10. What agreements are contracts. All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void.

Nothing herein contained shall affect any law in force in India, and not hereby expressly repealed, by which any contract is required to be made in writing or in the presence of witnesses, or any law relating to the registration of documents.

The first paragraph of this section is developed and applied by the more specific provisions of several following sections, which will be considered as they occur.

As to contracts required to be in writing.---See S. 25, sub-ss. 1 and 3, and S. 28, Exception 2, below. See also Indian Companies Act, 1956, S. 15, as to memorandum of association, S. 30 as to articles of association, and S. 46 as to contracts by companies. In this connection may also be noted the provisions of the Transfer of Property Act, 1882, which require a writing in the case of a sale (S. 54), of a mortgage (S. 59), lease (S. 107) and gift (S. 123), and the provisions of the Indian Trusts Act, 1882 which require a trust to be created in writing (S. 5); but these are not cases of contract in the proper sense of the word. Acknowledgments to save the law of limitation are required to be in writing by S. 19 of the Limitation Act, 1908. Arbitration agreements under the Arbitration Act, 1940, are similarly required to be in writing.

Oral and documentary evidence.---The. Act does not deal with the kind of proof generally required to establish the facts constituting a contract. In India the law on that subject is codified in the Indian Evidence Act, 1872. See especially ch. VI of that Act, Ss. 91 seq. as to the exclusion of oral by documentary evidence.

Ship..-Charter---Charter-party---Hire---Payment of---Condition---Punctual and regular payment of hire in advance---Failure to pay hire---Effect of---Owner becomes entitled to withdraw vessel---Charterer paying hire on due date by irrevocabled transfer to owners bank---Payment received by owner on due date but not attracting interest for four days---Owner can withdraw amount subject to payment of four days interest---Held: Payment not unconditional and punctual, owner entitled to withdraw vessel.

Contract for sale of land---Performance---It is well-settled that though period is fixed by contract itself presumption is that parties intended that agreement should be performed within a reasonable time---Fixation of time limit in agreement---Does not by itself rebut presumption and lead to an inference that time was intended to be essence of contract---Held, in circumstances of case, time fixed in contract was not intended to be essence of contract and defendant had committed no breach of agreement by not completing sale within stiputated time.

Terms contained in letter leading to execution of contract---Cannot be relied upon for interpreting contract.

S. 10 read with Land Revenue Act, 1967 (W.P. Act XVII of 1967)---S. 42---Contract---Legality of---Challenge to---Sale deed allegedly executed in favour of son not given effect in revenue record in lifetime of seller and till further period of about four years after his death---Held: Consent of seller having not been freely given, deed (in dispute) not to be genuine one.

Contract with Govt.---Validity challenged with contentions that it was without sanction/authorisation/approval and that it was arrived at in violation of Rules of Business---Contentions repelled to be untenable and validity of contract upheld.

Contract already performed---Reversal not to be lightly ordered. Where a contract has actually been performed, it is only in most exceptional circumstances that the law permits a reopening and reversal of what has already been done on the basis of mutual agreement.

Property conveyed under registered deed---Non-payment of consideration alleged---Sale is not avoided for non-payment---Price becomes charge on property. Where the seller challenges sale by registered deed on the ground that no consideration was paid for it.

Held: When the matter has passed from the stage of contract to that of an executed conveyance and possession of the property has been given thereunder even non-payment of consideration will not render the transaction void. The price if not paid, is a charge on the property sold and it can be recovered under the law. Title to the property nevertheless passed on the registration of the sale deed.

No written agreement between contractor and Government---Claim of contractor not finally accepted by Government---Matter still under consideration---No claim may be sustained on entries in minute books of negotiation between contractor and Government.

Charter party agreement---How can be construed. Like ordinary contracts the terms of a charter party agreement can also be spelt from the correspondence exchanged between the parties.

Contract with Government---Must be entered in proper form---Unenforceable if the officer executing it is not authorised to do so. Where the requisitioning authority gave alternate accommodation to the person occupying the requisitioned premises and it was contended that there was a contract between K and the Government to provide him with the accommodation so that the Government could not ask him to vacate it.'

Held: S. 176 of Government of India Act provides a particular method by which a contract should be made with the Govt. In this case no formal document was executed. The plaintiff has merely relied on the assurance given by the Accommodation Authority. The Government, however, is not bound by the said assurance as it was not expressed to be made by the Governor. It is well settled that, when a statute provides a particular method by which a contract should be made there must be compliance with the provisions of the statute.

Sovereign States,--If may enter into contract with each other---One State may act as agent of another. It would not be correct to say that sovereign and independent States cannot enter into any contractual relationship with each other or with an individual or individuals. There is no inherent incapacity in sovereign or independent States to enter into a contract either inter se or with individual or individuals. Although it is correct to say that treaties entered into by two States in the exercise of their sovereign powers, such as do not create any contractual relationship, would not constitute one the agent of the other, it would not be correct to say that a sovereign or independent State is incapable of acting as agent of another State or that of an individual or a body corporate.

Breach of contract of service---Contract for definite period---Damages---Salary for stipulated period must be paid. Held: Plaintiff's contract of service was for a definite period and has been terminated before its completion. In these circumstances the plaintiff is entitled to a salary for the remaining part of the period at the stipulated rate.

Contract of service---Terms and conditions set forth by Government in letter of appointment---Cannot be superseded by notification in Gazette. Where a retired Judge of High Court was appointed as Chairman of Industrial Court, and the letter of appointment among other things also stated that he was being appointed for an initial period of 3 years. But Gazette notification stated that his appointment was till further orders. Held: The plaintiff was in fact appointed for a minimum period of 3 years from the date he assumed office as Chairman of the Central Industrial Court and his services could not be terminated earlier than that.

Government contracts by---Must be within framework of Executive authority of Government. Even while entering into contracts the Government has to act necessarily within the framework of its executive authority. If the executive authority of the Government in relation to a particular subject is found to be wanting this void cannot be made good by the concerned Government purporting to act through a contract.

Contract with Government---No form prescribed by statute---Government bound by contract. S. 175 (3), Government of India Act, 1935, provides a particular method by which a contract should be made with the Government. In this case no formal document was executed. The plaintiff has merely relied on the assurance given by the Accommodation Authority. The Government, however, is not bound by the said assurance as it was not expressed to be made by the Governor. It is well settled that, when a statute provides a particular method by which a contract should be made, there must be compliance with the provisions of the Statute.

Contract with Government not executed on proper form---Contract not void. When a particular form has been prescribed for execution of contracts with the Government or where it is prescribed that the contract should be in the name of a particulars person as was done by S. 175 (3) of the Government of India Act, 1935 or S. 135, Constitution of Pakistan, 1956, the observance of the forms is not mandatory and their non-compliance does not render the document, or instrument void.

Document constituting contract envisaging another contract--.Whether such subsequent contract is condition precedent to the earlier contract depends on terms of contract. If the documents or letter relied on as constituting a contract contemplated the execution of a further contract between the parties, it is a question of construction whether the execution of the further contract is a condition or term of the bargain or whether it is a mere expression of the desire of the parties as to the manner in which the transaction already agreed to will in fact go through. In the former case there is no enforceable contract either because the condition is unfulfilled or because the law does not recognise a contract to enter into a contract. In the latter case there is a binding contract and the reference to the more formal document may be ignored.

Obligation inconsistent with terms of contract---Not to be implied in contract. Held: no obligation can be implied in a contract inconsistently with its expressed terms.

