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Contingent Contract

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This article has been written by Shivani Kumari, a student of Lloyd law college, Greater Noida. This article will impress upon a type of contract which is contingent. Contingent contracts are uncertain contracts and depend upon the occurrence and non -occurrence of a certain event.

INTRODUCTION

 A contract is defined under section 2(h) of the Indian contract Act, 1872. A contract is a legally binding promise between the parties to fulfill the terms and conditions in return for some lawful consideration. The basic elements of a contract are proposal, acceptance, intention to create a legal relationship, competency to contract, free consent, and lawful consideration. If a contract does not satisfy these elements, then the contract is said to be void.

 A Contingent contract is derived from the Indian contract Act, 1872 under section 31-36. According to the definition given under section 31 of the Indian Contract Act, a ‘contingent contract is a contract to do or not to do something, if some event, collateral to such contract, does or does not happen’. These contracts are mainly formed for some uncertain event and the enforceability of such contracts directly depends upon happening or not happening of those events. The main element which differs from other contracts is, it is not dependent on consideration rather it is dependent on condition. Whenever a condition is fulfilled, the contract is said to be discharged. The contract made on an impossible event is void.

Main Provisions

  • The performance of a contingent contract depends upon the happening or non- happening of some future events.
  • The event upon which the performance of a contingent contract depends must be collateral to the contract, not a party of consideration of the contract.
  • A contingent contract must have all the essential elements of a valid contract.

Enforcement of a Contingent Contract

The provision for enforcement of a contract is given under section 32-36 of the Indian Contract Act.

Section 32: Enforcement of contracts contingent on an event happening

A contingent contract is made on certain conditions, the moment that condition happens, the contract is enforced. It is the contract to do or not to do anything in an uncertain future event, however it cannot be enforced by law unless that event has happened.

For instance- A makes a contract with B to sell his horse at a specified price. However, a condition was included, if C to whom the horse has been offered, refuses to buy. Here, the contract cannot be enforced unless C refuses to buy the horse.

Section 33: Enforcement of contract contingent on an event not happening

This type of contract relies on not happening at an event. These contracts are unassertive. It is to do or not to do anything if an uncertain future event does not happen, however, this can be enforced only when the happening of this event becomes impossible.

For instance- A and B make a contract and A agrees to pay B a sum of money if a certain ship does not return which means either the ship sunk or lost in the sea/ ocean. The Sinking of the ship makes the contract enforceable by law.

Section 34: Enforceability of contingent contract on the conduct of a living person

Under this section, a contract is contingent to be deemed impossible, if it is the future conduct of a living person. These types of contracts are not time-bound and thus create an exceptional condition for the parties involved. It is enforceable if the act shall be considered as impossible. The main element of this contract is the future conduct of the living person.

For instance- A makes a contract with B and agrees to pay a sum of money to him, if B marries C, meanwhile C gets married to D. the marriage between B and C must be considered impossible until D dies and that C may afterward marry B.

Section 35: contracts contingent on an event happening within the fixed time

 Fixed time is the essence of these types of contingent contracts. A contingent contract is enforceable if an uncertain event happens within a fixed time. Such a contract is void if the event does not happen and the time lapses. It is also void if before the time is fixed, the happening of the event becomes impossible. It is similar to the happening and not happening of the contract but it is time-bound.

For instance- A and B make a contract and A agrees to pay B a sum of money if any certain ship will not return within a year. The contract is enforceable if the ship does not return within the year.

Section 36: Agreements on impossible events are void

A contingent agreement to do or not to do anything for an impossible event happens, are void. the impossibility of the event may be known or not to the parties to the agreement at the time when it is made. In simple words, whenever a contract is made for an impossible event, the agreement becomes void.

For instance- A agrees to pay B a sum of money if B will marry C. C was dead at the time of the agreement. Thus this event is impossible and thus void.

Usage of Contingent Contract

  • Insurance: Every insurance company may be a life insurer, health insurer, or fire insurer, because uncertain events deal with contingent contracts. Insurance is an agreement by which a company undertakes to provide a guarantee of compensation for specified loss or damage in return for the payment of a specified premium.

For instance- In a life insurance contract, the insurer pays a certain amount if the insured dies under certain conditions. The insurer is not called into action until the event of the death of the insured happens. This is a contingent contract.

  • Indemnity: Contract of indemnity is a contract in which one party promises to save the other party from loss caused to him by the Promisor or someone else. These contracts are based on uncertain events.

The case of Chandulal Harjivandas v. Commissioner of Income-tax held that the contract of indemnity and insurance are contingent contracts.

  • Guarantee: A contingent guarantee is a promise to make a future payment as long as certain contractual terms are met. A contingent guarantee is often used when the seller is doing business with a buyer with whom there is an increased risk of default.

