is done as evidence or is prescribed it becomes a binding contract again implied now where would this be this is usually required for considering the jurisdiction of courts and especially where a contract takes place at two places in a large country like India or at two places countries in the world when the acceptance is received there it becomes a contract so if the proposer makes a promise the acceptor accepts it by delivery or any such thing the when it is received it becomes that is the place of the jurisdiction of the courts where the letter is posted or the email is sent there itself it would become a contract so therefore when we have this question of jurisdictions the delivery of the goods the acceptance of the delivery etc become very important and there may be two places at times where a contract may have taken place but the acceptance is always at one place this is the place of the contract and the law of that place is applicable as the proper law of contract that happens in international contracts now the consequences of this contract simple it becomes binding on both the parties but not so simple as that because there are various other things which parties would have to do and for that the letter if it is it must be actually posted not only delivered to a postman and then you forget about it it must be correctly addressed the emails must be shown to be sent now a contract has taken place both parties can revoke the contract so revocation of an offer and revocation of an acceptance by the proposer and the proposer when does this take place the revocation of the offer can be before it is accepted once it is accepted it becomes a binding contract you can revoke it until it is accepted how would you revoke it by notice by saying look I have made this offer somebody has accepted now the offer is not open to anybody else you have revoked it for everyone else except the person who has accepted the offer with whom you have a you have a binding contract then by lapse of time if an offer has to be accepted it must be accepted within the time given by the proposer the proposer may sometimes say that it can be accepted within a reasonable time if it is not I will go and I'll make a contact with somebody else quite often that happens in immobile property contracts because an offer could be made but you can't go on waiting because the real estate prices go on rising and therefore then the proposer would say that I went into a contract with somebody else that offer had lapsed and so the contract was revoked then by failure of the acceptor to fulfill the condition preceded to acceptance if it says you accept the offer by paying 10% of price that I am offering that I am expecting if you don't pay it the offer stands accepted and the payment must be made within a reasonable time failure to accept in a prescribed manner generally this happens in government contracts because there is a lot of kind of liability to the public these are government persons and somebody may make a charge of corruption also so therefore everything must be transparent and therefore they lay down a prescribed procedure for contractors to enter into the contract for off government companies so when there are contracts of road construction bridge construction etc that this guide manner if it is not followed the contract stands and of course the death of the proposer so the proposer dies unless of course the cause of action survives so if the contract says that it includes my as a science and successor the death of the proposer doesn't matter but otherwise before a contract is entered into if the proposer dies the contract automatically stands. Now aside from all this there is a proper contract now what kind of contract can be enforceable by law as we had said earlier voidable contracts will not be enforced by law but not if so effective only when the party agreed by that contract comes and says I want to avoid that contract now there are four instances in which contracts get tainted by voidability and can be avoided one is coercion under section 15 that is duress now in all these commercial contracts we are what is called economic duress so there are parties in different bargaining positions there are huge corporations and there is a single small contractor who will have to do a particular thing there is a tendency for some kind of duress and therefore law lays down that if there is coercion if any party is forced into signing a contract then the contract becomes voidable at his auction if he then feels that oh I was forced because of this particular factor and that determines to a kind of misrepresentation of law which we'll come to in another section because of the economic duress he will say I'm avoiding the contract now so many times there are contracts where an NOC is given so you see there is a contract made there's a contractor who does the work the construction contract you see it's the contractor cannot do it for various things for various reasons these are commercial impossibilities at times but he is bound just because the prices of goods rise or just because then he gets some other contract he cannot breach this contract so what they do is they say look I cannot do it and the other party would say that I want this contract done you're not performing the contract empty number of contracts out of that nature then they agree that okay whatever I have done so far you pay me and I go out so the parties will then bring the contract to an end now in doing that there is an NOC which is issued a no objection certificate then no objection is no objection to granting this same contract to some other party and there are many parties who come and say no we have been forced to execute this NOC now this is economic duress and there are judgments would say that if there is economic duress especially between parties who are not on the same bar in in the business relationships then the contract becomes voidable and if it is voidable he can avoid it but the other party cannot avoid it and therefore if he doesn't want to avoid it the other party would commit a breach breach by going to a third party to continue that construction contract okay so there are many many litigations by adjudication or by arbitration which come up where there are commercial contracts with economic duress so much so that the supreme god has laid down that if there is such a contract then some particular terms of the contract may not be enforced by the court also the court will see that our very small man has been economically duress to enter into our course to enter into this particular contract by a large corporation and he could not do anything except sign on the dotted line and therefore if there is some clause which is particularly generous for him that