Legal and illegal agreement entered into at the same time.--Illegal agreement not to be effective if legal agreement fails--Illegal agreement is void---Legal agreement is good so far as it goes. If two persons enter into a perfectly legal agreement and at the same time provide that if this agreement fails then another agreement which the law does not permit will come into existence, the legal agreement does not become illegal because of such a provision. The illegal clause, which is in fact an agreement in the alternative, will remain void and ineffective whereas the other agreement will continue to be effective.

Law applicable---Contract entered into in one country to be performed in another---Law of which country applicable---Presumption and principles discussed. Where a contract is entered into in one country and is to be performed in another country the following principles would determine the law applicable to the contract.

Prima facie the proper law of the contract is presumed to be the law of the country where the contract is made (lex loci contractus). This presumption applies wholly in the country where it is made or may be performed anywhere, or performed in another country. This is the first presumption.

The second presumption is :--

"When the contract is made in one country, and it is to be performed either wholly or partly in another, then the proper law of the contract may be presumed to be the law of the country where the performance is to take place (lex loci solutionis).

Then again in order to determine which law will apply it shall have to be gathered from the intention of the parties in the contract. When the intention of the parties to a contract, as to the law governing the contract, is expressed in words, this expressed intention determines the proper law of contract and in general overrides every presumption.

Law applicable to contract entered into foreign country---Principle stated. In Private International Law, it is often the case that the rights and obligations arising out of a contract entered into in a re, reign State are governed by lax loci contractus, namely the law of the country where the contract was made. However, whether the law of the country where the contract was made or whether the law of the country where it is to be executed will govern the case, is a matter which would be usually decided according to the intention of the parties.

Transfer of movable property---Transfer affected by distributors and confirmed by owner---Both owner and distributor are transferors. Where in the case of rights in a cinema film, the transfer of rights was effected by the distributor and confirmed by the producer-owner of the film. It was held that the confirming party also became the transferor in the eye of law.

Indent business---Relationship between indentors, indent merchant and foreign supplier is determined by terms of contract. In cases arising out of indent business the relationship between the various parties should be determined on the construction of the terms of the contract entered into between them.

Relationship of indentor and foreign supplier---Direct Letter of Credit issued to supplier---Goods shipped direct to indentor---Contract is between them---Indent merchant acts as commission agent only. Where the indentor opened a letter of credit in favour of the foreign supplier and the foreign supplier shipped the goods direct to the indentor. It would be clearly a case of contract to supply the goods between those parties and the indent merchant would only be in the position of a commission agent.

Form of---Parties deliberately making contract in a particular form with ulterior motive---Must take the consequences. When the parties deliberately gave a particular form to a contract to evade income-tax. It was held that if the parties deliberately chose to give the transaction a particular form they must take the consequences. They cannot advance their case by pleading that the intention was to commit a fraud on the law relating to income-tax. A party to a fraud is not, except in circumstances with which we are not here concerned, allowed to plead his own fraud.

Misapprehension of terms of contract---Rights of parties not affected. If there was no misrepresentation and both parties had been labouring under a misapprehension that the contract had been cancelled, the abandonment due to a mutual mistake, would not affect the plaintiff's rights.

Misrepresentation by one party---Other party abandoning claim---Rights of latter not effected. If one of the parties to a contract abandons his claim on the basis of a misrepresentation made by the other party. It was held that the abandonment by it is of no legal effect.

Licence for sale of liquor---Not a contract---Licence is only a privilege. The arrangement by which a liquor licensee was enabled to sell excisable liquor under a licence, cannot be described as a contract. A licence is in the nature of a privilege conferred to do that which it would not have been permissible for the licensee to do otherwise.

Company, contract with---Presumption of act being properly done by company may be raised---Doctrine of indoor management. Broadly and briefly stated, the doctrine of "indoor management" is to the effect that persons contracting with a Company and dealing in good faith may assume that acts within its constitution and powers have been properly and duly performed and are not bound to inquire whether acts of internal management have been regularly done. Thus where the lease was made by the Secretary of the Company, the lessee was not required to inquire as to whether in fact the Society had approved the terms which were being offered to him in writing by the Honorary Secretary of the Society. Even if there was no delegation of the necessary powers in favour of the Secretary or the delegation was not valid on account of its inconsistency with any rule or bye-law of the Society, the transaction appears to be saved by what is known as the doctrine of "indoor management".

Sale by major in consideration of debt contracted during minority--Not a ratification of void contract---Sale valid. Where a minor after attaining majority executed a sale-deed stating that he, during minority, incurred debts for his maintenance, necessities of life and payment of revenue, etc. The sale document was challenged to be Void as being a ratification of a void contract.

Held: A sale is a complete demise and as such when a sale has taken place it has passed the stage of contract the analogy of void contract is not available.

Arbitration clause in contract---Interpretation of. The words of the arbitration clause should be given reasonable, ordinary, natural meaning and not extended meaning. The extended meaning must be kept within bounds.

Written contract---Oral evidence as to interpretation of terms of contract---Not ordinarily admitted. Held: When parties entered into a written contract, the Court would be very slow to import oral evidence for a decision on the interpretation of the terms of the agreement.

Earnest money---May be forfeited in case of breach of contract. Held: This amount of Rs. 5,000, though described as an advance was of the same nature as a deposit or earnest money. Such an amount is paid as a guarantee for the performance of the contract. When the contract is performed it goes as part of the price and when it is broken it is liable to be forfeited.

Earnet money---Bank guarantee is earnest money---Forfeiture of money guaranteed may be ordered. An earnest ordinarily means a tangible thing including a deposit, it will be restricting its meaning too much if deposit only is said to be the subject-matter of earnest. The mordern trend in commerce is to take extensive advantage of facilities offered by banks. It is more advantageous for buyers to furnish Bank guarantees than to make deposits of cash money as earnest for fulfillment of the terms of contracts of the purchase. The denial to the sellers of the right to forfeit the amounts covered by Bank guarantees in case of breach of contract by the purchasers would result in reversing the trend and that will be in nobody's interest.

Terms of contract---Unilateral addition to terms not permissible.

Agreement to sell immovable property---Part payment of purchase money mentioned in agreement---Registration not necessary. A contract of sale of immovable property though it contains a recital of payment of a part of purchase money of more than Rs. 100 by the proposed vendee, does not require registration.

Implied terms---When may be read into a contract---Agreement of parties on such term necessary. Whether an implication should or should not be made in a particular case depends on and must be answered with reference to the special facts and circumstances of a case but the principles which should guide us in the matter have been laid down in several leading cases. The principle is well settled that a stipulation not expressed in a written contract should not be implied merely because the Court thinks that it would be reasonable thing to imply it. Such an implication can be made only if, on a consideration of the terms of the contract in a reasonable and business like manner, the Court is satisfied that it should necessarily have been intended by the parties when the contract was made. The power of the Court of implying terms which the parties have not expressed should be exercised very sparingly and only in cases of necessity.

Agreement to reconvey property---Whole property must be reconveyed---Suit for reconveyance of part of property---Not maintainable. Every contract not only creates a right but also corresponding obligation in another. Here the right of repurchase has created a corresponding obligation on the vendee to reconvey the property. He cannot reconvey, or it will be wrong to force him to reconvey, only a portion of it nor under the law he can reconvey any portion of it because the obligation is one and whole. Similarly, here the right created by the agreement for reconveyance is joint and several and any one of them can enforce it in respect of whole and cannot enforce it in respect of his share only. If any one of the co-contractors wants to enforce the specific performance of contract for reconveyance he is to enforce it as a whole on payment of the entire consideration money and there will be no variation of the contract.