All the three above mentioned contracts are the commercial application of contingent contracts.

CONCLUSION

A Contingent contract is a contract based on assurance. These contracts do not involve reciprocal promises. It is a valid contract under the Indian Contract Act, 1872. The parties involved in these contracts have an interest in this. ‘Contingent contracts’ are also called ‘conditional contracts’ in English law. The terms of these contracts are certain and depend on the occurrence or non-occurrence of a future event.      

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Appearance and Non-Appearance of Parties under CPC

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This article is written by Harshit Khandelwal, 2nd year Law student currently pursuing BBA-LL.B(Hons.) from Unitedworld School of Law, Karnavati University. In this article, the author discusses the laws regarding the appearance of parties and what are the consequences of non-appearance of parties. 

INTRODUCTION

The fate of any case depends on an important factor i.e., the appearance and non-appearance of parties in a civil suit. Non-appearance of any party in the count on a determined day may result in an adverse decision. The provisions of the CPC (Civil Procedure Code, 1908) states that no proceedings detrimental to the interest of any of the parties to the suit shall be conducted before the court. The parties must appear in front of the court on the due date which has been fixed by the court of law. In the case of the non-appearance of one party to the suit, the judgement may go in favour of the other party appearing in front of the court. 

Rule 1 of Order IX of the Code of Civil Procedure, 1908 states that the parties to the suit need to attend the court either in person or by their pleaders on the due date which has been fixed by the court of law. If on the given due date either plaintiff or the defendant do not appear in the court and neither have the sufficient cause for the non-appearance, the court is empowered to decide under Rule 12 of Order IX as follows –

a) If the defendant does not appear in the court of law on the due date, the court can dismiss the suit.  

b) If the plaintiff does not appear in the court of law on the due date, the court can pass ex-parte order. 

Rules regarding the appearance and non-appearance of parties under Order IX of the CPC – 

  • Rule 2 states the consequences regarding the non-deposition of fees by the plaintiff. 
  • Rule 3&4 states the consequences of non-appearance of both the parties to the suit. 
  • Rule 8, 9, and 9A deals with the consequences of non-appearance of the plaintiff to the court of law. 
  • Rule 6, 13, and 13A deals with the consequences of non-appearance of the defendant to the court of law. 

Appearance of Parties

Appearance means the appearance of the party to the suit before the court of law. This appearance can be by the party in person or through his advocates or any person along with the advocates of the party. The appearance of the parties on the date of the first hearing of the case is mentioned in Rule 1 of Order IX. 

When Neither Party Appears

According to Rule 3 & 4 of Order IX of CPC, 1908 states that when both the parties to the suit does not appear before the court of law on the due date fixed. Rule 3 of Order IX states that in such a case the suit can be dismissed by the court of law and Rule 4 states that plaintiff can file a new suit if he satisfies the court the sufficient reason for his non-appearance in court. 

When Only Plaintiff Appears

An ex-parte order can be passed against the defendant when only the plaintiff appears and the defendant does not appear in the court of law on the due date. The court can proceed for an ex-parte order against the defendant only when services of the summon are proved in the court and then the court may pass a decree in favour of the plaintiff. This provision does not apply for the subsequent hearings but only applies to the first hearing and the same was held in the case of Sangram Singh v. Election Tribunal.

When Only Defendant Appears

The legal consequences of the non-appearance of the plaintiff and appearance of the defendant in the court of law are mentioned in Rule 8 of Order IX of the CPC, 1908. According to this rule, in a case when the defendant appears in the court of law on the due date and the plaintiff remains absent, then the court has the power to pass an order of dismissal of the case unless the defendant admits a claim.

Ex-Parte Decree

Rule 6(1)(a) of the CPC, 1908 states that the court has the power to pass any judgement ex-parte in the case where the defendant does not appear in the court of law on the due date which has been informed to him by the summon duly served on him of the case. An ex-parte decree is voidable at the option of one party which may seek the order of annulment of the decree.

Remedies

The following remedies are available when an ex-parte decree is passed against the defendant – 

1. A suit can be filed on the grounds of fraud.

2. The defendant can apply for a review under Order 47 Rule 1. 

3. The defendant can appeal against that decree under section 96(2) of the code, or prefer revision under section 115 of the code when no appeal lies.  

Setting Aside an Ex-Parte Decree

An application should be made by the defendant for setting aside an ex-parte decree. There are some rules which need to be followed for setting aside an ex-parte decree and when the defendant satisfies the court with sufficient cause, after that only the ex-parte decree which has been passed can be set aside. 

There is a limitation period for setting aside an ex-parte decree and within that period an application should be filed i.e. 30 days.