clause will not be enforced and what are those clauses in actual practice these clauses are the penalty clauses that if he does the slightest little wrong like if he makes one week delay or so then the penalty is so large that the large corporation says we will not pay you everything else that you have worked for now those kind of contracts are not enforced by court and the corporations have been made to pay that is because of economic duress now the other thing is undue influence which can avoid a contract which which makes it voidable so the person who has been unduly influenced can avoid the contract a lot of jurisprudence has gone into the aspect of wills now when a will is drawn up and when a will is challenged the other heir who has got nothing under the will or very little under the will and who challenges the will and doesn't want it to be probated would say that this man the plaintiff or whoever has got the will executed by the executor by exercising undue influence upon so it's very interesting to understand what is this undue influence because if there is due influence it is not voidable the contract doesn't become voidable the will and will have to be probated now let us take a simple example there are two sons of an old man one son has gone out abroad or whatever and the other son remains with the old man and takes care of the old man the father gives his entire property to the son who is with him the other son comes back after the father dies not before the father dies and then after the funeral says that you exercise undue influence gods have said no this is not undue influence in other words i would say it is due influence you be good to a person and then you expect that the person gives you the property the law doesn't say it is illegal but if you make a person sign the will at the time he's signing you either misrepresent him or you force him and you say that you sign on this when he would not have signed on that that is undue influence you will find a series of judgments on that which i had a very interesting matter where i dealt with there was a man in england and there were properties in bombay large estates where the grandson comes to the grandmother and makes a promise that this old heritage bungalow he will like to keep it the same way i don't know whether he meant it or not but at the time the grandmother makes the will and gives him that bungalow she has been duly influenced she would like that bungalow to remain in the heritage stage that it is and not be demolished by the marauding hordes of those builders who bring up towers so she makes a will and she gives him the bungalow now the other party says there was undue influence he came and look he came and he was with her for some time and then she has made the will immediately after he left for england again etc but the judgments that the jurisprudence on this shows that this was not undue influence this was due influence he goes back she makes the will she could not have made the will and nothing could have happened and all the heirs could have got it but she makes the will and gives it only to one grandson but what happens afterwards if after the grandmother dies and after a few years the man comes and says now i want to bring down this bungalow and build a tower his main intention would then be seen but it could not be seen when the will was probated and he would then not be able to do that he would be obliged to keep it if other heirs then wanted that way so it's it's a very interesting thing about what is undue now between a husband and wife h and w is husband and wife and the many properties which are taken by the husband in the name of the wife by the husband with the wife by the wife with the husband now not very often that only in the name of the husband only in the name of the wife but both parties have not paid consideration for it now both parties say that on paper we are equal owners because the property stands in our name now how this property was taken would be material to see and especially the property is in the name of the wife and the wife says that this is my property because it is in my name the husband's name was added by way of uh convenience we would have to see who actually paid the consideration and the dynamic transactions act 1988 sometimes kicks into this kind of contract and very often when the matrimonial home has to be decided whether the wife is entitled to the full of the property or the half of the property would dependant upon how this contract actually took place who paid the consideration who whether there was a new influence by one upon the other to take it in the name of somebody I of course later on we will also see different other aspects as to whether it was to treat somebody else like the income tax authorities and all which would make the contact point but that is different then for a new influence there are contracts of contractors which mainly I told you about there is a large corporation and a small contractor and there is likely to be a new influence which courts would have to see now money lenders we generally call them blood sucking money letters but nowadays money lenders also lend money only by check and they maintain accounts then they would fall not within the mischief of the money lenders act 1976 and generally the default of the person who does not want to return the money would say that there is always a new influence and I was made to sign on something or whatever if there is a promissory note or anything like that that 100 rupees was due but I was made to sign on a promissory note of 200 rupees etc which would be a part of oral evidence then to be considered and constitute as to whether there was a new influence of that kind but if there is a check which is given by the money lender then all this aspects of a new influence go off and the default of it would have to just make payment and that is how our 138 also to the student has come into being because it is accepted that there was consideration there is a presumption under 138 of the negotiable now the third kind of contracts which are avoidable fraud section 17 they are of two types there are frauds of many types and fraud has to be specifically pleaded and brewed so not only proved but also pleaded specifically as to how the fraud took place it can be by two ways essentially suppress your vary is when you suppress a material fact and enter into the contract and the party comes to know of that material fact later is that I'm not bound by that contract like he comes to know that a particular notice was given by say the land acquisition authority it was not shown to me and the later the land is acquired this is this was a fraud I could not have wanted that that price if the land was going to be acquired similarly