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BUSINESS LAW CONTRACT ACT, 1872History lst draft-1866 by Law Commission ,269clauses, revised on Dudley  NewYork ,1862. Redrafting by Leslie Stephen. Frederick Pollock praised  the uniformity of style.   [equity, justice and good conscience]Preamble and 238 Sections in the present Act. Se.1-75 GeneralPrinciples [6 chapters] 124-238 Special Contracts[ Ch.VII SALE OF GOODS-NOW ACT1930-][Indemnity&Guarantee .Ch. VIII-124-147] [Bailment&Pledge Ch.IX-148-181] [Agency Ch.X-182-238]
HISTORY OF ENGLISH CONTRACT  12th Century- Common Law Courts dealt with land tenures and the King’s Court took up private agreements. This was called the WRIT OF DEBT RETINUE. Debt meant money and Detinue meant unlawfully retained movable/immovable property. Later the concept of quid pro quo was introduced. This resulted in Writ of Covenant.  In the 16th century the Writ of Assumpsit involving personal understanding became redressible under law.
Definitions Se 2 .Interpretation Clause –[ a. to j.]2.a. Proposal- signifies to another his wiliingness to  do or abstain from doing with a view to obtain the assent of that other[offer] 2.b.Acceptance- to whom the proposal is made signifies his assent there to 2.d. at the desire of the promiser , the promisee or any other person has done or abstained from doing or promises to do, such act or abstinence iscondiderationfor the promise 2.e.Agreement- every promise and every set of promises forming consideration for each other 2.h.Contract- an agreement enforceable by law  2. g. Void[notenforceable]  2.i.Voidable[ enforceable at the option of one or more of the parties] 2.Reciprocal[ promises become part consideration for each other]
Elements of a Valid  Contract 1. Promisor and a promisee[2.c] 2. Valid proposal[2a]- A. expression of willor intention, B. definite terms-subject matter-consideration-time of performance-work to be done .C. communiated to the offeree [Sec 4. communication complete when the offer reaches the offeree /Revocation before completetion of acceptance as against the acceptor Sec.5] eg.A misses certificates &offers reward. B gets  and brings not knowing offer-no claim  Offer can be General or Specific-HarbhajanLalv.ChiranLal – son missing/ pamphlet about reward/ son brought claimed as General offer . Carlill v. Carbolic Smoke Ball Co. Gen Offer Offer and Invitation to treat Eg Catalogues/ Price Quotations etc. are invitations to treat & not valid offers [ Harvey v. Facey – telegraphed lowest price  of Bumper Hall pens- no offer] [Mc Pherson v, Appanna – will purchase property for Rs, 6000/ will sell for Rs, 10000 / ready/no response] 3 . Acceptance[2.b] – consensus –ad –idem[identity of minds]  acceptance can be by assent/act or conduct/signing document/letter or telegram. Acceptance should be unqualified/accepting all terms/ person specific/ communicated as per  terms of time [ Sec.4. against offeror - in thecourse of transmission out of  the power of  the acceptor– against the acceptor when it comes to the knowledge of the offeror  [Se5.revocation before communication as against the acceptor]- silence no acceptance [ manager wrote ACCEPTED and left offer on the table-not communicated acceptance]
4 4. Intention to  create a legal obligation. Balfour.v. Balfour [30pounds monthly to wife, domestic agreement,Rose&Frank v. Crompton Bros.Formal agreement of agency beyondjudicial review. No contract. Sec 10. lays down the legal prerequisites of a contract .  These are 1. free consent[Sec14] [when consent  not caused bycoersion[sec15–act forbidden by IPC] 2. undue influence[sec16- one party dominates the will of another for unfair advantage.3. fraud[sec17- suggestion  as fact not true/ concealment of fact/ promise with no intention to perform,/act fit to deceive/ act or omission declared fraudulent  bylaw.] 4. misrepresentation[sec18- positive assertion not true/breach of duty giving advantage without intention to deceive/even innocently causing mistake as to the substance of an agreement] 5.mistake [sec.20-both parties mistaken as to fact  making contract  void /sec21.mistake of law[ignorantiajuris non excusath ] Indian law not voidable/ Foreign law voidability as mistake of fact /sec22. mistake by one party as to matter of fact- not voidable
5 Sec.10.mentionsparties competent to contract as a legal requisite for a valid contract. Sec.11. defines competence/capacity  as Of the age of majority/completed 18years. Of sound mind/ Sec.12. defines sound mind as capable of understanding and forming rational judgment as to its effect on his interests./if  occasionally of unsound mind , can contract  when in sound mind. Not disqualified  from contracting by any law to which he is subject .
5.Lawful Consideration- quid pro quo or return for something . A. not forbidden by law. B. nature of contract should not defeat the provisions of law.C. not  fraudulent .D .should move from the promisee at the desire of the promisor and not at the desire of a third party [Indian Law  holds that consideration  moving from a third party is valid] E. should not involve injury to person or property. F. should have mutuality and should be adequate and real,not vague and impossible.G. not declared immoral by court or opposed to public policy. [ consideration  can be in cash,kind,act,abstinence, promise to do or not to do ,past, present or future ] Eg. Upadyaya v/s RamrupPandey-  Contract regarding land/Rs.12ooo/-consideration  agreed upon22yrs. ago.The  court  enhanced  it as Rs.24000/- as adequate consideration.                                   [Sec.2d, 23,25] NSS v. Kunjukrishnapillai- Pillai promised  Rs.10000/- for NSS College. College started to the detriment of the promisee. Court ordered enforcement of promise Kedarnathv.Gorie Mohammed. Promised money for construction of townhall.To his detriment ,  the promisee, started  construction with his money. Court ordered enforcement of promise. Indian Law  [ third party consideration] Chinnayya v. Ramayya- An  old lady  made gift to her promisee daughter  on the condition of paying annuity to Ramayya .  Promisee argued Ramayya  is no party to he contract as  he  had no consideration. Ordered mother’s gift to daughter  is consideration  for the third party.