There are certain grounds on which an ex-parte decree can be set aside-

1. When the summon has not been served.

2. Due to any sufficient cause, the defendant could not appear on the day of the hearing. 

CONCLUSION

The appearance and non-appearance of the parties directly affect the case and helps in letting everyone know whether it will be carried on for the next hearing, dismissed or an ex-parte decree will be given. During the whole procedure, the court must keep in mind that nowhere any miscarriage of justice is done during the dismissal or while passing an ex-parte decree.

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Base Erosion and Profit Shifting (BEPS)

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This article is written by Shambhavi Shree, a student of KIIT School of Law, Bhubaneswar (4th year).

INTRODUCTION

Base erosion and profit shifting, shifts profits in a country were there is less tax or no tax. The taxpayers strive to reduce the tax burden by using various tax planning strategies so the profits are shifted from jurisdictions that are having high taxes to the jurisdictions having low taxes. The burden is on the individual taxpayers that affect the well-being and growth of the economy. New startups face problems while competing with multinational enterprises. The government has to cope with less revenue and higher cost. Economic growth is affected due to the lack of tax revenue and fair competition is harmed in this process. The major reason for base erosion is excessive payments to foreign companies in the form of fees, royalties, and interests.

Establishment 

Base Erosion and Profit Shifting (BEPS) were initiated by the Organization for Economic Cooperation and Development (OECD). It was developed in the year 2012 by G-20. OECD and G20 together developed the BEPS Action Plan, 2013-2015 which sets deadlines to implement an action plan, identifies actions, and the resources needed therein. BEPS deals with addressing the tax challenges of the digital economy. After the development of the action plan, developing countries started focusing on the avoidance of tax. In 2016, the OECD BEPS multinational agreement instrument was signed to stop treaty abuse. More than 85 countries and jurisdictions have signed the multilateral BEPS convention. In March 2019, India and the US signed an agreement to exchange country by country reporting. It involves sharing all the details including profits earned and the tax paid. BEPS tools are responsible for tax losses of about $100 to $240 billion per annum. According to June 2018 research Ireland is the world’s biggest tax havens.

BEPS Action Plan: In July 2013 OECD introduced Base Erosion Action Plan and a final report was initiated in October 2015. There are three fundamental pillars of the 15 action plans that are coherence, substance, and transparency. According to the BEPS  Action Plan 1, India introduced ‘equalization levy’ in the Finance Act, 2016 which provided levy at 6% for any services rendered by a non-resident who does not have a permanent establishment in India and carrying on business in India if such consideration exceeds 1 lakh during the financial year. The action plan has an impact on domestic as well as global laws which comprises of-

1. Digital economy

2. Hybrid mismatch arrangement

3. Designing Effective Controlled Foreign Company Rules

4. Limit before erosion

5. Counter harmful tax practices

6. Country can prevent treaty abuse by Limitation of Benefits (LOB) and by Principle Purpose Test Rule (PPT)

7. Prevent the artificial avoidance of permanent establishment status

8. Transfer pricing for controlled transactions including intangibles

9. Transfer pricing for risk and capital

10. Transfer pricing for other high-risk transactions 

11. Indicator of Base Erosion and Profit Shifting (BEPS)

        i) Increase in Foreign Direct Investment (FDI) 

       ii) Low tax jurisdiction profit is more than that of multinational enterprises.

      iii) Profit is shifted from the high value-creating company to less value-creating company.

      iv) Royalties received by the entity is located in the low tax countries accounted for 3% of total royalty

       v) Increase in the debt were there is the higher statutory tax rate

12. Disclosure of tax planning regime

13. Re-examine transfer pricing report

14. Dispute resolution mechanism 

15. Multilateral instrument agreement 

Case laws

1. CIT V. RD Aggarwal and Company 56 ITR 20 (SC)

RD Aggarwal and Company was having its place of business in Amritsar, Punjab. In March 1951, assesses were appointed as sale agents of woollen yarns for the Italian company to the Indian company. The issue was whether the assessee and the non-residents of taxable territories amounted to business connection. Supreme Court focused on the term ‘business connection’ between the non-resident and the taxable territories. It further stated that the Income-tax Act, 1961 does not define the exact meaning of the term business connection. Business connection means a real and intimate relation carried on by non-resident which are concerned to earn a profit. It was held that sale made through the agent in India is not taxable.

2. ITO V. Right Florists Private Limited (2013) 25 ITR(T) 639 Kolkata

In this case, it was held under section 5(2)(b) of Income Tax Act, 1961 that the income arising in India is chargeable to tax in India. The servers of Google and Yahoo were not located in India so their ‘permanent establishment’ will not be in India. Section 9(1)(i) of the Income Tax Act, 1995 talks about the income accruing or arising, whether directly or indirectly in India will not be applicable in this situation as there is no ‘business connection.’ Google and Yahoo do not come under the purview of section 9(1)(vi) because it is a service rendered by the search engines and there is no requirement of human touch. 