Agreement of reconveyance not signed by vendor but sub-registrar certifying agreement of vendor to terms of agreement---Agreement is not unilateral---Binding on parties. Where it was urged that the agreement, of reconveyance of property was unilateral and as such not binding on the party because it was not signed by the vendor.

Held: Though the signature of the vendor did not appear on the agreement yet it did appear on the back of the agreement and there was an endorsement by the Deputy Registrar to the effect that the vendor had agreed to the agreement. Therefore, the agreement could not be held to be unilateral and as such void.

Completion of---Enforcement of contract---Acceptance and offer---Communication of---Non-receipt by proposer contract---Completion of...Acceptance of offer---Communication of---Non-receipt of acceptance by proposer---Effect of---Respondent was higher bidder in an open auction held by appellant in respect of plot of land---1/3rd amount of total sale price paid by respondent on spot---Possession of plot was also delivered to respondent on spot---Balance price had to be paid by respondent on receipt of letter of acceptance of bid from appellant---Letter of acceptance despatched by appellant but respondent never received same---Appellant cancelled sale of plot---Appellant never revoked acceptance---Respondent was willing to perform his part of contract---Suit for declaration that appellant-defendant was leaned to communicate and plaintiff-respondent was entitled to' receive formal acceptance of their bid brought by respondent---Suit was decreed by civil Court and appellate Court affirmed finding of civil Court---Second appeal dismissed by High Court as being without any merit, however respondent was also bound to perform his part of contract within six weeks.

Hire purchase agreement---No clause in contract providing penalty for subletting premises---Contract cannot be rescinded for subletting. Held: As the hire purchase agreement for the bonus did not permit subletting but no penalty was prescribed for it, the Government could not rescined the contract because the hire purchaser had sublet it.

Letter of credit issued on basis of contract---Draft of consignment and bill of exchange negotiated---Subsequent amendment to letter of credit does not reduce liability of buyer. Where in accordance with the letter of credit, the Draft, the Bill of Exchange and Bill of Lading and other documents were negotiated. Thereafter the defendant allegedly amended the letter of credit. Held: The defendants could not raise the question of the belated amended letter of credit to avoid their liability.

Contract of sale of immovable property---Question whether time was of essence of contract is a question of intention of parties---Its determination depends upon terms of contract, conduct of parties before executing contract and surrounding circumstances---It is not a pure question of law but a question of fact---If not raised before trial Court, it cannot be raised in second appeal u/s. 100 before High Court or in leave proceedings before Supreme Court.

Barter contract---Law regarding---Sale of Goods Act, 1930 (III of 1930)---Non-applicability of---Law on sale of goods though codified in form of special statute (known as Sale of Goods Act, 1930), no such statute (enacted) or case law (developed) to guide courts in respect of barter contracts---Held: Sale of Goods Act as such of its force not to be attracted to such barter contracts---Held further: Consideration in barter agreement being goods exchanged for goods on either side, no monetary consideration to be involved there (in contradiction to case of sale of goods where monetary consideration to be sine qua non in our law).

Hire-purchase---Contract must vest the ownership of goods in the vendor till payment is made---Ownership transferred---Contract not of hire-purchase. In the case of sale of movable property the ordinary presumption would be that property in the apparatus which was subject Of the contract passed to the alleged "hire-purchaser" when the contract was made, it being immaterial whether the time of payment of the price was postponed beyond the date of the contract. Reference in this connection may be made to section 20 of the Sale of Goods Act, 1930 which is relatable to an "unconditional contract for the sale of specific goods", but embodies a principle which may be extended to cover a case where there are terms in the contract which purport to retain ownership in the vendor until the fulfillment of a certain condition relating to the price, alongside with other conditions from which an equally clear conclusion may be drawn that ownership in the goods became vested in the vendee upon the making of the contract.

Letter of credit---Bill of Lading---Non-payment---Appellant firm entering into general agreement with a foreign firm to export frozen shrimps of consignment basis to be paid for by means of opening letters of credit---Being in need of funds to finance export, appellant firm obtaining overdraft, called packing credit, from respondent-Bank against lien of letter of credit and on security of shipment to be made under letter of credit---A foreign Bank on instructions of purchaser opening an irrevocable letter of credit in favour of appellant-firm---Letter of credit in question bearing a specified date for expiry and respondent-Bank instructed to advise appellant firm of opening of letter of credit---Appellant firm negotiating documents called for by letter of credit together with a bill of exchange drawn on buyer---Bill of lading drawn to order of respondent-Bank and not to order of foreign Bank as required under credit---Respondent-Bank, forwarding shipping documents together with Bill of Exchange duly negotiated to foreign Bank for payment however forwarding only two copies of bill of lading instead of required full set of three---Foreign Bank declining to make payment for want of third copy---Third copy eventually sent by respondent-Bank to foreign Bank but reaching after expiry of period specified in such regard and foreign Bank again declining to make payment---Appellant-firm having supplied respondent Bank full set of three copies of Bill of Lading, respondent Bank, held, Committed negligence and lost its right to recourse under arrangements entered into with appellant firm.

Damages---Defendant's announcement in paper inviting research papers offering prize for best paper---Plaintiff sending his research paper but receiving no reply about acceptability or otherwise---Plaintiff's claim that contract between parties had been completed and as such he was entitled to amount claimed---No contract concluded between parties---No letter filed to indicate that paper submitted by plaintiff was accepted as the best research paper---Even if his paper had been accepted and prize had not been paid, he could not claim damages---Suit for claiming damages, held, was not maintainable in circumstances.

Agreement to sell---Effect of---Held · Agreement to sell by its nature being mere promise to do needful in future, no title in property to be conceived to have flown therefrom (in favour of party relying on such agreement).

S. 10 read with the Revenue Act, 1967 (W.P. Act XVII of 1967)---S. 42---Contract---Legality of---Challenge to---Sale deed allegedly executed in favour of son not given effect in revenue record in life time of seller and till further period of about four years after his death---Held: Consent of seller having not been freely given, deed (in dispute) not to be genuine one.

Suit for pre-emption---Non-deposit of balance amount---Consent decree---Respondent, pre-emptor as ordered in consent decree failing to deposit balance amount by the prescribed date and Appellate Court not passing any interim order to stay deposit of the amount---Proposition that if the amount, during pendency of appeal, was not deposited, the same became invalid as the suit stood dismissed cannot be regarded as valid as an appeal is a continuation of the suit and Appellate Court has power to extend time for depositing pre-emption money in which event original decree is varied to that extent---Held, mere non-deposit of balance amount under decree of Court of first instance before the decision of appeal, could not be regarded as fatal---Trial Court fell into an error in holding that the suit stood dismissed by default in payment of balance of pre-emption money and that the appeal against decree consequently abated---Consent judgment or order is not less than a contract and is subject to incidents of a contract because there is superadded command of the Court and its force and effect derives from contract between the parties leading to, or evidenced by, or incorporated in, the consent judgment or order---Consent judgment obtained by fraud or collusion would be a nullity if fraud was established---Setting aside compromise decree, in such a case, was not, however, warranted as it per se showed that not only the appellant but the Court itself was aware of the non-deposit of balance amount---Trial Court, therefore, fell into an error in not noticing that feature from the order itself---Decision of appeal having turned on the second question it was not necessary to consider the first one---Appeal dismissed and respondent allowed to deposit the pre-emption money or its balance under the impugned decree.