OTHER CONDITIONS FOR A VALID CONTRACT 6. Lawful object- not illegal, immoral, or against public policy [Sec,23] 7.Not declared Void- by any law in force in the country 8.Possibility of performance- ScammelV.Ouston –shall buy van on ‘higher-purchase terms’  What are the h.p terms? Montreal Gas Co. v.Vasey renewal of contract  will be favourably considered [w hat favour?] impossible cannot be enforced. Sec56[1] 9.Legal  formalities- are to be complied with- in writing,dulystamaped, signing witnessed, registered etc as rquired by statutes [eg. TP Act]
Void Contract-Sec 2g.contract not enforceable by law is void[Validity] Can be void abinitio.Conditions.1. Sec 11. party  not competent eg.minor/unsound mind/disqualified by law [status& mental deficiency] 2. Se22.parties under mistake as to matter of fact.3. Sec23.[no] lawful consideration –object not lawful/ fraudulent/ involves injury to person or property/immoral or opposed to public policy 4. Sec25. ex nudopactoon orituractio, contract without consideration is void[  Exceptions sec25. 1.valid contract without consideration if in writingand registered under existing law for registration/ 2. if the promise is to compensate for something already done .3 . to pay  a time-barred debt.] 5.Sec 26. in restraint of marriage  other than minor is void.6. Sec.27 in restraint of trade, lawful profession or business  7.Sec.28in restraint of legal proceedings [as regards restraining legal redressal/controlling time of litigation Exceptions 1. subjects of arbitration/ 2. right to opt for arbitration] 8.Sec.29uncertainty of meaning –void 9. Sec.30.wagering contract void. Lottery / crossword puzzle  valid as skill involved/ insuarance valid as interest protected and welfare assured/ Exception to Sec 30. prizes above Rs.500 for horse race .
Voidable Contract& Unenforceable  Contract[Validity Aspect defective] Sec2[i]Voidable Contract -agreement enforceable by law at the option of one or more of the parties thereto, and not at the option of the other or others.eg if A  has been coerced to sell his house to B but repudiates coercion and is ready to sell contract is voidable. Unenforceable Contract is valid, but the court refuses enforcement on technical reasons. Eg a time barred debt.  The creditor should  sue within  Period of Limitation . [But can be performed by the parties, not enforced by law]
Illegal Contracts Sec.23. A contract becomes  unlawful  if the consideration  or object is  unlawful. Unlawful consideration exists 1. if it is forbidden by law2. its nature if permitted would defeat the provision of law .3.it implies  injury to person or property.4.the court regards it as illegal, immoral, or opposed to public policy. Unlawful agreements are unenforceable and void. Illegal contracts violate statute law or common law. Eg. A contracts with B to kill C/A grants a loan to B to celebrate B’s minor daughter’s marriage against Child Marriage Restraint Act./ A agrees to an amount below Minimum Wage a remuneration under Minimum Wages Act. Immoral Contract- against the principles of morality-eg. A leases his house to B for running a brothel. Contract against Public Policy-  A promises  B to get medical admission for his son giving a bribe.
Doctrine of Privity of  Contracts A stranger to a contract cannot sue. Under English Law there are two principles . 1 Consideration must not move from a stranger 2.A stranger cannot enforce a contract. Sec 2[d] At the desire of the promisor ,the promisee or any other person has done  or abstained from doing, does or abstains from doing, such an act or abstinence is called consideration. So in Indian Law  consideration  can move from any other person, a third party. But a third party cannot sue for enforcing a contract. Eg. DunlopTyresCo. V. Selfridge- Wholesale seller contracted not to sell tyre below  company pricelist rates. Selfridge, retailer, sold below the rates and was sued by the company.  No damages allowed as Selfridge was third party. In Indian  and English Law  there are exceptions. 1 .Beneficiary- Beswickv.Beswick [1968]  Peter Beswick sold his coal business to John on two conditions-.1. he should function as consultant.2. Mrs . Beswick be paid5pounds per week when she became a widow. B died  in Nov1963.In a suit Lord Hudson called her administratrix, andordered payment as lawful beneficiary.  2. Agency –principal can sue on a contract made by his agent 3.. Charge on specific immovable property –Chinnayya v. Ramayya- Chinnayya gifted  landand accessories to daughter on the condition of giving annuity to Ramayya. Decreed Ramayya had a lien on the property.  Annuity was enforced. 4.Funds entrusted with a party-A gives Rs. 1ooo/- to B  to pay C . If B admits receipt, C can sue B.. 5..Family Settlements-
 DIFFERENT TYPES OF CONTRACTS123 formation based 4-7 performance based 1.Express- terms in clear spoken or written language 2.Implied bylaw- A mistakenly pays money to B instead of to C.B has to return the amount though there is no promise.[Also called Quasi Contract] 3Tacit- inferred from conduct of parties-  coin calls, bus ticket 4. Executed –performed- buys a soap from shop and pays. 5.Executory. Both parties still obliged to perform- advances Rs1000/- for painting a portrait 6. Unilateral- one side performance over.  A finds missing dog and  B has to  pay the offered reward.  7.Bilateral or reciprocal- both parties are obliged to perform- If A paints his portrait , B will pay him Rs.2000/- 8.Void- no legal validity, Sec11,23,24,25,26,27,28,29,30,56 Minor, mistake of fact, no consideration, restraint of marriage , trade, legal proceedings, wagering ,, subsequently impossible or illegal 10.Voidable-Sec2[i]-enfroceable at the option of one or more party and not at the option of the other. 11.Unenforceable- technical defect- eg. time-barred  debt- Limitation Act applies negating legal enforceability.
