The Importance Of Contract

1874 Words8 Pages
Life is a set of contract which we perform every day in our life. Contracts have become a crucial part of our life as we enter into contract so many times in our everyday life. We go to purchase biscuits or book or for a movie at night, we are entering into contract. The law has its own outlook of what a contract constitutes. The Indian Contract Act, 1872 is a combination of limiting factors and conditions subject which contract may be entered, performed and breached enforced. It provides certain rules and regulations regarding govern formation and performance of the contract. The conditions, limitations, rules and regulations are fixed by the contracting parties itself and the court of law acts while in non-performance to enforce agreement.…show more content…
In the case Taylor v. Avi , Mrs. Taylor tried to void a release which she had signed after being in a car accident stating that her memory had been impaired. The court of law said that the contract is legal and binding. The principle was that: Failure of memory does not prove incapacity unless it is to the extent that it otherwise would seem impractical. Court can’t void a contract due to simple lapse of memory. Many legal professionals and scholars argued that capacity to contract artificially restrict a class of persons from the ‘right to contract’. Right to contract here means that every person can enter into contract with his consent, without any restriction from law regarding his capacity or ability. Contractual capacity is the ability to understand the terms and conditions with consequences of a contact. Those who lack such capacity are vulnerable hence protected under the eyes of law such as minors, the intoxicated and mentally incapacitated. These parties are called protected parties under the law to ensure that they are not exploited. When a contract is disaffirmed the protected party is to receive back anything they put into the…show more content…
Dharmodas Ghose , a minor entered into a contract with a moneylender and mortgaged his house to moneylender to borrow a sum of Rs.20000. So the lender paid him the first installment of Rs.10500. After two months, his guardians approached and claim that the contract was void as their son was underage at the time of contract. The court of law considered the contract as voidable but didn’t have any relief to the lender. So the lender demanded his amount under Section 64 of Indian contract act. But the relief was cancelled under sec 39 of the original specific relief Act 1877 where courts were authorized to order the cancellation of void contract. The Privy Council states that – all contracting parties should be competent to contract. It was held that there was no contract as mortgage made was void so the lender is not entitled for
Open Document