INTRODUCTION:
Every day we enter into various kinds of agreements be it purchasing a toffee or buying airplane tickets. But the real question here is can these agreements be called contracts or not. For instance, one person orders another person to kill a certain person for consideration of some amount. Can the parties sue each other in a court of law for the enforcement of the same?
As laid down in Indian Contract Act (ICA), 1872—
Section 2 (e) agreement is defined as a promise or set of promises forming consideration for each other. Agreements shall include various ingredients—
- PARTIES: There must be two or more parties to an agreement.
- PROPOSAL: Signifying willingness to do or omit something to obtain the consent of others.
- CONSENT: Signifying willingness to do the same thing in the same sense to signify consent to the same.
- PROMISE: Acceptance of the proposal makes it a promise.
- CONSIDERATION: It is the price one must get to do or omit something.
Conclusively, every promise or set of promises is an agreement. A kid is buying chocolate from a shopkeeper and in return giving him Rs. 20. Here chocolate is a consideration for a kid and Rs. 20 is a consideration for the shopkeeper.
The agreements which are void in the eyes of law:
- Agreements that are restraint of marriage.
- Agreements that restrain trading.
- Agreements are entered by wagering.
- Agreements for uncertain or impossible acts.
The above-mentioned agreements cannot be enforced by any court of law.
Section 2 Clause h of the act states that any agreement that is enforceable by law is a contract.
‘Enforceability by law’ means when non-performance of mutual obligations of an agreement allows the aggrieved party to approach the court for the performance of a contract.
An offer to sell 100 tons of oil to B at the consideration of Rs. 50000 on 12th January 2017. B agrees to the same. However, A only delivered 75 tin of oil on said date. Here, B has the right to sue A for the delivery of 25 tin of oil.
The contract is an agreement that is enforceable by law. While entering into a contract there must be an intention to create a legal obligation on part of both parties. It shall further include the capacity to contract, lawful subject matter, and free consent of parties. A husband failing to pay for the medical expenses of his wife cannot be contacted. As the rights and duties are not defined in the contract hence not legally liable.
Section 13 of ICA ‘Consent’ the parties enter into contracts agreeing to the same thing in the same manner. Section 14 of ICA defines ‘Free Consent’ which resulted by way of—
- Coercion: It is defined under Section 15 of ICA. Threatening to commit or committing any act that is forbidden by the Indian Penal Code (IPC) to cause any person to enter into a contract.
- Undue influence: It is defined under Section 16 of ICA. When parties are in such relation that one of them is in a position to dominate the will of the other.
- Fraud: It is defined under Section 17 of ICA. It shall include any act by the party or his agent to deceive another party to enter into a contract.
- Misrepresentation: It’s defined under Section 18 of ICA. When a party enters into a contract without any intention to deceive the other party.
- Mistake: It is defined under Sections 20, 21, and 22 of ICA. The contract entered between parties in case of mistake of fact and law. Such agreement shall be considered null and void.
- Although consent is not defined under any section but consent obtained under—
When consent is given under fear of injury or misconception of fact under ICA. The person performing the act has a reason to believe such consent was a result of fear or misconception. That every consent is invalid if—
- Causes fear of death or injury.
- By an insane person.
- By any person below the age of 12 years.
- The misconception of fact.
While dealing with cases of undue influence the court must determine the two issues—
- One is, whether the parties to the contract were in such a relationship where one may dominate the will of the other.
- The second is, whether the one in the dominant position influenced the will of another party.
To satisfy the claim under ‘Undue Influence’ it is essential that both conditions must co-existence. The mere existence of one of the above may not be able to satisfy the court–
- The parties do not necessarily need to be in familial relation.
- The mere fact that one is in a position to dominate the will of another person is sufficient enough.
- An unfair advantage is an advantage that is obtained through unfair or unjust means.
- There is real or apparent authority. For example, father and son.
- The relationship between parties as fiduciary. For example, doctor and patient.
- The party must receive any benefit in the name of the child.
- The party may take advantage of the other party due to an unsound mind.
CONCLUSION:
Any agreement that is entered between parties is not necessarily a contract. The contract shall have its own terms and conditions to which parties may agree in the same sense. An agreement is induced under undue influence where one party may be in a dominant position. When relations subsist between parties one of the parties uses that position to have an unfair advantage on them.|
Also, read – https://www.investopedia.com/terms/u/undue-influence.asp