Privity of contract---Contended that even if agreement is considered to have been entered into by applicants and buyers on principal to principal basis, first respondent would still be party---Contention repelled as being devoid of any merit---Held, if a contract .is between two executants on principal to principal basis, first respondent cannot be treated as a party to contract unless it is shown that contract was executed by buyers also on behalf of first respondent---Held further, first respondent was not able to show how a contract of nature and terms of agreement involved in instant case violated any provision of Foreign Exchange Regulation Act/1947.

Government contracts for cutting and lifting wood from forest---Chief Conservator of Forests is competent authority to execute contract.

Omission by a party to sign agreement for sale of property for valuable consideration which was reduced in writing and was acted upon---Does not warrant inference that a valid agreement did not exist.

Suit---Contract entered into by parties as to manner in which suit .between them would be decided---Held, not illegal---Parties undertaking to be bound by verdict of Local Commissioner appointed on their request---No valid exception can be taken to disposal of suit on basis of report of such Local Commissioner---Civil Procedure Code (V of 1908), O. XXVI, r. 9.

Agreement---Contract---Undue influence---Appellants challenging agreement being vitiated on account of old age and mental infirmity of seller---Seller, predecessor-in-interest of appellants, only once having attack of paralysis and continuing profession of photography never lacking mental fitness---Held: none of ingredients of S. 16 being proved, contention of no avail.

Foreign contract---Recovery of debt payable in foreign currency---Material date for calculating amount of debt in local currency would be the date on which each installment of entire debt became due in absence of any provision in contract or where action could be brought under law expressing dues in foreign currency or decree could be passed in foreign country---Devaluation of currency resulting change in rate of exchange---Amounts of installments that became due before date of devaluation of Pakistani Rupees, held to be calculated at rate of exchange prevailing on dates when each installment became due.

Sale of goods---It cannot be disputed that in cases of contract for sale of goods time is normally considered the essence of the contract.

Contract of guarantee---Contention that liability against borrower having been extinguished or lapsed by efflux of time and by cessation of East Pakistan emerging out as a separate and independent country named Bangla Desh, contract of guarantee was rendered void due to impossibility of its performance---Repelled as being devoid of force---Held---(i) Notwithstanding remedy against borrower having become barred by operation of law as a result of new situation having arisen due to events that have taken place in instant case, remedy against borrower by virtue of letter of guarantee read with S. 13 (Contract Act 1872) would be available to lender bank---(ii) S. 20 CPC also gives jurisdiction to Contract as borrower had a sub-office at Karachi and cause of action having arisen to lender bank against guarantor on service of notice of demand at Karachi and guarantor, at commencement of suit, actually and voluntarily residing or carrying on business at Karachi.

Written agreement acted upon by parties---Absence of signature of one party on agreement immaterial---Contract valid and binding. Held: The agreement between the parties was reduced to writing. Both the parties accepted its terms and have partially carried them out. In view of this the contract in dispute is established between them and the respondents are entitled to enforce it. Even when the agreement has been not signed by one of the parties to it.

11. Who are competent to contract. Every person is competent to contract who is of the age of majority according to the law to which he is subject, and who is of sound mind, and is not disqualified from contracting by any law to which he is subject.

This section deals with personal capacity in three distinct branches: (a) disqualification by infancy; (b) disqualification by insanity; (c) other special disqualifications by personal law.

"To Contract."---That is, to bind himself by promise. A minor who gives value, without promising any further performance, to a person competent to contract is entitled to sue him for the promised equivalent. This may be properly not in contract but on a quasi-contract under S. 70.

Infancy.---As to infancy, the terms of the Act , as compared with the Common Law, were long a source of grave difficulty. By the Common Law an infant's contract is generally not void but voidable at his option, if it appears to the Court to be for his benefit, it may be binding, and especially if the contract is for necessaries. There was formerly, however, a current opinion, countenanced by the lax forms in which some of the decisions were expressed, that infants' agreements were of three kinds: namely, that some were wholly void as being obviously not for the infant's benefit, some valid as being obviously for his benefit, and all others voidable. This opinion is now quite exploded, but it was to be found in text-books the time when the Contract Act was framed. Still, there was never any authority fox saying that infants were absolutely incompetent to contract. The literal construction of the present section requires being of the age of majority according to one's personal law as a necessary element of contractual capacity. Since, however, the Act, as a whole, purports to consolidate the English law of contracts, with only such alteration as local circumstances require, and there is no trace in the report prefixed to the original draft, or any other relative document of any intention to make a new rule as to the contracts of minors, the Indian High Courts endeavoured to avoid a construction involving so wide a departure from the law to which they had been accustomed; but the Privy Council in 1903 declared that the literal construction is correct, and suggested that it was intended to give effect to the rule of Hindu law on the subject.

We may mention that in England the powers of infants to contract and to ratify their contracts have been much restrained by the Infants' Relief Act, 1874, a statute of good intentions and imperfect workmanship; and the Sale of Goods Act, 1893, S. 2 has declared the liability of infants to pay a reasonable price for necessaries sold and delivered to them, and has defined necessaries according to the latest and best judicial authorities. These enactments, of course, have no authority in India, and can be referred to only for the purpose of illustrating the common law rules. The result of the statutes is to bring the English law much nearer to the Anglo-Indian, for most practical purposes, than it might seem at first sight. We proceed to the details of the Anglo-Indian law.

Age of majority.---This is now regulated by the Indian Majority Act, 1875. S. 3 of the Act declares that every person domiciled in India shall be deemed to have attained his majority when he shall have completed his age of eighteen years, and not before. In the case, however, of a minor of whose person or property or both a guardian has been appointed by a Court, or of whose property the superintendence is assumed by a Court of Wards, before the minor has attained the age of eighteen years, the Act provides that the age of majority shall be deemed to have been attained on the minor completing his age of twenty-one years. S. 2 of the Act declares that nothing in the Act contained shall affect the capacity of any person to act in matters of marriage, dower, divorce, and adoption. An order discharging the guardian of a minor under S. 48 of the Guardians and Wards Act, 1890, does not terminate the minority when it is obtained by fraud practised upon the Court by a third party.

"Law to which he is subject."---The age of majority as well as the disqualification from contracting is to be determined by the law to which the contracting party is subject. The following examples show that the Indian Courts recognize that all cases may not be governed by the same rule. A Hindu widow above the age of sixteen and under the age of eighteen years, whose husband had his domicile in British India, executed a bond in Kolhapur (outside British India), where she was then residing. As the widow had not changed her domicile after the husband's death, her domicile was the same as that of her husband at his death, namely, British India. The question arose whether her liability on the bond was to be governed by the law of Kolhapur (lex loci contractus), or by the law of British India (Law of domicile). According to the law obtaining in Kolhapur, which is Hindu law unaffected by the Contract Act, she would have been liable on the bond, as the age of majority according to that law is sixteen years, and the bond was executed by her after she completed her sixteenth year. According to the law in British India, namely, the Contract Act, she was not liable, as the contract was made when she was under the age of eighteen years, and was not ratified by her after she attained her majority. It was held that her capacity to contract was regulated by the Contract Act, being the law of her domicile, and that under the Act she was not liable on the bond. But the Madras High Court has held that where a person aged eighteen domiciled in British India endorsed certain negotiable instruments in Ceylon, by the laws of which he was a minor, he was not liable as an endorsee, the contract being a mercantile one and governed by the lex loci contractus.

