Indian Contract Act THE INDIAN CONTRACT ACT, 1872 ACT No. 9 OF 1872 1 [25th Apri , 1872.!

Preamble WHEREAS it is expedient to define and amend certain parts of the law relating to contracts ; It is hereby enacted as follows "RE#I$INAR% - Short title ! "his Act may be called the Indian #ontract Act$ %&'( Extent$ #ommencements(-It extends to the whole of India ')*except the State of +amm, and -ashmir.; and it shall come into force on the first day of September$ %&'( /othing herein contained shall affect the pro0isions of any Stat,te$ Act or Reg,lation not hereby expressly repealed$ nor any ,sage or c,stom of trade$ nor any incident of any contract$ not inconsistent with the pro0isions of this Act( '- Interpretation-cla,se( In this Act the following words and expressions are ,sed in the following senses$ ,nless a contrary intention appears from the context 1&a' (h)n on) p)r*on *i+ni,i)* to anoth)r hi* -i in+n)** to do or to a.*tain ,ro/ doin+ an0thin+, -ith a 1i)- to o.tainin+ th) a**)nt o, that oth)r to *2ch act or a.*tin)nc), h) i* *aid to /a3) a propo*a 4 &.' (h)n th) p)r*on to -ho/ th) propo*a i* /ad) *i+ni,i)* hi* a**)nt th)r)to, th) propo*a i* *aid to .) acc)pt)d. A propo*a , -h)n acc)pt)d, .)co/)* a pro/i*)4 &c' Th) p)r*on /a3in+ th) propo*a i* ca )d th) 5pro/i*or and th) p)r*on acc)ptin+ th) propo*a i* ca )d th) It pro/i*)54 &d' (h)n, at th) d)*ir) o, th) pro/i*or, th) pro/i*)) or an0 oth)r p)r*on ha* c on) or a.*tain)d ,ro/ doin+, or do)* or a.*tain* ,ro/ doin+, or pro/i*)* to do or to a.*tain ,ro/ doin+, *o/)thin+, *2ch Act or a.*tin)nc) or pro/i*) i* ca )d a con*id)ration ,or th) pro/i*) 4 &)' E1)r0 pro/i*) and )1)r0 *)t o, pro/i*)*, ,or/in+ th) con*id)ration ,or )ach oth)r, i* an a+r))/)nt4 &,' "ro/i*)*, -hich ,or/ th) con*id)ration or part, o, th). Con*id)ration* ,or )ach oth)r ar) ca )d r)ciproca pro/i*)*4 &+' An a+r))/)nt not )n,orc)a. ) .0 a- i* *aid to .) 1oid4 &h' An a+r))/)nt )n,orc)a. ) .0 a- i* a contract4 &i' An a+r))/)nt -hich i* )n,orc)a. ) .0 a- at th) option o, on) or /or) o, th) parti)*6 th)r)to, .2t not at th) option o, th) oth)r or oth)r*, i* a a1oida. ) contract4 &7' A contract -hich c)a*)* to .) )n,orc)a. ) .0 a- .)co/)* 1oid -h)n it c)a*)* to .) )n,orc)a. ). CHA"TER I OF THE CO$$8NICATION, ACCE"TANCE AND RE9OCATION OF "RO"O:A#: 2- #omm,nication$ acceptance and re0ocation of proposals "he comm,nication of proposals the acceptance of proposals$ and the re0ocation of

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proposals and acceptances$ respecti0ely$ are deemed to be made by any act or omission of the party proposing$ accepting or re0o3ing by which he intends to comm,nicate s,ch proposal acceptance or re0ocation$ or which($ has the effect of comm,nicating it( #omm,nication when complete ! "he comm,nication of a proposal is complete when it comes to the 3nowledge of the person to whom it is made( "he comm,nication of an acceptance is complete$ as against the proposer$ when it is p,t in a co,rse of transmission to him$ so as to be o,t of the power of the acceptor; as against the acceptor$ when it comes to the$ 3nowledge$ of the proposer( "he comm,nication of a re0ocation is complete$ as against the person who ma3es it$ when it is p,t into a co,rse of transmission to the person to whom it is made$ so as 5to be o,t of the power of the person who ma3es it; as against the person( to whom it is made$ when it comes( to his 3nowledge( Ill,strations &a' A propo*)*, .0 )tt)r, to *) a ho2*) to ; at a c)rtain pric). Th) co//2nication o, th) propo*a i* co/p )t) -h)n ; r)c)i1)* th) )tt)r. &.' ; acc)pt* A<* propo*a .0 a )tt)r *)nt .0 po*t. Th) co//2nication o, th) acc)ptanc) i* co/p )t), a* a+ain*t A -h)n th) )tt)r i* po*t)d a* a+ain*t ;, -h)n th) )tt)r i* r)c)i1)d .0 A. &c' A r)1o3)* hi* propo*a .0 t) )+ra/. Th) r)1ocation i* co/p )t) a* a+ain*t A -h)n th) t) )+ra/ i* d)*patch)d. It i* co/p )t) a* a+ain*t ; -h)n ; r)c)i1)* it. ; r)1o3)* hi* acc)ptanc) .0 t) )+ra/. ;<* r)1ocation i* co/p )t) a* a+ain*t ; -h)n th) t) )+ra/ i* d)*patch)d, and a* a+ain*t A -h)n it r)ach)* hi/. Re0ocation of proposals and acceptances ! A proposal may be re0o3ed at any time before the comm,nication of its acceptance is complete as against the proposer$ b,t not afterwards( An acceptance may be re0o3ed at any time before the comm,nication of the acceptance is complete as against the acceptor$ b,t not afterwards( Ill,strations A proposes$ by a letter sent by post$ to sell his ho,se to 7( 7 accepts the proposal by a letter sent by post( A may re0o3e his proposal at any time before or at the moment when 7 posts his letter of acceptance$ b,t not afterwards( 7 may re0o3e his acceptance at any time before or at the moment when the letter comm,nicating it reaches A$ b,t not afterwards( Re0ocation how made ! A proposal is re0o3ed9 : by the comm,nication of notice of re0ocation by the proposer to the other party 9': by the lapse of the time prescribed in s,ch proposal for its acceptance$ or$ if no time is so prescribed$ by the lapse of a reasonable time$ witho,t comm,nication of the acceptance; 92: by the fail,re of the acceptor to f,lfill a condition precedent to acceptance ; or 94: by the death or insanity of the proposer$ if the fact of his death or insanity comes to the 3nowledge of the acceptor before acceptance( Acceptance m,st be absol,te !

In order to con0ert a proposal into a promise$ the acceptance m,st9 : be absol,te and ,n;,alified; 9': be expressed in Some ,s,al and reasonable manner$ ,nless the proposal prescribes the manner in which it is to be accepted( If the proposal prescribes a manner in which it is to be accepted$ and the acceptance is not made in s,ch manner$ the proposer may$ within a reasonable time after the acceptance is comm,nicated to him$ insist that his proposal shall be accepted in the prescribed manner$ and not otherwise; b,t if he fails to do so$ he accepts the acceptance( %- Acceptance by performing conditions$ or recei0ing consideration Performance of the conditions of a proposal$ or the acceptance of any consideration for a reciprocal promise which may be offered with a proposal$ is an acceptance of the proposal( <- Promises express and implied ! In so far as the proposal or acceptance of any promise is made in words$ the promise is said to be express( In so far as s,ch proposal or acceptance is made otherwise than in words$ the promise is said to be implied( CHA"TER II OF CONTRACT:, 9OIDA;#E CONTRACT: AND 9OID A=REE$ENT: =- What agreements are contracts ! All agreements are contracts if they are made by the free consent of parties competent to contract$ for a lawf,l consideration and with a lawf,l ob>ect$ and are not hereby expressly declared to be 0oid( /othing herein contained shall affect any law in force in )*India. and not hereby expressly repealed by which any contract is re;,ired to be made in writing') or in the presence of witnesses$ or any law relating to the registration of doc,ments( - Who are competent to contract ! E0ery person is competent to contract who is of the age of ma>ority according to the law to which he is s,b>ect$ 2)and who is of so,nd mind$ and is not dis;,alified from contracting by any law to which he is s,b>ect( '- What is a so,nd mind for the p,rposes of contracting ! A person is said to be of so,nd mind for the p,rpose of ma3ing a contract if$ at the time when he ma3es it$ he is capable of ,nderstanding it and of forming a rational >,dgment as to its effect ,pon his interests( A person who is ,s,ally of ,nso,nd mind$ b,t occasionally of so,nd mind$ may ma3e a contract when he is of so,nd mind( A person who is ,s,ally of so,nd mind$ b,t occasionally of ,nso,nd mind$ may not ma3e a contract when he is of ,nso,nd mind( Ill,strations &a' A pati)nt in a 2natic a*0 2/, -ho i* at int)r1a * o, *o2nd /ind, /a0 contract d2rin+ tho*) int)r1a *. &.' A *an) /an, -ho i* d) irio2* ,ro/ ,)1)r or -ho i* *o dr2n3 that h) cannot 2nd)r*tand th) t)r/* o, a contract or ,or/ a rationa 72d+/)nt a* to it* ),,)ct on hi* int)r)*t*, cannot contract -hi *t *2ch d) iri2/ or dr2n3)nn)** a*t*. 2- 5#onsent5 defined ! "wo or more persons are said to consent when they agree ,pon the same thing in the same sense(

4- 5?ree consent5 defined(-#onsent is said to be free when it is not ca,sed by ! 9 : coercion$ as defined in section 6$ or 9': ,nd,e infl,ence$ as defined in section 8$ or 92: fra,d$ as defined in section &$ or 94: misrepresentation$ as defined in section %$ or 96: mista3e$ s,b>ect to the pro0isions of sections '=$ ' and ''( #onsent is said to be so ca,sed when it wo,ld not ha0e been gi0en b,t for the existence of s,ch coercion$ ,nd,e infl,ence$ fra,d$ misrepresentation or mista3e( 6- 5#oercion5 defined ! 5#oercion5 is the committing$ or threatening to commit$ any act forbidden by the Indian Penal #ode$ or the ,nlawf,l detaining$ or threatening to detain$ any property$ to the pre>,dice of any person whate0er$ with the intention of ca,sing any person to enter into an agreement( 946 of %8=(: Explanation(-It is immaterial whether the Indian Penal #ode is or is not in force in the place where the coercion is employed( 946 of %8=(: Ill,stration A$ on board an English ship on the high seas$ ca,ses 7 to enter into an agreement by an act amo,nting to criminal intimidation ,nder the Indian Penal #ode( 946 of %8=(: A afterwards s,es 7 for breach of contract at #alc,tta( A has employed coercion$ altho,gh his act is not an offence by the law of England$ and altho,gh section 6=8 of the Indian Penal #ode was not in force at the time when or place where the act was done(946 of %8=(: 8- 5@nd,e infl,ence5 defined( defined 9 : A contract is said to be ind,ced by 5,nd,e infl,enceA where the relations s,bsisting between the parties are s,ch that one of the parties is in a position to dominate the will of the other and ,ses that position to obtain an ,nfair ad0antage o0er the other( 9': In partic,lar and witho,t pre>,dice to the generality of the foregoing principle$ a person is deemed to be in a position to dominate the will of another&a' -h)r) h) ho d* a r)a or appar)nt a2thorit0 o1)r th) oth)r or -h)r) h) *tand* in a ,id2ciar0 r) ation to th) oth)r> or &.' -h)r) h) /a3)* a contract -ith a p)r*on -ho*) /)nta capacit0 i* t)/porari 0 or p)r/an)nt 0 a,,)ct)d .0 r)a*on o, a+), i n)**, or /)nta or .odi 0 di*tr)**. 92: Where a person who is in a position to dominate the will of another$ enters into a contract with him$ and the transaction appears$ on the face of it or on the e0idence add,ced$ to be ,nconscionable$ the b,rden of pro0ing that s,ch contract was not ind,ced by ,nd,e infl,ence shall lie ,pon the person in a position to dominate the will of the other( /othing in this s,b-section shall affect the pro0isions of section Ill of the Indian E0idence Act$ %&'( 9 of %&'(: Ill,strations &a' A ha1in+ ad1anc)d /on)0 to hi* *on, ; d2rin+ hi* /inorit0, 2pon ;<* co/in+ o, a+) o.tain*, .0 /i*2*) o, par)nta in, 2)nc), a .ond ,ro/ ; ,or a +r)at)r a/o2nt than th) *2/ d2) in r)*p)ct o, th) ad1anc). A )/p o0* 2nd2) in, 2)nc). &.' A, a /an )n,)). )d .0 di*)a*) or a+), i* ind2c)d, .0 ;<* in, 2)nc) o1)r hi/

a* hi* /)dica att)ndant, to a+r)) to pa0 ; an 2nr)a*ona. ) *2/ ,or hi* pro,)**iona *)r1ic)*. ; )/p o0* 2nd2) in, 2)nc). &c' A, .)in+ in d).t to ;, th) /on)06 )nd)r o, hi* 1i a+), contract* a ,r)*h oan on t)r/* -hich app)ar to .) 2ncon*ciona. ). It i)* on ; to pro1) that th) contract -a* not ind2c)d .0 2nd2) in, 2)nc). &d' A app i)* to a .an3)r ,or a oan at a ti/) -h)n th)r) i* *trin+)nc0 in th) /on)0 /ar3)t. Th) .an3)r d)c in)* to /a3) th) oan )?c)pt at an 2n2*2a 0 hi+h rat) o, int)r)*t. A acc)pt* th) oan on th)*) t)r/*. Thi* i* a tran*action in th) ordinar0 co2r*) o, .2*in)**, and th) contract i* not ind2c)d .0 2nd2) in, 2)nc). &- 5?ra,d5 defined(5?ra,d5 means and incl,des any of the following acts committed by a party to a contract$ or with his conni0ance$ or by his agent$ with intent to decei0e another party thereto of his agent$ or to ind,ce him to enter into the contract19 : the s,ggestion$ as a fact$ of that which is not tr,e$ by one who does not belie0e it to be tr,e; 9': the acti0e concealment of a fact by one ha0ing 3nowledge or belief of the fact; 92: a promise made witho,t any intention of performing it 94: any other act fitted to decei0e; 96: any s,ch act or omission as the law specially declares to be fra,d,lent( Explanation(- Bere silence as to facts li3ely to affect the willingness of a person to enter into a contract is not fra,d$ ,nless the circ,mstances of the case are s,ch that$ regard being had to them$ it is the d,ty of the person 3eeping silence to spea3$ ) or ,nless his silence is$ in itself$ e;,i0alent to speech( Ill,strations &a' A *) *, .0 a2ction, to ;, a hor*) -hich A 3no-* to .) 2n*o2nd. A *a0* nothin+ to ; a.o2t th) hor*)<* 2n*o2ndn)**. Thi* i* not ,ra2d in A. &.' ; i* A<* da2+ht)r and ha* 72*t co/) o, a+). H)r), th) r) ation .)t-))n th) parti)* -o2 d /a3) it A<* d2t0 to t) ; i, th) hor*), i* 2n*o2nd. &c' ; *a0* to A 6 5I, 0o2 do not d)n0 it, I *ha a**2/) that th) hor*) i* *o2nd.5 A *a0* nothin+. H)r), A<* *i )nc) i* )@2i1a )nt to *p))ch. &d' A and ;, .)in+ trad)r*, )nt)r 2pon a contract. A ha* pri1at) in,or/ation o, a chan+) in pric)* -hich -o2 d a,,)ct ;<* -i in+n)** to proc))d -ith th) contract. A i* not .o2nd to in,or/ ;. %- 5Bisrepresentation5 defined ! 5Bisrepresentation5 means and incl,des ! 9 : the positi0e assertion$ in a manner not warranted by the information of the person ma3ing it$ of that which is not tr,e$ tho,gh he belie0es it to be tr,e 9': any breach$ of d,ty which$ witho,t an intent to decei0e$ gains an ad0antage to the person committing it$ or any one claiming ,nder him$ by misleading another to his pre>,dice or to the pre>,dice of any one claiming ,nder him; 92: ca,sing$ howe0er innocently$ a party to an agreement to ma3e a mista3e as to the s,bstance of the thing which is the s,b>ect of the agreement(

<- Coidability of agreements witho,t free consent ! When consent to an agreement is ca,sed by coercion$ fra,d or misrepresentation$ the agreement is a contract 0oidable at the option of the party whose consent was so ca,sed( A party to a contract whose consent was ca,sed by fra,d or misrepresentation$ may$ if he thin3s fit$ insist that the contract hall be performed and that he shall be p,t in the position in which he wo,ld ha0e been if the representations made had been tr,e( Exception(- If s,ch consent was ca,sed by misrepresentation or by silence$ fra,d,lent within the meaning of section &$ the contract$ ne0ertheless is not 0oidable$ if the party whose consent was so ca,sed had the means of disco0ering the tr,th with ordinary diligence( Explanation(- A fra,d or misrepresentation which did not ca,se the consent to a contract of the party on whom s,ch fra,d was practiced$ or to whom s,ch misrepresentation was made$ does not render a contract 0oidable( Ill,strations &a' A, int)ndin+ to d)c)i1) ;, ,a *) 0 r)pr)*)nt* that ,i1) h2ndr)d /o2nd* o, indi+o ar) /ad) ann2a 0 at A<* ,actor0, and th)r).0 ind2c)* ; to .20 th) ,actor0. Th) contract i* 1oida. ) at th) option o, ;. &.' A, .0 a /i*r)pr)*)ntation, )ad* ; )rron)o2* 0 to .) i)1) that, ,i1) h2ndr)d /o2nd* o, indi+o ar) /ad) ann2a 0 at A<* ,actor0. ; )?a/in)* th) acco2nt* o, th) ,actor0, -hich *ho- that on 0 ,o2r h2ndr)d /o2nd* o, indi+o ha1) .))n /ad). A,t)r thi* ; .20* th) ,actor0. Th) contract i* not 1oida. ) on acco2nt o, A<* /i*r)pr)*)ntation. &c' A ,ra2d2 )nt 0 in,or/* ; that A<* )*tat) i* ,r)) ,ro/ inc2/.ranc). ; th)r)2pon .20* th) )*tat). Th) )*tat) i* *2.7)ct to a /ort+a+). ; /a0 )ith)r a1oid th) contract, or /a0 in*i*t on it* .)in+ carri)d o2t and th) /ort+a+) d).t r)d))/)d. &d' ;, ha1in+ di*co1)r)d a 1)in o, or) on th) )*tat) o, A, adopt* /)an* to conc)a , and do)* conc)a , th) )?i*t)nc) o, th) or) ,ro/ A. Thro2+h A<* i+noranc) ; i* )na. )d to .20 th) )*tat) at an 2nd)r61a 2). Th) contract i* 1oida. ) at th) option o, A. &)' A i* )ntit )d to *2cc))d to an )*tat) at th) d)ath o, ;> ; di)*4 C, ha1in+ r)c)i1)d int) i+)nc) o, ;<* d)ath, pr)1)nt* th) int) i+)nc) r)achin+ A and th2* ind2c)* A to *) hi/ hi* int)r)*t in th) )*tat). Th) *a ) i* 1oida. ) at th) option o, A. <A( Power to set aside contract ind,ced by ,nd,e infl,ence ! When consent to an agreement is ca,sed by ,nd,e infl,ence$ the agreement is a contract 0oidable at the option of the party whose consent was so ca,sed( Any s,ch contract may be set aside either absol,tely or$ if the party who was entitled to a0oid it has recei0ed any benefit there ,nder$ ,pon s,ch terms and conditions as to the #o,rt may seem >,st( Ill,strations 9a: ADs son has forged 7Ds name to a promissory note( 7$ ,nder threat of prosec,ting ADs son$ obtains a bond from A for the amo,nt of the forged note( If 7 s,es on this bond$ the #o,rt may set the bond aside( 9b: A$ a money-lender$ ad0ances Rs( == to 7$ an agric,lt,rist$ and$ by ,nd,e infl,ence$ ind,ces 7 to exec,te a bond for Rs( '== with