Conclusion

India has actively participated and contributed to the BEPS project. In order to put the impact on any specific business and to reduce the negative effects of BEPS, a micro-level analysis should be taken into consideration. Developing countries with a less developed industrial base have been the participant of the BEPS project. They also face issues related to BEPS. Recently in 2011, OECD began working on transfer pricing simplification and treatment of intangibles. Measures implemented by the business at a group level could be more effective than the ones implemented separately. In this changing scenario, the global economy is undergoing certain alterations so it is very difficult to adopt any specific methodology. In order to avoid harmful tax practices, the government must continue to work together as a unity.

References

*http://www.oecd.org/tax/beps/beps-actions/

*https://www.google.com/search?q=www.oecd.org%2Fctp%2FBEPSACTIONPLAN.pdf&oq=www.oecd.org%2Fctp%2FBEPSACTIONPLAN.pdf&aqs=chrome..69i58j69i57.39856j0j4&sourceid=chrome&ie=UTF-8

*https://indiankanoon.org/doc/98785989/

*https://indiankanoon.org/doc/1705242/

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The Kanooniyat Kuriosity Kuiz Series: 1st National Online Quiz Competition on Constitutional Law and Criminal Law by Kanooniyat: Register by 20th August 2020

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About Kanooniyat

 Kanooniyat is a legal website providing daily legal updates to its user base comprising law students, law aspirants, lawyers and legal professionals, in the form of articles, opportunities and legal news.

 View our Instagram profile – https://www.instagram.com/kanooniyat/ 

Visit our website – https://kanooniyat.com  

About Kanooniyat Kuriosity Kuiz Series

 The Kanooniyat Kuriosity Kuiz Series is the flagship annual series of quizzes conducted by Kanooniyat comprising 10 quizzes with 5 quizzes on Constitutional Law and 5 on Criminal Law each.

 The tentative dates for all the quizzes are as follows –

  1. 1st Online Quiz Competition of the Kanooniyat Kuriosity Kuiz Series

1.1  Quiz on Constitutional Law – 22nd August 2020

1.2  Quiz on Criminal Law – 23rd August 2020

  1. 2nd Online Quiz Competition of the Kanooniyat Kuriosity Kuiz Series

2.1  Quiz on Constitutional Law – 14th September 2020

2.2  Quiz on Criminal Law – 15th September 2020

  1. 3rd Online Quiz Competition of the Kanooniyat Kuriosity Kuiz Series

3.1  Quiz on Constitutional Law – 2nd October 2020

3.2  Quiz on Criminal Law – 3rd October 2020

  1. 4th Online Quiz Competition of the Kanooniyat Kuriosity Kuiz Series

4.1  Quiz on Constitutional Law – 25th October 2020

4.2  Quiz on Criminal Law – 26th October 2020

  1. 5th Online Quiz Competition of the Kanooniyat Kuriosity Kuiz Series

5.1  Quiz on Constitutional Law – 19th November 2020

5.2  Quiz on Criminal Law – 20th November 2020 

You can Register for either the Constitutional Law Quiz or the Criminal Law Quiz in the 1st Online Quiz Competition of the Kanooniyat Kuriosity Kuiz Series to be held on 22nd and 23rd August respectively

OR

You can register for both – Constitutional and Criminal Law quizzes in the 1st Online Quiz Competition of the Kanooniyat Kuriosity Kuiz Series (special discount) to be held on 22nd and 23rd August

OR

You can Register for either the Constitutional Law Quizzes or the Criminal Law Quizzes of the entire Kanooniyat Kuriosity Kuiz Series (tentative dates given above)

(Includes 5 quizzes each with special discount)

OR

You can Register for the entire Kanooniyat Kuriosity Kuiz Series (tentative dates given above) (Includes 10 quizzes with bumper discount – 5 from Constitutional Law and 5 from Criminal Law)

 Scroll down for registration & fee details

About the 1st Online Quiz Competition on Constitutional and Criminal Law from the Kanooniyat Kuriosity Kuiz Series (to be held on 22nd and 23rd August respectively)

  •  This quiz competition will contain 2 quizzes – one on constitutional law and one on criminal law which are to be conducted in two consecutive days, i.e. 22nd and 23rd August.
  • A candidate can register for either one OR both of the quizzes. (Special discount for registering in both the quizzes. Scroll down to know the fee details)

 Click here – https://docs.google.com/forms/d/1fvnIjJgQ9PVlEZKijtf28zHqhdkU5Cb_sJGVMDufolk/edit?usp=sharing to Register

 Eligibility

  • This Competition is open for all interested candidates who are pursuing UG/PG courses, are studying in schools or are legal professionals. Participation is not in any way limited to only law students and registrations from students from different streams, UPSC aspirants, Law Entrance Exams Aspirants and Judiciary Aspirants are welcome.