Minor's agreement.---If the first branch of the rule laid down in the section be converted into a negative proposition, it reads thus: No person is competent to contract who is trot of the age of majority according to the law to which he is subject: in other words, a minor is not competent to contract. This proposition is capable of two constructions · either that a minor is absolutely incompetent to contract, in which case his agreement is void, or that he is incompetent to contract only in the sense that he is not liable on the contract though the other party is, in which case there is a voidable contract. If the agreement is void, the minor can neither sue nor be sued upon it, and the contract is not capable of ratification in any manner; if it is voidable, he can sue upon it, though he cannot be sued by the other party, and the contract be ratified by the minor on his attaining majority. The former current of Indian decisions was that, as under the English law, a minor's contract is only voidable at his option. Although an agreement with a minor is void, a compromise of a suit to which a minor is a party and which is made a decree of the Court is not void but voidable. If therefore, the minor desires to enforce it, it is not open to the defendant to plead that the compromise was void on the ground that the guardian did not obtain the consent of the Court.

All contracts in India made by an infant are void. In Raj Rani v. Prem Adib a film producer entered into an agreement with a minor girl to act in a film, and the same agreement was entered into by the father of the minor on her behalf with the producer. On a breach of the agreement, the minor sued the producer through her father as next friend. Desai J. held that the agreement with the father was void, seeing that the consideration moving from the father was the minor's promise to act, and as the minor could not in law promise, there was no consideration. On the other hand, had the consideration moved from the father in the shape of an undertaking by him that his daughter should act, the father could have sued, but could recover only the damages he had suffered.

Fradulent Representation.---The decision has been regarded by the Indian Courts as an authority that the circumstances of a particular case may be such that, having regard to S. 41 of the Specific Relief Act, the Court may, on adjudging the cancellation of an instrument at the instance of a minor, require the minor to make compensation to the other party to the instrument. It has accordingly been held that where a mortgage of his property by a minor is set aside by the Court, the Court may order compensation to the lender if the loan was obtained by the minor by fraudulently representing that he was of full age. It has similarly been held that where a sale of his property by a minor, which, of course, is void under the Privy Council ruling, is set aside by the Court, the Court may, if satisfied that the sale was procured by the minor by a fraudulent misrepresentation as to his age, direct the minor to make compensation to the purchaser. There appears to be some difference of judicial opinion whether something in the nature of fraud on the part of the minor must be shown before the Court will exercise the powers given it under S. 41. It is submitted that the Court's discretion is not to be fettered, though, no doubt, it will always be more ready to exercise its discretion where the element of fraud is present.

Where however an infant retains property obtained under the contract from the other party, the equitable remedy of restitution has been applied, even though the infant made no false representation as to his age.

S. 41 of the Specific Relief Act, as already observed, gives the Court power "to make any compensation which justice may require" in cases where cancellation of a void or voidable written instrument is ordered. The Lahore High Court has held that the power to give equitable relief is more extensive in India than in England and ordered a money compensation in a case where the infant had misrepresented his age. In a later Full Benched case of the Allahabad High Court the Indian and English decisions were exhaustively reviewed and it was held that where money had been borrowed by two minors under a mortgage deed with a fraudulent concealment of their age, the mortgagee was not entitled to a mortgage decree, nor was he entitled 1o a decree for the principal money under any equitable principles other than those recognized in England. This is also the view taken by the Nagpur High Court. It is submitted that the judgment of Shadi Lal, C.J., in the Lahore case is the more correct. In India the Court derives its power from a statutory enactment which is expressed in the widest terms, and the word used is "compensation" not "restitution". In ordering compensation the Court is not necessarily giving effect to a contract which is in law a nullity, but is doing its best to put the parties, so far as possible, in the position which they occupied before the void transaction took place and from which one of them was only induced to depart by reason of the minor's fraud. Thus in no circumstances can a claim for interest be allowed as part of the compensation; for that would be to enforce one the stipulations of the contract. The nature of the compensation "which justice may require" must depend on the circumstances of each case, and there is nothing which requires that justice to be interpreted as the exact counterpart of the English rules of equity.

Estoppel.---If a minor procures a loan or enters into any other agreement by representing that he is of full age, is he estopped by S. 115 of the Evidence Act,. 1872 from setting up that he was a minor when he executed the mortgage? The point was raised but not decided, in Mohari Bibee’s case. In that case the Privy Council said: "The Courts below seem to have decided that this section does not apply to infants; but their lordships do not think it necessary to deal with that question now. They consider it clear that the section does not apply to a case like the present, where the statement relied upon is made to a person who knows the real facts and is not misled by the untrue statement. There can be no estoppel where the truth of the matter is known to both parties, and their lordships hold, in accordance with English authorities, that a false representation, made to a person who knows it to be false, is not such a fraud as to take away the privilege of infancy." There were many conflicting decision whether a minor could be estopped by a false representation as to his age. But the question is now settled by the case of Sadik Ali Khan where the Privy Council observed that a deed executed by a minor is a nullity and incapable of founding a plea of estoppel. The principle underlying the decision is that there can be no estopped against a statute. The Bombay High Court has since this case reversed its former course of decisions.

Ratification.---As it is now finally settled that a minor's agreement is void, it follows that there can be no question of ratifying it. Upon the same principle a promissory note given by a person on attaining majority in settlement of an earlier one signed by him while a minor in consideration of money then received from the obligee cannot be enforced in law. Such a note, the Madras High Court holds, is void for want of consideration.

Payment of debt incurred during minority.--- Where a person on attaining majority pays of debt incurred by him during minority, no question of ratification of a contract arises, since an agreement with a minor is merely void and not unlawful, the sum paid cannot be sued for subsequently, and in law it must be regarded on the same footing as a gift.

Specific performance.---A minor's agreement being now decided to be void, it is clear that there is no agreement to be specifically enforced; and it is unnecessary to refer to former decisions and distinctions, following English authorities which were applicable only on the view now overruled by the Privy Council. The guardian of a minor unless competent to do so has no power to bind the minor by a contract for the purchase or sale of immovable property, and the minor therefore is not entitled to specific performance of the contract. In the course of the judgment their Lordships said: "They are, however, of opinion that it is not within the competence of a manager of a minor's estate or within the competence of a guardian of a minor to bind the minor or the minor's estate by a contract for the purchase of immovable property, and they are further of opinion that as the minor in the present case was not bound by the contract, there was no mutuality and that the minor who has now reached his majority cannot obtain specific performance of the contract." It is, however, different with regard to contracts entered into on behalf of a minor by his guardian or by a manager of his estate, where the guardian or manager, as under Hindu Law, is competent to alienate property. In such a case it has been held by the Privy Council that the contract can be specifically enforced by or against the minor, if the contract is one which it is within the competence of the guardian to enter into on his behalf so as to bind him by it, and further, if it is for the benefit of the minor. But if either of these two conditions is wanting, the contract cannot be specifically enforced at all.

It is also within the competence of a certificated guardian appointed by statute, such as the Guardian and Wards Act, 1890, or the various Courts of Wards Acts to enter into a contract for the purchase or sale of immovable property on behalf of the minor with the sanction of the Court.

"Of sound mind.---See S. 12, for the definition of soundness of mind. By English law a lunatic's contract is not void, but voidable at his option, and this only if the other party had notice of his insanity at the time of making the contract. But after the decision that this section makes a minor's agreement wholly void, it is clear that a person of unsound mind must in India be held absolutely incompetent to contract. And it has in fact been held to be so in a Madras case. The supply of necessaries to lunatics, among other persons "incapable of entering into a contract," is dealt with by S. 68 of the Act; see the illustrations.