under the urban land ceiling act there are various cases of fraud where people would say that I didn't know he suppressed from me that this falls within the urban land ceiling all those kind of things suggest your fall see is another kind of one of fraud it is where the promises suggest falsely that a particular state of being is there for example it's an old building and he suggests that it's a heritage construction it was built in so-and-so ira and therefore it has got marble etc etc whatever inside these false representations this false suggestions which come to be made make a contract voidable because there is a fraud but under section 17 if there is an attempt to deceive which does not deceive it doesn't become a fraud so if there is a contract of caveat and talk that bio beware you know this is my land I want to sell it that's all whatever it is you see and I am selling it on his various faces this takes out of the contract any fraud that will be alleged then misrepresentation now misrepresentation takes place in different ways like for example I told you about the will you may misrepresent to a particular person etc and the contract may be initiated the will may be initiated but most of these contracts are of insurance companies and they say that there was misrepresentation the insurance company's contracts are you were very feeling contracts of utmost good faith and you have to disclose everything and of course there are huge firms that have to be filled in and if the slightest thing when the insurance company comes to know that was false the contract is initiated by misrepresentation or false representation even marriage contracts if suppose a man says that I'm not talking about really nullity of marriage it's come with potency of marriage but that he is the heiress or a baroness of baron of so and so estate or so and it turns out to be a or some such thing marriage contracts also get initiated by misrepresentation you can come to a civil court and get the marriage contracts set aside not that there are many such ones now because people go to the family court and get a divorce in those cases but this misrepresentation can be of fact or of law so misrepresentation of both can make the contract voidable now this contract has become voidable under section 19 and misrepresentation under section 19 a so these sections would show how you can avoid the contract and when the contract is avoided then under section 74 you have to return the benefits received so for example some kind of earnest which is paid if it has to be returned there would be a clause in the contract that it will be returned without interest now white contracts these are contracts which the law makes void so the law says we don't want this kind of contract they are illegal they are unenforceable and we don't want to look at it the simplest one but generally which doesn't come to be is mistake of fact but this mistake of fact should be by both the parties one party cannot make a mistake and so sorry i made a mistake because then it will be liable to abuse because anytime it doesn't want to perform the contract so i made a mistake and i said that it can't be both parties are add item as to a mistake of fact oh my we didn't think generally these contracts took place you see when the there were war contracts like india pakistan war and we made a mistake we didn't know that this particular portion was in pakistan and would become an alien anyway so both parties then feel so let us this contract becomes void they don't want to perform it but mistake of law is not what will initiate a contract because ignorance of law is no exclusive so if you make a mistake of law you are bound by it mistake by one party mistake of law not under 21 and 22 but mistake by both the parties under 20 makes it a void contract then we come to only section 23 whether many such parties section 23 is really what says what are void contracts contracts which are forbidden by law if there is a contract that i will pay you dowry of one lakh of rupees but you marry my daughter and he marries the daughter and the father does not say dowry nobody can enforce it because dowry is it is illegal similarly under the urban land ceiling act when you make a contract for land which is in excess of the ceiling limit then you can make it only under certain circumstances under sections 20 21 22 23 of that act which will allow it for say housing for for the what is it called the common housing etc if that is not so urban land ceiling act prevents you from taking a contract so if you don't want to make a contract let us say and there have been cases where they don't enter into any agreement for sale of the land because it is above the ceiling limits what they do is they enter into a partnership the builder comes in as a partner and after some time the owner of the land walks out and dissolves a partnership or retires from the partnership these kind of contracts have not been enforced by law because fun it becomes fraudulent but it is forbidden by any law and it would defeat that law so under section 23 under both these clauses such contracts were not enforced then there's money lenders contracts money lender without the license cannot contract so if he contracts without the license a person may take the money because he wants the money but if he doesn't want to return it the money lender will not be able to sue in the court of law and the defense which will be legitimately taken up though of course maybe immorally because you have taken the money you've got to repay but he says he's a money lender he's a blood sucking money lender he has taken much more than what he has written down etc etc the entire contract that's initiated for lack of license because when he takes a license under the money lender that he will have to do it lend the money only by an account paycheck then there are tenancy contracts tenancies are not transferable so if a tenancy is transferred then you make it only as a contractual tenancy and a statutory tenancy contractual tenancies maybe for lands as well as for certain blocks units flats etc and when it falls under the tenancy law the rent control law it may be different in different places in Bombay we have the master rent control act of tenant cannot then transfer the tenanted premises he sublets it and he will have to show that it is only a license license etc so if it becomes a subletting contract it becomes white and the tenant his tenancy itself becomes white and can be terminated sorry then contracts which defeat the law generally they defeat the income tax law so if you make a contract of 100 rupees and agree that you will show that it is of 50 rupees and 50 rupees will be in black as we call it only the enforceable part is the agreement of 50 