 Mode of Participation

  •   Online via Google Forms.
  • The Link for the quiz would be sent on the WhatsApp Group so formed by the coordinators for the quiz.
  • The registered candidate will be added automatically to the group by the coordinators.

Quiz Format

  1. Constitutional Law Quiz
  • The quiz will comprise of 25 questions divided into 2 sections:

a)  MCQ (15 questions)

b)      Short text- One word or one line (10 questions)

  • Quiz Time: 4:00 PM – 4:20PM (22nd August 2020)
  • The duration of the quiz will be 20 minutes. Any submission after 20 minutes will not be recorded.
  • The quiz will be based on Constitutional law and it also may contain historic events based on this.
  • There will be NO Negative marking for any wrong attempt or un-attempted questions.
  • Each question will carry 1 point.

2.  Criminal Law Quiz

  • The quiz will comprise of 25 questions divided into 2 sections:

a)      MCQ (15 questions)

b)      Short text- One word or one line (10 questions)

  • Quiz Time: 4:00PM – 4:20 PM (23rd August 2020)
  • The duration of the quiz will be 20 minutes. Any submission after 20 minutes will not be recorded.
  • The quiz will be based on Criminal law and its axillary laws. It may also contain historic events based on the subject.
  • There will be NO Negative marking for any wrong attempt or un-attempted questions.
  •  Each question will carry 1 point.

The Kanooniyat Kuriosity Kuiz Guidelines

  1.  The link to the quiz will be provided to all the registered participants on the WhatsApp group formed by the coordinators. Participants are required to have an internet connection to take the quiz.
  2. Any form submitted after the 20 min deadline will not be accepted and no points will be given to any question therewith.
  3. All ties will go through a 2-stage process:

a)      Stage 1: Special “Star Marked (*)” questions are placed at Q5, Q10, Q15, Q20, Q25. In case of any ties, the participant who has attempted more star marked questions will be given preference.

b)  Stage 2: In case of tie even after the Stage 1, the participant who has finished the quiz earlier will be given preference.

 General Rules

  • Both the Quizzes will be conducted on Google Forms as it’s a viable platform that is secure and easy to comprehend for even the first timers.
  • The link of the Google form quiz will be open to all participants who have completed their registration process.
  • Any kind of discrepancy in the registration process may lead to disqualification in the quiz.
  • Participants can take the quiz on their devices like phones, laptops, tablets, etc.
  • The coordinators will NOT be responsible in case of failure of the Internet connection or the device failure during the quiz.

 Important Dates

EventsDates
Last Date of Registration20th  August 2020
Constitutional Law Quiz22nd August 2020
Criminal Law Quiz23rd August 2020
Results27th  August 2020
Circulation of Certificates and Awards31st August 2020

NOTE: Results will be declared on the WhatsApp group so formed, our website – https://kanooniyat.com and Social Media handles.

 Registration Fee:-

  1.  For the 1st Online Quiz Competition of the Kanooniyat Kuriosity Kuiz Series to be held on 22nd and 23rd August

a.   For Constitutional Law Quiz (22nd August) – Rs. 90

b.  For Criminal Law Quiz (23rd August) – Rs. 90

c.   For both, Constitutional and Criminal Law Quiz – Rs. 140

  1. For the complete Kanooniyat Kuriosity Kuiz Series

a.   For all Constitutional Law Quizzes (total 5) – Rs. 350

b.  For all Criminal Law Quizzes (total 5) – Rs. 350

c.   For the complete series (total 10 quizzes – 5 Constitutional Law Quizzes and 5 Criminal Law Quizzes) – Rs. 650

 NOTE: On successful registration, an acknowledgment mail be sent to you within 24 hours of the registration.

 Registration Procedure

  1. For registering in the 1st Online Quiz Competition of the Kanooniyat Kuriosity Kuiz Series to be held on 22nd and 23rd August:

Step 1: Complete the payment of registration fee by visiting this link: https://pages.razorpay.com/kanooniyatkuriositykuiz and take a screenshot.