interest at 8 per cent( per month( "he #o,rt may set the bond aside$ ordering 7 to repay the Rs( == with s,ch interest as may seem >,st( Agreement 0oid where both parties are ,nder mista3e as to matter of fact( '=- ((((((((((( Agreement 0oid where both parties are ,nder mista3e as to matter of fact( Where both the parties to an agreement are ,nder a mista3e as to a matter of fact essential to the agreement$ the agreement is 0oid( Explanation(- An erroneo,s opinion as to the 0al,e of the thing which forms the s,b>ectmatter of the agreement is not to be deemed a mista3e as to a matter of fact( Ill,strations &a' A a+r))* to *) to ; a *p)ci,ic car+o o, +ood* *2ppo*)d to .) on it* -a0 ,ro/ En+ and to ;o/.a0. It t2rn* o2t that, .),or) th) da0 o, th) .ar+ain, th) *hip con1)0in+ th) car+o had .))n ca*t a-a0 and th) +ood* o*t. N)ith)r part0 -a* a-ar) o, th) ,act*. Th) a+r))/)nt i* 1oid. &.' A a+r))* to .20 ,ro/ ; a c)rtain hor*). It t2rn* o2t that th) hor*) -a* d)ad at th) ti/) o, th) .ar+ain, tho2+h n)ith)r part0 -a* a-ar) o, th) ,act. Th) a+r))/)nt i* 1oid. &c' A, .)in+ )ntit )d to an )*tat) ,or th) i,) o, ;, a+r))* to *) it to C. ; -a* d)ad at th) ti/) o, th) a+r))/)nt, .2t .oth parti)* -)r) i+norant o, th) ,act. Th) a+r))/)nt i* 1oid. ' - Effect of mista3es as to law ! A contract is not 0oidable beca,se it was ca,sed by a mista3e as to any law in force in )*India.; b,t a mista3e as to a law not in force in *India. has the same effect as a mista3e of fact( Ill,stration A and 7 ma3e a contract gro,nded on the erroneo,s belief that a partic,lar debt is barred by the Indian Eaw of Eimitation1 the contract is not 0oidable( ''- #ontract ca,sed by mista3e of one party as to matter of fact ! A contract is not 0oidable merely beca,se it was ca,sed by one of the parties to it being ,nder a mista3e as to a matter of fact( '2- What considerations and ob>ects are lawf,l and what not ! "he consideration or ob>ect of an agreement is lawf,l$ ,nless- it is forbidden by law; or is of s,ch a nat,re that$ if permitted$ it wo,ld defeat the Pro0isions of any law; or is fra,d,lent; or in0ol0es or implies in>,ry to the person or property of another or; the #o,rt regards it as immoral$ or opposed to p,blic policy( In each of these cases$ the consideration or ob>ect of an agreement is said to be ,nlawf,l( E0ery agreement of which the ob>ect or consideration is ,nlawf,l is 0oid( Ill,strations &a' A a+r))* to *) hi* ho2*) to ; ,or 1A,AAA r2p))*. H)r) ;<* pro/i*) to pa0 th) *2/ o, 1A,AAA r2p))* i* th) con*id)ration ,or A<* pro/i*) to *) th) ho2*), and A<* pro/i*) to *) th) ho2*) i* th) con*id)ration ,or ;<* pro/i*) to pa0 th) 1A,AAA r2p))*. Th)*) ar) a-,2 con*id)ration*. &.' A pro/i*)* to pa0 ; 1,AAA r2p))* at th) )nd o, *i? /onth*, i, C, -ho o-)* that *2/ to ;, ,ai * to pa0 it. ; pro/i*)* to +rant ti/) to C accordin+ 0. H)r) th) pro/i*) o, )ach part0 i* th) con*id)ration ,or th) pro/i*) o, th)

oth)r part0 and th)0 ar) a-,2 con*id)ration*. &c' A pro/i*)*, ,or a c)rtain *2/ paid to hi/ .0 ;, to /a3) +ood to ; th) 1a 2) o, hi* *hip i, it i* -r)c3)d on a c)rtain 1o0a+). H)r) A<* pro/i*) i* th) con*id)ration ,or ;<* pa0/)nt and ;<* pa0/)nt i* th) con*id)ration ,or A<* pro/i*) and th)*) ar) a-,2 con*id)ration*. &d' A pro/i*)* to /aintain ;<* chi d and ; pro/i*)* to pa0 A 1,AAA r2p))* 0)ar 0 ,or th) p2rpo*). H)r) th) pro/i*) o, )ach part0 i* th) con*id)ration ,or th) pro/i*) o, th) <oth)r part0. Th)0 ar) a-,2 con*id)ration*. &)' A, ; and C )nt)r into an a+r))/)nt ,or th) di1i*ion a/on+ th)/ o, +ain* ac@2ir)d, or6 to .) ac@2ir)d, .0 th)/ .0 ,ra2d. Th) a+r))/)nt i* 1oid, a* it* o.7)ct i* 2n a-,2 . &,' A pro/i*)* to o.tain ,or ; an )/p o0/)nt in th) p2. ic *)r1ic), and ; pro/i*)* to pa0 1,AAA r2p))* to A. Th) a+r))/)nt i* 1oid, a* th) con*id)ration ,or it i* 2n a-,2 . &+' A, .)in+ a+)nt ,or a and)d propri)tor, a+r))* ,or /on)0, -itho2t th) 3no- )d+) o, hi* principa , to o.tain ,or ; a )a*) o, and .) on+in+ to hi* principa . Th) a+r))/)nt .)t-))n A and ; i* 1oid. a* it i/p i)* a ,ra2d .0 conc)a /)nt, .0 A, on hi* principa . &h' A pro/i*)* ; to drop a pro*)c2tion -hich h) ha* in*tit2t)d a+ain*t ; ,or ro..)r0, and ; pro/i*)* to r)*tor) th) 1a 2) o, th) thin+* ta3)n. Th) a+r))/)nt i* 1oid, a* it* o.7)ct i* 2n a-,2 . &i' A<* )*tat) i* *o d ,or arr)ar* o, r)1)n2) 2nd)r th) pro1i*ion* o, an Act o, th) #)+i* at2r), .0 -hich th) d),a2 t)r i* prohi.it)d ,ro/ p2rcha*in+, th) )*tat). ;, 2pon an 2nd)r*tandin+ -ith A, .)co/)* th) p2rcha*)r, and a+r))* to con1)0 th) )*tat) to A 2pon r)c)i1in+ ,ro/ hi/ th) pric) -hich ; ha* paid. Th) a+r))/)nt i* 1oid, a* it r)nd)r* th) tran*action, in ),,)ct a p2rcha*) .0 th) d),a2 t)r, and -o2 d *o d),)at th) o.7)ct o, th) a-. &7' A, -ho i* ;<* /23htar pro/i*)* to )?)rci*) hi* in, 2)nc), a* *2ch, -ith ; in ,a1o2r o, C, and C pro/i*)* to pa0 1,AAA r2p))* to A. Th) a+r))/)nt i* 1oid, .)ca2*) it i* i//ora . &3' A a+r))* to )t h)r da2+ht)r to hir) to ; ,or conc2.ina+). Th) a+r))/)nt i* 1oid, .)ca2*) it i* i//ora , tho2+h th) )ttin+ /a0 not .) p2ni*ha. ) 2nd)r th) Indian ")na Cod). &B5 o, 18CA.' '4- Agreement 0oid$ if considerations and ob>ects ,nlawf,l in part If any part of a single consideration for one or more ob>ects$ or any one or any part of any one of se0eral considerations for a single ob>ect$ is ,nlawf,l$ the agreement is 0oid( Ill,stration A promise to s,perintend$ on behalf of 7$ a legal man,fact,re of indigo$ and an illegal traffic in other articles( 7 promises to pay to A salary of =$=== r,pees a year( "he agreement is 0oid$ the ob>ect of ADs promise$ and the consideration for 7Ds promise$ being in part ,nlawf,l( '6- Agreement witho,t consideration$ 0oid$ ,ncles it is in writing and registered$ or is a promise to compensate for something done$ or is a promise to pay a debt barred by limitation law An agreement made witho,t consideration is 0oid$ ,nless ! 9 : it is expressed in writing and registered ,nder the law for the time being in force for the registration of )*doc,ments.$ and is made on acco,nt of nat,ral lo0e and

affection between parties standing in a$ near relation to each other ; or ,nless 9': it is a promise to compensate$ wholly or in part$ a person who has already 0ol,ntarily done something for the promisor$ or something which the promisor was legally compellable to do ; or ,nless 92: it is a promise$ made in writing and signed by the person to be charged therewith$ or by his agent generally or specially a,thoriFed in that behalf$ to pay wholly or in part a debt of which the creditor might ha0e enforced payment b,t for the law for the limitation of s,its( In any of these cases$ s,ch an agreement is a contract( Explanation (- othing in this section shall affect the 0alidity$ as between the donor and donee$ of any gift act,ally made( Explanation '(- n agreement to which the consent of the promisor is freely gi0en is not 0oid merely beca,se the consideration is inade;,ate; b,t the inade;,acy of the consideration may be ta3en into acco,nt by the #o,rt in determining the ;,estion whether the consent of the promisor was freely gi0en( Ill,strations &a' A pro/i*)*, ,or no con*id)ration, to +i1) to ; R*. 1,AAA.Thi* i* a 1oid a+r))/)nt. &.' A, ,or nat2ra o1) and a,,)ction, pro/i*)* to +i1) hi* *on, ;, R*. 1,AAA. A p2t* hi* pro/i*) to ; into -ritin+ and r)+i*t)r* it. Thi* i* a contract. &c' A ,ind* ;<* p2r*) and +i1)* it to hi/. ; pro/i*)* to +i1) A R*. 5A. Thi* i* a contract. &d' A *2pport* ;<* in,ant *on. ; pro/i*)* to pa0 A<* )?p)n*)* in *o doin+. Thi* i* a contract. &)' A o-)* ; R*. 1,AAA, .2t th) d).t i* .arr)d .0 th) #i/itation Act. A *i+n* a -ritt)n pro/i*) to pa0 ; R*. 5AA on acco2nt o, th) d).t. Thi* i* a contract. &,' A a+r))* to *) a hor*) -orth R*. 1,AAA ,or R*. 1A. A<* con*)nt to th) a+r))/)nt -a* ,r)) 0 +i1)n. Th) a+r))/)nt i* a contract not-ith*tandin+ th) inad)@2ac0 o, th) con*id)ration. &+' A a+r))* to *) a hor*) -orth R*. 1,AAA ,or R*. 1A. A d)ni)* that hi* con*)nt to th) a+r))/)nt -a* ,r)) 0 +i1)n. Th) inad)@2ac0 o, th) con*id)ration i* a ,act -hich th) Co2rt *ho2 d ta3) into acco2nt in con*id)rin+ -h)th)r or not A<* con*)nt -a* ,r)) 0 +i1)n. '8- Agreement in restraint of marriage 0oid ! E0ery agreement in restraint of the marriage of any person$ other than a minor$ is 0oid( '&- Agreement in restraint of trade 0oid ! E0ery agreement by which any one is restrained from exercising a lawf,l profession$ trade or b,siness of any 3ind$ is to that extent 0oid( Sa0ing of agreement not to carry on b,siness of which good-will is sold(-Exception (-Gne who sells the good-will of a b,siness may agree with the b,yer to refrain from carrying on a similar b,siness$ within specified local limits$ so long as the b,yer$ or any person deri0ing title to the good-will from him$ carries on a li3e b,siness therein$ pro0ided that s,ch limits appear to the #o,rt reasonable$ regard being had to the nat,re of the b,siness( '%- Agreements in restraint of legal proceedings 0oid ! E0ery agreement ! &a' .0 -hich an0 part0 th)r)to i* r)*trict)d a.*o 2t) 0 ,ro/ )n,orcin+ hi* ri+ht* 2nd)r or in r)*p)ct o, an0 contract, .0 th) 2*2a )+a proc))din+*

in th) ordinar0 tri.2na *, or -hich i/it* th) ti/) -ithin -hich h) /a0 th2* )n,orc) i* ri+ht*> or &.' -hich )?tin+2i*h)* th) ri+ht* o, an0 part0 th)r)to, or di*char+)* an0 part0 th)r)to ,ro/ an0 ia.i it0, 2nd)r or in r)*p)ct o, an0 contract on th) )?pir0 o, a *p)ci,i)d p)riod *o a* to r)*trict an0 part0 ,ro/ )n,orcin+ hi* ri+ht*, i* 1oid to that )?t)nt. :a1in+ o, contract o, r),)r to ar.itration di*p2t) that /a0 ari*).6E?c)ption 1.6Thi* *)ction *ha not r)nd)r i )+a a contract, .0 -hich t-o or /or) p)r*on* a+r)) that an0 di*p2t) -hich /a0 ari*) .)t-))n th)/ in r)*p)ct o, an0 *2.7)ct or c a** o, *2.7)ct* *ha .) r),)rr)d to ar.itration, and that on 0 th) a/o2nt a-ard)d in *2ch ar.itration *ha .) r)co1)ra. ) in r)*p)ct o, th) di*p2t) *o r),)rr)d. :2it* .arr)d .0 *2ch contract*.61D (h)n *2ch a contract ha* .))n /ad), a *2it /a0 .) .ro2+ht ,or it* *p)ci,ic p)r,or/anc) and i, a *2it, oth)r than ,or *2ch *p)ci,ic p)r,or/anc), or ,or th) r)co1)r0 o, th) a/o2nt *o a-ard)d, i* .ro2+ht .0 on) part0 to *2ch contract a+ain*t an0 oth)r *2ch part0, in r)*p)ct o, an0 *2.7)ct -hich th)0 ha1) *o a+r))d to r),)r, th) )?i*t)nc) o, *2ch contract *ha .) a .ar to th) *2it. :a1in+ o, contract to r),)r @2)*tion* that ha1) a r)ad0 ari*)n.6 E?c)ption 2.6 Nor *ha thi* *)ction r)nd)r, i )+a an0 contract in -ritin+, .0 -hich t-o or /or) p)r*on* a+r)) to r),)r to ar.itration an0 @2)*tion .)t-))n th)/ -hich ha* a r)ad0 ari*)n, or a,,)ct an0 pro1i*ion o, an0 ain ,orc) ,or th) ti/) .)in+ a* to r),)r)nc)* to ar.itration. '<- Agreements 0oid for ,ncertainty ! Agreements$ the meaning of which is not certain$ or capable of being made certain$ are 0oid( Ill,strations &a' A a+r))* to *) to ; 5a h2ndr)d ton* o, oi 5. Th)r) i* nothin+ -hat)1)r to *ho- -hat 3ind o, oi -a* int)nd)d. Th) a+r))/)nt i* 1oid ,or 2nc)rtaint0. &.' A a+r))* to *) to ; on) h2ndr)d ton* o, oi o, a *p)ci,i)d< d)*cription, 3no-n a* an artic ) o, co//)rc). Th)r) i* no 2nc)rtaint0 h)r) to /a3) th) a+r))/)nt 1oid. &c' A, -ho i* a d)a )r in cocoan2t6oi on 0, a+r))* to *) to ; 5on) h2ndr)d. ton* o, oi 5. Th) nat2r) o, A<* trad) a,,ord* an indication o, th) /)anin+ o, th) -ord*, and A ha* )nt)r)d into a contract ,or th) *a ) o, on) h2ndr)d ton* o, cocoan2t6oi . &d' A a+r))* to *) to ; 5a th) +rain in /0 +ranar0 at Ra/na+ar5. Th)r) i* no 2nc)rtaint0 h)r) to /a3) th) a+r))/)nt 1oid. &)' A a+r))* to *) ; 5on) tho2*and /a2nd* o, ric) at a pric) to .) ,i?)d .0 C 5. A* th) pric) i* capa. ) o, .)in+ /ad) c)rtain, th)r) i* no 2nc)rtaint0 h)r) to /a3) th) a+r))/)nt 1oid. &,' A a+r))* to *) to ; 5 /0 -hit) hor*) ,or r2p))* ,i1) h2ndr)d or r2p))* on) tho2*and5. <Th)r) I i* nothin+ to *ho- -hich o, th) t-o pric)* -a* to .) +i1)n. Th) a+r))/)nt i* 1oid. 2=- Agreements by way of wager 0oid ! Agreements by way of wager are 0oid; and no s,it shall be bro,ght for reco0ering anything alleged to be won on any wager$ or entr,sted to any person to abide the res,lt of any game

or other ,ncertain e0ent on which any wager is made( Exception in fa0o,r of certain priFes for horse-racing(-"his section shall not be deemed to render ,nlawf,l a s,bscription or contrib,tion$ or agreement to s,bscribe or contrib,te$ made or entered into for or toward any plate$ priFe or s,m of money$ of the 0al,e or amo,nt of fi0e h,ndred r,pees or ,pwards$ to be awarded to the winner or winners of any horserace( Section '<4A of the Indian Penal #ode not affected(- /othing in this section shall be deemed to legaliFe any transaction connected with horse-racing$ to which the pro0isions of section '<4A of the Indian Penal #ode apply( CHA"TER III OF CONTIN=ENT CONTRACT: 2 - 5#ontingent contract5 defined ! A 5contingent contract5 is a contract to do or not to do something$ if some e0ent$ collateral to s,ch contract$ does or does not happen( Ill,stration A contracts to pay 7 Rs( =$=== if 7Ds ho,se is b,rnt( "his is a contingent contract( 2'- Enforcement of contracts contingent on an e0ent happening(#ontingent contracts to do or not to do anything if an ,ncertain f,t,re e0ent appends cannot be enforced by law ,nless and ,ntil that e0ent has happened( If the e0ent becomes impossible$ s,ch contracts become 0oid( Ill,strations &a' A /a3)* a contract -ith ; to .20 ;<* hor*) i, A *2r1i1)* C. Thi* contract cannot .) )n,orc)d .0 a- 2n )** and 2nti C di)* in A<* i,)ti/). &.' A /a3)* a contract -ith ; to *) a hor*) to ; at a *p)ci,i)d pric), i, C, to -ho/ th) hor*) ha* .))n o,,)r)d, r),2*)* to .20 hi/. Th) contract cannot .) )n,orc)d .0 a- 2n )** and 2nti C r),2*)* to .20 th) hor*). &c' A contract* to pa0 ; a *2/ o, /on)0 -h)n ; /arri)* C. C di)* -itho2t .)in+ /arri)d to ;. Th) contract .)co/)* 1oid. 22- Enforcement of contracts contingent on an e0ent not happening(#ontingent contracts to do or not to do anything if an ,ncertain f,t,re e0ent does not happen can be enforced when the happening of that e0ent becomes impossible$ and not before( Ill,stration A agrees to pay 7 a s,m of money if a certain ship does not ret,rn( "he ship is s,n3( "he contract can be enforced when the ship sin3s( 24- When e0ent on which contract is contingent to be deemed impossible$ if it is the f,t,re cond,ct of a li0ing person ! If the f,t,re e0ent on which a contract is contingent is the way in which a person will act at an ,nspecified time$ the e0ent shall be considered to become impossible when s,ch person does anything which renders it impossible that he sho,ld so act within any definite time$ or otherwise than ,nder f,rther contingencies( Ill,stration A agrees to pay 7 a s,m of money if 7 marries #( # marries H( "he marriage of 7 to # m,st now be considered impossible$ altho,gh it is possible that H may die and that # may afterwards marry 7( 26- When contracts become 0oid which are contingent on happening of specified e0ent within fixed time !

#ontingent contracts to do or not to do anything if a specified ,ncertain e0ent happens within a fixed time become 0oid if$ at the expiration of the time fixed$ s,ch e0ent has not happened$ or if$ before the time fixed$ s,ch 0ent becomes impossible( When contracts may be enforced which are contingent on specified e0ent not happening within fixed time(-#ontingent contracts to do or not to do anything if a specified ,ncertain e0ent does not happen within a fixed time may be enforced by law when the time fixed has expired and s,ch e0ent has not happened or$ before the time fixed has expired$ if it becomes certain that s,ch e0ent will not happen( Ill,strations &a' A pro/i*)* to pa0 ; a *2/ o, /on)0 i, a c)rtain *hip r)t2rn* -ithin a 0)ar. Th) contract /a0 .) )n,orc)d i, th) *hip r)t2rn* -ithin th) 0)ar, <and .)co/)* 1oid i, th) *hip i* .2rnt -ithin th) 0)ar. &.' A pro/i*)* to pa0 ; a *2/ o, /on)0 i, a c)rtain *hip do)* not r)t2rn -ithin a 0)ar. Th) contract /a0 .) )n,orc)d i, th) *hip do)* not r)t2rn -ithin th) 0)ar, or i* .2rnt -ithin th) 0)ar. 28- Agreement contingent on impossible e0ents 0oid ! #ontingent agreements to do or not to do anything$ if an impossible e0ent happens$ are 0oid$ whether the impossibility of the e0ent is 3nown or not to the parties to the agreement at the time when it is made( Ill,strations &a' A a+r))* to pa0 ; 1,AAA r2p))* i, t-o *trai+ht in)* *ho2 d )nc o*) a *pac). Th) a+r))/)nt i* 1oid. &.' A a+r))* to pa0 ; 1,AAA r2p))* i, ; -i /arr0 A<* da2+ht)r C. C -a* d)ad at th) ti/) o, th) a+r))/)nt. Th) a+r))/)nt i* 1oid. CHA"TER I9. OF THE "ERFOR$ANCE OF CONTRACT: 2&- Gbligation of parties to contracts ! "he parties to a1 contract m,st either perform$ or offer to perform$ their respecti0e promises$ ,nless s,ch performanceD is dispensed with or exc,sed ,nder the pro0isions of this Act$ or of any other law( Promises bind the representati0es of the promisors in case of the death of s,ch promisors before performance$ ,nless a contrary intention appears from the contract( Ill,strations &a' A pro/i*)* to d) i1)r +ood* to ; on a c)rtain da0 on pa0/)nt o, R*. 1,AAA. A di)* .),or) that da0. A<* r)pr)*)ntati1)* ar) .o2nd to d) i1)r th) +ood* to ;, and ; i* .o2nd to pa0 th) R*. 1,AAA to A<* r)pr)*)ntati1)*. &.' A pro/i*)* to paint a pict2r) ,or ; .0 a c)rtain da0, at a c)rtain pric). A di)* .),or) th) da0. Th) contract cannot .) )n,orc)d )ith)r .0 A<* r)pr)*)ntati1)* or .0 ;. 2%- Effect of ref,sal to accept offer of performance ! Where a promisor has made an offer of performance to the promisee$ and the offer has not been accepted$ the promisor is not responsible for non-performance$ nor does he thereby lose his rights ,nder the contract( E0ery s,ch offer m,st f,lfill the following conditions19 : it m,st be ,nconditional;