Persons otherwise "disqualified from contracting."---The capacity of a woman to contract is not affected by her marriage either under the Hindu or Muhammadan law. A Hindu female is not, on account of her sex, absolutely disqualified from entering into a contract; and marriage, whatever other effet it may have, does not take away or destroy any capacity possessed by her in that respect. It is not necessary to the validity of the contract that her husband should have consented to it. When she enters into a contract with the consent or authority of her husband, she acts as his agent, and binds him by her act; and she may bind him by her contract, in certain circumstances, even without his authority, the law empowering her on the ground of necessity to pledge her husband's credit. Otherwise a married woman cannot bind her husband without his authority, but she is then liable on the contract. to the extent of her stridhanam (separate property). Similarly, a married Hindu woman may contract jointly with her husband, but then she is liable to the extent of her stridhanam only. In the same way a married Muhammadan woman is not by reason of her marriage disqualified from entering into a contract.

Turning next to persons of other denominations, there are two Indian enactments that create the separate property of married women, and impliedly confer upon them, as an incident of such property, the capacity to contract in respect thereof. The one is the Indian Succession Act, 1925, sec. 20, and the other the Married Women's Property Act, 1874. Both these enactments apply to the whole of India. S. 20 of the Succession Act provides that no person shall by marriage acquire any interest in the property of the person whom he or she marries, nor become incapable of doing any act in respect of his or her own property which he or she could have done if unmarried. The effect of this was that on or after January 1st, 1866, all married women to whose marriages the Act applied became absolute owners of all property vested in, or acquire any interest in their husband did not by their marriage acquire any interest in such property. It was subsequently considered expedient to make due provision for the enjoyment of wages and earnings by women married before 1866, and Married Women's Property Act enacted that the wages and earnings of any married woman acquired or gained by her after the passing of that Act in any employment, occupation, or trade carried on by her, and all money or other property acquired by her through the exercise of any literary, artistic, or scientific skill, should be deemed to be her separate property (S. 4). The Act also provides that a married woman may sue and may be sued in her own name in respect of her separate property (S. 7), and that a person entering into a contract with her with reference to such property may sue her, and to the extent of her separate property recover against her, as if she were unmarried (S. 8).

Certain classes of persons may be disqualified under certain enactments from entering into contracts in respect of matters specified in those enactments. Thus where a person in Oudh is declared a "disqualified proprietor" under the provisions of the Oudh Land Revenue Act, 1876, he is not competent to alienate his property, and the same incapacity extends to contracts entered into by him, though they relate to property situate outside the province of Oudh.

'Hiba bil-i-iwaz'---If minor can pay consideration for gift. The minor was held to have paid consideration for the hiba made to her and as such the gift was held to be valid.

Right of maintenance---Minor cannot contract himself out of statutory right through his mother. Where the mother of the minors made a compromise with her husband so as to give up her right under S. 488, Cr.P.C. to receive maintenance of the minors. It was held that the right of a minor to receive maintenance under section 488, Cr.P.C. is inalienable. A minor cannot contract himself out of it either himself or through any other person including his mother for the short and sensible reason that the minor is incompetent to enter into a contract.

12. What is a sound mind for the purposes of contracting. A person is said to be of sound mind for the purpose of making a contract if, at the time when he makes it, he is capable of understanding it and of forming a rational judgment as to its effect upon his interests.

A person who is usually of unsound mind, but occasionally of sound mind, may make a contract when he is of sound mind.

A person who is usually of sound mind, but occasionally of unsound mind, may not make a contract when he is of unsound mind.

(a) A patient in a lunatic asylum, who is at intervals of sound mind, may contract during those intervals.

(b) A sane man, who is delirious from fever, or who is so drunk that he cannot understand the terms of a contract, or from a rational judgment as to its effect on his interests, cannot contract whilst such delirium or drunkenness lasts.

Burden of proof.---The difficulty of understanding what is really the effect of this section, in conjunction with S. 11, has already been pointed out. The presence or absence of the capacity mentioned in this section at the time of making the contract is in all cases a question of fact. Where a person is usually of unsound mind, the burden of proving that at the time he was of sound mind lies on the person who affirms it. In cases, however, of drunkenness or delirium from fever or other causes, the onus lies on the party who sets up that disability to prove that it existed at the time of the contract. Questions of undue influence and of incapacity by reason of unsoundness of mind must not be mixed up, involving as they do totally different issues.

Contract in lucid interval.---The second paragraph of the section provides that a person who is usually of unsound mind, but occasionally of sound mind, may make a contract when he is of sound mind. Thus even a patient in a lunatic asylum may contract during lucid intervals (see illustration (a)). The question may arise whether a lunatic adjudged to be so under the Lunacy Act, 1912, and of whose property a committee or manager is appointed, can contract during intervals of sound mind. Where, however, a committee or a manager of the estate of a lunatic adjudged to be so is appointed under either of the Acts, no contract can be entered into by a lunatic in respect of his estate, even though at the time of the contract he may be in a lucid interval.

Insanity at the time of entering into agreement,--Party alleging must prove. Where it is alleged that an agreement is void as it was entered into by a party which was incompetent to do so on account of his insanity. It was held that there is a presumption that every one is sane till otherwise proved. Therefore a party who alleges insanity must prove tile same.

13. "Consent" defined. Two or more persons are said to consent when they agree upon the same thing in the same sense.

Apparent and real contract---The language of this section is, on the face of it, more of a judicial or expository than of legislative kind. As an authoritative definition it does not seem to define very much. It would need some courage to . maintain that persons can be said to consent when they do not agree upon the same thing, or that if they do not agree in the same sense they can be side to agree in any sense at all.

If the section is to cover all kinds of contracts, as presumably it does, the word "thing" must obviously be taken as widely as possible, though it seems most appropriate where the contract has to do with corporeal property. We must understand by "the same thing" the whole content of the agreement, whether it consists, wholly or in part, of delivery of material objects, or payment, or other executed acts or promises.

Students and young practitioners must be warned not to exaggerate the working importance of cases which are quoted and discussed for the very reason that they are exceptional. Generally parties who have concurred in purporting to express a common intention by certain words cannot be heard to deny that what they did intend was the reasonable effect of those words; and that effect must be determined, if necessary, by the Court, according to the settled rules of interpretation. Whoever becomes a party to a written contract "agrees to be bound, in case of dispute, by the interpretation which a Court of law may put upon the language of the instrument," whatever meaning he may attach to it in his own mind. Exceptions to this rule exist, but they are admitted only for special and carefully limited reasons.

Warning is also still needed, having regard to the language current in all but the most modern text-books, against the habit of using the word "mistake" as if it denoted any general legal principle, or was capable, taken alone, of explaining any departure from the normal grounds of decision.

The cases of mistake so far discussed by the learned authors have all been instances of what has been called mutual mistake, that is where the parties have misunderstood one another. For such a mistake to render an agreement void, the mistake must first be as to a term in the agreement. If A buy oats believing them to be old oats when in fact they arc new oats, A cannot plead that the agreement is void for mistake: A must prove that he believed that the seller warranted them to be old oats. The difference, as Blackburn J. put it is between buying a horse believed to be sound, and buying a horse believed to be warranted sound. The former case is one of mistaken motive, giving no relief to the disappointed buyer, whereas in the latter case the buyer has proved the first essential in establishing operative mutual mistake. Secondly the mistake as to a term in the agreement must either be known to the other party, or reasonable in the circumstances.