Step 2: Fill the google form by visiting this link: https://forms.gle/qd5gASU7TmJBzzFj6  and upload your screenshot

Step 3: Sit back and relax and we will send an acknowledgment mail to your email Id in 24 hours

  1. For registering for the complete Kanooniyat Kuriosity Kuiz series comprising 5 quizzes on Constitutional Law and 5 quizzes on Criminal Law:

Step 1: Complete the payment of registration fee by visiting this link: https://pages.razorpay.com/serieskanooniyatkuriositykuiz

Step 2: Fill the google form by visiting this link: https://forms.gle/qd5gASU7TmJBzzFj6  and upload your screenshot

Step 3: Sit back and relax and we will send an acknowledgment mail to your email Id in 24 hours

Payment Details

  1. Payment for 1st Online Quiz Competition on Constitutional and Criminal Law from the Kanooniyat Kuriosity Kuiz Series (to be held on 22nd and 23rd August respectively): https://pages.razorpay.com/kanooniyatkuriositykuiz
  1. Payment for the complete Kanooniyat Kuriosity Kuiz Series Comprising of 10 quizzes (5 Constitutional Law Quizzes and 5 Criminal Law Quizzes; tentative dates mentioned above): https://pages.razorpay.com/serieskanooniyatkuriositykuiz

 Awards & Prizes

  • Winner: Cash Prize of Rs 1600 to the winner in both the quizzes – Constitutional and Criminal (Rs. 800 in each quiz) + Online Internship Opportunity by Lawinternships under a recognized Law firm or Advocate + 50% off on Memo Pundit’s Online Memorial Course + Certificate of Merit
  • 1st Runner Up: Cash Prize of Rs 1000 to the winner in both the quizzes – Constitutional and Criminal (Rs. 500 in each quiz) + Online Internship Opportunity by Lawinternships under a recognized Law firm or Advocate + 50% off on Memo Pundit’s Online Memorial Course + Certificate of Merit
  • 2nd Runner Up: Cash Prize of Rs 600 to the winner in both the quizzes – Constitutional and Criminal (Rs. 300 in each quiz) + Online Internship Opportunity by Lawinternships under a recognized Law firm or Advocate + 50% off on Memo Pundit’s Online Memorial Course + Certificate of Merit

NOTE: 15% Off on LiveLaw Subscription Plans + 20% off on Memo Pundit’s Online Memorial Course + Participation Certificates to all the Participants.

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International Organisation: The Legal Framework

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Author Mansi Malik a fourth-year law student at Lovely Professional University, Phagwara, she is currently interning with Lexpeeps.in

“The article parlance about the Framework of International Organisation, its norms and duties.

General Provisions

International Organisation is an organisation where several states come together and form several binding agreements. Till date, more than 240 formal agreements have been established by intergovernmental organisations. Moreover, a non- governmental organisation is also part of the (IGOs).  International organisations have been developed to serve the world Intellectual property rights along with other general provisions, such a task is a high risk associated and has more complexity. During the French revolution, and European war in an 18-19th century the leaders of the European came up with the provisions of serving the status quo and for preserving their organisations from the sovereign powers. For instance, the International Telegraph Union was set up in 1865 to protect their government from sovereign rebellion.

Conferences were upheld by the Hague Conventions, that involved the stoppage of War in 1951 from Peace of Westphalia. To provide Neutral states various meetings were served out.

Legal Framework

  • In mid- 1985 total eight meetings were organised with the Head of the International state’s government
  • Summit was held by the country chairman, the organisation of the structure comprises of the council of ministers, Foreign Minister for each state which are agreed for the agreement
  • The council of ministers of each state government meets once in a year for the proper mechanism of the work.
  • The International Organisation structure comprises of SARC, SAPTA which was established as a draft committee to uphold the unity of the Trading Agreements
  • For smooth working for the SARC committee, the Integrated program of action was established and it focused into many fields for upliftment in Agriculture, Rural Development, women empowerment, Education, Human trafficking, Telecommunication.
  • The international organisation plays a dual role in both international as well as setting standards for Individual levels.

Principles

  • International Organisation plays a role in various fields like Trade, Commerce, Hierarchy, Administration staff.
  • Established the concept of a Sovereign State in 1648 after the end of protest reformation in the Peace of Westphalia.
  • Two assumptions were laid down by the International Organisation one was the check the interstate aggression by use of Sovereign and other was to establish the Secular reforms in the 16-18th century.
  • HAGUE CONFERENCE THE SOCIAL, ECONOMIC AND POLITICAL SETS WERE LAID DOWN FOR THE INTERSTATE DEVELOPMENT IN ALL SECTORS
  • The emphasis laid down upon the economic and social reformation, the IO has gradually started functioning into voluntary acceptance of the membership to curb the coercion influences.
  • Whereas the International Organisation has been a radical and complex ideological context that has made the world hypothetical also looks into the federation concept of DOCTRINE OF SEPERATION WHERE DIVISION OF POWER WAS MADE TO UNION AND PROVINCIAL GOVERNMENT.
  • The poles of a division of powers were divided into real head and nominal head in European reforms

Challenges in Building IO

  • It took five stages in building the International Organisation
  • First was to establish the memorial of design including structure
  • second thing was to set up conferences and meetings to curb the social and economic evils
  • The third stage was to try with an experimental effect
  • and the last was Developing into premovement IO
  • After the evolution of such stages, the League of Nations was founded by Thomas Jefferson.