9': it m,st be made at a proper time and place$ and ,nder s,ch circ,mstances that the person to whom it is made may ha0e a reasonable opport,nity of ascertaining that the person by whom it is made is able and willing there and then to do the whole of what he is bo,nd by his promise to do 92: if the offer is an offer to deli0er anything to the promisee$ the promisee m,st ha0e a reasonable opport,nity of seeing that the thing offered is the thing which the promisor is bo,nd by his promise to deli0er( An offer to one of se0eral >oint promisees has the same legal conse;,ences as an offer to all of them$ Ill,stration A contracts to deli0er to 7 at his wareho,se$ on the st Barch$ %&2$ == bales of cotton of a partic,lar ;,ality( In order to ma3e an offer of a performance with the effect stated in this section$ A m,st bring the cotton to 7Ds wareho,se$ on the appointed day$ ,nder s,ch circ,mstances that 7 may ha0e a reasonable opport,nity of satisfying himself that the thing offered is cotton of the ;,ality contracted for$ and that there are == bales( 2<- Effect of ref,sal of party to perform promise wholly ! When a party to a contract has ref,sed to perform$ or disabled himself from performing$ his promise in its entirety$ the promisee may p,t an end to the contract$ ,nless he has signified$ by words or cond,ct$ his ac;,iescence in its contin,ance( Ill,strations &a' A, a *in+)r, )nt)r* into a contract -ith ;, th) /ana+)r o, a th)atr), to *in+ at hi* th)atr) t-o ni+ht* in )1)r0 -))3 d2rin+ th) n)?t t-o /onth*, and ; )n+a+)* to pa0 h)r 1AA r2p))* ,or )ach ni+ht<* p)r,or/anc). On th) *i?th ni+ht A -i ,2 0 a.*)nt* h)r*) , ,ro/ th) th)atr). ; i* at i.)rt0 to p2t an )nd to th) contract. &.' A, a *in+)r, )nt)r* into a contract -ith ;, th) /ana+)r o, a th)atr), to *in+ at hi* th)atr) t-o ni+ht* in )1)r0. ())3 d2rin+ th) n)?t t-o /onth*, and ; )n+a+)* to pa0 h)r at th) rat) o, 1AA r2p))* ,or )ach ni+ht. On th) *i?th ni+ht A -i ,2 0 a.*)nt* h)r*) ,. (ith th) a**)nt o, ;, A *in+* on th) *)1)nth ni+ht. ; ha* *i+ni,i)d hi* ac@2i)*c)nc) in th) contin2anc) o, th) contract, and cannot no- p2t an )nd to it, .2t i* )ntit )d to co/p)n*ation ,or th) da/a+) *2*tain)d .0 hi/ thro2+h A<* ,ai 2r) to *in+ on th) *i?th ni+ht. ;0 -ho/ contract* /2*t .) p)r,or/)d ;0 -ho/ contract* /2*t .) p)r,or/)d 4=- Person by whom promise is to be performed ! If it appears from the nat,re of the case that it was the intention of the parties to any contract that any promise contained in it sho,ld be performed by the promisor himself$ s,ch promise m,st be performed by the promisor( In other cases$ the promisor or his representati0es may employ a competent person to perform it( Ill,strations &a' A pro/i*)* to pa0 ; a *2/ o, /on)0. A /a0 p)r,or/ thi* pro/i*), )ith)r .0 p)r*ona 0 pa0in+ th) /on)0 to ; or .0 ca2*in+ it to .) paid to ; .0 anoth)r> and, i, A di)* .),or) th) ti/) appoint)d ,or pa0/)nt, hi* r)pr)*)ntati1)* /2*t p)r,or/ th) pro/i*), or )/p o0 *o/) prop)r p)r*on to do *o. &.' A pro/i*)* to paint a pict2r) ,or ;. A /2*t p)r,or/ thi* pro/i*)

4 4'-

42-

44-

46-

p)r*ona 0. Effect of accepting performance from third person ! When a promisee accepts performance of the promise from a third person$ he cannot afterwards enforce it against the promisor( He0ol,tion of >oint liabilities ! When two or more persons ha0e made a >oint promise$ then$ ,nless a contrary intention appears by the contract$ all s,ch persons$ d,ring their >oint li0es$ and$ after the death of any of them$ his representati0e >ointly with the s,r0i0or or s,r0i0ors$ and$ after the death of the last s,r0i0or$ the representati0es of all >ointly$ m,st f,lfill the promise( Any one of >oint promisors may be compelled to perform ! When two or; more persons ma3e a >oint promise$ the promisee may$ in the absence of express agreement to the contrary$ compel any )*one or more. of s,ch >oint promisors$ to perform the whole of the promise( Each promisor may compel contrib,tion( Each of two or more >oint promisors may compel e0ery other >oint promisor to contrib,te e;,ally with himself to the performance of the promise$ ,nless a contrary intention appears from the contract( Sharing of loss by defa,lt in contrib,tion(-If any one of two or more >oint promisors ma3es defa,lt in s,ch contrib,tion$ the remaining >oint promisors m,st bear the loss arising from s,ch defa,lt in e;,al shares( Explanation(-/othing in this section shall pre0ent a s,rety from reco0ering from his principal; payments made by the s,rety on behalf of the principal$ or entitle the principal to reco0er anything from the s,rety on acco,nt of payments made by the principal( Ill,strations &a' A, ; and C 7oint 0 pro/i*) to pa0 D E,AAA r2p))*. D /a0 co/p) )ith)r A or ; or C to pa0 hi/ E,AAA r2p))*. &.' A, ; and C 7oint 0 pro/i*) to pa0 D th) *2/ o, E,AAA r2p))*. C i* co/p) )d to pa0 th) -ho ). A i* in*o 1)nt, .2t hi* a**)t* ar) *2,,ici)nt to pa0 on)6ha , o, hi* d).t*. C i* )ntit )d to r)c)i1) 5AA r2p))* ,ro/ A<* )*tat), and 1,25A r2p))* ,ro/ ;. &c' A, ; and C ar) 2nd)r a 7oint pro/i*) to pa0 D E,AAA r2p))*. C i* 2na. ) to pa0 an0thin+, and A i* co/p) )d to pa0 th) -ho ). A i* )ntit )d to r)c)i1) 1,5AA r2p))* ,ro/ ;. &d' A, ; and C ar) 2nd)r a 7oint pro/i*) to pa0 D E,AAA r2p))*, A and ; .)in+ on 0 *2r)ti)* ,or C. C ,ai * to pa0. A and ; ar) co/p) )d to pa0 h) -ho ) *2/. Th)0 ar) )ntit )d to r)co1)r it ,ro/ C. Effect of release of one >oint promisor ! Where two or more persons ha0e made a >oint promise$ a release of one of s,ch >oint promisors by the promisee does not discharge the other >oint promisor or >oint promisors ; neither does it free the >oint promisors so released from responsibility to the other >oint promisor or >oint promisors( He0ol,tion of >oint rights ! When a person has made a promise to two or more persons >ointly$ then$ ,nless a contrary intention appears from the contract$ the right to claim performance rests$ as between him and them$ with them d,ring their >oint li0es$ and$ after the death of any of them$ with the representati0e of s,ch deceased person( +ointly with the s,r0i0or or s,r0i0ors$ and$ after the death of the last s,r0i0or$ with the representati0es of all >ointly(

Ill,stration A$ in consideration of 6$=== r,pees$ lent to him by 7 and #$ promises 7 and # >ointly to repay them that s,m with interest on a day specified( 7 dies( "he right to claim performance rests with 7Ds representati0e >ointly with # d,ring #Ds life$ and after the death of # with the representati0es of 7 and # >ointly( Ti/) and p ac) ,or p)r,or/anc) 48- "ime for performance of promise$ when no application is to be made and no time is specified ! Where$ by the contract$ a promisor is to perform his promise witho,t application by the promisee$ and no time for performance is specified$ the engagement m,st be performed within a reasonable time( Explanation(- "he ;,estion 5what is a reasonable time5 is$ in each partic,lar case$ a ;,estion of fact( 4&- "ime and place for performance of promise$ where time is specified and no application to be made ! When promise is to be performed on a certain day$ and the promisor has ,nderta3en to perform it witho,t application by the promisee$ the promisor may perform it at any time d,ring the ,s,al ho,rs of b,siness on s,ch day and at the place at which the promise o,ght to be performed( Ill,stration A promises to deli0er goods at 7Ds wareho,se on the first +an,ary( Gn that day A brings the goods to 7Ds wareho,se$ b,t after the ,s,al ho,r for closing it$ and they are not recei0ed( A has not performed his promise( 4%- Application for performance on certain day to be at proper time and place ! When a promise is to be performed on a certain day$ and the promisor has not ,nderta3en to perform it witho,t application by the promisee$ it is the d,ty of the$ promisee to apply for performance at a proper place and within the ,s,al ho,rs of b,siness( Explanation(-"he ;,estion 5what is a proper time and place(5 is$ in each partic,lar case$ a ;,estion of fact( 4<- Place for performance of promise$ where no application to be made and no place fixed for performance ! When a promise is to be performed witho,t application by the promisee$ and no place is fixed for the performance of it$ it is the d,ty of the promisor to apply to the promisee to appoint a reasonable place for the performance of the promise$ and to perform it at s,ch place( Ill,stration A ,nderta3es to deli0er a tho,sand ma,nds of >,te to 7 on a fixed day( A m,st apply to 7 to appoint a reasonable place for the p,rpose of recei0ing it$ and m,st deli0er it to him at s,ch place( Performance in manner or at time prescribed or sanctioned by promisee( 6=- Performance in manner or at time prescribed or sanctioned by promisee ! "he performance of any promise may be made in any manner$ or at any time which the promisee prescribes or sanctions( Ill,strations &a' ; o-)* A 2,AAA r2p))*. A d)*ir)* ; to pa0 th) a/o2nt to A<* acco2nt -ith C, a .an3)r. ;, -ho a *o .an3* -ith C, ord)r* th) a/o2nt to .) tran*,)rr)d ,ro/ hi* acco2nt to A<* cr)dit, and thi* i* don) .0 C.

A,t)r-ard*, and .),or) A 3no-* o, th) tran*,)r, C ,ai *. Th)r) ha* .))n a +ood pa0/)nt .0 ;. &.' A and ; ar) /2t2a 0 ind).t)d. A and ; *)tt ) an acco2nt .0 *)ttin+ o,, on) it)/ a+ain*t anoth)r, and ; pa0* A th) .a anc) ,o2nd to .) d2) ,ro/ hi/ 2pon *2ch *)tt )/)nt. Thi* a/o2nt* to a pa0/)nt .0 A and ;, r)*p)cti1) 0, o, th) *2/* -hich th)0 o-)d to )ach oth)r. &c' A o-)* ; 2,AAA r2p))*. ; acc)pt* *o/) o, A<* +ood* in r)d2ction o, th) d).t. Th) d) i1)r0 o, +ood* op)rat)* a* a part pa0/)nt. &d' A d)*ir)* ;, -ho o-)* hi/ R*. 1AA, to *)nd hi/ a not) ,or R*. 1AA .0 po*t. Th) d).t i* di*char+)d a* *oon a* ; p2t* into th) po*t a )tt)r containin+ th) not) d2 0 addr)**)d to A. 6 - Performance of reciprocal promises Promisor not bo,nd to perform$ ,nless reciprocal promisee ready and willing to perform( When a contract consists of reciprocal promises to be sim,ltaneo,sly performed$ no promisor need perform his promise ,nless the promisee is ready and willing to perform his reciprocal promise( Ill,strations &a' A and ; contract that A *ha d) i1)r +ood* to ; to .) paid ,or .0 ; on d) i1)r0. A n))d not d) i1)r th) +ood*, 2n )** ; i* r)ad0 and -i in+ to pa0 ,or th) +ood* on d) i1)r0. ; n))d not pa0 ,or th) +ood*, 2n )** A i* r)ad0 and -i in+ to d) i1)r th)/ on pa0/)nt. &.' A and ; contract that A *ha d) i1)r +ood* to ; at a pric) to .) paid .0 in*ta /)nt*, th) ,ir*t in*ta /)nt to .) paid on d) i1)r0. A n))d not d) i1)r, 2n )** ; i* r)ad0 and -i in+ to pa0 th) ,ir*t in*ta /)nt on d) i1)r0. ; n))d not pa0 th) ,ir*t in*ta /)nt, 2n )** A i* r)ad0 and -i in+ to d) i1)r th) +ood* on pa0/)nt o, th) ,ir*t in*ta /)nt. 6'- Grder of performance of reciprocal promises ! Where the order in which reciprocal promises are to be performed is expressly fixed by the contract$ they shall be performed in that order; and$ where the order is not expressly fixed by the contract$ they shall be performed in that order which the nat,re of the transaction re;,ires( Ill,strations &a' A and ; contract that A *ha .2i d a ho2*) ,or ; at a ,i?)d pric). A<* pro/i*) to .2i d th) ho2*) $2*t .) p)r,or/)d .),or) ;<* pro/i*) to pa0 ,or it. &.' A and ; contract that A *ha /a3) o1)r hi* *toc36in6trad) to ; at a ,i?)d pric) and ; pro/i*)* to +i1) *)c2rit0 ,or th) pa0/)nt o, th) /on)0. A<* pro/i*) n))d not .) p)r,or/)d 2nti th) *)c2rit0 i* +i1)n, ,or th) nat2r) o, th) tran*action r)@2ir)* that A *ho2 d ha1) *)c2rit0 .),or) h) d) i1)r* 2p hi* *toc3. 62- Eiability of party pre0enting e0ent on which the contract is to ta3e effect ! When a contract contains reciprocal promises$ and one party to the contract pre0ents the other from performing his promise$ the contract becomes 0oidable at the option of the party so pre0ented; and he is entitled to compensation ) from the other party for any loss which he may s,stain in conse;,ence of the non-performance of the contract(

Ill,strations A and 7 contract that 7 shall exec,te certain wor3 for A for a tho,sand r,pees( 7 is ready and willing to exec,te the wor3 accordingly$ b,t A pre0ents him from doing so( "he contract is 0oidable at the option of 7; and$ if he elects to rescind it$ he is entitled to reco0er from A compensation for any loss which he has inc,rred by its non-performance( 64- Effect of defa,lt as to that promise which sho,ld be first performed$ in contract consisting of reciprocal promises ! When a contract consists of reciprocal promises$ s,ch that one of them cannot be performed$ or that its performance cannot be claimed till the other has been performed$ and the promisor of the promise last mentioned fails to perform it$ s,ch promisor cannot claim the performance of the reciprocal promise$ and m,st ma3e compensation to the other party to the contract for any loss which s,ch other party may s,stain by the non-performance of the contract( Ill,strations &a' A hir)* ;<* *hip to ta3) in and con1)0, ,ro/ Ca c2tta to th) $a2riti2*, a car+o to .) pro1id)d .0 A, ; r)c)i1in+ a c)rtain ,r)i+ht ,or it* con1)0anc). A do)* not pro1id) an0 car+o ,or th) *hip. A cannot c ai/ th) p)r,or/anc) o, ;<* pro/i*), and /2*t /a3) co/p)n*ation to ; ,or th) o** -hich ; *2*tain* .0 th) non6p)r,or/anc) o, th) contract. &.' A contract* -ith ; to )?)c2t) c)rtain .2i d)r<* -or3 ,or a ,i?)d pric), ; *2pp 0in+ th) *ca,,o din+ and ti/.)r n)c)**ar0 ,or th) -or3. ; r),2*)* to ,2rni*h an0 *ca,,o din+ or ti/.)r, and th) -or3 cannot .) )?)c2t)d. A n))d not )?)c2t) th) -or3, and ; i* .o2nd to /a3) co/p)n*ation to A ,or an0 o** ca2*)d to hi/ .0 th) non6p)r,or/anc) o, th) contract. &c' A contract* -ith ; to d) i1)r to hi/, at a *p)ci,i)d pric), c)rtain /)rchandi*) on .oard a *hip -hich cannot arri1) ,or a /onth, and ; )n+a+)* to pa0 ,or th) /)rchandi*) -ithin a -))3 ,ro/ th) dat) o, th) contract. ; do)* not pa0 -ithin th) -))3. A<* pro/i*) to d) i1)r n))d not .) p)r,or/)d, and ; /2*t /a3) co/p)n*ation. &d' A pro/i*)* ; to *) hi/ on) h2ndr)d .a )* o, /)rchandi*), to .) d) i1)r)d n)?t da0, and ; pro/i*)* A to pa0 ,or th)/ -ithin a /onth. A do)* not d) i1)r accordin+ to hi* pro/i*). ;<* pro/i*) to pa0 n))d not .) p)r,or/)d, and A /2*t /a3) co/p)n*ation. 66- Effect of fail,re to perform at fixed time$ in contract in which time is essential ! When a party to a contract promises to do a certain thing at or before a specified time or certain things at or before specified times$ and fails to do any s,ch thing at or before the specified time$ the contract$ or so m,ch of it as has not been performed$ becomes 0oidable at the option of the promisee$ if the intention of the parties was that time sho,ld be of the essence of the contract( Effect of s,ch fail,re when time is not essential - If it was not the intention of the parties that time sho,ld be of the essence of the contract$ the contract does not become 0oidable by the fail,re to do s,ch thing at or before the specified time ; b,t the promisee is entitled to compensation from the promisor for any loss occasioned to him by s,ch fail,re( Effect of acceptance of performance at time other than that agreed ,pon( If$ in case of a contract 0oidable on acco,nt of the promisorDs fail,re to perform his promise at the time greed the promisee accepts performance of s,ch promise at any time other than that agreed$

the promisee cannot claim compensation for any loss occasioned by the non-performance of the promise at the time agreed$ ,nless$ at the time of s,ch acceptance he gi0es notice to the promisor of his intention to do so( ) 68- Agreement to do impossible act( An agreement to do an act impossible in itself is 0oid( #ontract to do act afterwards becoming impossible or ,nlawf,l ! A contract to do an act which$ after the contract is made$ becomes impossible$ or$ by reason of some e0ent which the Promisor co,ld not pre0ent$ ,nlawf,l$ becomes 0oid when the act becomes impossible or ,nlawf,l(') #ompensation for loss thro,gh non-performance of act 3nown to be impossible or ,nlawf,l(-Where one person has promised to do something which he 3new$ or$ with reasonable diligence$ might ha0e 3nown$ and which the promisee did not 3now$ to be impossible or ,nlawf,l$ s,ch promisor m,st ma3e compensation to s,ch promisee for any loss which s,ch promisee s,stains thro,gh the non-performance of the promise( Ill,strations &a' A a+r))* -ith ; to di*co1)r tr)a*2r) .0 /a+ic. Th) a+r))/)nt i* 1oid, &.' A and ; contract to /arr0 )ach oth)r. ;),or) th) ti/) ,i?)d ,or th) /arria+), A +o)* /ad. Th) contract .)co/)* 1oid. &c' A contract* to /arr0 ;, .)in+ a r)ad0 /arri)d to C, and .)in+ ,or.idd)n .0 th) a- to (hich h) i* *2.7)ct to "ractic) po 0+a/0, A /2*t /a3) co/p)n*ation to ; ,or th) o** ca2*)d to h)r .0 th) non6p)r,or/anc) o, hi* pro/i*). &d' A contract* to ta3) in car+o ,or ; at a ,or)i+n port. A<* =o1)rn/)nt a,t)r-ard* d)c ar)* -ar a+ain*t th) co2ntr0 in -hich th) port i* *it2at)d. Th) contract .)co/)* 1oid -h)n -ar i* d)c ar)d. &)' A contract* to act at a th)atr) ,or *i? /onth* in con*id)ration o, a *2/ paid in ad1anc) .0 ;. On *)1)ra occa*ion* A i* too i to act. Th) contract to act on tho*) occa*ion* .)co/)* 1oid. 6&- Reciprocal promise to do things legal and also other things illegal ! Where persons reciprocally promise$ firstly$ to do certain things which are legal$ and$ secondly$ ,nder specified circ,mstances to do certain other things which are illegal$ the first set of promises is a contract$ b,t the second is a 0oid agreement( Ill,stration A and 7 agree that A shall sell 7 a ho,se for =$=== r,pees$ b,t that$ if 7 ,ses it as a gambling ho,se$ he shall pay A 6=$=== r,pees for it( "he first set of reciprocal promises$ namely$ to sell the ho,se and to pay =$=== r,pees for it$ is a contract( "he second set is for an ,nlawf,l ob>ect$ namely$ that 7 may ,se the ho,se as a gambling ho,se$ and is a 0oid agreement( 6%- Alternati0e promise$ one branch being illegal ! In the case of an alternati0e promise$ one branch of which is legal and the other illegal$ the legal branch alone can be enforced( Ill,stration A and 7 agree that A shall pay 7 $=== r,pees for which 7 shall afterwards deli0er to A either rice or sm,ggled opi,m( "his is a 0alid contract to deli0er rice$ and a 0oid agreement as to the opi,m( Appropriation o, pa0/)nt*