OFFER &ACCEPTANCE  OFFER can be 1.Express or Written Eg . Trace the missing dog, reward Rs.1000 Advt.in News paper] 2 Implied Offer- conduct of parties. Bus in a route is implied offer.Wilke.v. London Transport  Board-passenger boards  the bus acceptanc. 3.Specific offer-a person or class of persons-  seats for the handicapped. 4. General offer- world at large-Carlillv.Carbolic Smoke Balls[several acceptors – the FIRSTPERSON rewarded – Lancaster v. Walsh. PRICE LIST, QUOTATIONS, CATALOGUES, ADVERTISEMENTS etc are Invitations to an offer. An offer must be definite, with intention and communicated to the offeree. .ACCEPTANCE must be 1absolute &unqualified [Sec7[1] consensus ad idem -EgRoutledge v. Grant –G offered to sell land  for 280punds. R enclosd80pounds, and promisedto pay balance in instalments – no acceptance. 2. Must be communicated eg silent love  and desire to ,marry. BrogdenV. Metropolitan Rail- draft agreement signed with’’approved’ritten and left in the drawer. No acceptance. Acceptance can be through  action Crarlillv.Carbolic Smoke Balls. 3.As prescribed or  in reasonable mode- accept by  call/ answers by post- no acceptance 4. Prescribed time or Reasonable Time- Acceptance of shares late-no acceptance[RAMSGATE VICTORIA HOTEL v.MONTEFIORE] 5. Show Intention of the Acceptor  6. Offeror Specific 7. Made before offer  lapses  -late application 8. Silence no acceptance
CAPACITY  Sec.10 capacity essential for valid contract .Sec.11 who  competent MAJOR,SOUND MIND,NOT DISQUALIFIED. 1.INCAPACITY OF STATUS- A.Foreign Sovereign/ Ambassador-Mighell.v. Sultan of Jahore. In India CPC permits suit with Govt. sp. Permission B.Alien Enemy C. Convict undergoing sentence requires ticket of leave. D.Adjudicated insolvent E.In England, Barrister F. In England till1935, married women not permitted .In India The Hindu Succession Act1956, confers absolute rights over woman’s property. G.Corporation;- No ultra viires contract RyderVwombwell- golden Goblet on credit –payment cannot  be enforced INFANT’S  RELIEF ACT 1894 TOTAL VOIDABILITY 2.INCAPACITY  OF MENTAL STATUS Minor ,Drunkard, Lunatic Drunkard- voidable in England Indian Majority Act- 18YRS. MohorieBibeeV.DhurmodasGhose’ Minor Motgagor for Rs.20000,  Morgagee pays Rs. 8000 minor’s suit mortgage invalid abinitio ArumughamVDarai Singh-Minor signs promissory not for  meeting expenses. Reaching  Majority, signs another Pro Note to pay back.First being consideration for second cannot be enfroced though ratified at majority. Raja RaniV.PremAdib. Void due to minority Sec68 -For minor’s necessaries , his property is liable/ When minor misrepresents age  he is liable to  restitution of  the other’s loss/ NoESTOPPEL against minor/ no SPECIFIC PERFORMANCE  against minor/ Can  be a PARTNER if other partners agree. NashVInmam-waist coat not necessarty at Oxford, Tailor’s claim void.
CONSENT- Sec 13 – two or more agree on the same with same sense 1 Coersion[Sec15]1 – commiting or threatening to commit against IPC prejudicial to person /property. ENG. LAW –Duress- bodily violence/imprisonment 2.Undue influence-Fiduciary Rel[Sec.16]AlcardV.Skinner- nun 6yrs left in1879. sued for gifted property in 1885. time lag confirmed gift though fiduciary existed with mother of nunnery.  ------------------------------------------- 5.MistakeofFACT Sec21]-a.Identity of party CundyV.Lindsay. Blencarn signed asBlenkiron &Co. got goodsfrom Lindsay , sold to Cundy, Lindsay sued Cundy. Blencarnpenalised and  Lindsay under mistake of fact.b. Mistake ofQuantity Mis.of LAW-Own , Foreign, Private rights 3. Fraud. Sec17- intention to cheat, no fraud without damage/ silence when disclosure is duty is fraud esp, in contracts of uberrimaefidei [goodfaith]eg .insuarance partnership, family settlements,saleof land, share transactions suretyship 4 Misrepresentation- Sec18- Innocent OR fraudulent [DerryV.Peek-directors in Prospectus said company had rigt to use steam insteadof horse power.At winding up Share holder sued fraudulent misrepresentation. PC decreed innocent misrepresentation
DISCHARGE OF CONTRACT Discharged when the promisor’s contractual obligations cease to exist.Discharged the following ways. 1.By Performance [Sec37] 2.By Breach 3.By Agreement 4.By Impossibility[Sec.56,57] 5. By Operation of Law ---------------------------------------- Sec 38-Tender is attempted performance-must be  unconditional, at the proper time and place, provide reasonable opportunity  to verify delivery, tender should be for the whole obligation.  LEGAL EFFECTS- Promisor not liable for nonperformance,, but remains entitled to his rights in the contract Performance -Sec.37 parties to contract should perform or offer to perform Sec .40 –If the parties intend that the promiser should perform, he should perform . Eg. Painting Sec. 41. If promisee accepts third party performance, he cannot subsequently enforce it against the promisor Performance as per agreed  time , manner &place,ifnot as reasonable [Eg.usual hours of business as regards time] Sec 55 – If time is intentionally the essence of the  contract,non-performance makes the contract voidable.
JOINT & RECIPROCAL PROMISES In English Law joint promises are joint, in Indian contract, joint&several[Joint Liability-Sec42-45] 1. the promisee can sue one of the joint promisors or his survivor/ representative. 2. if one JP is compelled to perform,he can claim contribution from others. 3.if one JP defaults , others should bear the loss equally[ in England, the promisee must sue all JPs]         4.Surety & Prin.Debtor are JPs but legally several as an exception. Surety, when compelled to pay the creditor can sue and recover from the Prin. Debtor            5. if single promiser and joint promisees,allpromisees should claim jointly.If one promisee declines to join suit, it is liable to be dismissed Others can plead the declining promisee as defendant, to avoid dismissal[.PonnuswamyV.RamaBoyan] A contracts to sell land to B,C,D. B suesA as promisorandC &D as  defendants for Specific Performance Reciprocal Promises are BilateralPromises They are Sec.51- Mutual and Concurrent- Performed simutaneously- A contracts delivery of goods to B if he  pays on delivery..Non-perfomance binding both parties- no delivery, no payment  Sec.54-Mutual and Dependant- Aconracts with B to construct a house  if B  supplies timber. Bdoes not supply timber  and the contract is not executed. A need not execute as the contract is dependent on B’s supply. B is bound to  compensateA’s loss on dependant performance. Sec. 52Mutual and Independent- Each should perform without waiting for the other. Expressly fixed perfrmancein order. Ashould build a house and then Bwill buy it for a price.Sec 53 deals with aparty preventing performance.The prevented patrty gets compensation from the other