rupees and the other part which defeats the provisions of income tax act will not be enforced which is a white contract then fraudulent contracts contracts which make a flaw upon one party because you have done something with a third party so one party will say oh he entered into the contract with me and unknown to me he has entered into a contract of a part of the property with a third party that contract is a white contract because parties are bound by obligations under the first contract so all those subsequent contracts become white contracts injurious to person or property generally these are the construction contracts so when there is a building under construction you are going to take flats and the builder makes a makes a contract which takes bad cement or any such thing and it becomes bad for the parties who are taking it the municipality will not the architects will not allow it the municipality will not give the occupational certificate the contract becomes white then the flat owner will not have to pay make the payment and those contracts go under rara immoral contracts we generally don't have this kind of contracts involved but like the example that is given is that if a man gives out his taxi or his flat for prostitution or so he cannot recover the rent for it contracts supposed to public policy are important these are contracts which title prosecution they say that no we may make a contract now there is a crime you don't prosecute the crime i will pay you this much those kind of contracts are illegal to avoid they cannot be enforced smuggling contracts contracts which are discriminatory also generally we don't have them in that mode as to show that they are discriminatory but if they discriminate between two parties that you know we want only vegetarians and not non-vegetarian then some such thing those contracts are strictly speaking against public policy of India temperatures agreements and marriage broken contracts that if you marry my daughter i'll give you so and so is all not impossible because it's white then after section 23 we go to section 56 contracts would become impossible to perform they should have a super winning impossibility not a commercial impossibility so now in kovid there could be super winning impossibility of contracts and contracts may become void and one party may refuse to enforce it but the other party cannot go to court or will not get anything but if there is only a commercial impossibility even in kovid times for example you're just not getting your your goods because they are not coming because there is a lockdown there may be no ratios afterwards there may be some kind of leeway between the parties but that is commercial impossibility it will not make the contract impossible of performance now this white contracts when agreement is void when if the consideration of the object is unlocked so as we saw all of these all these agreements become white because the consideration under this like let us say to defraud the income tax the consideration is unlawful it cannot be at first it becomes white and agreement without consideration is also void and as we saw first when there's an offer and acceptance and it must be for a consideration then only there is a contract but there are exceptions if there is a gift made parties in your relations for out of love and affection it is naturally not with consideration but it is a proper contract of gift under a gift deed which has to be witnessed by two parties and has to be registered then there are quasi contracts contracts are not as such commercial contracts but contracts where parties are morally bound to do something if somebody has done something for that person out of necessity given something in times of need we can get it back and that makes it a quasi contract there may be no other consideration but it will have to be returned and if suppose there is already a debt and the debt is going to be time barred and it is acknowledged by the data in writing then under section 18 of the limitation act it becomes it is proper and therefore under the contract that such a contract will fall within the exception to section 25 and can be enforced so when there are these legal and illegal agreements if there is a legal part and an illegal part the legal part will be impossible if it is separable so if you have this black and white kind of things it is separable and the white part can be enforced these are generally both types of contracts under sections 57 and 58 you will enforce that otherwise which are white contracts contracts in restraint of marriage we cannot get married to this person i will give you so and so or whatever bad contracts in restraint of trade you cannot tell someone you can't trade except the exceptions which are provided under section 27 when there is a partnership and the partners agree upon the solution that for a limited period which is a reasonable period you will not carry on the same business or you will not carry on for a particular number amount of time or so then that is that is agreed and that is accepted then contracts in restraint of legal proceedings you cannot tell any party that you will not go to court of law every party is entitled to go to court of law but there is only one exception and if you want to go to arbitration or now mediation also it is accepted under section 28 vague contracts under section 29 generally there would be oral contracts the other party would say he said something but i thought it was like this etc etc and then the contract would have to be construed if it is not clear as to what the parties were at item on it will not be enforced and vituring contracts of course these are vitures where you bet on certain things they are illegal and they cannot be enforced they are even criminal at times party who has received any benefit then will have to restore it under section 65 of the contract now we'll go to the practice of these contracts this was the substance of the contracts now what is in practice parties have to perform as per their respective promises so when there is any breach of the contract and the other party says that i want to rescind the contract can he rescind the contract can he get compensation for breach we will have to see under section 37 of the contract act and under his contact how he was to perform it whatever that he could have performed as he was agreed as it was agreed by the parties must be performed in the same way for example they have to send goods in certain bulk and goods are not sent in that bulk then the party has not performed as per the his promise that i will send he may say i could not manufacture those goods but there is a breach of that contract and most often those contracts get initiated because either it is not supplied in the