6<-

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Appropriation o, pa0/)nt* Application of payment where debt to be discharged is indicated ! Where a debtor$ owing se0eral distinct debts to one person$ ma3es a payment to him$ either with express intimation$ or ,nder circ,mstances implying that the payment is to be applied to the discharge of some partic,lar debt$ the payment$ if accepted$ m,st be applied accordingly( Ill,strations &a' A o-)* ;, a/on+ oth)r d).t* 1,AAA r2p))* 2pon a pro/i**or0 not) -hich ,a * d2) on th)< ,ir*t F2n). H) o-)* ; no oth)r d).t o, that a/o2nt. On th) ,ir*t F2n) A pa0* to ; 1,AAA r2p))*. Th) pa0/)nt i* to .) app i)d to th) di*char+) o, th) pro/i**or0 not). &.' A o-)* to ;, a/on+ oth)r d).t*, th) *2/ o, 5C7 r2p))*. ; -rit)* to A and d)/and* pa0/)nt< o, thi* *2/ A *)nd* to ; 5C7 r2p))*. Thi* pa0/)nt i* to .) app i)d to th) di*char+) o, th) d).t o, -hich ; had d)/and)d pa0/)nt. Application of payment where debt to be discharged is not indicated Where the debtor has omitted to intimate and there are no other circ,mstances$ indicating to which debt the payment is to be applied$ the creditor may apply it at his discretion to any lawf,l debt act,ally d,e and payable to him from the debtor$ whether its reco0ery is or is not barred by the law in force for the time being as to the limitation of s,its( Application of payment where neither party appropriates(Where neither party ma3es any appropriation the payment shall be applied in discharge of the debts in order of time$ whether they are or are not barred by the law in force for the time being as to the limitation of s,its( If the debts are of e;,al standing$ the payment shall be applied in discharge of each proportionally( Effect of no0ation$ rescission$ and alteration of contract If the parties to a contract agree to s,bstit,te a new contract for it$ or to rescind or alter it$ the original contract need not be performed( Ill,strations &a' A o-)* /on)0 to ; 2nd)r a contract. It i* a+r))d .)t-))n A, ; and C that ; *ha th)nc),orth acc)pt C a* hi* d).tor, in*t)ad o, A. Th) o d d).t o, A to ; i* at an )nd, and a n)- d).t ,ro/ C to ; ha* .))n contract)d. &.' A o-)* ; 1A,AAA r2p))*. A )nt)r* into an arran+)/)nt -ith ;, and +i1)* ; a /ort+a+) o, hi* &A<*' )*tat) ,or 5,AAA r2p))* in p ac) o, th) d).t o, 1A,AAA r2p))*. Thi* i* a n)- contract and )?tin+2i*h)* th) o d. &c' o-)* ; 1,AAA r2p))* 2nd)r a contract. ; o-)* C 1,AAA r2p))*. ; ord)r* A to cr)dit C -ith 1,AAA r2p))* in hi* .oo3*, .2t C do)* not a**)nt to th) arran+)/)nt. ; *ti o-)* C 1,AAA r2p))*, and no n)- contract ha* .))n )nt)r)d into. Promisee may dispense with or remit performance of promise ! E0ery promisee may dispense with or remit$ wholly or in part$ the performance of the promise made to him$ or may extend the time for s,ch performance$ or may accept instead of it any satisfaction which he thin3s fit( Ill,strations &a' A pro/i*)* to paint a pict2r) ,or ;. ; a,t)r-ard* ,or.id* hi/ to do *o. A i* no on+)r .o2nd to p)r,or/ th) pro/i*). &.' A o-)* ; 5,AAA r2p))*. A pa0* to ;, and ; acc)pt*, in *ati*,action o, th)

84-

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-ho ) d).t, 2,AAA r2p))* paid at th) ti/) and p ac) at -hich th) 5,AAA r2p))* -)r) pa0a. ). Th) -ho ) d).t i* di*char+)d. &c' A o-)* ; 5,AAA r2p))*. C pa0* to ; 1,AAA r2p))*, and ; acc)pt* th)/, in *ati*,action o, hi* c ai/ on A. Thi* pa0/)nt i* a di*char+) o, th) -ho ) c ai/. &d' A o-)* ;, 2nd)r. a contract, a *2/ o, /on)0, th) a/o2nt o, -hich ha* not .))n a*c)rtain)d. A< -itho2t a*c)rtainin+ th) a/o2nt, +i1)* to ;, and ;, in *ati*,action th)r)o,, acc)pt*, th) *2/ o, 2,AAA r2p))*. Thi* i* a di*char+) o, th) -ho ) d).t, -hat)1)r /a0 .) it* a/o2nt. &)' A o-)* ; 2,AAA r2p))*, and i* a *o ind).t)d to oth)r cr)ditor*. A /a3)* an arran+)/)nt -ith hi* cr)ditor*, inc 2din+ ;, to pa0 th)/ a ED[co/po*ition! o, )i+ht anna* in th) r2p)) 2pon th)ir r)*p)cti1) d)/and*. "a0/)nt to ; o, 1,AAA r2p))* i* a di*char+) o, ;<* d)/and. #onse;,ences of rescission of 0oidable contract ! When a person at whose option a contract is 0oidable rescinds it$ the other party thereto need not perform any promise therein contained in which he is promisor( "he party rescinding a 0oidable contract shall$ if he ha0e recei0ed any benefit there,nder from another party to s,ch contract$ restore s,ch benefit$ so far as may be$ to the person from whom it was recei0ed(D Gbligation of person who has recei0ed ad0antage ,nder 0oid agreement$ or contract that becomes 0oid ! When an agreement is disco0ered to be 0oid$ or when a contract becomes 0oid$ any person who has recei0ed any ad0antage ,nder s,ch agreement or contract is bo,nd to restore it$ or to ma3e compensation for it to the person from whom he recei0ed it( Agreement to do impossible act( An agreement to do an act impossible in itself is 0oid( #ontract to do act afterwards becoming impossible or ,nlawf,l ! Ill,strations &a' A pa0* ; 1,AAA r2p))* in con*id)ration o, ;<* pro/i*in+ to /arr0 C, A<* da2+ht)r. C i* d)ad at th) ti/) o, th) pro/i*). Th) a+r))/)nt i* 1oid, .2t ; /2*t r)pa0 A th) 1,AAA r2p))*. &.' A contract* -ith ; to d) i1)r to hi/ 25A /o2nd* o, ric) .),or) th) ,ir*t o, $a0. A d) i1)r* 1EA /a2nd* on 0 .),or) that da0, and non) a,t)r. ; r)tain* th) 1EA /a2nd* a,t)r th) ,ir*t o, $a0. H) i* .o2nd to pa0 A ,or th)/. &c' A, a *in+)r, contract* -ith ;, th) /ana+)r o, a th)atr), to *in+ at hi* th)atr) ,or t-o ni+ht* in )1)r0 -))3 d2rin+ th) n)?t t-o /onth*, and ; )n+a+)* to pa0 h)r a h2ndr)d r2p))* ,or )ach ni+ht<* p)r,or/anc). On th) *i?th ni+ht, A -i ,2 0 a.*)nt* h)r*) , ,ro/ th) th)atr), and ;, in con*)@2)nc), r)*cind* th) contract. ; /2*t pa0 A ,or th) ,i1) ni+ht* on -hich *h) had *2n+. &d' A contract* to *in+ ,or ; at a conc)rt ,or 1,AAA r2p))*, -hich ar) paid in ad1anc). A i* too i to *in+. A i* not .o2nd to /a3) co/p)n*ation, to ; ,or th) o** o, th) pro,it* -hich ; -o2 d ha1) /ad) i, A had .))n a. ) to *in+, .2t /2*t r),2nd to ; th) 1,AAA r2p))* paid in ad1anc). Bode of comm,nicating or re0o3ing rescission of 0oidable contract ! "he rescission of a 0oidable contract may be comm,nicated or re0o3ed in the same manner$

and s,b>ect to the same r,les$ as apply to the comm,nication or re0ocation of a proposal( 8&- Effect of neglect of promisee to afford promisor reasonable facilities for performance ! If any promisee neglects or ref,ses to afford the promisor reasonable facilities for the performance of his promise$ the promisor is exc,sed by s,ch neglect or ref,sal as to any non-performance ca,sed thereby( Ill,stration A contracts with 7 to repair 7Ds ho,se( 7 neglects or ref,ses to point o,t to A the places in which his ho,se re;,ires repair( A is exc,sed for the nonperformance of the contract if it is ca,sed by s,ch neglector ref,sal( CHA"TER 9. 8%- G? #ER"AI/ REEA"IG/S RESEB7EI/I "HGSE #REA"EH 7J #G/"RA#" #laim for necessaries s,pplied to person incapable of contracting$ or on his acco,nt( If a person$ incapable of entering into a contract$ or any one whom he is legally bo,nd to s,pport$ is s,pplied by another$ person with necessaries s,ited to his condition in life$ the person who has f,rnished s,ch s,pplies is entitled to be reimb,rsed from the property of s,ch incapable person( Ill,strations &a' A *2pp i)* ;, a 2natic, -ith n)c)**ari)* *2ita. ) to hi* condition in i,). A i* )ntit )d to .) r)i/.2r*)d ,ro/ ;<* prop)rt0. &.' A *2pp i)* th) -i,) and chi dr)n o, ;, a 2natic, -ith n)c)**ari)* *2ita. ) to th)ir condition in i,). A i* )ntit )d to .) r)i/.2r*)d ,ro/ ;<* prop)rt0. 8<- Reimb,rsement of person paying money d,e by another$ in payment of which he is interested A person who is interested in the payment of money which another is bo,nd by law to pay$ and who therefore pays it$ is entitled to be reimb,rsed by the other( Ill,stration 7 holds land in 7engal$ on a lease granted by A$ the Famindar( "he a0en,e payable by A to the Io0ernment being in arrear$ his land is ad0ertised for sale by the Io0ernment( @nder the re0en,e law$ the conse;,ence of s,ch sale will be the ann,lment of 7Ds lease( 7$ to pre0ent the sale and the conse;,ent ann,lment of his own lease$ pays to the Io0ernment the s,m d,e from A( A is bo,nd to ma3e good to 7 the amo,nt so paid( &=- Gbligation of person en>oying benefit of non-grat,ito,s act ! Where a person lawf,lly does anything for another person$ or deli0ers anything to him$ not intending to do so grat,ito,sly$ and s,ch other person en>oys the benefit thereof$ the latter is bo,nd to ma3e compensation to the former in respect of$ or to restore$ the thing so done or deli0ered( Ill,strations &a' A, a trad)*/an, )a1)* +ood* at ;<* ho2*) .0 /i*ta3). ; tr)at* th) +ood* a* hi* o-n. H) i* .o2nd to pa0 A ,or th)/. &.' A *a1)* ;<* prop)rt0 ,ro/ ,ir). A i* not )ntit )d to co/p)n*ation ,ro/ ;, i, th) circ2/*tanc)* *ho- that h) int)nd)d to act +rat2ito2* 0. & - Responsibility of finder of goods ! A person who finds goods belonging to another$ and ta3es them into his c,stody$ is s,b>ect to the same responsibility as a bailee( &'- Eiability of person to whom money is paid or thing deli0ered by mista3e or ,nder coercion ! A person to whom money has been paid$ or anything deli0ered$ by mista3e or ,nder

coercion$ m,st repay or ret,rn it( Ill,strations &a' A and ; 7oint 0 o-) 1AA r2p))* to C. A a on) pa0* th) a/o2nt to C, and ;, not 3no-in+ thi* ,act, pa0* 1AA r2p))* o1)r a+ain to C. C i* .o2nd to r)pa0 th) a/o2nt to ;. &.' A rai -a0 co/pan0 r),2*)* to d) i1)r 2p c)rtain +ood* to th) con*i+n)), )?c)pt 2pon th) pa0/)nt o, an i )+a char+) ,or carria+). Th) con*i+n)) pa0* th) *2/ char+)d in ord)r to o.tain th) +ood*. H) i* )ntit )d to r)co1)r *o /2ch o, th) char+) a* -a* i )+a 0 )?c)**i1). CHA"TER 9I OF THE CON:EG8ENCE: OF ;REACH OF CONTRACT &2- #ompensation for loss or damage ca,sed by breach of contract ! When a contract has been bro3en$ the party who s,ffers by s,ch breach is entitled to recei0e$ from the party who has bro3en the contract$ compensation for any loss or damage ca,sed to him thereby$ which nat,rally arose in the ,s,al co,rse of things from s,ch breach$ or which the parties 3new$ when they made the contract$ to be li3ely to res,lt from the breach of it( S,ch compensation is not to be gi0en for any remote and indirect loss or damage s,stained by reason of the breach( #ompensation for fail,re to discharge obligation resembling those created by contract When an obligation resembling those created by contract has been inc,rred and has not been discharged$ any person in>,red by the fail,re to discharge it is entitled to recei0e the same compensation from the party in defa,lt$ as if s,ch person had contracted to discharge it and had bro3en his contract( Explanation - In estimating the loss or damage arising from a breach of contract$ the means which existed of remedying the incon0enience ca,sed by the non-performance of the contract m,st be ta3en into acco,nt( Ill,strations &a' A contract* to *) and d) i1)r 5A /a2nd* o, *a tp)t)r to ;, at a c)rtain pric) to .) paid on d) i1)r0. A .r)a3* hi* pro/i*). ; i* )ntit )d to r)c)i1) ,ro/ A, .0 -a0 o, co/p)n*ation, th) *2/, i, an0, .0 -hich th) contract pric) ,a * *hort o, th) pric) ,or -hich ; /i+ht ha1) o.tain)d 5A /a2nd* o, *a tp)t)r o, i3) @2a it0 at th) ti/) -h)n th) *a tp)t)r o2+ht to ha1) .))n d) i1)r)d. &.' A hir)* ;<* *hip to +o to ;o/.a0, and th)r) ta3) on .oard, on th) ,ir*t o, Fan2ar0, a car+o -hich A i* to pro1id) and to .rin+ it to Ca c2tta, th) ,r)i+ht to .) paid -h)n )arn)d. ;<* *hip do)* not +o to ;o/.a0, .2t A ha* opport2niti)* o, proc2rin+ *2ita. ) con1)0anc) ,or th) car+o 2pon t)r/* a* ad1anta+)o2* a* tho*) on -hich h) had chart)r)d th) *hip. A a1ai * hi/*) , o, tho*) opport2niti)*, .2t i* p2t to tro2. ) and )?p)n*) in doin+ *o. A i* )ntit )d to r)c)i1) co/p)n*ation ,ro/ ; in r)*p)ct o, *2ch tro2. ) and )?p)n*). &c' A contract* to .20 o, ;, at a *tat)d pric), 5A /a2nd* o, ric), no ti/) .)in+ ,i?)d ,or d) i1)r0. A a,t)r-ard* in,or/* ; that h) -i not acc)pt th) ric) i, t)nd)r)d to hi/. ; i* )ntit )d to r)c)i1) ,ro/ A, .0 -a0 o, co/p)n*ation, h) a/o2nt, i, an0, .0 -hich th) contract pric) )?c))d*

that -hich ; can o.tain ,or th) ric) at th) ti/) -h)n A in,or/* ; that h) -i not acc)pt it. A contract* to .20 ;<* *hip ,or CA,AAA r2p))*, .2t .r)a3* hi* pro/i*). A /2*t pa0 to ;, .0 -a0 o, co/p)n*ation, th) )?c)**, i, an0, o, th) contract pric) o1)r th) pric) -hich ; can o.tain ,or th) *hip at th) ti/) o, th) .r)ach o, pro/i*). A, th) o-n)r o, a .oat, contract* -ith ; to ta3) a car+o o, 72t) to $irHap2r, ,or *a ) at that p ac), *tartin+ on a *p)ci,i)d da0. Th) .oat, o-in+ to *o/) a1oida. ) ca2*), do)* not *tart at th) ti/) appoint)d, -h)r).0 th) arri1a o, th) car+o at $irHap2r i* d) a0)d .)0ond th) ti/) -h)n it -o2 d ha1) arri1)d i, th) .oat had *ai )d accordin+ to th) contract. A,t)r that dat), and .),or) th) arri1a o, th) car+o, th) pric) o, 72t) ,a *. Th) /)a*2r) o, th) co/p)n*ation pa0a. ) to ; .0 A i* th) di,,)r)nc) .)t-))n th) pric) -hich ; co2 d ha1) o.tain)d ,or th) car+o at $irHap2r at th) ti/) -h)n it -o2 d ha1) arri1)d i, ,or-ard)d in d2) co2r*), and it* /ar3)t pric) at th) ti/) -h)n it act2a 0 arri1)d. A contract* to r)pair ;<* ho2*) in a c)rtain /ann)r, and r)c)i1)* pa0/)nt in ad1anc). A r)pair* th) ho2*), .2t not accordin+ to contract. ; i* )ntit )d to r)co1)r ,ro/ A th) co*t o, /a3in+ th) r)pair* con,or/ to th) contract. A contract* to )t hi* *hip to ; ,or a 0)ar, ,ro/ th) ,ir*t o, Fan2ar0, ,or a c)rtain pric). Fr)i+ht* ri*), and, on th) ,ir*t o, Fan2ar0, th) hir) o.taina. ) ,or th) *hip i* hi+h)r than th) contract pric). A .r)a3* hi* pro/i*). H) /2*t pa0 to ;, .0 -a0 o, co/p)n*ation, a *2/ )@2a to th) di,,)r)nc) .)t-))n th) contract pric) and th) pric) ,or -hich ; co2 d hir) a *i/i ar *hip ,or a 0)ar on and ,ro/ th) ,ir*t o, Fan2ar0. A contract* to *2pp 0 ; -ith a c)rtain @2antit0 o, iron at a ,i?)d pric), .)in+ a hi+h)r pric) than that ,or -hich A co2 d proc2r) and d) i1)r th) iron. ; -ron+,2 0 r),2*)* to r)c)i1) th) iron. ; /2*t pa0 to A, .0 -a0 o, co/p)n*ation, th) di,,)r)nc) .)t-))n th) contract pric) o, th) iron and th) *2/ ,or -hich A co2 d ha1) o.tain)d and d) i1)r)d it. A d) i1)r* to ;, a co//on carri)r, a /achin), to .) con1)0)d, -itho2t d) a0, to A<* /i in,or/in+ ; that hi* /i i* *topp)d ,or -ant o, th) /achin). ; 2nr)a*ona. 0 d) a0* th) d) i1)r0 o, th) /achin), and A, in con*)@2)nc), o*)* a pro,ita. ) contract -ith th) =o1)rn/)nt. A i* )ntit )d to r)c)i1) ,ro/ ;, .0 -a0 o, co/p)n*ation, th) a1)ra+) a/o2nt o, pro,it -hich -o2 d ha1) .))n /ad) .0 th) -or3in+ o, th) $i d2rin+ th) ti/) that d) i1)r0 o, it -a* d) a0)d, .2t not th) o** *2*tain)d thro2+h th) o** o, th) =o1)rn/)nt contract. A, ha1in+ contract)d -ith ; to *2pp 0 ; -ith 1,AAA ton* o, iron at 1AA r2p))* a ton, to .) d) i1)r)d at a *tat)d ti/), contract* -ith C ,or th) p2rcha*) o, 1,AAA ton* o, iron at 18A r2p))* a ton, t) in+ C that h) do)* *o ,or th) p2rpo*) o, p)r,or/in+ hi* contract -ith ;. C ,ai * to p)r,or/ hi* contract -ith A, -ho cannot proc2r) oth)r iron, and ;, in con*)@2)nc), r)*cind* th) contract. C /2*t pa0 to A 2A,AAA r2p))*, .)in+ th) pro,it -hich A -o2 d ha1) /ad) .0 th) p)r,or/anc) o, hi* contract

-ith ;. A contract* -ith ; to /a3) and d) i1)r to ;, .0 a ,i?)d da0, ,or a *p)ci,i)d pric), a c)rtain pi)c) o, /achin)r0. A do)* not d) i1)r th) pi)c) o, /achin)r0 at th) ti/) *p)ci,i)d, and in con*)@2)nc) o, thi*, ; i* o. i+)d to proc2r) anoth)r at a hi+h)r pric) than that -hich h) -a* to ha1) paid to A, and i* pr)1)nt)d ,ro/ p)r,or/in+ a contract -hich ; had /ad) -ith a third p)r*on at th) ti/) o, hi* contract -ith A .2t -hich had not .))n th)n co//2nicat)d to A, and i* co/p) )d to /a3) co/p)n*ation ,or .r)ach o, that contract. A /2*t pa0 to ;, .0 -a0 o, co/p)n*ation, th) di,,)r)nc) .)t-))n th) contract pric) o, th) pi)c) o, /achin)r0 and th) *2/ paid .0 ; ,or anoth)r, .2t not th) *2/ paid .0 ; to th) third p)r*on .0 -a0 o, co/p)n*ation. A, a .2i d)r, contract* to )r)ct and ,ini*h a ho2*) .0 th) ,ir*t o, Fan2ar0, in ord)r that ; /a0 +i1) po**)**ion o, it at that ti/) to C, to -ho/ ; ha* contract)d to )t it. A i* in,or/)d o, th) contract .)t-))n ; and C. A .2i d* th) ho2*) *o .ad 0 that, .),or) th) ,ir*t o, Fan2ar0, it ,a * do-n and ha* to .) r)6.2i t .0 ;, -ho, in con*)@2)nc), o*)* th) r)nt -hich h) -a* to ha1) r)c)i1)d ,ro/ C, and i* o. i+)d to /a3) co/p)n*ation to C ,or th) .r)ach o, hi* contract. A /2*t /a3) co/p)n*ation to ; ,or th) co*t o, r).2i din+ th) ho2*), ,or th) r)nt o*t, and ,or th) co/p)n*ation /ad) to C. A *) * c)rtain /)rchandi*) to ;, -arrantin+ it to .) o, a partic2 ar @2a it0, and ;, in r) ianc) 2pon thi* -arrant0, *) * it to C -ith a *i/i ar -arrant0. Th) +ood* pro1) to .) not accordin+ to th) -arrant0, and ; .)co/)* ia. ) to pa0 C a *2/ o, /on)0 .0 -a0 o, co/p)n*ation. ; i* )ntit )d to .) r)i/.2r*)d thi* *2/ .0 A. A contract to pa0 a *2/ o, /on)0 to ; on a da0 *p)ci,i)d. A do)* not pa0 th) /on)0 on that da0> ;, in con*)@2)nc) o, not r)c)i1in+ th) /on)0 on that da0, i* 2na. ) to pa0 hi* d).t*, and i* tota 0 r2in)d. A i* not ia. ) to /a3) +ood to ; an0thin+ )?c)pt th) principa *2/ h) contract)d to pa0, to+)th)r -ith int)r)*t 2p to <th) da0 o, pa0/)nt. A contract to d) i1)r 5A /a2nd* o, *a tp)t)r to ; on th) ,ir*t o, Fan2ar0, at a c)rtain pric). ; a,t)r-ard*, .),or) th) ,ir*t o, Fan2ar0, contract* to *) th) *a tp)t)r to C at a pric) hi+h)r than th) /ar3)t pric) o, th) ,ir*t o, Fan2ar0. A .r)a3* hi* pro/i*). In )*ti/atin+ th) co/p)n*ation pa0a. ) .0 A to ;, th) /ar3)t pric) o, th) ,ir*t o, Fan2ar0, and not th) pro,it -hich -o2 d ha1) ari*)n to ; ,ro/ th) *a ) to C, i* to .) ta3)n into acco2nt. A contract to *) and d) i1)r 5AA .a )* o, cotton to ; on a ,i?)d da0. A 3no-* nothin+ o, ;<* /od) o, cond2ctin+ hi* .2*in)**. A .r)a3* hi* pro/i*), and ;, ha1in+ no cotton, i* o. i+)d to c o*) hi* /i . A i* not r)*pon*i. ) to ; ,or th) o** ca2*)d to ; .0 th) c o*in+ o, th) /i . A contract to *) and d) i1)r to ;, on th) ,ir*t o, Fan2ar0, c)rtain c oth -hich ; int)nd* to /an2,act2r) into cap* o, a partic2 ar 3ind, ,or -hich th)r) i* no d)/and, )?c)pt at that *)a*on. Th) c oth i* not d) i1)r)d ti a,t)r th) appoint)d ti/), and too at) to .) 2*)d that 0)ar in /a3in+