ASSIGNMENT OF CONTRACT A contract is assigned when the right,title or interest arising is transferred to another by the party entitled to the benefits under it. In English Law contractual right is chose -in-action[a right enforceable by court]. In Indian Law ,it is an actionable claim under Sec 130 of TP Act. Assignment as in English Law should be 1. in writing& signed by the assignor 2.should be absolute comprising the whole debt.3. promisor should be given notice. Assingnment requires no consideration. The assignee can sue the promisor in his own name. Contractual liabilities cannot be assigned without the consent of the promisee, but for the following exceptions- 1. Novation- Sec.62 if the parties agree to substitute   the former with a new contract, the original need not be performed. Liability can be assigned in the new contract. A indebted to C. after novation, B becomes liable instead of A. 2. Sec 40- The promior or his legal representative must perform. Sec41- If promisee accepts performance by a third party, he cannot subsequently enforce it against the promisor. These sections functionally exempt assignment of liability. 3.The promisor can make a vicarious delegation of his contactual liability .Eg. THE PROMISOR CAN APPOINT HIS AGENT FOR DELEGATED PERFORMANCE. ASSIGNMENTS OF CONTRACT DEPENDS ON THE FOLLOWING LEGAL PRINCIPLES I. Contracts based on personal skill cannot be transferred and as a result cannot be assigned 2 .The assignee should give notice to the promisor as regards the transfer of benefits. 3. Under Indian law, a contract  for future delivery  of goods cannot be assigned  because the burden of of an executory  contract  cannot be transferred
DISCHARGE THROUGH IMPOSSIBILITY Two types of Impossibility 1.Impossibility at the time of contract[Sec.56] contract to do the impossible is void-eg.discover gold by magic. 2.Supervening Impossibility[Sec.56] also called Doctrine of Frustration. Eg.A contracts to marry B but goes mad before marriage. Superve.Impossibility can be due to 1.Destruction of subject matter. TaylorV.Caldwell. Let out Music Hall on fire before the day of performance.HowellV.Coupland .contracted potato blighted. 2 Foundation of contract ceases to exist . Krell V. Henry- room rented to view king’s procession which was cancelled due to king’s illness. Discharged from rental. 3. Death and Diablement-unable to paint portrait loosing both hands in accident. 4.Change of law- Contracts to sell liquor in Tamil Nadu, subsequently declared Dry State. 5Declaration of War- Contract with enemy country void abinitio. If war lasts contract is dischaged through Impossibility  DOCTRINE OF FRUSTRATION- lex non cogit ad impossiblia- the law does not compell the impossible. Formerly subsequent impossibility was no excuse. Now in English Law, there is the IMPLIED  TERM  THEORY  which allows implied discharge I in the event o supervening impossibility like1,2,3,4,5. Fibrosa,s Case-Contract between Eng &Germa n Companies.1ooo pounds out of 1600 advanced for 4800 pounds contract. War between England&Gemany. LIABBLE FOR REPAYMENT AS PATMENT WAS BEFORE SUPER. REVOCATION BY WAR. EXCEPTIONS TO SUPERVENING IMPOSSIBILITY Impossibility is no excuse for nonperformance 1.Difficulty of performance        2. Commercial impossibility[promisor’s loss] 3.Action of third party.[ Promisor depends on 3rdparty, so becomes liable for his nonperformance           A contracts with B ,but depends on C’s performance.C’s nonperformance is no excuse of impossibility] 4.Strikes ,Lockouts Civil Disturbances, Riots.             5. Partial Impossibility [several purposes for contract, one becomes impossible]HB Steam Boat Co.v. Hutton;boat hired to cruise round naval  fleet on coronaton. King’s illness, boat not given as King was not crusing.Cruise by naval commander. Boat not given  unlawful- partial impossibility.    In the above conditions, discharge through  Supervening Impossibility does not apply. Under Sec 65 the partiies are discharged from obligations by SuperveningI impossibility.. But whatever advantage received  shoud be mutually restored.
Discharge through AGREEMENT Mutual agreement of parties can effect discharge 1. Novation Sec.62- new contract between the same parties or between different parties 2.Recission .62Sec-put an end to  contract through mutual agreement. 4. Alteration- Sec.62 change in termsof the contract. 5.Remission. Sec63-  lesser fulfilment- one time settlement of debts 6.Waiver-mutual abandonment 7.Merger – inferior right  merging into superior right eg. Lessee becoming owner by buying the leasehold building.
BREACH AS  DISCHARGE Breach  brings cause of action & ensures discharge for the other party –A contracts with B to perform at theatre for Rs 10000, fails to turn up. B can sue for damage and rescind.  BREACH CAN  be through renouncing obligations,through conduct make impossible, refuse to perform. Breach can be 1. Actual or 2. Anticipatory.  Actual breach can be  1.  when performance is due  Sec.55.deals with time as essential to the contract.[Promises 100tonnes of oil, supplies 50 tonnes on due date]  2. in the course of performance— breach of essential condition -rescinding. Warranty or collateral  condition -sue for damages. [  Can supply only 50 tonnes- condition  can supply only different quality – warranty] Anticipatory Breach- actions  repudiating performance as Constructive Breach CAN BE Expressed or Implied-Wont marry the girl – Epress/marrying a different girl  before before marriage - Implied 1. Can be by impossibility created by one party  2. Repudiation by the party Sec 39 –Constructive Breach-1. The other party can rescind. 2.Wait until due date and then sue. REMEDIES 1.Recission- get discharged on one’s own. 2.Sue for damages 3. Sue forQUANTUM MERUIT or LAWFUL REMUNERATION [ contract for serialised story- magazine stops being published – payment for published chapters.] 4.Specific Performance 5. Injunction to do or not to do smething
Remedies for BREACH 1.COMMON  LAW REMEDIES.1 Recinding or getting discharged from own obligations  2.Suing for damages [compensation is no punishment, but placing the injured party in the position before breach] DAMAGES can be LIQUIDATED- Consensually  pre-estimated &fixed by the parties in the cntracteg. Nonpayment of advance if not vacating lease hold on contracted date. NON LIQUIDATED – TO BE ASSESSED BY COURT 1.General Damage- Sec.73- normal/natural loss in the usual course. 2.Special Damage- based on the special conditions mutually known by parties by parties at the time of contract 3.Liquidated- Reasonable compensation not exceeding real loss as fixed in contract[Sec74] 4. Vindictive or Exemplary- Marriage Contract, Bouncing of Cheque. 5.Nominal- cost of litigationwhen loss nominal 2.EQUITABLEREMEDIES A.injunction- to do or not to do- court’s discretion B.Specific Relief- DECREE TO PERFORM –court’s discretion. The court may refuse SpPer.if 1.Compenation in money adequate 2. Contract for personal service eg. Painting portrait 3.Court cannot supervise eg mining and extraction  4.Terms of contract cannot be reasonably ascertained 5.Revocable Contracts 6.Ultravires Trusteeship  powers 7. Ultravires  companies or corporates 8. Contract party Minor. C.OTHER  EQUITABLE remedies are-decrees for recission, rectification, cancellation, declaratory decree, appointingReceivers. D.Suit for Quantum Meruit

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Business law

  • 1. BUSINESS LAW CONTRACT ACT, 1872History lst draft-1866 by Law Commission ,269clauses, revised on Dudley NewYork ,1862. Redrafting by Leslie Stephen. Frederick Pollock praised the uniformity of style. [equity, justice and good conscience]Preamble and 238 Sections in the present Act. Se.1-75 GeneralPrinciples [6 chapters] 124-238 Special Contracts[ Ch.VII SALE OF GOODS-NOW ACT1930-][Indemnity&Guarantee .Ch. VIII-124-147] [Bailment&Pledge Ch.IX-148-181] [Agency Ch.X-182-238]
  • 2. HISTORY OF ENGLISH CONTRACT 12th Century- Common Law Courts dealt with land tenures and the King’s Court took up private agreements. This was called the WRIT OF DEBT RETINUE. Debt meant money and Detinue meant unlawfully retained movable/immovable property. Later the concept of quid pro quo was introduced. This resulted in Writ of Covenant. In the 16th century the Writ of Assumpsit involving personal understanding became redressible under law.