time limit or it is not supplied as per the description of the contract then the then you have to read the sale of goods act along with the contract act for that the time and place of performance is important how will the performance of contracts be made at a specified time when the time is specified so if they say that within six months you get a particular let us say marketable title certificate you have to get it within that much time and if you don't get it then that specified time goes there is a breach if there is no time for any of the things that has to be performed under the contract of course it must be performed within a reasonable time you can make the plan wait for three years you can make him wait for some more months so the court will see what is reasonable and whether there is a breach then the place of contract is important because again the jurisdiction will be seen where the goods have to be delivered ultimately and the price has to be paid becomes a substantial part of the contract which gives the court the jurisdiction under section 16 of the CPC so the place of contract the place of delivery is important time and the manner of performance under section 15 would have to be seen for the performance so at any time and in any manner but as per the contract or as per what is reasonable now generally there are reciprocal promises so both parties have to perform the party will have to perform let us say deliver goods in certain bulk this is what generally happens he delivers the first installment the second installment but he is not paid he said I can't deliver the third installment because unless I receive that money I cannot really put it into the raw materials so there are reciprocal promises and when a person fails to make delivery the court will see whether the other party has performed his reciprocal promise of making the payment and if that is not done then the man who does not make the delivery should be discharged and will not be liable for breach now these are simultaneous performances so when there is simultaneous reciprocal promises and performances they have to be performed one after another and therefore under the context of specific performance you require that readiness and willingness to perform now there is an amendment to the specific relief act relating to readiness and willingness formally it had to be a word and proved now it may not be a word but it nevertheless has to be proved now the time time becomes very important because you can't say that I will make you wait for 50 years of course I'm going to perform I'm going to perform no it can't be there has to be a breach which has to be seen so when time is made of the essence then upon breach the contract becomes voidable voidable means the other party would say I'm avoiding it I'm rescinding the contract so he goes under the specific relief act for rescission of the contract because time is of the essence he says you have to do it within two three years make the payment of price for the land which is sold is always very important so he can't wait until eternity because there are other people who can buy his land but generally time is of the essence in context of movable property in context of goods which are of commercial value perishable goods etc where you cannot wait but in immobile property time is not deemed to be of essence that is what our courts have held that is not in the legislation but when time is not of the essence then upon breach the contract doesn't become voidable the compensation known is payable so you have to pay more for that much time that you have taken but what happened how much can you pay more so you have to make time the essence generally now time is made the essence in all of these contracts which are drafted by lawyers because they make it of essence because otherwise there are various other parties and the real estate value goes up so for those commercial considerations time is made of the essence but if it is not made of the essence and if it is of immobile property where it is not presumed to be of essence you can later on make it of essence by giving a notice and the late performance if it is accepted by the promise of we give base the money but he pays it late then we will not get compensation except if he has given notice that compensation would be payable at a particular rate of interest so it's very important that these four stages and you have to see where you for now when payments are made this is a little off the record but off the usual link but under section 59661 you have appropriation of the payments so assuming that there is a contract both parties have performed the contract first the appropriation will be by the debtor the person who has to make the payment he will say I am making it towards this installment okay if he does not make it that way the creditor will will appropriate it to whichever installment that the creditor wants now generally this assumes importance when a part of the contract will become time barred so a particular part of the contract is not enforced is not sort of enforced by the by the promissor it becomes it gets barred by limitation the promissor will say I am appropriating it towards the barred debt when there is an account that has to be kept it is allowed so he would do it if it is done by neither then by order of time the appropriation will be made so if there are parties who go on supplying goods and giving offers all the time the one man goes on supplying another man with the offers then generally it is done in order of time and sometimes the creditor will say that the bar will be discharged first now this is one part of the contract that then we come to a new part and this is what generally parties do that is novation so often it happens that but the price becomes less for a particular property or the time has been extended so these are the things where parties don't want to perform the contract and then the other party would say that they would rather settle with the part with the other party then actually rest in the contract go to a court of law apply for specific performance or restriction of the contract claim damages prove damages get compensation all of those things could be avoided and how is that done they substitute one contract by a time so by a simple letter they can say that you know you have not built a building for example so the the flat purchaser would say okay please if you don't do it by 31st January I don't want to then again he doesn't do it by 31st January and then they go on extending the time this tantamounts to a novation both parties agree then that it will be done within that extended period or sometimes it is also for amounts amount is not paid so then the parties would agree okay you pay by installments