cap*. ; i* )ntit )d to r)c)i1) ,ro/ A, .0 -a0 o, co/p)n*ation, th) di,,)r)nc) .)t-))n th) contract pric) o, th) c oth and it* /ar3)t pric) at th) ti/) o, d) i1)r0, .2t not th) pro,it* -hich h) )?p)ct)d to o.tain .0 /a3in+ cap*, nor th) )?p)n*)* -hich h) ha* .))n p2t to in /a3in+ pr)paration ,or th) /an2,act2r). A, a *hip6o-n)r, Contract* -ith ; to con1)0 hi/ ,ro/ Ca c2tta to :0dn)0 in A<* *hip, *ai in+ on th) ,ir*t o, Fan2ar0, and ; pa0* to A, .0 -a0 o, d)po*it, on)6ha , o, hi* pa**a+)6/on)0. Th) *hip do)* not *ai on th) ,ir*t o, Fan2ar0, and ;, a,t)r .)in+ in con*)@2)nc) d)tain)d in Ca c2tta ,or *o/) ti/) and th)r).0 p2t to *o/) )?p)n*), proc))d* to :0dn)0 in anoth)r 1)**) , and, in con*)@2)nc), arri1in+ too at) in :0dn)0, o*)* a *2/ o, /on)0. A i* ia. ) to r)pa0 to ; hi* d)po*it -ith int)r)*t, and th) )?p)n*) to -hich h) i* p2t .0 hi* d)t)ntion in Ca c2tta, and th) )?c)**, i, an0, o, th) pa**a+)6/on)0 paid ,or th) *)cond *hip o1)r that a+r))d 2pon ,or th) ,ir*t, .2t not th) *2/ o, /on)0 -hich ; o*t .0 arri1in+ in :0dn)0 too at). &4#ompensation for breach of contract where penalty stip,lated for*When a contract has been bro3en$ if a s,m is named in the contract as the amo,nt to be paid in case of s,ch breach$ or if the contract contains any other stip,lation by way of penalty$ the party complaining of the breach is entitled$ whether or not act,al damage or loss is pro0ed to ha0e been ca,sed thereby$ to recei0e from the party who has bro3en the contract reasonable compensation not exceeding the amo,nt so named or$ as the case may be$ the penalty stip,lated for( Explanation(- A stip,lation for increased interest from the date of defa,lt may be a stip,lation by way of penalty(. Exception(- When any person enters into any bail-bond$ recogni- Fance or other instr,ment of the same nat,re$ or$ ,nder the pro0isions of any law$ or ,nder the orders of the )*#entral Io0ernment. or of any State Io0ernment$ gi0es any bond for the performance of any p,blic d,ty or act in which the p,blic are interested$ he shall be liable$ ,pon breach of the condition of any s,ch instr,ment$ to pay the whole s,m mentioned therein( Explanation(- A person who enters into a contract with Io0ernment does not necessarily thereby ,nderta3e any p,blic d,ty$ or promise to do an act in which the p,blic are interested( Ill,strations &a' A contract -ith ; to pa0 ; R*. 1,AAA, i, h) ,ai * to pa0 ; R*. 5AA on a +i1)n da0. A ,ai * to pa0 ; R*. 5AA on that da0. ; i* )ntit )d to r)co1)r ,ro/ A *2ch co/p)n*ation, not )?c))din+ R*. 1,AAA, a* th) Co2rt con*id)r* r)a*ona. ). &.' A contract -ith ; that, i, A practic)* a* a *2r+)on -ithin Ca c2tta, h) -i pa0 ; R*. 5,AAA. A practic) a* a *2r+)on in Ca c2tta. ; i* )ntit )d to *2ch co/p)n*ation, not )?c))din+ R*. 5,AAA, a* th) Co2rt con*id)r* r)a*ona. ). &c' A +i1)* a r)co+niHanc) .indin+ hi/ in a p)na t0 o, R*. 5AA to app)ar in Co2rt on a c)rtain da0. H) ,or,)it* hi* r)co+niHanc). H) i* ia. ) to pa0

th) -ho ) p)na t0. &d' A +i1)* ; a .ond ,or th) r)pa0/)nt o, R*. 1,AAA -ith int)r)*t at 12 p)r c)nt at th) )nd o, *i? /onth*, -ith a *tip2 ation that, in ca*) o, d),a2 t, int)r)*t *ha .) pa0a. ) at th) rat) o, 75 p)r c)nt ,ro/ th) dat) o, d),a2 t. Thi* i* a *tip2 ation .0 -a0 o, p)na t0, and ; i* on 0 )ntit )d to r)co1)r ,ro/ A *2ch co/p)n*ation a* th) Co2rt con*id)r* r)a*ona. ). &)' A, -ho o-)* /on)0 to ; a /on)06 )nd)r, 2nd)rta3)* to r)pa0 hi/ .0 d) i1)rin+ to hi/ 1A /a2nd* o, +rain on a c)rtain dat), and *tip2 at)* that, in th) )1)nt o, hi* not d) i1)rin+ th) *tip2 at)d a/o2nt .0 th) *tip2 at)d dat), h) *ha .) ia. ) to d) i1)r 2A /a2nd*. Thi* i* a *tip2 ation .0 -a0 o, p)na t0, and ; i* on 0 )ntit )d to r)a*ona. ) co/p)n*ation in ca*) o, .r)ach. &,' A 2nd)rta3)* to r)pa0 ; a oan o, R*. 1,AAA .0 ,i1) )@2a /onth 0 in*ta /)nt*, -ith a *tip2 ation that5 in d),a2 t o, pa0/)nt o, an0 in*ta /)nt, th) -ho ) *ha .)co/) d2). Thi* *tip2 ation i* not .0 -a0 o, p)na t0, and th) contract /a0 .) )n,orc)d accordin+ to it* t)r/*. &+' A .orro-* R*. 1AA ,ro/ ; and +i1)* hi/ a .ond ,or R*. 2AA pa0a. ) .0 ,i1) 0)ar 0 in*ta /)nt* o, R*. BA, -ith a *tip2 ation that, in d),a2 t o, pa0/)nt o, an0 in*ta /)nt, th) -ho ) *ha .)co/) d2). Thi* i* a *tip2 ation .0 -a0 o, p)na t0. &6- Party rightf,lly rescinding contract entitled to compensation ! A person who rightf,lly rescinds a contract is entitled to compensation for any damage which he has s,stained thro,gh the non-f,lfillment of the contract( Ill,stration A$ a singer$ contracts with 7$ the manager of a theatre$ to sing at his theatre for two nights In e0ery wee3 d,ring the next two months$ and 7 engages to pay her == r,pees for each nightDs performance( Gn the sixth night$ A willf,lly absents herself from the theatre$ and 7$ in conse;,ence$ rescinds the contract( 7 is entitled to claim compensation for the damage which he has s,stained thro,gh the non-f,lfillment of the contract( CHA"TER 9II Sale of Ioods #hapter CII ! *Sale of Ioods. Rep( by the Indian Sale of Ioods Act <2= 92 of <2=:$ s( 86( CHA"TER 9III OF INDE$NIT% AND =8ARANTEE '4- 5#ontract of indemnity5 defined ! A contract by which one party promises to sa0e the other from loss ca,sed to him by the cond,ct of the promisor himself$ or by the cond,ct of any other person$ is called a 5 contract of indemnity5( Ill,stration A contract to indemnify 7 against the conse;,ences of any proceedings which # may ta3e against 7 in respect of a certain s,m of '== r,pees( "his is a contract of indemnity( '6- Rights of indemnity holder when s,ed( "he promisee in a contract of indemnity$ acting within the scope of his a,thority$ is entitled to reco0er from the promisor9 : all damages which he may be compelled to pay in any s,it in respect of any matter

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to which the promise to indemnify applies 9': all costs which he may be compelled to pay in any s,ch s,it if$ in bringing or defending it$ he did not contra0ene the orders of the promisor$ and acted as it wo,ld ha0e been pr,dent for him to act in the absence of any contract of indemnity$ or if the promisor a,thoriFed him to bring or defend the s,it; 92: all s,ms which he may ha0e paid ,nder the terms of any compromise of any s,ch s,it$ if the compromise was not contrary to the orders of the promisor$ and was one which it wo,ld ha0e been pr,dent for the promisee to ma3e in the absence of any contract of indemnity$ or if the promisor a,thoriFed him to compromise the s,it( 5#ontract of g,arantee5$ 5s,rety5$ principal debtor5 and 5creditor5 ! A 5contract of g,arantee5 is a contract to perform the promise$ or discharge the liability$ of a third person in case of his defa,lt( "he person who gi0es the g,arantee is called the 5s,rety5; the person in respect of whose defa,lt the g,arantee is gi0en is called the 5principal debtor 5$ and the person to whom the g,arantee is gi0en is called the 5creditor5( A g,arantee may be either oral or written( #onsideration for g,arantee ! Anything done$ or any promise made$ for the benefit of the principal debtor$ may be a s,fficient consideration to the s,rety for gi0ing the g,arantee( Ill,strations &a' ; r)@2)*t* A to *) and d) i1)r to hi/ +ood* on cr)dit. A a+r))* to do *o, pro1id)d C -i +2arant)) th) pa0/)nt o, th) pric) o, th) +ood*. C pro/i*)* to +2arant)) th) pa0/)nt in con*id)ration o, A<* pro/i*) to d) i1)r th) +ood*. Thi* i* a *2,,ici)nt con*id)ration ,or C<* pro/i*). &.' A *) * and d) i1)r* +ood* to ;. C a,t)r-ard* r)@2)*t* A to ,or.)ar to *2) ; ,or th) d).t ,or a 0)ar, and pro/i*)* that, i, h) do)* *o, C -i pa0 ,or th)/ in d),a2 t o, pa0/)nt .0 ;. A a+r))* to ,or.)ar a* r)@2)*t)d. Thi* i* a *2,,ici)nt con*id)ration ,or C<* pro/i*). &c' A *) * and d) i1)r* +ood* to ;. C a,t)r-ard*, -itho2t con*id)ration, a+r))* to pa0 ,or th)/ in d),a2 t o, ;. Th) a+r))/)nt i* 1oid. S,retyDs liability ! "he liability of the s,rety is co-extensi0e with that of the principal debtor$ ,nless it is otherwise pro0ided by the contract( Ill,stration A g,arantees to 7 the payment of a bill of exchange by #$ the acceptor( "he bill is dishonored by #( A is liable not only for the amo,nt of the bill b,t also for any interest and charges which may ha0e become d,e on it( 5#ontin,ing g,arantee5 ! A g,arantee which extends to a series series of transactions is called a 5contin,ing g,arantee5( Ill,strations &a' A, in con*id)ration that ; -i )/p o0 C in co )ctin+ th) r)nt o, ;<* Ha/indari, pro/i*)* ; to .) r)*pon*i. ), to th) a/o2nt o, 5,AAA r2p))*, ,or th) d2) co )ction and pa0/)nt .0 C o, tho*) r)nt*. Thi* i* a contin2in+ +2arant)). &.' A +2arant))* pa0/)nt to ;, a t)a6d)a )r, to th) a/o2nt o, po2nd 1AA, ,or an0 t)a h) /a0 ,ro/ ti/) to ti/) *2pp 0 to C. ; *2pp i)* C -ith t)a to

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a.o1) th) 1a 2) o, po2nd 1AA, and C pa0* ; ,or it. A,t)r-ard* ; *2pp i)* C -ith t)a to th) 1a 2) o, po2nd 2AA. C ,ai * to pa0. Th) +2arant)) +i1)n .0 A -a* a contin2in+ +2arant)), and h) i* accordin+ 0 ia. ) to ; to th) )?t)nt o, po2nd 1AA. &c' A +2arant))* pa0/)nt to ; o, th) pric) o, ,i1) *ac3* o, , o2r to .) d) i1)r)d .0 ; to C and to .) paid ,or in a /onth. ; d) i1)r* ,i1) *ac3* to C. C pa0* ,or th)/. A,t)r-ard* ; d) i1)r* ,o2r *ac3* to C, -hich C do)* riot pa0 ,or. Th) +2arant)) +i1)n .0 A -a* not a contin2in+ +2arant)), and accordin+ 0 h) i* not ia. ) ,or th) pric) o, th) ,o2r *ac3*. Re0ocation of contin,ing g,arantee ! A contin,ing g,arantee may at any time be re0o3ed by the s,rety$ as to f,t,re transactions$ by notice to the creditor( Ill,strations &a' A, in con*id)ration o, ;<* di*co2ntin+, at A<* r)@2)*t, .i * o, )?chan+) ,or C, +2arant))* to ;, ,or t-) 1) /onth*, th) d2) pa0/)nt o, a *2ch .i * to th) )?t)nt o, 5,AAA r2p))*. ; di*co2nt* .i * ,or C to th) )?t)nt o, 2,AAA r2p))*. A,t)r-ard*, at th) )nd o, thr)) /onth*, A r)1o3)* th) +2arant)). Thi* r)1ocation di*char+)* A ,ro/ a ia.i it0 to ; ,or an0 *2.*)@2)nt di*co2nt. ;2t A i* ia. ) to ; ,or th) 2,AAA r2p))*, on d),a2 t o, C. &.' A +2arant))* to ;, to th) )?t)nt o, 1A,AAA r2p))*, that C *ha pa0 a th) .i * that ; *ha dra- 2pon hi/. ; dra-* 2pon C. C acc)pt* th) .i . A +i1)* notic) o, r)1ocation. C di*hono2r* th) .i at /at2rit0. A i* ia. ) 2pon hi* +2arant)). Re0ocation of contin,ing g,arantee by s,retyDs death ! "he death of the s,rety operates$ in the absence of any contract to the contrary$ as a re0ocation of a contin,ing g,arantee$ so far as regards f,t,re transactions( Eiability of two persons$ primarily liable$ not affected by arrangement between them that one shall be s,rety on otherDs defa,lt ! Where two persons contract with a third person to ,nderta3e a certain liability$ and also contract with each other that one of them shall be liable only on the defa,lt of the other$ the third person not being a party to s,ch contract$ the liability of each of s,ch two persons to the third person ,nder the first contract is not affected by the existence of the second contract$ altho,gh s,ch third person may ha0e been aware of its existence( Ill,stration A and 7 ma3e a >oint and se0eral promissory note to #( A ma3es it$ infact$ as s,rety for 7$ and # 3nows this at the time when the note is made( "he fact that A$ to the 3nowledge of #$ made the note as s,rety for 7$ is no answer to a s,it by # against A ,pon the note( Hischarge of s,rety by 0ariance in terms of contract ! Any 0ariance$ made witho,t the s,retyDs consent$ in the terms of the contract between the principal *debtor. and the creditor$ discharges the s,rety as to transactions s,bse;,ent to the 0ariance( Ill,strations &a' A .)co/)* *2r)t0 to C ,or ;<* cond2ct a* a /ana+)r in C<* .an3. A,t)r-ard* ; and C contract, -itho2t A<* con*)nt, that ;<* *a ar0 *ha .) rai*)d, and that h) *ha .)co/) ia. ) ,or on)6,o2rth o, th) o**)* on

o1)rdra,t*. ; a o-* a c2*to/)r to o1)rdra-, and th) .an3 o*)* a *2/ o, /on)0. A i* di*char+)d ,ro/ hi* *2r)t0 *hip .0 th) 1arianc) /ad) -itho2t hi* con*)nt, and i* not ia. ) to /a3) +ood thi* o**. &.' A +2arant))* C a+ain*t th) /i*cond2ct o, ; in an o,,ic) to -hich ; i* appoint)d .0 C, and o, -hich th) d2ti)* ar) d),in)d .0 an Act o, th) #)+i* at2r). ;0 a *2.*)@2)nt Act, th) nat2r) o, th) o,,ic) i* /at)ria 0 a t)r)d. A,t)r-ard*, ; /i*cond2ct* hi/*) ,. A i* di*char+)d .0 th) chan+) ,ro/ ,2t2r) ia.i it0 2nd)r hi* +2arant)), tho2+h th) /i*cond2ct o, ; i* in r)*p)ct, o, a d2t0 not a,,)ct)d .0 th) at)r Act. &c' C a+r))* to appoint ; a* hi* c )r3 to *) +ood* at a 0)ar 0 *a ar0, 2pon A<* .)co/in+ *2r)t0 to C ,or ;<* d2 0 acco2ntin+ ,or /on)0* r)c)i1)d .0 hi/ a* *2ch c )r3. A,t)r-ard*, -itho2t A<* 3no- )d+) or con*)nt, C and ; a+r)) that ; *ho2 d .) paid .0 a co//i**ion on th) +ood* *o d .0 hi/ and not .0 a ,i?)d *a ar0. A i* not ia. ) ,or *2.*)@2)nt /i*cond2ct o, ;. &d' A +i1)* to C a contin2in+ +2arant)) to th) )?t)nt o, E,AAA r2p))* ,or an0 oi *2pp i)d .0 C to ; on cr)dit. A,t)r-ard* ; .)co/)* )/.arra**)d, and, -itho2t th) 3no- )d+) o, A, ; and C contract that C *ha contin2) to *2pp 0 ; -ith oi ,or r)ad0 /on)0, and that th) pa0/)nt* *ha .) app i)d to th) th)n )?i*tin+ d).t* .)t-))n ; and C. A i* not ia. ) on hi* +2arant)) ,or an0 +ood* *2pp i)d a,t)r4 thi* n)- arran+)/)nt. &)' C contract* to )nd ; 5,AAA r2p))* on th) 1*t $arch. A +2arant))* r)pa0/)nt. C pa0* th) 5,AAA r2p))* to ; on th) 1*t Fan2ar0. A i* di*char+)d ,ro/ hi* ia.i it0, a* th) contract ha* .))n 1ari)d, ina*/2ch a* C /i+ht *2) ; ,or th) /on)0 .),or) th) 1*t o, $arch. 24- Hischarge of s,rety by release or discharge of principal debtor ! "he s,rety is discharged by any contract between the creditor and the principal debtor$ by which the principal debtor is released or by any act or omission of the creditor$ the legal conse;,ence of which is the discharge of the principal debtor( Ill,strations &a' A +i1)* a +2arant)) to C ,or +ood* to .) *2pp i)d .0 C to ;. C *2pp i)* +ood* to ;, and a,t)r-ard* ; .)co/)* )/.arra**)d and contract* -ith hi* cr)ditor* &inc 2din+ C' to a**i+n to th)/ hi* prop)rt0 in con*id)ration o, th)ir r) )a*in+ hi/ ,ro/ th)ir d)/and*. H)r) ; i* r) )a*)d ,ro/ hi* d).t .0 th) contract -ith C, and A i* di*char+)d ,ro/ hi* *2r)t0 *hip. &.' A contract* -ith ; to +ro- a crop o, indi+o an A<* and and to d) i1)r it to ; at a ,i?)d rat), and C +2arant))* A<* p)r,or/anc) o, thi* contract. ; di1)rt* a *tr)a/ o, -at)r -hich i* n)c)**ar0 ,or irri+ation o, A<* and and th)r).0 pr)1)nt* hi/ ,ro/ rai*in+ th) indi+o. C i* no on+)r ia. ) on hi* +2arant)). &c' A contract -ith ; ,or a ,i?)d pric) to .2i d a ho2*) ,or ; -ithin a *tip2 at)d ti/), ; *2pp 0in+ th) n)c)**ar0 ti/.)r. C +2arant))* A<* p)r,or/anc) o, th) contract. ; o/it* to *2pp 0 th) ti/.)r. C i* di*char+)d ,ro/ hi* *2r)t0 *hip. 26- Hischarge of s,rety when creditor compo,nds with$ gi0es time to$ or agrees not to s,e$ principal debtor !