  • 3. Definitions Se 2 .Interpretation Clause –[ a. to j.]2.a. Proposal- signifies to another his wiliingness to do or abstain from doing with a view to obtain the assent of that other[offer] 2.b.Acceptance- to whom the proposal is made signifies his assent there to 2.d. at the desire of the promiser , the promisee or any other person has done or abstained from doing or promises to do, such act or abstinence iscondiderationfor the promise 2.e.Agreement- every promise and every set of promises forming consideration for each other 2.h.Contract- an agreement enforceable by law 2. g. Void[notenforceable] 2.i.Voidable[ enforceable at the option of one or more of the parties] 2.Reciprocal[ promises become part consideration for each other]
  • 4. Elements of a Valid Contract 1. Promisor and a promisee[2.c] 2. Valid proposal[2a]- A. expression of willor intention, B. definite terms-subject matter-consideration-time of performance-work to be done .C. communiated to the offeree [Sec 4. communication complete when the offer reaches the offeree /Revocation before completetion of acceptance as against the acceptor Sec.5] eg.A misses certificates &offers reward. B gets and brings not knowing offer-no claim Offer can be General or Specific-HarbhajanLalv.ChiranLal – son missing/ pamphlet about reward/ son brought claimed as General offer . Carlill v. Carbolic Smoke Ball Co. Gen Offer Offer and Invitation to treat Eg Catalogues/ Price Quotations etc. are invitations to treat & not valid offers [ Harvey v. Facey – telegraphed lowest price of Bumper Hall pens- no offer] [Mc Pherson v, Appanna – will purchase property for Rs, 6000/ will sell for Rs, 10000 / ready/no response] 3 . Acceptance[2.b] – consensus –ad –idem[identity of minds] acceptance can be by assent/act or conduct/signing document/letter or telegram. Acceptance should be unqualified/accepting all terms/ person specific/ communicated as per terms of time [ Sec.4. against offeror - in thecourse of transmission out of the power of the acceptor– against the acceptor when it comes to the knowledge of the offeror [Se5.revocation before communication as against the acceptor]- silence no acceptance [ manager wrote ACCEPTED and left offer on the table-not communicated acceptance]
  • 5. 4 4. Intention to create a legal obligation. Balfour.v. Balfour [30pounds monthly to wife, domestic agreement,Rose&Frank v. Crompton Bros.Formal agreement of agency beyondjudicial review. No contract. Sec 10. lays down the legal prerequisites of a contract . These are 1. free consent[Sec14] [when consent not caused bycoersion[sec15–act forbidden by IPC] 2. undue influence[sec16- one party dominates the will of another for unfair advantage.3. fraud[sec17- suggestion as fact not true/ concealment of fact/ promise with no intention to perform,/act fit to deceive/ act or omission declared fraudulent bylaw.] 4. misrepresentation[sec18- positive assertion not true/breach of duty giving advantage without intention to deceive/even innocently causing mistake as to the substance of an agreement] 5.mistake [sec.20-both parties mistaken as to fact making contract void /sec21.mistake of law[ignorantiajuris non excusath ] Indian law not voidable/ Foreign law voidability as mistake of fact /sec22. mistake by one party as to matter of fact- not voidable
  • 6. 5 Sec.10.mentionsparties competent to contract as a legal requisite for a valid contract. Sec.11. defines competence/capacity as Of the age of majority/completed 18years. Of sound mind/ Sec.12. defines sound mind as capable of understanding and forming rational judgment as to its effect on his interests./if occasionally of unsound mind , can contract when in sound mind. Not disqualified from contracting by any law to which he is subject .
  • 7. 5.Lawful Consideration- quid pro quo or return for something . A. not forbidden by law. B. nature of contract should not defeat the provisions of law.C. not fraudulent .D .should move from the promisee at the desire of the promisor and not at the desire of a third party [Indian Law holds that consideration moving from a third party is valid] E. should not involve injury to person or property. F. should have mutuality and should be adequate and real,not vague and impossible.G. not declared immoral by court or opposed to public policy. [ consideration can be in cash,kind,act,abstinence, promise to do or not to do ,past, present or future ] Eg. Upadyaya v/s RamrupPandey- Contract regarding land/Rs.12ooo/-consideration agreed upon22yrs. ago.The court enhanced it as Rs.24000/- as adequate consideration. [Sec.2d, 23,25] NSS v. Kunjukrishnapillai- Pillai promised Rs.10000/- for NSS College. College started to the detriment of the promisee. Court ordered enforcement of promise Kedarnathv.Gorie Mohammed. Promised money for construction of townhall.To his detriment , the promisee, started construction with his money. Court ordered enforcement of promise. Indian Law [ third party consideration] Chinnayya v. Ramayya- An old lady made gift to her promisee daughter on the condition of paying annuity to Ramayya . Promisee argued Ramayya is no party to he contract as he had no consideration. Ordered mother’s gift to daughter is consideration for the third party.