rather than not paid and they make a novation now very strangely maybe very interestingly novation falls in the under the contract act but restriction falls under the specific relief act and then understand why because novation is done by parties both parties make a new contract and then the old contract doesn't have to be performed a new contract but if both parties don't do it and one body commits a breach of the go to court so then you have to file a suit and therefore specific relief act kicks in so that aspect is not in the contract law it is in the specific relief act this is very interesting very nice to see now there is a breach of the contract there is no novation also even after novation a party makes a breach and another party says enough is enough now no more novation so the party in breach will have to compensate the other party for the loss or damage this is very interesting very important very difficult how do you prove that loss or damage one is you have to prove the market rate so you have to get evidence to prove the market rate invariably arbitration agreements on contracts end up in this because there is a breach so you have to prove how what was the market rate and what you did not get and for how long you did not get and you can get this in the by way of damages now this is not for any remote damage under section 73 itself which talks of the breach of the contract so whatever is the direct cause of the contract you see the market price i would have invested it in a given manner and then that investment would have given me this much is not what is accepted in law and all that evidence was by the board under the exception to section 73 itself so damages for mental agony except in cases of breach of marriage are not enforced and are accepted now we don't have contracts in breach of the contract of marriage we have what are called 376 prosecutions there is a boy and a girl who want to get married who who date who live together parents don't want them they bring the girl back and say that the boy has raped the girl because there was no consent and the girl says that he promised to marry me but he didn't marry me therefore there was no consent why because this provision is not used under the civil law if we use this provision the breach of contract even a breach of contract of marriage can fall under this and if there is specifically a promise to marry and the boy does not marry he will have to compensate the girl but not be liable for what could be an offense of rape that is the statutory rate but we don't go into the criminal law today then the delay in performance so when breach will have to be seen the delay in performance of a contract by both parties would have to be seen because one party cannot be sent to a breach the contract if the other party has not performed this reciprocal promise so even as I told you many times the contracts of installments amounts are not paid and the person commits a breach but he says that this breach is only delayed in performance I will perform it so soon as my amount of the earlier installment is paid and maybe there will be more damages that could be that could be awarded and of course mitigation of damages it's a separate chapter by itself under the law of thought that if there is damages caused to a particular person he must mitigate as much as he can because whatever it can be the standard can be given under section 70 now interestingly section 74 lays down that when no loss has to be proved generally in all of these contracts loss will have to be proved but when no loss has to be proved if parties that says agree that there is going to be this penalty for this kind of a breach if you don't give this particular contractor in this much time then 10 percent of this contract will be the amount in breach section 74 says you don't have to prove it you can get it our court says no you can't get it if it tantamounts to a penalty so only if it is not a penalty then to that extent section 74 will hold good if then if the court feels oh this is 10 percent which shall have been only 2 percent then it is taken as a penalty and then you will have to prove the loss under section 70 I don't know if this is a fair reading of the law because when there is a law in one section which says group of slots and the other section is which says no loss has to be proved I would say that is an exception to the first section and not an extension of the first section now if both parties today contract are in the same kind of balancing relationship then it is no business of the court to say whether it is penalty or not the parties will decide but if they are in a position not to balance one another like a big corporation and a small contractor then the question of penalty actually would come up and the court would say this 10 percent becomes a penalty no therefore 10 percent will not be able unless you prove that 10 percent to that extent was your actual loss so I leave you to that these are the fundamentals of the contract that and in that what we have to see today is how these contracts are performed and they are they are no ratios of the contract because parties negotiate with one another and we accept that there could be mediation between the parties to the commercial contracts even under the commercial contracts act now there's a specified mediation or compulsory mediation under section 12a so all these contracts can be negotiated facilitated no way sure and not reached so I would conclude by saying you must bear in mind that the parties have a continuing relationship in all of these contracts except of course marriage contracts then parties relationships have to be handled with care and we always tell them that you have to maintain that business relationship and therefore there could be mediation rather than extradication or arbitration and we allow that even in arbitration and you ensure that the relationship is set so thank you that's what I'm yeah I can only sum up the last lines what we had written on your slide screen that the genius is one who can conclude the things in a simplified manner so the entire fundamentals you have explained in such a simplified manner and we often repeat on the platform though it is said he came he saw he conquered I can say now it is a gender without gender it says so you came you saw and you conquered the entire platform and it's all flat on it's just a minute ago only 99 it became so I'm reminded what Gwaskar played an innings in 1975 he came and he played for 60 over then it was 36 but here is a case where we had a flurry of sixes with all the entire section I was also amazed the manner in which you not even just looked into any of the notes you simplicity you go ahead created the slides but you kept on saying that so one