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A contract between the creditor and the principal debtor$ by which the creditor ma3es a composition with$ or promises to gi0e time to$ or not to s,e$ the principal debtor$ discharges the s,rety$ ,nless the s,rety assents to s,ch contract( ((((((((((((((((((( S,rety not discharged when agreement made with third person to gi0e time to principal debtor( Where a contract to gi0e time to the principal debtor is made by the creditor with a third person$ and not with the principal debtor$ the s,rety is not discharged( Ill,stration #$ the holder of an o0erd,e bill of exchange drawn by A as s,rety for 7$ and accepted by 7$ contracts with B to gi0e time to 7( A is not discharged( #reditorDs forbearance to s,e does not discharge s,rety ! Bere forbearance on the part of the creditor to s,e the principal debtor or to enforce any other remedy against him does not$ in the absence of any pro0ision in the g,arantee to the contrary$ discharge the s,rety( Ill,stration 7 owes to # a debt g,aranteed by A( "he debt becomes payable( # does not s,e 7 for a year after the debt has become payable( A is not discharged from his s,rety ship( Release of one co-s,rety does not discharge others ! Where there are co-s,reties$ a release by the creditor of one of them does not discharge the others; neither does it free the s,rety so released from his responsibility to the other s,reties ( Hischarge of s,rety by creditorDs act or omission impairing s,retyDs e0ent,al remedy ! If the creditor does any act which is inconsistent with the rights of the s,rety$ or omits to do any act which his d,ty to the s,rety re;,ires him to do$ and the e0ent,al remedy of the s,rety himself against the principal debtor is thereby impaired$ the s,rety is discharged( Ill,strations &a' ; contract* to .2i d a *hip ,or C ,or a +i1)n *2/, to .) paid .0 in*ta /)nt* a* th) -or3 r)ach)* c)rtain *ta+)*. A .)co/)* *2r)t0 to C ,or ;<* d2) p)r,or/anc) o, th) contract. C, -itho2t th) 3no- )d+) o, A, pr)pa0* to ; th) a*t t-o in*ta /)nt*. A i* di*char+)d .0 thi* pr)pa0/)nt. &.' C )nd* /on)0 to ; on th) *)c2rit0 o, a 7oint and *)1)ra pro/i**or0 not) /ad) in C<* ,a1o2r .0 ;, and .0 A a* *2r)t0 ,or ;, to+)th)r -ith a .i o, *a ) o, ;<* ,2rnit2r), -hich +i1)* po-)r to C to *) th) ,2rnit2r), and app 0 th) proc))d* in di*char+) o, th) not). :2.*)@2)nt 0, C *) * th) ,2rnit2r), .2t, o-in+ to hi* /i*cond2ct and -i ,2 n)+ i+)nc), on 0 a */a pric) i* r)a iH)d. A i* di*char+)d ,ro/ ia.i it0 on th) not). &c' A p2t* $ a* appr)ntic) to ;, and +i1)* a +2arant)) to ; ,or $<* ,id) it0. ; pro/i*)* on hi* part that h) -i , at )a*t onc) a /onth, *)) $ /a3) 2p th) ca*h. ; o/it* to *)) thi* don) a* pro/i*)d, and $ )/.)HH )*. A i* not ia. ) to ; on hi* +2arant)). ((((((((((((((((((( Rights of s,rety on payment or performance( Where a g,aranteed debt has become d,e$ or defa,lt of the principal debtor to perform a g,aranteed d,ty has ta3en place$ the s,rety$ ,pon payment or performance of all that he is liable for$ is in0ested with all the rights which the creditor had against the principal debtor(

4 - S,retyDs right to benefit of creditorDs sec,rities ! A s,rety is entitled to the benefit of e0ery sec,rity which the creditor has against the principal debtor at the time when the contract of s,rety ship is entered into$ whether the s,rety 3nows of the existence of s,ch sec,rity or not; and$ if the creditor loses$ or$ witho,t the consent of the s,rety$ parts with s,ch sec,rity$ the s,rety is discharged to the extent of the 0al,e of the sec,rity( Ill,strations &a' C ad1anc)* to ;, hi* t)nant, 2,AAA r2p))* on th) +2arant)) o, A. C ha* a *o a ,2rth)r *)c2rit0 ,or th) 2,AAA r2p))* .0 a /ort+a+) o, ;<* ,2rnit2r). C canc) * th) /ort+a+). ; .)co/)* in*o 1)nt, and C *2)* A on hi* +2arant)). A i* di*char+)d ,ro/ ia.i it0 to th) a/o2nt o, th) 1a 2) o, th) ,2rnit2r). &.' C, a cr)ditor, -ho*) ad1anc) to ; i* *)c2r)d .0 a d)cr)), r)c)i1)* a *o a +2arant)) ,or that ad1anc) ,ro/ A. C a,t)r-ard* ta3)* ;<* +ood* in )?)c2tion 2nd)r th) d)cr)), and th)n, -itho2t th) 3no- )d+) o, A, -ithdra-* th) )?)c2tion. A i* di*char+)d. &c' A, a* *2r)t0 ,or ;, /a3)* a .ond 7oint 0 -ith ; to C, to *)c2r) a oan ,ro/ C to ;. A,t)r-ard*, C o.tain* ,ro/ ; a ,2rth)r *)c2rit0 ,or th) *a/) d).t. :2.*)@2)nt 0, C +i1)* 2p th) ,2rth)r *)c2rit0. A i* not di*char+)d. 4'- ((((((((((((((((((( I,arantee obtained by misrepresentation in0alid( Any g,arantee which has been obtained by means of misrepresentation made by the creditor$ or with his 3nowledge and assent$ concerning a material part of the transaction$ is in0alid( 42- I,arantee obtained by concealment in0alid ! Any g,arantee which the creditor has obtained by means of 3eeping silence as to material circ,mstances is in0alid( Ill,strations &a' A )n+a+)* ; a* c )r3 to co )ct /on)0 ,or hi/. ; ,ai * to acco2nt ,or *o/) o, hi* r)c)ipt*, and A in con*)@2)nc) ca * 2pon hi/ to ,2rni*h *)c2rit0 ,or hi* d2 0 acco2ntin+. C +i1)* hi* +2arant)) ,or ;<* d2 0 acco2ntin+. A do)* not ac@2aint C -ith ;<* pr)1io2* cond2ct. ; a,t)r-ard* /a3)* d),a2 t. Th) +2arant)) i* in1a id. &.' A +2arant))* to C pa0/)nt ,or iron to .) *2pp i)d .0 hi/ to ; to th) a/o2nt o, 2,AAA ton*. ; and C ha1) pri1at) 0 a+r))d that ; *ho2 d pa0 ,i1) r2p))* p)r ton .)0ond th) /ar3)t pric), *2ch )?c)** to .) app i)d in i@2idation o, an o d d).t. Thi* a+r))/)nt i* conc)a )d ,ro/ A. A i* not ia. ) a* a *2r)t0. 44- I,arantee on contract that creditor shall not act on it ,ntil co-s,rety >oins ! Where a person gi0es a g,arantee ,pon a contract that the creditor shall not act ,pon it ,ntil another person has >oined in it as co-s,rety$ the g,arantee is not 0alid if that other person does not >oin( 46- Implied promise to indemnify s,rety ! In e0ery contract of g,arantee there is an implied promise by the principal debtor to indemnify the s,rety; and the s,rety is entitled to reco0er from the principal debtor whate0er s,m he has rightf,lly paid ,nder the g,arantee$ b,t$ no s,ms which he has paid

wrongf,lly( Ill,strations &a' ; i* ind).t)d to C, and A i* *2r)t0 ,or th) d).t. C d)/and* pa0/)nt ,ro/ A, and on hi* r),2*a *2)* hi/ ,or th) a/o2nt. A d),)nd* th) *2it, ha1in+ r)a*ona. ) +ro2nd* ,or doin+ *o, .2t i* co/p) )d to pa0 th) a/o2nt o, th) d).t -ith co*t*. H) can r)co1)r ,ro/ ; th) a/o2nt paid .0 hi/ ,or co*t*, a* -) a* th) principa d).t. &.' C )nd* ; a *2/ o, /on)0, and A, at th) r)@2)*t o, ;, acc)pt* a .i o, )?chan+) dra-n .0 ; 2pon A to *)c2r) th) a/o2nt. C, th) ho d)r o, th) .i , d)/and* pa0/)nt o, it ,ro/ A, and, on A<* r),2*a to pa0, *2)* hi/ 2pon th) .i . A, not ha1in+ r)a*ona. ) +ro2nd* ,or *o doin+, d),)nd* th) *2it, and ha* to pa0 th) a/o2nt o, th) .i and co*t*. H) can r)co1)r ,ro/ ; th) a/o2nt o, th) .i , .2t not th) *2/ paid ,or co*t*, a* th)r) -a* no r)a +ro2nd ,or d),)ndin+ th) action. &c' A +2arant))* to C, to th) )?t)nt o, 2,AAA r2p))*, pa0/)nt ,or ric) to .) *2pp i)d .0 C to ;. C *2pp i)* to ; ric) to a )** a/o2nt than 2,AAA r2p))*, .2t o.tain* ,ro/ A pa0/)nt o, th) *2/ o, 2,AAA r2p))* in r)*p)ct o, th) ric) *2pp i)d. A cannot r)co1)r ,ro/ ; /or) than th) pric) o, th) ric) act2a 0 *2pp i)d. 48- ((((((((((((((((((( #o-s,reties liable to contrib,te e;,ally( Where two or more persons are #G-s,reties for the same debt or d,ty$ either >ointly or se0erally$ and whether ,nder the same or different contracts$ and whether with or witho,t the 3nowledge of each other$ the co-s,reties$ in the absence of any contract to the contrary$ are liable$ as between themsel0es$ to pay each an e;,al share of the whole debt$ or of that part of it which remains ,npaid by the principal debtor( Ill,strations &a' A, ; and C ar) *2r)ti)* to D ,or th) *2/ o, E,AAA r2p))* )nt to E. E /a3)* d),a2 t in pa0/)nt. A, a and C ar) ia. ), a* .)t-))n th)/ *) 1)*, to pa0 1,AAA r2p))* )ach. &.' A, ; and C ar) *2r)ti)* to D ,or th) *2/ o, 1,AAA r2p))* )nt to E, and th)r) i* a contract .)t-))n A, ; and C that A i* to .) r)*pon*i. ) to th) )?t)nt o, on)6@2art)r, ; to th) )?t)nt o, on)6@2art)r, and C to th) )?t)nt o, on)6ha ,. E /a3)* d),a2 t in pa0/)nt. A* .)t-))n th) *2r)ti)*, A i* ia. ) to pa0 25A r2p))*, ; 25A r2p))*, and C 5AA r2p))*. 4&- Eiability of co-s,reties bo,nd in different s,ms ! #o-s,reties who are bo,nd in different s,ms are liable to pay e;,ally as far as the limits of their respecti0e obligations permit( Ill,strations &a' A, ; and C, a* *2r)ti)* ,or D, )nt)r into thr)) *)1)ra .ond*, )ach in a di,,)r)nt p)na t0, na/) 0, A in th) p)na t0 o, 1A,AAA r2p))*, ; in that o, 2A,AAA r2p))*, C in that o, BA,AAA r2p))*, condition)d ,or D<* d2 0 acco2ntin+ to E. D /a3)* d),a2 t to th) )?t)nt o, EA,AAA r2p))*. A, ; and C ar) ia. ) to pa0 1A,AAA r2p))*. &.' A, ; and C, a* *2r)ti)* ,or D, )nt)r into thr)) *)1)ra .ond*, )ach in a di,,)r)nt p)na t0, na/) 0, A in th) p)na t0 o, 1A,AAA r2p))*, ; in that o,

2A,AAA r2p))*, C in that o, BA,AAA r2p))*, condition)d ,or D<* d2 0 acco2ntin+ to E. D /a3)* d),a2 t to th) )?t)nt o, BA,AAA r2p))*. A i* ia. ) to pa0 1A,AAA r2p))*, and ; and C 15,AAA r2p))* )ach. &c' A, ; and C, a* *2r)ti)* ,or D, )nt)r into thr)) *)1)ra .ond*, )ach in a di,,)r)nt p)na t0, na/) 0, A in th) p)na t0 o, 1A,AAA r2p))*, ; in that o, 2A,AAA r2p))*, C in that o, BA,AAA r2p))*, condition)d ,or D<* d2 0 acco2ntin+ to E. D /a3)* d),a2 t to th) )?t)nt o, 7A,AAA r2p))*. A, ; and C ha1) to pa0 )ach th) ,2 p)na t0 o, hi* .ond. #HAP"ER IK G? 7AIEBE/" 4% 57ailment5 5bailor5 and 5bailee5 defined( A 5bailment5 is the deli0ery of goods by one person to another for some p,rpose$ ,pon a contract that they shall$ when the p,rpose is accomplished$ be ret,rned or otherwise disposed of according to the directions of the person deli0ering them( "he person deli0ering the goods is called the 5bailor5( "he person to whom they are deli0ered is called$ the 5bailee5( Explanation -If a person already in possession of the goods of another contracts to hold them as a bailee$ he thereby becomes the bailee$ and the owner becomes the bailor of s,ch goods$ altho,gh they may not ha0e been deli0ered by way of bailment( 4<- Heli0ery to bailee how made( "he deli0ery to the bailee may be made by doing anything which has the effect of p,tting the goods in the possession of the intended bailee or of any person a,thoriFed to hold them on his behalf( 6=- 7ailorDs d,ty to disclose fa,lts in goods bailed( "he bailor is bo,nd to disclose to the bailee fa,lts in the goods bailed$ of which the bailor is aware$ and which materially interfere with the ,se of them$ or expose the bailee to extraordinary ris3s; and if he does not ma3e s,ch disclos,re$ he is responsible for damage arising to the bailee directly from s,ch fa,lts( If the goods are bailed for hire$ the bailor is responsible for s,ch damage$ whether he was or was not aware of the existence of s,ch fa,lts in the goods bailed( Ill,strations &a' A )nd* a hor*), -hich h) 3no-* to .) 1icio2*, to ;. H) do)* not di*c o*) th) ,act that th) hor*) i* 1icio2*. Th) hor*) r2n* a-a0. ; i* thro-n and in72r)d. A i* r)*pon*i. ) to ; ,or da/a+) *2*tain)d. &.' A hir)* a carria+) o, ;. Th) carria+) i* 2n*a,), tho2+h ; i* not a-ar) o, it, and A i* in72r)d. ; i* r)*pon*i. ) to A ,or th) in72r0. 6 - #are to be ta3en by bailee ! In all cases of bailment the bailee is bo,nd to ta3e as m,ch care of the goods bailed to him as a man of ordinary pr,dence wo,ld$ ,nder similar circ,mstances$ ta3e of his own goods of the same b,l3$ ;,ality and 0al,e as the goods bailed( 6'- 7ailee when not liable for loss$ etc($ of thing bailed ! "he bailee$ in the absence of any special contract$ is not responsible for the loss$ destr,ction or deterioration of the thing bailed$ if he has ta3en the amo,nt of care of it described in section 6 ( 62- "ermination of bailment by baileeDs act inconsistent with conditions(-

A contract of bailment is a0oidable at the option of the bailor$ if the bailee does any ad with regard to the goods bailed$ inconsistent with the conditions of the bailment( Ill,stration A lets to 7$ for hire$ a horse for his own riding( 7 dri0es the horse in his carriage( "his is$ at the Doption of A$ a termination of the bailment( Eiability of bailee ma3ing ,na,thoriFed ,se of goods bailed ! If the bailee ma3es any ,se of the goods bailed$ which is not according to the conditions of the bailment$ he is liable to ma3e compensation to the bailor for any damage arising to the goods from or d,ring s,ch ,se of them( Ill,strations &a' A )nd* a hor*) to ; ,or hi* o-n ridin+ on 0. ; a o-* C, a /)/.)r o, hi* ,a/i 0, to rid) th) hor*). C rid)* -ith car), .2t th) hor*) accid)nta 0 ,a * and i* in72r)d. ; i* ia. ) to /a3) co/p)n*ation to A ,or th) in72r0 don) to th) hor*). &.' A hir)* a hor*) in Ca c2tta ,ro/ ; )?pr)** 0 to /arch to ;)nar)*. A rid)* -ith c 2) car), .2t /arch)* to C2ttac3 in*t)ad. Th) hor*) accid)nta 0 ,a * and i* in72r)d. A i* ia. ) to /a3) co/p)n*ation to ; ,or th) in72r0 to th) hor*). Effect of mixt,re$ with bailorDs consent$ of his goods with baileeDs( If the bailee$ with the consent of the bailor$ mixes the goods of the bailor with his own goods$ the bailor and the bailee shall ha0e an interest$ in proportion to their respecti0e shares$ in the mixt,re th,s prod,ced( Effect of mixt,re witho,t bailorDs consent$ when the goods can be separated ! If the bailee$ witho,t the consent of the bailor$ mixes the goods of the bailor with his own goods$ and the goods can be separated or di0ided$ the property in the goods re-mains in the parties respecti0ely; b,t the bailee is bo,nd to bear the expense of separation or di0ision$ and any damage arising from the mixt,re( Ill,stration A bails == bales of cotton mar3ed with a partic,lar mar3 to 7( 7$ witho,t ADs consent$ mixes the == bales with other bales of his own$ bearing a different mar3 1 A is entitled to ha0e his == bales ret,rned$ and 7 is bo,nd to bear all the expense inc,rred in the separation of the bales$ and any other incidental damage( Effect of mixt,re$ witho,t bailorDs consent$ when the goods cannot be separated ! If the bailee$ witho,t the consent of the bailor$ mixes the goods of the bailor with his own goods$ in s,ch a manner that it is impossible to separate the goods bailed from the other goods and deli0er them bac3$ the bailor is entitled to be compensated by the bailee for the loss of the goods( Ill,stration A bails a barrel of #ape flo,r worth Rs( 46 to 7( 7$ witho,t ADs consent$ mixes the flo,r with co,ntry flo,r of his own$ worth only Rs( '6 a barrel( 7 m,st compensate A for the loss of his flo,r( Repayment$ by bailor$ of necessary expenses ! Where$ by the conditions of the bailment$ the goods are to$ be 3ept or to be carried$ or to ha0e wor3 done ,pon them by the bailee for the bailor$ and the bailee is to recei0e no rem,neration$ the bailor shall repay to the bailee the necessary expenses inc,rred by him

64-

66-

68-

6&-

6%-

for the p,rpose of the bailment( 6<- Restoration of goods lent grat,ito,sly ! "he lender of a thing for ,se may at any time re;,ire its ret,rn$ if the loan was grat,ito,s$ e0en tho,gh he lent it for a specified time or p,rpose( 7,t$ if$ on the faith of s,ch loan made for a specified time or p,rpose$ the borrower has acted in s,ch a manner that the ret,rn of the thing lent before the time agreed ,pon wo,ld ca,se him loss exceeding the benefit act,ally deri0ed by him from the loan$ the lender m,st$ if he compels the ret,rn$ indemnify the borrower for the amo,nt in which the loss so occasioned exceeds the benefit so deri0ed( 8=- Ret,rn of goods bailed on expiration of time or accomplishment of p,rpose ! It is the d,ty of the bailee to ret,rn$ or deli0er according to the bailorDs directions$ the goods bailed$ witho,t demand$ as soon as the time for which they were bailed has expired$ or the p,rpose or which they were bailed has been accomplished( 8 - 7aileeDs responsibility when goods are not d,ly ret,rned( If$ by the defa,lt of the bailee$ the goods are not ret,rned$ deli0ered or tendered at the proper time$ he is responsible to the bailor for any loss$ destr,ction or deterioration of( the goods from that time( 8'- "ermination of grat,ito,s bailment by death ! A grat,ito,s bailment is terminated by the death either of the bailor or of the bailee( 82- 7ailor entitled to increase or profit from goods bailed ! In the absence of any contract to the contrary$ the bailee is bo,nd to deli0er to the bailor$ or according to his directions$ any increase or profit which may ha0e accr,ed from the goods bailed( Ill,stration A lea0es a cow in the c,stody of 7 to be ta3en care of( "he cow has a calf( 7 is bo,nd to deli0er the calf as well as the cow to A( 84- 7ailorDs responsibility to bailee ! "he bailor is responsible to the bailee for any loss which the bailee may s,stain by reason that the bailor was not entitled to ma3e the bailment$ or to recei0e bac3 the goods or to gi0e directions$ respecting them( 86- 7ailment by se0eral >oint owners( If se0eral >oint owners of goods bail them$ the bailee may deli0er them bac3 to$ or according to the directions of$ one >oint owner witho,t the consent of all$ in the absence of any agreement to the contrary( 88- 7ailee not responsible on re-deli0ery to bailor witho,t title ! If the bailor has no title to the goods$ and the bailee$ in good faith$ deli0ers them bac3 to$ or according to the directions of$ the bailor$ the bailee is not responsible to the owner in respect of s,ch deli0ery( 8&- Right of third person claiming goods bailed ! If a person$ other than the bailor$ claims goods bailed$ he may apply to the #o,rt to stop the deli0ery of the goods to the bailor$ and to decide the title to the goods( 8%- Right of finder of goods; may s,e for specific reward offered ! "he finder of goods has no right to s,e the owner for compensation for tro,ble and expense 0ol,ntarily inc,rred by him to preser0e the goods and to find o,t the owner; b,t he may retain the goods against the owner ,ntil he recei0es s,ch compensation; and$ where the owner has offered a specific reward for the ret,rn of goods lost$ the finder may s,e for