  • 8. OTHER CONDITIONS FOR A VALID CONTRACT 6. Lawful object- not illegal, immoral, or against public policy [Sec,23] 7.Not declared Void- by any law in force in the country 8.Possibility of performance- ScammelV.Ouston –shall buy van on ‘higher-purchase terms’ What are the h.p terms? Montreal Gas Co. v.Vasey renewal of contract will be favourably considered [w hat favour?] impossible cannot be enforced. Sec56[1] 9.Legal formalities- are to be complied with- in writing,dulystamaped, signing witnessed, registered etc as rquired by statutes [eg. TP Act]
  • 9. Void Contract-Sec 2g.contract not enforceable by law is void[Validity] Can be void abinitio.Conditions.1. Sec 11. party not competent eg.minor/unsound mind/disqualified by law [status& mental deficiency] 2. Se22.parties under mistake as to matter of fact.3. Sec23.[no] lawful consideration –object not lawful/ fraudulent/ involves injury to person or property/immoral or opposed to public policy 4. Sec25. ex nudopactoon orituractio, contract without consideration is void[ Exceptions sec25. 1.valid contract without consideration if in writingand registered under existing law for registration/ 2. if the promise is to compensate for something already done .3 . to pay a time-barred debt.] 5.Sec 26. in restraint of marriage other than minor is void.6. Sec.27 in restraint of trade, lawful profession or business 7.Sec.28in restraint of legal proceedings [as regards restraining legal redressal/controlling time of litigation Exceptions 1. subjects of arbitration/ 2. right to opt for arbitration] 8.Sec.29uncertainty of meaning –void 9. Sec.30.wagering contract void. Lottery / crossword puzzle valid as skill involved/ insuarance valid as interest protected and welfare assured/ Exception to Sec 30. prizes above Rs.500 for horse race .
  • 10. Voidable Contract& Unenforceable Contract[Validity Aspect defective] Sec2[i]Voidable Contract -agreement enforceable by law at the option of one or more of the parties thereto, and not at the option of the other or others.eg if A has been coerced to sell his house to B but repudiates coercion and is ready to sell contract is voidable. Unenforceable Contract is valid, but the court refuses enforcement on technical reasons. Eg a time barred debt. The creditor should sue within Period of Limitation . [But can be performed by the parties, not enforced by law]
  • 11. Illegal Contracts Sec.23. A contract becomes unlawful if the consideration or object is unlawful. Unlawful consideration exists 1. if it is forbidden by law2. its nature if permitted would defeat the provision of law .3.it implies injury to person or property.4.the court regards it as illegal, immoral, or opposed to public policy. Unlawful agreements are unenforceable and void. Illegal contracts violate statute law or common law. Eg. A contracts with B to kill C/A grants a loan to B to celebrate B’s minor daughter’s marriage against Child Marriage Restraint Act./ A agrees to an amount below Minimum Wage a remuneration under Minimum Wages Act. Immoral Contract- against the principles of morality-eg. A leases his house to B for running a brothel. Contract against Public Policy- A promises B to get medical admission for his son giving a bribe.
  • 12. Doctrine of Privity of Contracts A stranger to a contract cannot sue. Under English Law there are two principles . 1 Consideration must not move from a stranger 2.A stranger cannot enforce a contract. Sec 2[d] At the desire of the promisor ,the promisee or any other person has done or abstained from doing, does or abstains from doing, such an act or abstinence is called consideration. So in Indian Law consideration can move from any other person, a third party. But a third party cannot sue for enforcing a contract. Eg. DunlopTyresCo. V. Selfridge- Wholesale seller contracted not to sell tyre below company pricelist rates. Selfridge, retailer, sold below the rates and was sued by the company. No damages allowed as Selfridge was third party. In Indian and English Law there are exceptions. 1 .Beneficiary- Beswickv.Beswick [1968] Peter Beswick sold his coal business to John on two conditions-.1. he should function as consultant.2. Mrs . Beswick be paid5pounds per week when she became a widow. B died in Nov1963.In a suit Lord Hudson called her administratrix, andordered payment as lawful beneficiary. 2. Agency –principal can sue on a contract made by his agent 3.. Charge on specific immovable property –Chinnayya v. Ramayya- Chinnayya gifted landand accessories to daughter on the condition of giving annuity to Ramayya. Decreed Ramayya had a lien on the property. Annuity was enforced. 4.Funds entrusted with a party-A gives Rs. 1ooo/- to B to pay C . If B admits receipt, C can sue B.. 5..Family Settlements-
  • 13. DIFFERENT TYPES OF CONTRACTS123 formation based 4-7 performance based 1.Express- terms in clear spoken or written language 2.Implied bylaw- A mistakenly pays money to B instead of to C.B has to return the amount though there is no promise.[Also called Quasi Contract] 3Tacit- inferred from conduct of parties- coin calls, bus ticket 4. Executed –performed- buys a soap from shop and pays. 5.Executory. Both parties still obliged to perform- advances Rs1000/- for painting a portrait 6. Unilateral- one side performance over. A finds missing dog and B has to pay the offered reward. 7.Bilateral or reciprocal- both parties are obliged to perform- If A paints his portrait , B will pay him Rs.2000/- 8.Void- no legal validity, Sec11,23,24,25,26,27,28,29,30,56 Minor, mistake of fact, no consideration, restraint of marriage , trade, legal proceedings, wagering ,, subsequently impossible or illegal 10.Voidable-Sec2[i]-enfroceable at the option of one or more party and not at the option of the other. 11.Unenforceable- technical defect- eg. time-barred debt- Limitation Act applies negating legal enforceability.