Rights and Duties of International Organisation in International Law

  • According to Article 13 Aid is being provided for the wrongful commission of act at international level
  • In the case of Human Right violation, the UNESCO will provide suitable remedies to overcome from such crisis
  • Article 16, mandates that International organisations can seek Suo moto cognizance if it is responsible.
  • To resolve the counter, measure the article 21 emphasis about preserving the rights of their members
  • If the wrongful act has been committed by the organisation will be equally liable for the act.
  • One of the major responsibilities of the International Organisation for developing founding treaties, for instance, the Lisbon Treaty, to explicit the ambiguous and arbitration.
  • Other Right of the International Organisation is to guarantee the legal personality to each state governmental member.
  • Pacta tertiic nec nocent nec prosunt
  • The powers and responsibilities can be divided among states and even the powers can be executed 
  • Following Article 2(c) International Organisation is an independent body it has its sovereign context and balance of inter- aggression among states to interfere at any cost.
  • Duties towards Principles of the provincial government under art. 57ILC, the welfare and the economic activities for state context was raised in the Hague Conference
  • The context of self-defence under the UN Charter was not extremist and it was seen as an attack to the states as well. 

Committee of International Organisation

  • The International Organisation focuses on many objectives, stages. it states about membership which is provided to both individuals as well as collectively, and also provides universal adult franchise that includes voting rights.
  • The International Organisation ensures the parameters, about fair and regular operations of an election, also the constitutional power to its member of the states.
  • It helps in establishing the organizational structure, with evident value
  • It consists of collective membership, ideology, manifestation, geographical cells
  • International Organisation also ensures fair play of provincial states
  • It regulates the working of agencies

Regimes of International Organisation

  • To set a sovereign relation among both internal and external state international organisation has played a vital role
  • World Trade Organisation was set up in 1995 to regulate trade affairs all over the world
  •  League Nations mandates about the provisions of Arbitration, Conciliation and Mediation
  • South Asia stabilizes about the sovereign state, social justice in aspect to UDHR
  • International Organisation aims in developing sustainable economic development
  • It also establishes  the World Bank, at the centre level and helps in monetary financing 
  • International Organisation has regained friendly relations and has established a separation of the wall
  • It helps in promoting peace and eradicate the interrelations aggression between states and its cooperative member

CONCLUSION

The International Organisation is facing future challenges regarding the domestic level of the inter-state sovereign, economic issues and the World Bank has uplifted the political issues related to monetary finances and fiscal deficits. League Nations has also set aims in developing and maintaining good relations with state members in the International Organisation.

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Future of Social Security in India: Social Issues about Pensions, Gratuity Funds

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INTRODUCTION

This article is written by AASHIKA AGGARWAL pursuing BBA-LLB (H) from AMITY UNIVERSITY, GURGAON. 

INTRODUCTION

India has made colossal steps in decrease in the primary decade of the 21st century.  Social security basically involves access to health care and income security, especially in your age groups, like old age groups, for example- people who are unemployed, people who are sick, invalidity ( which means who cannot work), people who have work injury, women who are dealing with maternity, loss or a main income earner. Social security deals with vulnerable groups. It basically means that these household people should meet their minimum basic needs. Social security is related to the welfare state.

Social security means a program that requires the Government to create a fund or system which can be used to make payments to people who are unable to work because of circumstances. The social security paradigm is not a simple goodwill gesture from a Government to the citizen but a RIGHT. 

The first major social security program in Southeast Asia came into operation in India on February, 24, 1952. The program, which was initiated on a limited basis, will cover about 2.5 million factory employees when it comes into operation throughout the main industrial centres.

The government of India has given high priority to a program of social security for its many workers. India is the most popular country in this world with a democratic form of government and rank second among the industrial nations of Asia. The adoption there of a social security program is an important development. The new nation faced and still faces numerous problems. Illiteracy is widespread. The population is increasing at the rate of about 5 million a year.  Initially almost all security schemes and programs were focused on younger generations and issues related to health care and disability. Old age security was considered as a family subject as most people lived there with their children. With rapid increase in population of older persons and fast changing socio-economic scenario, issues concerning old people are now also being included within the social security schemes over the years.