8<-

&=-

& -

&'-

&2-

&4-

s,ch reward$ and may retain the goods ,ntil he recei0es it( When finder of thing commonly on sale may sell it ! When a thing which is commonly the s,b>ect of sale is lost$ if the owner cannot with reasonable diligence be fo,nd$ or if he ref,ses$ ,pon demand$ to pay the lawf,l charges of the finder$ the finder may sell it9 : when the thing is in danger of perishing or of losing the greater part of its 0al,e$ or$ 9': when the lawf,l charges of the finder$ in respect of the thing fo,nd$ amo,nt to twothirds of its 0al,e( 7aileeDs partic,lar line ! Where the bailee has$ in accordance with the p,rpose of the bailment$ rendered any ser0ice in0ol0ing the exercise of labo,r or s3ill in respect of the goods bailed$ he has$ in the absence of a contract to the contrary$ a right to retain s,ch goods ,ntil he recei0es d,e rem,neration for the ser0ices he has rendered in respect of them( Ill,strations &a' A d) i1)r* a ro2+h dia/ond to ;, a 7)-) )r, to .) c2t and po i*h)d, -hich i* accordin+ 0 don). ; i* )ntit )d to r)tain th) *ton) ti h) i* paid ,or th) *)r1ic)* h) ha* r)nd)r)d. &.' A +i1)*, c oth to ;, a tai or, to /a3) into a coat. ; pro/i*)* A to d) i1)r th) coat a* *oon a* it i* ,ini*h)d, and to +i1) a thr)) /onth*< cr)dit ,or th) pric). ; i* not )ntit )d to r)tain th) coat 2nti h) i* paid. Ieneral line of ban3ers$ factors$ wharfingers$ attorneys and policy bro3ers ! 7an3ers$ factors$ wharfingers$ attorneys of a High #o,rt and policy-bro3ers may$ in the absence of a contract to the contrary$ retain as a sec,rity for a general balance of acco,nt$ any goods bailed to them ; b,t no other persons ha0e a right to retain$ as a sec,rity for s,ch balance$ goods bailed to them$ ,nless there is an express contract to that effect( 7ailments of Pledges 5Pledge5 5pawnor5 and 5pawnee5 defined ! "he bailment of goods as sec,rity for payment of a debt or performance of a promise is called 5pledge5( "he bailor is in this case called the 5pawnor5( "he bailee is called the 5pawnee5( PawneeDs right of retainer ! "he pawnee may retain the goods pledged$ not only for payment of the debt or the performance of the promise$ b,t for the interest of the debt$ and all necessary expenses inc,rred by him in respect of the possession or for the preser0ation of the goods pledged( Pawnee not to retain for debt or promise other than that for which goods pledged( Pres,mption in case of s,bse;,ent ad0ances ! "he pawnee shall not$ in the absence of a contract to that effect$ retain the goods pledged for any debt or promise other than the debt or promise for which they are pledged; b,t s,ch contract$ in the absence of anything to the contrary$ shall be pres,med in regard to s,bse;,ent ad0ances made by the pawnee(

&6

PawneeDs right as to extraordinary expenses inc,rred( "he pawnee is entitled to recei0e from the pawnor extraordinary expenses inc,rred by him for the preser0ation of the goods pledged( &8- PawneeDs right where pawnor ma3es defa,lt If the pawnor ma3es defa,lt in payment of the debt$ or performance$ at the stip,lated time

of the promise$ in respect of which the goods were pledged$ the pawnee may bring a s,it against the pawnor ,pon the debt or promise$ and retain the goods pledge as a collateral sec,rity; or he may sell the thing pledged$ on gi0ing the pawnor reasonable notice of the sale( If the proceeds of s,ch sale are less than the amo,nt d,e in respect of the debt or promise$ the pawnor is still liable to pay the balance( If the proceeds of the sale are greater than the amo,nt so d,e$ the pawnee shall pay o0er the s,rpl,s to the pawnor( &&- Hefa,lting pawnorDs right to redeem ! If a time is stip,lated for the payment of the debt$ of performance of the promise$ for which the pledge is made$D and the pawnor ma3es defa,lt in payment of the debt or performance of the promise at the stip,lated time$ he may redeem the goods pledged at any s,bse;,ent time before the act,al sale of themD ; b,t he m,st$ in that case$ pay$ in addition$ any expenses which ha0e arisen from his defa,lt( &%- Pledge by mercantile agent ! Where a mercantile agent is$ with the consent of the owner$ in possession of goods or the doc,ment of title to goods$ any pledge made by him$ when acting in the ordinary co,rse of b,siness of a mercantile agent$ shall be as 0alid as if he were expressly a,thoriFed by the owner of the goods to ma3e the same; pro0ided that the pawnee acts in good faith and has not at the time of the pledge notice that the pawnor has not a,thority to pledge( Explanation(-In this section$ the expressions 5mercantile agent and5 doc,ments of title5 shall ha0e the meanings assigned to them in the Indian Sale of Ioods Act$ <2=( 92 of <2=:( &%A Pledge by person in possession ,nder 0oidable contract ! When the pawnor has obtained possession of the goods pledged by him ,nder a contract 0oidable ,nder section < or section <A$ b,t the contract has not been rescinded at the time of the pledge$ the pawnee ac;,ires a good title to the goods$ pro0ided he acts in good faith and witho,t notice of the pawnorDs defect of title( &<- Pledge where pawnor has only a limited interest ! Where a person pledges goods in which he has only a limited interest$ the pledge is 0alid to the extent of that interest( S,its by bailees or bailors against wrong-doers %=- S,it by bailor or bailee against wrong-doer ! If a third person wrongf,lly depri0es the bailee of the ,se or possession of the goods bailed$ or does them any in>,ry$ the bailee is entitled to ,se s,ch remedies as the owner might ha0e ,sed in the li3e case if no bailment had been made; and either the bailor or the bailee may bring a s,it against a third person for s,ch depri0ation or in>,ry( % - Apportionment of relief or compensation obtained by s,ch s,its ! Whate0er is obtained by way of relief or compensation in any s,ch s,it shall$ as between the bailor and the bailee$ be dealt with according to their respecti0e interests$ #HAP"ER K AIE/#J Appointment and a,thority of agents( %'- 5Agent5 and 5principal5 defined !

%2%4-

%6%8%&-

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An 5agent5 is a person employed to do any act for another or to represent another in dealings with third persons( "he person for whom s,ch act is done$ or who is so represented$ is called the 5principal5( Who may employ agent ! Any person who is of the age of ma>ority according to the law to which he is s,b>ect$ and who is of so,nd mind$ may employ an agent( Who may be an agent ! As between the principal and third persons any person may become an agent$ b,t no person who is not of the age of ma>ority and of so,nd mind can become an agent$ so as to be responsible to his principal according to the pro0isions in that behalf herein contained( #onsideration not necessary ! /o consideration is necessary to create an agency$ AgentDs a,thority may be expressed or implied ! "he a,thority of an agent may be expressed or implied( Hefinitions of express and implied a,thority ! An a,thority is said to be express when it is gi0en by words spo3en or written( An a,thority is said to be implied when it is to be inferred from the circ,mstances of the case; and things spo3en or written$ or the ordinary co,rse of dealing$ may be acco,nted circ,mstances of the case( Ill,stration A owns a shop in Serampore$ li0ing himself in #alc,tta$ and 0isiting the shop occasionally( "he shop is managed by 7$ and he Is in the habit of ordering goods from # in the name( of A for the p,rposes of the shop$ and of paying for them o,t of ADs f,nds with ADs 3nowledge( 7 has an implied a,thority from A to order goods from # in the name of A for the p,rposes of the shop( Extent of agentDs a,thority ! An agent ha0ing an a,thority to do an act has a,thority to do e0ery lawf,l thing which is necessary in order to do s,ch act(

An agent ha0ing an a,thority to carry on a b,siness has a,thority to do e0ery lawf,l thing necessary for the p,rpose$ or ,s,ally done in the co,rse$ of cond,cting s,ch b,siness( Ill,strations &a' A i* )/p o0)d .0 ;, r)*idin+ in #ondon, to r)co1)r at ;o/.a0 a d).t d2) to ;. A /a0 adopt an0 )+a proc)** n)c)**ar0 ,or th) p2rpo*) o, r)co1)rin+ th) d).t, and /a0 +i1) a 1a id di*char+) ,or th) *a/). &.' A con*tit2t)* ; hi* a+)nt to carr0 on hi* .2*in)** o, a *hip6.2i d)r. ; /a0 p2rcha*) ti/.)r and oth)r /at)ria *, and hir) -or3/)n, ,or th) p2rpo*) o, carr0in+ on th) .2*in)**. %<- AgentDs a,thority in an emergency ! An agent has a,thority$ in an emergency$ to do all s,ch acts for the p,rpose of protecting his principal from loss as wo,ld be done by a person of ordinary pr,dence$ in his own case$ ,nder similar circ,mstances( Ill,strations &a' An a+)nt ,or *a ) /a0 ha1) +ood* r)pair)d i, it .) n)c)**ar0. &.' A con*i+n* pro1i*ion* to ; at Ca c2tta, -ith dir)ction* to *)nd th)/ i//)diat) 0 to C, at C2ttac3. ; /a0 *) th) pro1i*ion* at Ca c2tta, i,

th)0 -i not .)ar th) 7o2rn)0 to C2ttac3 -itho2t *poi in+. S,b-Agents <=- When agent cannot delegate ! An agent cannot lawf,lly employ another to perform acts which he has expressly or impliedly ,nderta3en to perform personally$ ,nless by the ordinary c,stom of trade a s,bagent may$ or$ from the nat,re of the agency$ a s,b-agent m,st$ be employed( < - 5S,b-agent5 defined ! A 5s,b-agent5 is a person employed by$ and acting ,nder the control of$ the original agent in the b,siness of the agency( <'- Representation of principal by s,b-agent properly appointed ! Where a s,b-agent is properly appointed$ the principal is$ so far as regards third persons$ represented by the s,b-agent$ and is bo,nd by and responsible for his acts$ as if he were an agent originally appointed by the principal( AgentDs responsibility for s,b-agent( "he agent is responsible to the principal for the acts of the s,b agent( S,b-agentDs responsibility( "he s,b-agent is responsible for his acts to the agent$ b,t not to $the principal$ except in case of fra,d or willf,l wrong( <2- AgentDs responsibility for s,b-agent appointed witho,t a,thority ! Where an agent$ witho,t ha0ing a,thority to do so$ has appointed a person to act as a s,bagent$ the agent stands towards s,ch person in the relation of a principal to an agent$ and is responsible for his acts both to the principal and to third persons; the principal is not represented by or responsible for the acts of the person so employed$ nor is that person responsible to the principal( <4- Relation between principal and person d,ly appointed by agent to act in b,siness of agency ! Where an agent$ holding an express or implied a,thority to name another person to act for the principal in the b,siness of the agency$ has named another person accordingly$ s,ch person is not a s,b-agent$ b,t an agent of the principal for s,ch part of the b,siness of the agency as is entr,sted to him( Ill,strations &a' A dir)ct* ;, hi* *o icitor, to *) hi* )*tat) .0 a2ction, and to )/p o0 an a2ction))r ,or th) p2rpo*). ; na/)* C, an a2ction))r, to cond2ct th) *a ). C i* not a *2.6a+)nt, .2t i* A<* a+)nt ,or th) cond2ct o, th) *a ). &.' A a2thoriH)* ;, a /)rchant in Ca c2tta, to r)co1)r th) /on)0* d2) to A ,ro/ C I Co. ; in*tr2ct* D, a *o icitor, to ta3) )+a proc))din+* a+ain*t C I Co. ,or th) r)co1)r0 o, th) /on)0. D i* not a *2.6a+)nt, .2t i* *o icitor ,or A. <6- AgentDs d,ty in naming s,ch person ! In selecting s,ch agent for his principal$ an agent is bo,nd to exercise the same amo,nt of discretion as a man of ordinary pr,dence wo,ld exercise in his own case; and$ if he does this$ he is not responsible to the principal for the acts or negligence of the agent so selected( Ill,strations &a' A in*tr2ct* ;, a /)rchant, to .20 a *hip ,or hi/. ; )/p o0* a *hip *2r1)0or o, +ood r)p2tation to choo*) a *hip ,or A. Th) *2r1)0or /a3)* th) choic) n)+ i+)nt 0 and th) *hip t2rn* o2t to .) 2n *)a-orth0 and i*

o*t. ; i* not, .2t th) *2r1)0or i*, r)*pon*i. ) to A. &.' A con*i+n* +ood* to ;, a /)rchant, ,or *a ). ;, in d2) co2r*), )/p o0* an a2ction))r in +ood cr)dit to *) th) +ood* o, A, and a o-* th) a2ction))r to r)c)i1) th) proc))d* o, th) *a ). Th) a2ction))r a,t)r-ard* .)co/)* in*o 1)nt -itho2t ha1in+ acco2nt)d ,or th) proc))d*. ; i* not r)*pon*i. ) to A ,or th) proc))d*. Ratification <8- Right of person as to acts done for him witho,t his a,thority( Effect of ratification ! Where acts are done by one person on behalf of another$ b,t witho,t his 3nowledge or a,thority$ he may elect to ratify or to disown s,ch acts( If he ratify them$ the same effects will follow as if they had been performed by his a,thority( <&- Ratification may be expressed or implied ! Ratification may be expressed or may be implied in the cond,ct of the person on whose behalf the acts are done( Ill,strations &a' A, -itho2t a2thorit0, .20* +ood* ,or ;. A,t)r-ard* ; *) * th)/ to C ,on hi* o-n acco2nt> ;<* cond2ct i/p i)* a rati,ication o, th) p2rcha*) /ad) ,or hi/ .0 A. &.' A, -itho2t ;<* a2thorit0, )nd* ;<* /on)0 to C. A,t)r-ard* ; acc)pt* int)r)*t on th) /on)0 ,ro/ C. ;<* cond2ct i/p i)* a rati,ication o, th) oan. <%- -nowledge re;,isite for 0alid ratification ! /o 0alid ratification can be made by a person whose 3nowledge of the facts of the case is materially defecti0e( <<- Effect of ratifying ,na,thoriFed act forming part of a transaction ! A person ratifying any ,na,thoriFed act done on his behalf ratifies the whole of the transaction of which s,ch act formed a part( '==- Ratification of ,na,thoriFed act cannot in>,re third person ! An act done by one person on behalf of another$ witho,t s,ch other personDs a,thority$ which$ if done with a,thority$ wo,ld ha0e the effect of s,b>ecting a third person to damages$ or of terminating any right or interest of a third person$ cannot$ by ratification$ be made to ha0e s,ch effect( Ill,strations &a' A, not .)in+ a2thoriH)d th)r)to .0 ;, d)/and*, on .)ha , o, ;, th) d) i1)r0 o, a chatt)1D, th) prop)rt0 o, ;, ,ro/ C, -ho i* in po**)**ion o, it. Thi* d)/and cannot .) rati,i)d .0 ;, *o a* to /a3) C ia. ) ,or da/a+)* ,or hi* r),2*a to d) i1)r. &.' A ho d* a )a*) ,ro/ ;, t)r/ina. ) on thr)) /onth*< notic). C, an 2na2thoriH)d p)r*on, +i1)* notic) o, t)r/ination to A. Th) notic) cannot .) rati,i)d .0 ;, *o a* to .) .indin+ on A. Re0ocation of A,thority '= - "ermination of agency ! An agency is terminated by the principal re0o3ing his a,thority; or by the agent reno,ncing the b,siness of the agency; or by the b,siness of the agency being completed; or by either the principal or agent dying or becoming of ,nso,nd mind; or by the principal being ad>,dicated an insol0ent ,nder the pro0isions of any Act for the time being in force

'='-

'=2-

'=4-

'=6-

'=8-

'=&-

for the relief of insol0ent debtors( "ermination of agency where agent has an interest in s,b>ect-matter ! Where the agent has himself an interest in the property which forms the s,b>ect-matter of the agency$ the agency cannot$ in the absence of an express contract$ be terminated to the pre>,dice of s,ch interest( Ill,strations &a' A +i1)* a2thorit0 to ; to *) A<* and, and to pa0 hi/*) ,, o2t o, th) proc))d*, th) d).t* d2) to hi/ ,ro/ A. A cannot r)1o3) thi* a2thorit0, nor can it .) t)r/inat)d .0 hi* in*anit0 or d)ath. &.' A con*i+n* 1,AAA .a )* o, cotton to ;, -ho ha* /ad) ad1anc)* to hi/ on *2ch cotton, and d)*ir)* ; to *) th) cotton, and to r)pa0 hi/*) ,, o2t o, th) pric), th) a/o2nt o, hi* o-n ad1anc)*. A cannot r)1o3) thi* a2thorit0, nor i* it t)r/inat)d .0 hi* in*anit0 or d)ath. When principal may re0o3e agentDs a,thority ! "he principal may$ sa0e as is otherwise pro0ided by the last preceding section$ re0o3e the a,thority gi0en to his agent at any time before the a,thority has been exercised so as to bind the principal( Re0ocation where a,thority has been partly exercised ! "he principal cannot re0o3e the a,thority gi0en to his agent after the a,thority has been partly exercised so far as regards s,ch acts and obligations as arise from acts already done in the agency( Ill,strations &a' A a2thoriH)* ; to .20 1,AAA .a )* o, cotton on acco2nt o, A, and to pa0 ,or it o2t o, A<* /on)0* r)/ainin+ in ;<* hand*. ; .20* 1,AAA .a )* o, cotton in hi* o-n na/), *o a* to /a3) hi/*) , p)r*ona 0 ia. ) ,or th) pric). A cannot r)1o3) ;<* a2thorit0 *o ,ar a* r)+ard* pa0/)nt ,or th) cotton. &.' A a2thoriH)* ; to .20 1,AAA .a )* o, cotton on acco2nt o, A, and to pa0 ,or it o2t o, A<* /on)0* r)/ainin+ in ;<* hand*. ; .20* 1,AAA .a )* o, cotton in A<* na/), and *o a* not to r)nd)r hi/*) , p)r*ona 0 ia. ) ,or th) pric). A can r)1o3) ;<* a2thorit0 to pa0 ,or th) cotton. #ompensation for re0ocation by principal$ or ren,nciation by agent ! Where there is an express or implied contract that the agency sho,ld be contin,ed for any period of time$ the principal m,st ma3e compensation to the agent$ or the agent to the principal$ as the case may be$ for any pre0io,s re0ocation or ren,nciation of the agency witho,t s,fficient ca,se( /otice of re0ocation or ren,nciation ! Reasonable notice m,st be gi0en of s,ch re0ocation or ren,nciation; otherwise the damage thereby res,lting to the principal or the agent$ as the case may be$ m,st be made good to the one by the other( Re0ocation and ren,nciation may be expressed or implied ! Re0ocation and ren,nciation may be expressed or may be implied in the cond,ct of the principal or agent respecti0ely( Ill,stration A empowers 7 to let ADs ho,se( Afterwards A lets it himself( "his is an Implied re0ocation of 7Ds a,thority(

'=%- When termination of agentDs a,thority ta3es effect as to agent$ and as to third persons ! "he termination of the a,thority of an agent does not$ so far as regards the agent$ ta3e effect before it becomes 3nown to him$ or$ so far as regards third persons$ before it becomes 3nown to them( Ill,strations &a' A dir)ct* ; to *) +ood* ,or hi/, and a+r))* to +i1) ; ,i1) p)r c)nt. co//i**ion on th) pric) ,)tch)d .0 th) +ood*. A a,t)r-ard*, .0 )tt)r, r)1o3) ;<* a2thorit0 . ;, a,t)r th) )tt)r i* *)nt, .2t .),or) h) r)c)i1)* it, *) * th) +ood* ,or 1AA r2p))*. Th) *a ) i* .indin+ on A, and ; i* )ntit )d to ,i1) r2p))* a* hi* co//i**ion. &.' A, at $adra*, .0 )tt)r, dir)ct* ; to *) ,or hi/ *o/) cotton 0in+ in a -ar)ho2*) in ;o/.a0, and a,t)r-ard*, .0 )tt)r, r)1o3)* hi* a2thorit0 to *) , and dir)ct* ; to *)nd th) cotton to $adra*. ;, a,t)r r)c)i1in+ th) *)cond )tt)r, )nt)r* into a contract -ith C, -ho 3no-* o, th) ,ir*t )tt)r, .2t not o, th) *)cond, ,or th) *a ) to hi/ o, th) cotton. C pa0* ; th) /on)0, -ith -hich ; a.*cond*. C<* pa0/)nt i* +ood a* a+ain*t A. &c' A dir)ct* ;, hi* a+)nt, to pa0 c)rtain /on)0 to C. A di)*, and D ta3)* o2t pro.at) to hi* -i . ;, a,t)r A<* d)ath, .2t .),or) h)arin+ o, it, pa0* th) /on)0 to C. Th) pa0/)nt i* +ood a* a+ain*t D, th) )?)c2tor. '=<- AgentDs d,ty on termination of agency by principalDs death or insanity ! When an agency is terminated by the principal dying or becoming of ,nso,nd mind$ the agent is bo,nd to ta3e$ on behalf of the representati0es of his late principal$ all reasonable steps for the protection and preser0ation of the interests entr,sted to him( ' =- "ermination of s,b-agentDs a,thority ! "he termination of the a,thority of an agent ca,ses the termination 9s,b>ect to the r,les herein contained regarding the termination of an agentDs a,thority:$ of the a,thority of all s,b-agents appointed by him( AgentDs d,ty to principal ' - AgentDs d,ty in cond,cting principalDs b,siness ! An agent is bo,nd to cond,ct the b,siness of his principal according to the directions gi0en by the principal$ or$ in the absence of any s,ch directions$ according to the c,stom which pre0ails in doing b,siness of the same 3ind at the place where the agent cond,cts s,ch b,siness( When the agent acts otherwise$ if any loss be s,stained$ he m,st ma3e it good to his principal$ and$ if any profit accr,es$ he m,st acco,nt for it( Ill,strations &a' A, an a+)nt )n+a+)d in carr0in+ on ,or ; a .2*in)**, in -hich it i* th) c2*to/ to in1)*t ,ro/ ti/) to ti/), at int)r)*t, th) /on)0* -hich /a0 .) in hand, o/it* to /a3) *2ch in1)*t/)nt. A /2*t /a3) +ood to ; th) int)r)*t 2*2a 0 o.tain)d .0 *2ch in1)*t/)nt*. &.' ;, a .ro3)r, in -ho*) .2*in)** it i* not th) c2*to/ to *) on cr)dit, *) * +ood* o, A on cr)dit to C, -ho*) cr)dit at th) ti/) -a* 1)r0 hi+h. C, .),or) pa0/)nt, .)co/)* in*o 1)nt. ; /2*t /a3) +ood th) o** to A. ' '- S3ill and diligence re;,ired from agent ! An agent is bo,nd to cond,ct the b,siness of the agency with as m,ch s3ill as is generally possessed by persons engaged in similar b,siness$ ,nless the principal has notice of his want of s3ill(