  • 14. OFFER &ACCEPTANCE OFFER can be 1.Express or Written Eg . Trace the missing dog, reward Rs.1000 Advt.in News paper] 2 Implied Offer- conduct of parties. Bus in a route is implied offer.Wilke.v. London Transport Board-passenger boards the bus acceptanc. 3.Specific offer-a person or class of persons- seats for the handicapped. 4. General offer- world at large-Carlillv.Carbolic Smoke Balls[several acceptors – the FIRSTPERSON rewarded – Lancaster v. Walsh. PRICE LIST, QUOTATIONS, CATALOGUES, ADVERTISEMENTS etc are Invitations to an offer. An offer must be definite, with intention and communicated to the offeree. .ACCEPTANCE must be 1absolute &unqualified [Sec7[1] consensus ad idem -EgRoutledge v. Grant –G offered to sell land for 280punds. R enclosd80pounds, and promisedto pay balance in instalments – no acceptance. 2. Must be communicated eg silent love and desire to ,marry. BrogdenV. Metropolitan Rail- draft agreement signed with’’approved’ritten and left in the drawer. No acceptance. Acceptance can be through action Crarlillv.Carbolic Smoke Balls. 3.As prescribed or in reasonable mode- accept by call/ answers by post- no acceptance 4. Prescribed time or Reasonable Time- Acceptance of shares late-no acceptance[RAMSGATE VICTORIA HOTEL v.MONTEFIORE] 5. Show Intention of the Acceptor 6. Offeror Specific 7. Made before offer lapses -late application 8. Silence no acceptance
  • 15. CAPACITY Sec.10 capacity essential for valid contract .Sec.11 who competent MAJOR,SOUND MIND,NOT DISQUALIFIED. 1.INCAPACITY OF STATUS- A.Foreign Sovereign/ Ambassador-Mighell.v. Sultan of Jahore. In India CPC permits suit with Govt. sp. Permission B.Alien Enemy C. Convict undergoing sentence requires ticket of leave. D.Adjudicated insolvent E.In England, Barrister F. In England till1935, married women not permitted .In India The Hindu Succession Act1956, confers absolute rights over woman’s property. G.Corporation;- No ultra viires contract RyderVwombwell- golden Goblet on credit –payment cannot be enforced INFANT’S RELIEF ACT 1894 TOTAL VOIDABILITY 2.INCAPACITY OF MENTAL STATUS Minor ,Drunkard, Lunatic Drunkard- voidable in England Indian Majority Act- 18YRS. MohorieBibeeV.DhurmodasGhose’ Minor Motgagor for Rs.20000, Morgagee pays Rs. 8000 minor’s suit mortgage invalid abinitio ArumughamVDarai Singh-Minor signs promissory not for meeting expenses. Reaching Majority, signs another Pro Note to pay back.First being consideration for second cannot be enfroced though ratified at majority. Raja RaniV.PremAdib. Void due to minority Sec68 -For minor’s necessaries , his property is liable/ When minor misrepresents age he is liable to restitution of the other’s loss/ NoESTOPPEL against minor/ no SPECIFIC PERFORMANCE against minor/ Can be a PARTNER if other partners agree. NashVInmam-waist coat not necessarty at Oxford, Tailor’s claim void.
  • 16. CONSENT- Sec 13 – two or more agree on the same with same sense 1 Coersion[Sec15]1 – commiting or threatening to commit against IPC prejudicial to person /property. ENG. LAW –Duress- bodily violence/imprisonment 2.Undue influence-Fiduciary Rel[Sec.16]AlcardV.Skinner- nun 6yrs left in1879. sued for gifted property in 1885. time lag confirmed gift though fiduciary existed with mother of nunnery. ------------------------------------------- 5.MistakeofFACT Sec21]-a.Identity of party CundyV.Lindsay. Blencarn signed asBlenkiron &Co. got goodsfrom Lindsay , sold to Cundy, Lindsay sued Cundy. Blencarnpenalised and Lindsay under mistake of fact.b. Mistake ofQuantity Mis.of LAW-Own , Foreign, Private rights 3. Fraud. Sec17- intention to cheat, no fraud without damage/ silence when disclosure is duty is fraud esp, in contracts of uberrimaefidei [goodfaith]eg .insuarance partnership, family settlements,saleof land, share transactions suretyship 4 Misrepresentation- Sec18- Innocent OR fraudulent [DerryV.Peek-directors in Prospectus said company had rigt to use steam insteadof horse power.At winding up Share holder sued fraudulent misrepresentation. PC decreed innocent misrepresentation
  • 17. DISCHARGE OF CONTRACT Discharged when the promisor’s contractual obligations cease to exist.Discharged the following ways. 1.By Performance [Sec37] 2.By Breach 3.By Agreement 4.By Impossibility[Sec.56,57] 5. By Operation of Law ---------------------------------------- Sec 38-Tender is attempted performance-must be unconditional, at the proper time and place, provide reasonable opportunity to verify delivery, tender should be for the whole obligation. LEGAL EFFECTS- Promisor not liable for nonperformance,, but remains entitled to his rights in the contract Performance -Sec.37 parties to contract should perform or offer to perform Sec .40 –If the parties intend that the promiser should perform, he should perform . Eg. Painting Sec. 41. If promisee accepts third party performance, he cannot subsequently enforce it against the promisor Performance as per agreed time , manner &place,ifnot as reasonable [Eg.usual hours of business as regards time] Sec 55 – If time is intentionally the essence of the contract,non-performance makes the contract voidable.
  • 18. JOINT & RECIPROCAL PROMISES In English Law joint promises are joint, in Indian contract, joint&several[Joint Liability-Sec42-45] 1. the promisee can sue one of the joint promisors or his survivor/ representative. 2. if one JP is compelled to perform,he can claim contribution from others. 3.if one JP defaults , others should bear the loss equally[ in England, the promisee must sue all JPs] 4.Surety & Prin.Debtor are JPs but legally several as an exception. Surety, when compelled to pay the creditor can sue and recover from the Prin. Debtor 5. if single promiser and joint promisees,allpromisees should claim jointly.If one promisee declines to join suit, it is liable to be dismissed Others can plead the declining promisee as defendant, to avoid dismissal[.PonnuswamyV.RamaBoyan] A contracts to sell land to B,C,D. B suesA as promisorandC &D as defendants for Specific Performance Reciprocal Promises are BilateralPromises They are Sec.51- Mutual and Concurrent- Performed simutaneously- A contracts delivery of goods to B if he pays on delivery..Non-perfomance binding both parties- no delivery, no payment Sec.54-Mutual and Dependant- Aconracts with B to construct a house if B supplies timber. Bdoes not supply timber and the contract is not executed. A need not execute as the contract is dependent on B’s supply. B is bound to compensateA’s loss on dependant performance. Sec. 52Mutual and Independent- Each should perform without waiting for the other. Expressly fixed perfrmancein order. Ashould build a house and then Bwill buy it for a price.Sec 53 deals with aparty preventing performance.The prevented patrty gets compensation from the other
