Indian Contract Act Case Study

1982 Words8 Pages
INTRODUCTION: The following essay is based on the implications of Section 65 of the Indian Contract Act, 1872 and its inadequacies with respect to eradicating ‘unjust enrichment’ in frustrated contracts. This paper seeks to analyze the effects of frustration with special reference to the restitution of benefits received by a party, who is not entitled to such benefit. If an agreement being deemed void, subsequent to certain obligations being fulfilled by either party, there would continue to subsist, rights to make good the loss caused. Section 65 of the Indian Contract Act, 1872, states, “When an agreement is discovered to be void, or when a contract becomes void, any person who has received any advantage under such agreement or contract is…show more content…
Ebrahim v. Commissioner for the Port of Chittagong , that where an agreement was not enforceable by reason of resistance with a statutory provision quantum meruit can be recuperated. In that case a contract was entered into by the Port Commissioners of Chittagong by which a towing vessel was driven out by the Commissioners for operation outside the Chitrtagong Port. It was discovered that the agreement was in contravention of the obligatory provisions of Section 29, Chittagong Port Act, 1914, & was not enforceable, rather it was held that the chiefs were qualified for recoup quantum meruit for the administrations rendered by them. The learned Judges observed as follows: "We don't thing that the invalidity of the agreement prevents the plffs. From recovering such amount under Section 65 as may be reasonable & just for the services rendered by…show more content…
There are certain fallacies that each provision bears. However, shortcomings that defy the primary object of the act itself need to be concurred. We know that our Indian legal system has arisen from the English Common Law system and each act and provision is based on various historical principles enumerated by the English Common Law. So it is important to look upon the objectives of those principles to enact the law. A provision should have a clearly defined intention. Also, it should comply with the principles of Equity and Natural Justice. Interpreting the Section 65 of Indian Contract Act, it can be said that the provision has certainly lacked to fulfill the object and intention of the act itself and also, has not been up to the mark with various Common Law Principles as illustrated in the analysis. Also, It is observed that judicial opinion In India has not been uniform on the question whether Section 65, should be applied where an agreement is entered into by parties which is discovered to be void by reason of failure to comply with statutory requirements. There are certain fallacies in the provision itself which has been the reason for difference of opinion of judiciary in different cases. This non-uniformity does not comply with the principles of equity, thus defying the Principles of Natural
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