"he agent is always bo,nd to act with reasonable diligence$ and to ,se s,ch s3ill as he possesses; and to ma3e compensation to his Dprincipal in respect of the direct conse;,ences of his own neglect$ want of s3ill or miscond,ct$ b,t not in respect of loss or damage which are indirectly or remotely ca,sed by s,ch neglect$ want of s3ill or miscond,ct( Ill,strations &a' A, a /)rchant in Ca c2tta, ha* an a+)nt, ;, in #ondon, to -ho/ a *2/ o, /on)0 i* paid on A<* acco2nt, -ith ord)r* to r)/it. ; r)tain* th) /on)0 ,or a con*id)ra. ) ti/). A, in con*)@2)nc) o, not r)c)i1in+ th) /on)0, .)co/)* in*o 1)nt. ; i* ia. ) ,or th) /on)0 and int)r)*t ,ro/ th) da0 on -hich it o2+ht to ha1) .))n paid, accordin+ to th) 2*2a rat), and ,or an0 ,2rth)r dir)ct o**6a* ).+., .0 1ariation o, rat) o, )?chan+)6.2t not ,2rth)r. &.' A, an a+)nt ,or th) *a ) o, +ood*, ha1in+ a2thorit0 to *) on cr)dit, *) * to ; on cr)dit, -itho2t /a3in+ th) prop)r and 2*2a )n@2iri)* a* to th) *o 1)nc0 o, ;. ;, at th) ti/) o, *2ch *a ), i* in*o 1)nt. A /2*t /a3) co/p)n*ation to hi* principa in r)*p)ct o, an0 o** th)r).0 *2*tain)d. &c' A, an in*2ranc)6.ro3)r )/p o0)d .0 ; to ),,)ct an in*2ranc) on a *hip o/it* to *)) that th) 2*2a c a2*)* ar) in*)rt)d in th) po ic0. Th) *hip i* a,t)r -ard* o*t. In con*)@2)nc) o, th) o/i**ion o, th) c a2*)* nothin+ can .) r)co1)r)d ,ro/ th) 2nd)r-rit)r*. A i* .o2nd to /a3) +ood th) o** to ;. &d' A, a /)rchant in En+ and, dir)ct* ;, hi* a+)nt at ;o/.a0, -ho acc)pt* th) a+)nc0, to *)nd hi/ 1AA .a )* o, cotton .0 a c)rtain *hip. ;, ha1in+ it in hi* po-)r to *)nd th) cotton, o/it* to do *o. Th) *hip arri1)* *a,) 0 in En+ and. :oon a,t)r h)r arri1a th) pric) o, cotton ri*)*. ; i* .o2nd to /a3) +ood to A th) pro,it -hich h) /i+ht ha1) /ad) .0 th) 1AA .a )* o, cotton at th) ti/) th) *hip arri1)d, .2t not an0 pro,it h) /i+ht ha1) /ad) .0 th) *2.*)@2)nt ri*). ' 2- AgentDs acco,nts ! An agent is bo,nd to render proper acco,nts to his principal on demand( ' 4- AgentDs d,ty to comm,nicate with principal ! It is the d,ty of an agent$ in cases of diffic,lty$ to ,se all reasonable diligence in comm,nicating with his principal$ and in see3ing to obtain his instr,ctions( ' 6- Right of principal when agent deals$ on his own acco,nt$ in b,siness of agency witho,t principalDs consent ! If an agent deals on his own acco,nt in the b,siness of the agency$ with o,t first obtaining the consent of his principal and ac;,ainting him with all material circ,mstances which ha0e come to his own 3nowledge on the s,b>ect$ the principal may rep,diate the transaction( If the case shows either that any material fact has been dishonestly concealed from him by the agent$ or that the dealings of the agent ha0e been disad0antageo,s to him( Ill,strations &a' A dir)ct* ; to *) A<* )*tat). ; .20* th) )*tat) ,or hi/*) , in th) na/) o, C. A, oh di*co1)rin+ that ; ha* .o2+ht th) )*tat) ,or hi/*) ,, /a0

r)p2diat) th) *a ), i, h) can *ho- that ; ha* di*hon)*t 0 conc)a )d an0 /at)ria ,act, or that th) *a ) ha* .))n di*ad1anta+)o2* to hi/. &.' A dir)ct* ; to *) A<* )*tat) ;, on oo3in+ o1)r th) )*tat) .),or) *) in+ it, ,ind* a /in) on th) )*tat) -hich i* 2n3no-n to A. ; in,or/* A that h) -i*h)* to .20 th) )*tat) ,or hi/*) ,, .2t conc)a * th) di*co1)r0 o, th) /in). A a o-* J to .20 in i+noranc) o, th) )?i*t)nc) o, th) /in). A, on di*co1)rin+ that ; 3n)- o, th) /in) at th) ti/) h) .o2+ht th) )*tat), /a0 )ith)r r)p2diat) or adopt th) *a ) at hi* option. PrincipalDs right to benefit gained by agent dealing on his own acco,nt in b,siness of agency ! If an agent$ witho,t the 3nowledge of his principal$ deals in the b,siness of the agency on his own acco,nt instead of on acco,nt of his principal$ the principal is entitled to claim from the agent any benefit which may ha0e res,lted to him from the transaction( Ill,stration A directs 7$ his agent$ to b,y a certain ho,se for him( 7 tells A it cannot be bo,ght$ and b,ys the ho,se for himself( A may$ on disco0ering that 7 has bo,ght the ho,se$ compel him to sell it to A at the price he ga0e for it( AgentDs right of retainer o,t of s,ms recei0ed on principalDs acco,nt ! An agent may retain$ o,t of any s,ms recei0ed on acco,nt of the principal in the b,siness of the agency$ all moneys d,e to himself in respect of ad0ances made or expenses properly inc,rred by him in cond,cting s,ch b,siness$ and also s,ch rem,neration as may be payable to him for acting as agent( AgentDs d,ty to pay s,ms recei0ed for principal ! S,b>ect to s,ch ded,ctions$ the agent is bo,nd to pay to his principal all s,ms recei0ed on his acco,nt( When agentDs rem,neration becomes d,e ! In the absence of any special contract$ payment for the performance of any act is not d,e to the agent ,ntil the completion of s,ch act; b,t an agent may detain moneys recei0ed by him on acco,nt of goods sold$ altho,gh the whole of the goods consigned to him for sale may not ha0e been sold$ Gr altho,gh the sale may not be act,ally complete( Agent not entitled to rem,neration for b,siness miscond,cted ! An agent who is g,ilty of miscond,ct in the b,siness of the agency is not entitled to any rem,neration in respect of that part of the b,siness which he has miscond,cted( Ill,strations &a' A )/p o0* ; to r)co1)r, 1,AA,AAA r2p))* ,ro/ C, and to a0 it o2t on +ood *)c2rit0. ; r)co1)r* th) 1,AA,AAA r2p))*> and a0* o2t 9A,AAA r2p))* on +ood *)c2rit0, .2t a0* o2t 1A,AAA r2p))* on *)c2rit0 -hich h) o2+ht to ha1) 3no-n to .) .ad, -h)r).0 A o*)* 2,AAA r2p))*. ; i* )ntit )d to r)/2n)ration ,or r)co1)rin+ th) 1,AA,AAA r2p))* and ,or in1)*tin+ th) 9A,AAA r2p))*. H) i* not )ntit )d to an0 r)/2n)ration ,or in1)*tin+ th) 1A,AAA r2p))*, and h) /2*t /a3) +ood th) 2,AAA r2p))* to ;. &.' A )/p o0* ; to r)co1)r 1,AAA r2p))* ,ro/ C. Thro2+h ;<* /i*cond2ct th) /on)0 i* not r)co1)r)d. ; i* )ntit )d to no r)/2n)ration ,or hi*

' 8-

' &-

' %' <-

''=-

*)r1ic)*, and /2*t /a3) +ood th) o**. '' - AgentDs line on principalDs property ! In the absence of any contract to the contrary$ an agent is entitled to retain goods$ papers and other property$ whether mo0able or immo0able$ of the principal recei0ed by him$ ,ntil the amo,nt d,e to himself for #ommission$ disb,rsements and ser0ices in respect of the same has been paid or acco,nted for to him( PrincipalDs d,ty to agent '''- Agent to be indemnified against conse;,ences of lawf,l acts ! "he employer of an agent is bo,nd to indemnify him against the conse;,ences of all lawf,l acts done by s,ch agent in exercise of the a,thority #onferred ,pon him( Ill,strations &a' ;, at :in+apor), 2nd)r in*tr2ction* ,ro/ A o, Ca c2tta, contract* -ith C to d) i1)r c)rtain +ood* to hi/. A do)* not *)nd th) +ood* to ;, and C *2)* ; ,or .r)ach o, contract. ; in,or/* A o, th) *2it, and A a2thoriH)* hi/ to d),)nd th) *2it. ; d),)nd* th) *2it, and i* co/p) )d to pa0 da/a+)* and co*t*, and inc2r* )?p)n*)*. A i* ia. ) to ; ,or *2ch da/a+)*, co*t* and )?p)n*)*. &.' ;, a .ro3)r at Ca c2tta, .0 th) ord)r* o, A, a /)rchant th)r), contract* -ith C ,or th) p2rcha*) o, 1A ca*3* o, oi ,or A. A,t)r-ard* A r),2*)* to r)c)i1) th) oi , and C *2)* ;. ; in,or/* A, -ho r)p2diat)* th) contract a to+)th)r. ; d),)nd*, .2t 2n*2cc)**,2 0, and ha* to pa0 da/a+)* and co*t* and inc2r* )?p)n*)*. A i* ia. ) to ; ,or *2ch da/a+)*, co*t* and )?p)n*)*. ''2- Agent to be indemnified against conse;,ences of acts done in good faith ! Where one person employs another to do an act$ and the agent does the act in good faith$ the employer is liable to indemnify the agent against the conse;,ences of that act$ tho,gh it ca,se an in>,ry to the rights of third persons( Ill,strations &a' A, a d)cr))6ho d)r and )ntit )d to )?)c2tion o, ;<* +ood*, r)@2ir)* th) o,,ic)r o, th) Co2rt to *)iH) c)rtain +ood*, r)pr)*)ntin+ th)/ to .) th) +ood* o, ;.Th) o,,ic)r *)iH)* th) +ood*, and i* *2)d .0 C, th) tr2) o-n)r o, th) +ood*. A i* ia. ) to ind)/ni,0 th) o,,ic)r ,or th) *2/ -hich h) i* co/p) )d to pa0 to, C, in con*)@2)nc) o, o.)0in+ A<* dir)ction*. &.' ;, at th) r)@2)*t o, A, *) * +ood* in th) po**)**ion o, A, .2t -hich A had no ri+ht to di*po*) o,. ; do)* not 3no- thi*, and hand* o1)r th) proc))d* o, th) *a ) to A. A,t)r-ard* C, th) tr2) o-n)r o, th) +ood*, *2)* ; and r)co1)r* th) 1a 2) o, th) +ood* and co*t*. A i* ia. ) to ind)/ni,0 ; ,or -hat h) ha* .))n co/p) )d to pa0 to C and ,or ;<* o-n )?p)n*)*. ''4- /on-liability of employer of agent to do a criminal act ! Where one person employs another to do an act which is criminal$ the employer is not liable to the agent$ either ,pon an express or an implied promise$ to indemnify him against the conse;,ences of that Act( Ill,strations &a' A )/p o0* ; to .)at C, and a+r))* to ind)/ni,0 hi/ a+ain*t a con*)@2)nc)* o, th) act. ; th)r)2pon .)at* C, and ha* to pa0 da/a+)* to C ,or *o doin+. A i* not ia. ) to ind)/ni,0 ; ,or tho*) da/a+)*.

&.' ;, th) propri)tor o, a n)-*pap)r, p2. i*h)*, at A<* r)@2)*t, a i.) 2pon C in th) pap)r, and A a+r))* to ind)/ni,0 ; a+ain*t th) con*)@2)nc)* o, th) p2. ication, and a co*t* and da/a+)* o, an0 action in r)*p)ct th)r)o,. ; i* *2)d .0 C and ha* to pa0 da/a+)*, and a *o inc2r* )?p)n*)*. A i* not ia. ) to ; 2pon th) ind)/nit0. ''6- #ompensation to agent for in>,ry ca,sed by principalDs neglect ! "he principal m,st ma3e compensation to his agent in respect of in>,ry ca,sed to s,ch agent by the principalDs neglect or want of s3ill( Ill,stration A employs 7 as a bric3layer in b,ilding a ho,se$ and p,ts ,p the scaffolding himself( "he scaffolding is ,ns3illf,lly p,t ,p$ and 7 is in conse;,ence h,rt( A m,st ma3e compensation to 7( Effect of agency on contracts with third persons ''8- Enforcement and conse;,ences of agentDs contracts ! #ontracts entered into thro,gh an agent$ and obligations arising from acts done by an agent$ may be enforced in the same manner$ and will ha0e the same legal conse;,ences$ as if the contracts had been entered into and the acts done by the principal in person( Ill,strations &a' A .20* +ood* ,ro/ ;, 3no-in+ that h) i* an a+)nt ,or th)ir *a ), .2t not 3no-in+ -ho i* th) principa . ;<* principa i* th) p)r*on )ntit )d to c ai/ ,ro/ A th) pric) o, th) +ood*, and A cannot, in a. *2it .0 th) principa , *)t6o,, a+ain*t that c ai/ a d).t d2) to hi/*) , ,ro/ ;. &.' A, .)in+ ;<* a+)nt -ith a2thorit0 to r)c)i1) /on)0 on hi* .)ha ,, r)c)i1)* ,ro/ C a *2/ o, /on)0 d2) to ;. C i* di*char+)d o, hi* o. i+ation to pa0 th) *2/ in @2)*tion to ;. ''&- Principal how far bo,nd$ when agent exceeds a,thority ! When an agent does more than he is a,thoriFed to do$ and when the part of what he does$ which is within his a,thority$ can be separated from the part which is beyond his a,thority$ so m,ch only of what he does as is within his a,thority is binding as between him and his principal( Ill,stration A$ being owner of a ship and cargo$ a,thoriFes 7 to proc,re an ins,rance for 4$=== r,pees on the ship( 7 proc,res a policy for 4$=== r,pees on the ship$ and another for the li3e s,m on the cargo( A is bo,nd to pay the premi,m for the policy on the ship$ b,t not the premi,m for the policy on the cargo( ''%- Principal not bo,nd when excess of agentDs a,thority is not separable ! Where an agent does more than he is a,thoriFed to do$ and what he does beyond the scope of his a,thority cannot be separated from what is within it$ the principal is not bo,nd to recogniFe the transaction( Ill,stration A a,thoriFes 7 to b,y 6== sheep for him( 7 b,ys 6== sheep and '== lambs for one s,m of 8$=== r,pees( A may rep,diate the whole transaction( ''<- #onse;,ences of notice gi0en to agent ! Any notice gi0en to or information obtained by the agent$ pro0ided it be gi0en or obtained in the co,rse of the b,siness transacted by him for the principal$ shall$ as between the principal and third parties$ ha0e the same legal conse;,ences as if it had been gi0en to or

obtained by the principal( Ill,strations &a' A i* )/p o0)d .0 ; to .20 ,ro/ C c)rtain +ood*, o, -hich C i* th) appar)nt o-n)r, and .20* th)/ accordin+ 0. In th) co2r*) o, th) tr)at0 ,or th) *a ), A )arn* that th) +ood* r)a 0 .) on+)d to D, .2t ; i* i+norant o, that ,act. ; i* not )ntit )d to *)t6o,, a d).t o-in+ to hi/ ,ro/ C a+ain*t th) pric) o, th) +ood*. &.' A i* )/p o0)d .0 ; to .20 ,ro/ C +ood* o, -hich C i* th) appar)nt o-n)r. A -a*, .),or) h) -a* *o )/p o0)d, a *)r1ant o, C, and th)n )arnt that th) +ood* r)a 0 .) on+)d to D, .2t ; i* i+norant o, that ,act. In *pit) o, th) 3no- )d+) o, hi* a+)nt, ; /a0 *)t6o,, a+ain*t th) pric) o, th) +ood* a d).t o-in+ to hi/ ,ro/ C. '2=- Agent cannot personally enforce$ nor be bo,nd by$ contracts on behalf of principal ! In the absence of any contract to that effect$ an agent cannot personally enforce contracts entered into by him on behalf of his principal$ nor is he personally bo,nd by them( Pres,mption of contract to contrary( S,ch a contract shall be pres,med to exist in the following cases1 9 : where the contract is made by an agent for the sale or p,rchase of goods for a merchant resident abroad; 9': where the agent does not disclose the name of his principal 92: where the principal$ tho,gh disclosed$ cannot be s,ed( '2 - Rights of parties to a contract made by agent not disclosed ! If an agent ma3es a contract with a person who neither 3nows$ nor has reason to s,spect$ that he is an agent$ his principal may re;,ire the performance of the contract ; b,t the other contracting party has$ as against the principal$ the same rights as he wo,ld ha0e had as against the agent if the agent had been principal( If the principal discloses himself before the contract is completed$ the other contracting party may ref,se to f,lfill the contract$ if he can show that$ if he had 3nown who was the principal in the contract$ or if he had 3nown that the agent( was not a principal$ he wo,ld not ha0e entered into the contract( '2'- Performance of contract with agent s,pposed to be principal ! Where one man ma3es a contract with another$ neither 3nowing nor ha0ing reasonable gro,nd to s,spect that the other is an agent$ the principal$ if he re;,ires the performance of the contract$ can only obtain s,ch performance s,b>ect to the rights and obligations s,bsisting between the agent and the other party to the contract( Ill,stration A$ who owes 6== r,pees to 7$ sells $=== r,peesD worth of rice to 7( A is acting as agent for # in the transaction$ b,t 7 has no 3nowledge nor reasonable gro,nd of s,spicion that s,ch is the case( # cannot compel 7 to ta3e the rice witho,t allowing him to set-off ADs debt( '22- Right of person dealing with agent personally liable ! In cases where the agent is personally liable$ a person dealing with him may hold either him or his principal$ or both of them$ liable( Ill,stration A enters into a contract with 7 to sell him == bales of cotton$ and afterwards disco0ers

that 7 was acting as agent for #( A may s,e either 7 or #$ or both$ for the price of the cotton( '24- #onse;,ence of ind,cing agent or principal to act on belief that principal or agent will be held excl,si0ely liable ! When a person who has made a contract with an agent ind,ces the agent to act ,pon the belief that the principal only will be held liable$ or ind,ces the principal to act ,pon the belief that the agent only will be held liable$ he cannot afterwards hold liable the agent or principal respecti0ely( '26- Eiability of pretended agent ! A person ,ntr,ly representing himself to be the a,thoriFed agent of another$ and thereby ind,cing a third person to deal with him as s,ch agent$ is liable$ if his alleged employer does not ratify his acts$ to ma3e compensation to the other in respect of any loss or damage which he has inc,rred by so dealing( '28- Person falsely contracting as agent not entitled to performance ! A person$ with whom a contract has been entered into in the character of agent$ is not entitled to re;,ire the performance of it$ if he was in reality acting$ not as agent$ b,t on his own acco,nt( '2&- Eiability of principal ind,cing belief that agentDs ,na,thorised acts were a,thoriFed ! When an agent has$ witho,t a,thority$ done acts or inc,rred obligations to third persons on behalf of his principal$ the principal is bo,nd by s,ch acts or obligations$ if he has by his words or cond,ct ind,ced s,ch third persons to belie0e that s,ch acts and obligations were within the scope of the agentDs a,thority( Ill,strations &a' A con*i+n* +ood* to ; ,or *a ), and +i1)* hi/ in*tr2ction* not to *) 2nd)r a ,i?)d pric). C, .)in+ i+norant o, ;<* in*tr2ction*, )nt)r* into a contract -ith ; to .20 th) +ood* at a pric) o-)r than th) r)*)r1)d pric). A i* .o2nd .0 th) contract. &.' A )ntr2*t* ; -ith n)+otia. ) in*tr2/)nt* )ndor*)d in . an3. ; *) * th)/ to C in 1io ation o, pri1at) ord)r* ,ro/ A. Th) *a ) i* +ood. '2%- Effect on agreement$ of misrepresentation of fra,d$ by agent ! Bisrepresentation made$ or fra,ds committed$ by agents acting in the co,rse of their b,siness for their principals$ ha0e the same effect on agreements made by s,ch agents as if s,ch misrepresentations or fra,ds had been made or committed by the principals; b,t misrepresentations made$ or fra,ds committed$ by agents$ in matters which do not fall within their a,thority$ do not affect their principals( Ill,strations &a' A, .)in+ ;<* a+)nt ,or th) *a ) o, +ood*, ind2c)* C to .20 th)/ .0 a /i*r)pr)*)ntation, -hich -a* not a2thoriH)d .0 ; to /a3), Th) contract i* 1oida. ), a* .)t-))n ; and C, at th) option o, C. &.' A, th) captain o, ;<* *hip, *i+n* .i * o, adin+ -itho2t ha1in+ r)c)i1)d on .oard th) +ood* /)ntion)d th)r)in. Th) .i * o, adin+ ar) 1oid a* .)t-))n ; and th) pr)t)nd)d co*i+nor. #HAP"ER KI- *Gf Partnership(. Rep( by the Indian Partnership Act$ <2' 9< of <2':$ s( &2 and Sch( II( S#HEH@EES- *Enactments repealed(. Rep( by the Repealing and Amending Act$ < 4 9 =

of < 4:$ s( 2 and Sch(II(