  • 19. ASSIGNMENT OF CONTRACT A contract is assigned when the right,title or interest arising is transferred to another by the party entitled to the benefits under it. In English Law contractual right is chose -in-action[a right enforceable by court]. In Indian Law ,it is an actionable claim under Sec 130 of TP Act. Assignment as in English Law should be 1. in writing& signed by the assignor 2.should be absolute comprising the whole debt.3. promisor should be given notice. Assingnment requires no consideration. The assignee can sue the promisor in his own name. Contractual liabilities cannot be assigned without the consent of the promisee, but for the following exceptions- 1. Novation- Sec.62 if the parties agree to substitute the former with a new contract, the original need not be performed. Liability can be assigned in the new contract. A indebted to C. after novation, B becomes liable instead of A. 2. Sec 40- The promior or his legal representative must perform. Sec41- If promisee accepts performance by a third party, he cannot subsequently enforce it against the promisor. These sections functionally exempt assignment of liability. 3.The promisor can make a vicarious delegation of his contactual liability .Eg. THE PROMISOR CAN APPOINT HIS AGENT FOR DELEGATED PERFORMANCE. ASSIGNMENTS OF CONTRACT DEPENDS ON THE FOLLOWING LEGAL PRINCIPLES I. Contracts based on personal skill cannot be transferred and as a result cannot be assigned 2 .The assignee should give notice to the promisor as regards the transfer of benefits. 3. Under Indian law, a contract for future delivery of goods cannot be assigned because the burden of of an executory contract cannot be transferred
  • 20. DISCHARGE THROUGH IMPOSSIBILITY Two types of Impossibility 1.Impossibility at the time of contract[Sec.56] contract to do the impossible is void-eg.discover gold by magic. 2.Supervening Impossibility[Sec.56] also called Doctrine of Frustration. Eg.A contracts to marry B but goes mad before marriage. Superve.Impossibility can be due to 1.Destruction of subject matter. TaylorV.Caldwell. Let out Music Hall on fire before the day of performance.HowellV.Coupland .contracted potato blighted. 2 Foundation of contract ceases to exist . Krell V. Henry- room rented to view king’s procession which was cancelled due to king’s illness. Discharged from rental. 3. Death and Diablement-unable to paint portrait loosing both hands in accident. 4.Change of law- Contracts to sell liquor in Tamil Nadu, subsequently declared Dry State. 5Declaration of War- Contract with enemy country void abinitio. If war lasts contract is dischaged through Impossibility DOCTRINE OF FRUSTRATION- lex non cogit ad impossiblia- the law does not compell the impossible. Formerly subsequent impossibility was no excuse. Now in English Law, there is the IMPLIED TERM THEORY which allows implied discharge I in the event o supervening impossibility like1,2,3,4,5. Fibrosa,s Case-Contract between Eng &Germa n Companies.1ooo pounds out of 1600 advanced for 4800 pounds contract. War between England&Gemany. LIABBLE FOR REPAYMENT AS PATMENT WAS BEFORE SUPER. REVOCATION BY WAR. EXCEPTIONS TO SUPERVENING IMPOSSIBILITY Impossibility is no excuse for nonperformance 1.Difficulty of performance 2. Commercial impossibility[promisor’s loss] 3.Action of third party.[ Promisor depends on 3rdparty, so becomes liable for his nonperformance A contracts with B ,but depends on C’s performance.C’s nonperformance is no excuse of impossibility] 4.Strikes ,Lockouts Civil Disturbances, Riots. 5. Partial Impossibility [several purposes for contract, one becomes impossible]HB Steam Boat Co.v. Hutton;boat hired to cruise round naval fleet on coronaton. King’s illness, boat not given as King was not crusing.Cruise by naval commander. Boat not given unlawful- partial impossibility. In the above conditions, discharge through Supervening Impossibility does not apply. Under Sec 65 the partiies are discharged from obligations by SuperveningI impossibility.. But whatever advantage received shoud be mutually restored.
  • 21. Discharge through AGREEMENT Mutual agreement of parties can effect discharge 1. Novation Sec.62- new contract between the same parties or between different parties 2.Recission .62Sec-put an end to contract through mutual agreement. 4. Alteration- Sec.62 change in termsof the contract. 5.Remission. Sec63- lesser fulfilment- one time settlement of debts 6.Waiver-mutual abandonment 7.Merger – inferior right merging into superior right eg. Lessee becoming owner by buying the leasehold building.
  • 22. BREACH AS DISCHARGE Breach brings cause of action & ensures discharge for the other party –A contracts with B to perform at theatre for Rs 10000, fails to turn up. B can sue for damage and rescind. BREACH CAN be through renouncing obligations,through conduct make impossible, refuse to perform. Breach can be 1. Actual or 2. Anticipatory. Actual breach can be 1. when performance is due Sec.55.deals with time as essential to the contract.[Promises 100tonnes of oil, supplies 50 tonnes on due date] 2. in the course of performance— breach of essential condition -rescinding. Warranty or collateral condition -sue for damages. [ Can supply only 50 tonnes- condition can supply only different quality – warranty] Anticipatory Breach- actions repudiating performance as Constructive Breach CAN BE Expressed or Implied-Wont marry the girl – Epress/marrying a different girl before before marriage - Implied 1. Can be by impossibility created by one party 2. Repudiation by the party Sec 39 –Constructive Breach-1. The other party can rescind. 2.Wait until due date and then sue. REMEDIES 1.Recission- get discharged on one’s own. 2.Sue for damages 3. Sue forQUANTUM MERUIT or LAWFUL REMUNERATION [ contract for serialised story- magazine stops being published – payment for published chapters.] 4.Specific Performance 5. Injunction to do or not to do smething
  • 23. Remedies for BREACH 1.COMMON LAW REMEDIES.1 Recinding or getting discharged from own obligations 2.Suing for damages [compensation is no punishment, but placing the injured party in the position before breach] DAMAGES can be LIQUIDATED- Consensually pre-estimated &fixed by the parties in the cntracteg. Nonpayment of advance if not vacating lease hold on contracted date. NON LIQUIDATED – TO BE ASSESSED BY COURT 1.General Damage- Sec.73- normal/natural loss in the usual course. 2.Special Damage- based on the special conditions mutually known by parties by parties at the time of contract 3.Liquidated- Reasonable compensation not exceeding real loss as fixed in contract[Sec74] 4. Vindictive or Exemplary- Marriage Contract, Bouncing of Cheque. 5.Nominal- cost of litigationwhen loss nominal 2.EQUITABLEREMEDIES A.injunction- to do or not to do- court’s discretion B.Specific Relief- DECREE TO PERFORM –court’s discretion. The court may refuse SpPer.if 1.Compenation in money adequate 2. Contract for personal service eg. Painting portrait 3.Court cannot supervise eg mining and extraction 4.Terms of contract cannot be reasonably ascertained 5.Revocable Contracts 6.Ultravires Trusteeship powers 7. Ultravires companies or corporates 8. Contract party Minor. C.OTHER EQUITABLE remedies are-decrees for recission, rectification, cancellation, declaratory decree, appointingReceivers. D.Suit for Quantum Meruit