of the takes before we take to the questions how do you remember all these things for the young participants and all other participants want to learn that how one can memorize all this without looking into it because not only while taking webinars but also while as a lawyer the less one looks into a beef the more fascinating it becomes and also asked Mr. Shyam Padman to give his also views of this session because he is also joined from yeah. Shyam you can unmute yourself. Namaste. I hope I am audible. Yeah I would just ask ma'am first how one has to remember all these things. I have two persons to ask one is Nausham Dalvi ma'am and of course Prem also I mean phenomenal memory persons with phenomenal memory one articulation that's second I just while listening to you ma'am I just had one doubt contract act for the benefit of the listeners also contract act section 73 you just mentioned that is if there is a breach what is possible is only compensation had it not been for the interplay of the specific relief fact nothing more than compensation was possible under the contract act right. Yeah another contract act you get compensation for breach of a contract but aside from that the specific relief act gives you specific reliefs which are not contemplated even in the contract act and now under the amended specific relief act specific performance would have to be given only by their specific performance. Okay so therefore what we therefore you know what we kick in is also the mediation that you know you will have to specifically perform this contract you can't perform let us have a let us negotiate and let us have a new ratio kind of thing so even in mediation there is negotiation and even in mediation there is a new ratio parties then agree now what I do in my arbitrations is when we have this breach there's a contract the contract is admitted so we take the contract as a whole then there is some correspondence and we have to see where any party has committed the breach so when we see that there are reciprocal promises both parties could have committed breach and we are generally cannot give one party every so the entire compensation that is asked for cannot be given then we have to see how we have to mold that relief and how we have to say that you also made a little breach you also delayed the contract and then he has made you also not given the let us say the payment payment or any such thing and we work out all of them that is what we do in need of that's how I will ask Dr. Shrikanth to express his views Dr. Shrikanth unmute yourself you have to unmute Dr. Shrikanth we are not here we can't you would have to unmute here let me thank you for the fantastic lecture that you have given and the articulation that you've done it was just quite usual you know for you and Justice Danaka at this particular moment I'd like to thank the class that we also have for a minute you will have to bother yourself kindly switch off your fan because it's not audible at Kandestine community there's a lot of breeze fan fan okay no let me continue the praise for Vikasji at least the the fan was not praised for that purpose that is why you wanted the fan to be wished off I am saying we are all fans of Justice Roshan Dalvi the way things are taken up so the fan had to be switched off there couldn't be two fans in one place so let me let me let me put my vote of Vikasji also for having such a steady participation and keeping the the group alive for such a long time I've known him for over a year now I look forward to further such interaction and I only yesterday I spoke to Shyam sir and he's here today I never thought the opportunity to speak will arise so soon but I have a fundamental question the question is is hardship as compared to force major FM clause that we are seeing is it recognized right now by the Indian courts because hardship seems to be quite alien to us and it seems to be a more of a civil law element as compared to the Indian law that is that is question number one and a comparable question is to the unit draw principles the unit draw principles which has the convention on the sale of goods but we are not party to the CISG which which which has the hardship clause so it was more of a comment rather than what are your views in this particular regard under the Indian contract act under section 56 only a supermeaning impossibility in a contract can make the contract impossible of performance so that you can say I won't perform specifically the commercial impossibility is not seen so we don't have this hardship clause but again in all of these contracts what really prevails today is how the party is facilitated and negotiate their respective positions and I would say the skill of a lawyer also is in that to maintain the relationship of the parties not really only to go to court and decide and get one case you know decided this way or that way that is not the skill of a lawyer today the skill of a lawyer the skill of an arbitrator even a judge is to see that both parties really feel that this is a win-win situation in contracts and therefore under commercial contracts the commercial courts act the specific relief act but civil procedure court have all been amended to make it both party friendly I would take all of these laws together and a fine lawyer would know these four laws always together you know when you're when you're considering the commercial courts act you see the CPC the CPC of 2015 the amendments the commercial court that when you see further amendments of 2018 mediation you see the new issue of us in the contract you're all of this so just hardship is one of the things to be said but you have to you have to kind of I would say what would this be the two lawyers must come together and make that hardship go away you have to conquer that hardship and that is that is what meant for the economic stability of the country that is why we have all this mediation so it's all fine to say hardship I see all of those but we have to take our country forward yeah mr. Prem your expressions madam it was an excellent articulation and it was I would nearly say it was a very erudite and enlightening session regarding the importance of the law of contract and we really understand this particular branch which will determine the circumstances in which as you said a promise shall be legally binding on the person making it I just have to ask you just one thing madam because this is concerning sections 4 and 46 section section 4 okay now kindly see we have a supreme court judgment which of course is a good law right now Bhagwan Das K.D.S. case it's a constitutional decision wherein the supreme court goes on to state whether a contract could be made by means of telephone and of course supreme court answers it as yes kindly