If both parties are behaving reasonably, but have different things in mind, there is no contract, there the Court, considering the matter objectively, was unable to determine which ship was the contract ship.

Ambiguity.---Sometimes an apparent agreement can be avoided by showing that some term (such as a name applying equally to two different ships) is ambiguous, and there has been a misunderstanding without fault on either side. Such cases, however, are in fact extremely rare. It usually turns out either that the terms have an ascertained sense by which both parties are bound, and there is a contract which neither can dispute, whatever either of them may profess to have thought, or that, when the facts are established, there was really never a proposal accepted according to its terms, and therefore the conditions of a binding contract were not satisfied. Many of the cases cited in the books under the head of mistake belong to the latter class.

Fundamental error.---In certain classes of cases there may be all the usual external evidence of consent, but the apparent consent may have been given under a mistake, which the party is not precluded from showing, and which is so complete as to prevent the formation of any real agreement "upon the same thing". Such fundamental error may relate to the nature of the transaction, to the person dealt with, or to the subject matter of the agreement.

As to the nature of the transaction.---A man who has put his name to an instrument of one kind understanding it to be an instrument of a wholly different kind may be entitled, not only to set it aside against the other party on the ground of any fraud or mis-representation which caused his error, but to treat it as an absolute nullity, under which no right can be acquired against him by any one. There are much older authorities showing that if a deed is falsely read over to an illiterate man, and he executes the deed relying on the false reading as being the true substance of the transaction, his act is wholly void.

We may expect to find fraud as an element in cases of this class. But it is not the decisive element. A signature attached to a document supposed to be of a wholly different kind, or not to contain a clause so important as substantially to alter its character, is invalid unless the signor is estopped by negligence from denying that he understood what he was signing, and this "not merely on the ground of fraud, where fraud exists, but on the ground that the mind of the signor did not accompany the signature; in other words, that he never intended to sign, and therefore in contemplation of law never did sign, the contract to which his name is appended." Neither is fraud a necessary element.

It has been mentioned that a signatory may be estopped by negligence from pleading non est factum. The Court of Appeal has however held that a signatory can treat as a nullity a document in a category different from the one he intended to sign, even though he has been negligent, unless he has in fact signed a negotiable instrument. This case has been much criticised, mainly on the ground that it is arbitrary and illogical to hold that the need for the signatory to take care and his consequent liability should ever depend upon the document he has in fact singed, irrespective of what he believed he was signing, when ex hypothesi he is ignorant of its nature.

Consent and estoppel.---The Courts have followed English authority in holding that, in normal circumstances, a man is not allowed to deny that he consented to that which he has in fact done, or enabled to be done with his apparent authority. Thus when a person entrusts to his own man of business a blank paper duly stamped as a bond and signed and sealed by himself in order that the instrument may be drawn up and money raised upon it for his benefit, if the instrument is afterwards duly drawn up and money obtained upon it from persons who have no reason to doubt the good faith of the transaction, it is presumed that the bond was drawn in accordance with the obligor's wishes and instructions. As to inchoate stamped negotiable instruments provision is made by the Negotiable Instruments Act, 1881, S. 20, which is as follows:-- "Where one person signs and delivers to another a paper stamped in accordance with the law relating to negotiable instruments then in force in British India, and either wholly blank or having written thereon an incomplete negotiable instrument, he thereby gives prima facie authority to the holder thereof to make or complete, as the case may be, upon it a negotiable instrument, for any amount specified therein and not exceeding the amount conveyed by the stamp. The person so signing shall be liable upon such instrument, in the capacity in which he signed the same, to any holder in due course for such amount; provided that no person other than a holder in due course shall recover from the person delivering the instrument anything in excess of the amount intended by him to be paid thereunder.

Parda-nishin cases.---It might be possible to refer to this head some of the cases in which gifts or other acts, practically amounting to acts of bounty, of parda-nishin women have been set aside. But it is certainly not necessary for this purpose to show that the nature of the act was not understood at all. The jurisdiction rests on a presumption of imperfect knowledge of the world and exposure to undue influence, making it the duty of a person taking a beneficial grant or contract from a parda-nishin woman to show that the deed was explained to her and understood by her, so that the ordinary burden of proof is reversed. These cases accordingly belong to the head of undue influence.

Error as to the person of the other party.---There can be no real formation of an agreement by proposal and acceptance unless a proposal is accepted by the persons, or one of a class or number of persons, to whom it is made. Similarly the acceptance must be directed to the proposer, or at least the acceptor must have so acted as to entitle the proposer to treat the acceptance as meant for him. The acceptance of an offer not directed to the acceptor may occur by accident, as where a man's successor in business receives an order addressed to his predcessor by a customer who does not know of the change, and executes it without explaining the facts. Here no contract is formed. But the buyer would be bound, as on a new contract, if after notice he treated the sale as subsisting. This kind of case is very unusual. Acceptance intended for a person other than the person actually making the offer might possibly happen by accident, but in the reported cases it has been the result of fraudulent personation. The proposer has obtained credit, in effect, by pretending to be some person of credit and substance known to the acceptor, or the agent of such a person. It may be a delicate question in a case of this kind, if tile transaction is between parties face to face.

As to the subject-matter of the agreement.---It is quite possible for the parties to a contract to be under a common mistake of this kind. If the mistake is not common, it may happen, in very exceptional cases, that by reason of an ambiguous name, or the like, each party is mistaken as to the other's intention, and neither is estopped from showing his own intention. Otherwise a contract (assuming the other conditions for the formation of a contract to be satisfied) can be affected by such a mistake, not common to both parties, only where it is induced by fraud or misrepresentation. We shall find (see below on S. 18) that willful acquiescence in the other party's mistake is equivalent to misrepresentation under certain circumstances. If the mistake is common, it can seldom, if ever, be said that there was no consent. A simpler and more correct explanation is to say that there was an agreement subject to a condition understood or implied in the nature of the agreement itself, though not expressed, and that condition has not been fulfilled. It may be that at the date of the agreement the condition is already incapable of fulfillment by reason of some fact unknown to the parties, as in the case of an agreement for the sale of a horse which in fact is dead, or a specific cargo which in fact is lost. In that case no operative obligation ever arises under the agreement. But this may be the case with any conditional contract. The interposition of a time of suspense, during which it cannot be known whether there will be an operative contract or not, can make no difference to the legal nature of the transaction. This particular class of cases, however, is specially dealt with by S. 20 of the Act.

In many cases falling under the foregoing heads, though not in all, the same result may be arrived at by observing that there is no consideration for the promise which it is sought to enforce.

Coercion wholly excluding consent.---Coercion might possibly be such as not only to prevent consent from being free (Ss. 14, 15), but to exclude any real or intelligent consent altogether.

S. 13 read with Specific Relief Act (I of 1877), .S. 3---Consent---Definition---Definition of "consent" or free-consent in Contract Act, 1872 applies to provisions of Specific Relief Act under residuary clause of S. 3 of Specific Relief Act.

Mutuality in contract---Contract of sale clearly showing names of two purchases jointly with third purchaser---Such two purchasers not signing contract but both executing power of attorney in favour of third joint purchaser who signed contract---Seller (appellant) accepting earnest money and also a further sum of maximum money---Held, it does not lie in seller’s mouth to say that contract lacked mutuality---Held furthere, mere absence of their signatures on contract does not render contract void and privity of contract existed between them and seller.

Illiterate and poor women---Not pardanashin’---Entitled to protection given to ‘pardanashin women. The rule of law, which is applicable to pardanashin ladies, is to protect the week and helpless and consequently such a rule should not be restricted to that class only, but should apply to the case of a poor woman who is equally ignorant and illiterate though not a pardanashin woman in the strict sense of the term.

14. "Free consent defined." Consent is said to be free when it is not caused by:---

(1) coercion, as defined in section 15, or
(2) undue influence, as defined in section 16, or
(3) fraud, as defined in section 17, or
(4) misrepresentation, as defined in section 18, or
(5) mistake subject to the provisions of sections 20, 21, and 22.

Consent is said to be so caused when it would not have been given but for the existence of such coercion, undue influence, fraud, misrepresentation or mistake.

Unfree consent.--- Not only consent but free consent is declared by S. 10 to be necessary to the complete validity of a contract. The Act now proceeds to declare the meaning of this addition. Where there is no consent or no real and certain object of consent (cf. S. 29, below) there can be no contract at all. Where there is consent, but not free consent, there is generally a contract voidable at the option of the party whose consent was not free. This section declares in general the causes which may exclude freedom of consent, leaving them to be more fully explained by the later sections referred to in the text. In one respect the language is open to objection. It seems, when read together with that of other relevant sections, to assume that there are cases in which a contract is voidable on the ground of mistake. We are not aware of any such cases. We have seen that certain kinds of mistake may exclude consent altogether. In such cases no real agreement is ever formed, or there is no real object on which the parties are agreed, and the seeming agreement is wholly void. Otherwise mistake, if not induced by misrepresentation or fraud, is inoperative. If there be any specific exceptions to this rule, the Act gives no clue to them; in fact, we do not believe there are any. The specific provisions of the Act, however, cover the ground sufficiently to avoid any danger of serious error in practice.

The decision purported to be based on equitable grounds, but it seems on the new equity that Denning L.J. has often advocated, rather than on established doctrine of the Chancery Courts.

Illiterate person signing document---Person obtaining signature must prove that he signed after document was properly explained to him. Held: the appellant is an illiterate person and the onus was on the respondent to establish beyond doubt that the signature of the appellant was obtained on that document after it was properly explained to him.

It is an established principle that in case of a document executed by an illiterate pardahanashin lady the court must satisfy itself upon the evidence that the document was executed by the pardahanashin lady with full understanding of what she was about to do: that she had full knowledge of the nature and effect of the transaction and, that she had independent disinterested advice in the matter. The burden, in such a case, to prove that the document executed was untainted by fraud misrepresentation and undue influence, lies on the person alleging the document to be genuine.

Minor's contract---No express plea raised in plaint as to agreements executed by father having been executed as guardians on behalf of minor sons---Agreements thus executed whether void.

Minor---Sale of minor's immovable property declared to be ab initio void---Consideration amount of such sale not found to have been spent for benefit of minor's estate---Held, alienee, in such circumstances, cannot be compensated by refund of consideration amount.

Plaintiff claiming on account of supply of goods---Such amount was payable on 60 days sight drafts drawn on Defendant No. 2---Defendant No. 1 contending that there was no privity of contract between him and the plaintiff and as such the claim against him was baseless---Held : such contention repelled---Suit---Held further: Decreed to the extent of cost of consignments.

Agreement by a person under a legal disability e.g. a minor or a person of unsound mind---Validity of---Held: Such act is void ab initio and is incapable of ratification or confirmation---Law forbids the enforcement of such a transaction even if the minor were to ratify it after attaining majority.

Purchase of property by guardian of minor on his behalf---Contract valid for benefit of minor. A distinction is to be drawn between contracts made by minors and those made by their guardians on their behalf. The important point for consideration in the latter class of cases should be as to whether the guardian is competent to make a contract on behalf of the minor or not. Therefore where the father of the minor had entered into a contract to purchase a piece of land on behalf of the minor, the contract is for the benefit of the minor and is valid and enforceable.

Right of maintenance---Minor cannot contract himself out of statutory right through his mother. Where the mother of the minors made a compromise with her husband so as to give up her right under S. 488, Cr.P.C. to receive maintenance of the minors. It was held that the right of a minor to receive maintenance under section 488, Cr.P.C., is inalienable. A minor cannot contract himself out of it either himself or through any other person including his mother for the short and sensible reason that the minor is incompetent to enter into a contract.

Firm, contract by---Department of firm entering into contract in a name different from name of firm---Department duly authorised to do such act---Contract valid. Where a department of a firm F & Co. operated under the name of S. & Sons and it entered into a contract in that name. Held: that a legal person was entitled to carry on business in different assumed names and since Messrs F & Co. was a legal person, the contract signed by its department Messrs S & Sons could not be held to be void. In law a contract can be signed in the trade name of a business by a person duly authorised on this behalf by the owners of such business.

Minors--Contracts by or on behalf of, are void. Minors cannot enter into a Contract nor a natural guardian can bind minors by making a contract on their behalf.

Contract jointly by majors and minors---Contract void for minors---May be enforced so far as majors are concerned. Where a contract has been made by four persons jointly, two minors and two adults, the invalidity of the contract with respect to two minors cannot have any contagious effect on the contract made by the other two majors. In such a case that part of the contract which relates to contract by minors is to be disregarded and the rest of the contract made by the adults should be taken to have been validly entered into by them and they are to be considered to be entitled to enforce the contract and claim specific performance of the same.

Contract on behalf of the minor by the father---Valid. Held: Since the contract was entered into by the father on behalf of and for the benefit of the minor it is a valid contract.

Lease in favour of minor---Minor can enforce---Ss. 10 and 11 cannot be used against the minor. Sections 10 and 11 of the Contract Act enacted for the benefit and protection of the minor cannot be made to operate against the minor. It is true that the contract in which the minor is a party cannot be enforced against the minor, but that does not mean that the major party who with his eyes wide open to the fact of the minority of the other side entered into a contract with him, and, after taking advantage of such a contract, can he allowed to go back from his part of the contract and repudiate it.

Therefore, in a lease by the minor in favour of the defendants and of which the leasehold property was given in possession of the defendants there is no obligation on the part of the minor to be enforced by the defendants, the lessees. Obligations are created by the least to be discharged by the lessees, and it can be enforced by the minor.

Minor executing sale deed---Sale nullity even when registered---Need not be set aside. Held: The deed was void and must be regarded a nullity in the eye of the law, and cannot be used for conferring any right or title on the purchaser.

Held further: There was no need for filing a suit for the cancellation or setting aside of the sale-deed in question, and in effect the suit of the plaintiff was not one for such cancellation or setting aside of the instrument in question.

Property---If can be transferred to a minor. Held: In the lower Court by mistake it was held that an infant being incapable of contracting under section 11 of the Con Act was also incapable of being the transferee under a sale deed of immovable property.

15. "Coercion" defined. "Coercion" is the committing, or threatening to commit, any act forbidden by the Pakistan Penal Code, or the unlawful detaining, or threatening to detain, any property, to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement.

Explanation.---It is immaterial whether the Pakistan Penal Code is or is not in force in the place where the coercion is employed.

A, on board an English ship on the high seas, causes B, to enter into an agreement by an act amounting to criminal intimidation under the Pakistan Penal Code.

A afterwards sues B for breach of contract at Karachi.

A has employed coercion, although his act is not an offence by the law of England, and although section 506 of the Pakistan Penal Code was not in force at the time when or place where the act was done.