see madam there's a lone dissent voice of justice with Ayatollah see in that particular judgment his dissenting opinion he would say see in a contract is made by telephone see there is a possibility that the acceptance either is not fully heard or understood where the telephone fails as a machine and the proposer does not hear the acceptor or were owing to some fault and the proposers can the acceptor is not heard by him or were the acceptors has not been heard by the proposer and he informs the acceptor about this and again ask him to repeat his words okay this is a very obscure area especially because we have the law of contract which we borrowed from England of course with minor variations but if you see the law in England there's a case by Lord Denning which we know is a famous Tellex case it also was a mild quarries that's a 1955 two-point decision which says that where a contract is made by instantaneous communication like the telephone then the contract is complete only when the acceptance is received by the offeror kindly see Lord Denning in that particular judgment he goes on to draw an illustration because suppose an offer is made from a river bank and the acceptor is on the other bank and there's a problem of curing due to the wind the famous Tellex case and what is your take on this particular judgment from section 4 I am usually very practical and I feel that all of this has now gone by the board because today we don't have contracts made on telephone like this we have emails most of the contracts that I come across by arbitrations all of these are written down contracts with various emails afterwards between the parties who have to either go on with the contract or discussing the contract or any such thing by and large today everything is in writing but we have implied contracts also but all of these things about telephone not being there is now past history luckily the marriage if I can add one thing to frame sir we had that postal rule earlier wherein you put in into communication when it is out of your reach etc whether it is the postal rule or the instantaneous communication or telephone rule which would apply ma'am as far as the internet and web in a bit so far the telephone is when it is heard by the person so I accept it I accept your contract when you hear it is complete so far as I am concerned but when I put it into the transmission it is complete then I can't say no so once it is put in the translation so far as me I am concerned it's complete when you hear it so far as we both are concerned the contract is complete but as I said you know when there is a written contract and mostly contracts are in writing today all this goes by the board but implied contracts are there we do find that there are times when a contract is implied one party says there was a contract other party says there is no contract and we say no you have done this this this and this these are circumstantial evidences which implies that there was such a contract and then we have to see whether there is breach of that contract or not but oral contract is on the statute book I think don't spend too much of anxiety and stress over this because most of your clients will come with written contract that's true and even otherwise normal principles facts may speak live but circumstances don't they can all gather from that and I will ask Raghav he is from the Lawyers Club India he just wanted to say a few words just for the words of expression Raghav Raghav you have actually logged in through two laptops therefore that's the problem I was meaning to tell you that I'm speaking from another idea login through the other laptop yeah I'm audible now yeah all right so I meant to speak ma'am earlier but I think all visor ones have already spoken and Mr. Premraj Mr. Pagman and Vikas sir of course and I would just thank ma'am for the lecture that you've given ma'am it was so good I'll say that I was bound to you know listen to it so carefully I've heard you on many platforms earlier also on corporate law on leading evidence on Vikas sir's platform and you've always been elegant, graceful and you know closest to genius that we can so I'll just I think there are a lot of questions we should give it away to the participants now and thank you for ma'am only one question we will take clarify this is by Rajshree clarify by an indemnity clause is required when there is section 72 to 75 what is the role of the indemnity clause ma'am you are muted you let unmute ma'am unmute you let unmute yeah yeah ma'am unmute yourself and yes immunity these are sort of specified contracts I didn't do it in the general contrast because the contract of immunity is when a party gives an indemnity to another party who does not know a particular state of affairs that it would remain generally insurance contracts may be contracts of indemnity but when a party has to let us say a government has to make a payment to a particular person because of a particular position like he's the only heir he's the son of that person to whom I have to make the payment what if two other sons come up so he gives an indemnity that if there are no other sons and if there is another son who comes up I will be responsible you will not be responsible so that indemnity is taken today that indemnity is taken for many of those contracts you know where we have to give up indemnity by way of an affidavit that no other claim will be made it's about that there's nothing much in it and it doesn't fall under the general contrast these are special contracts so thank you and the way he was saying Raghav was saying that all the good wise people were speaking I've just reminded that in the lighter way they said that two people were speaking and the third entered and he was speaking without any any knowledge about the same they say who is he they said that he's otherwise so on that note we're part of the today and tomorrow friends we have a session on seven guidelines which have been issued by the Honourable Supreme Court under the Negotiable Instrument Act on 16th of April 2021 by Mr. V. Angadhi the district judge of Karnataka do join us tomorrow at 4 p.m. everyone stay safe stay blessed and we are enamoured by the fact that Mr. Salsandha we always accept our invite and I would just share the memo saying that we haven't you haven't shared anywhere I said ma'am you are so popular even if we circulated people will join and the fact that it is being picked up like anything on the YouTube Facebook and on this platform shows your popularity for the talks with whatever you give because you cover all spectrums of everything thank you everyone and again we are repeating that kindly wear your masks and maintain social distancing and don't go out of the house unless it is very cumbersome thank you