Government of India has also prioritized old age-related issues in its social security and social protection and schemes and programs. Generally, India’s social security schemes cover the following social security schemes:-

  1. Pension
  2. Health insurance and medical benefits
  3. Disability benefits
  4. Maternity benefits to women
  5. Gratuity

 1. Employee State Insurance Act, 1948

This act includes factories and companies with 10 or more than 10 employees. Each and every organisation has to enrol their company and even their workers under this act so that they can get all the medical benefits and protection to all the employees and their families.  This act has a family pension benefit as well in case of any disability with the worker or death of any worker.

2. Health Insurance and Medical Benefit Schemes

India’s national social insurance framework does exclude free clinical consideration for the whole populace. The employees’ state insurance (ESI) act makes a reserve to give clinical care to representatives and their families, just as money benefits during affliction and maternity, and regularly scheduled instalments if there should be an occurrence of death for those working in industrial facilities and foundations with at least 10 workers.

 3. Payment of Gratuity Act, 1972

In this act, 15 days wages are paid if you complete minimum 5 years of service. They calculate service like at the time of resignation, if the salary of a person is RS.100000/- p.m. then 1 lakh is divided by 2 as you get 15 days and then they multiply by 5. Minimum 10 workers are required to get this act enforced. There are even some amendments in this act but they are not officially enforced. 

  4. Maternity Benefit Act, 1961

This act gives 12 weeks wages to the women during the whole maternity period. They even get 12 weeks leave during the maternity period. 

 5. Payment of Bonus Act, 1965

This act gives annual payment of bonus. Ceiling has been revised to RS.7000/- from RS.3000/-. This act has more than 20 persons in the factories. In this act, some of the employees are eligible to earn RS.21000/- but not all the employees are eligible. 

 6. Employee Pension Scheme, 1995

In this act, the pension is guaranteed. In the employee pension scheme, there is both employer plus government contribution. They need more than 20 people establishments.  This act gives pension to the widow/ widower if pensioner is dead. To avail this act, one must be a member of EPFS.

7. UAN (Universal Account Number)

It is a 12 digit unique number which is allotted to each member of EPF. This number gives online access to every EPF member. Basically, any person of EPF can check their money online or withdrawal the money online, so this is the benefit of having UAN. It has allowed the EPF accounts online. The online access EPF account is by Ministry of Labour and Employment. 

 8. LIN (Labour Identification Number)

This is the single and unique identification number for the factories and establishments. This LIN is applicable under all the labour laws. This number is going to replace all the different licenses under the Ministry of Labour and Employment.

  •  Organised Sector under Social Security
  1. Government sector is an organised sector and the MNC’s which are working in India, which are being established.
  2. Establishments covered under Factories Act, 1948. 
  3. Organised sector have all the social benefits and they are covered under all schemes. 
  4. They have shops and establishments act of State Government.
  •  Unorganized Sector under Social Security
  1. No legal coverage. 
  2. No social security coverage.
  3. Casual nature of work.
  4. Unorganised sector have low wages.
  5. Unorganised sector workers include Agro labourers, marginal farmers, animal husbandry, street vendors, hawkers, cobblers, construction workers, vegetable vendors, etc.

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Think India Chandigarh and Licitelite-Webinar: “Revisiting the Ayodhya Judgement”

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About the Program

The theory and practice of law come down to the application of the scientific methodology in the analysis of cases, because the law is, in fact, a science about singular and particular problems. Although we may try to get a glimpse of the system as a function of cases, “in a rational sense, it is the problem and not the system that sets up the essence of the legal thought”.  For a legal professional, precedents are of utmost importance and the judgments like Ram Mandir’s are required to be well understood, as it has been one of the most controversial and talked-about cases. In view of the same, we feel the requirement to unroll the expert knowledge about the Ayodhya dispute & verdict, by revisiting the same and disseminate the knowledge among the students & legal fraternity.
In this interaction with Professor Dr Devinder Singh, Department of Law Panjab University Chandigarh & Ms Sofia Bhambri, Advocate, Delhi High Court we will discuss the background, the dispute, the Law and the verdict of Ram Mandir case.


Topic: Revisiting the Ayodhya Judgement

(Background, Dispute, Law and the Verdict)


 Highlights:·

. Religious and historical background

 ·Beginning of dispute

· Demolition of Disputed Structure

·Stages of trial

·Efforts of Mediation and Final verdict

About the Speakers

1)    Dr Devinder Singh is a Professor at Department of Law, Panjab University Chandigarh, Former faculty of Army Institute of Law, Mohali.
2)    Advocate Sofia BhambhriManaging Partner at S.Bhambri & Associates (Advocates), Delhi.
Venue and TimeGoogle meet on 5th August 2020 from 6:00pm  Onwards


 Registration Details 

Registration for the Webinar is FREE. Note: Certificates will be sent only to the registered participants who will fill out the feedback form at the end of the session.


 How to apply click here: https://forms.gle/73H4KtYKFMqZNVXH7
or visit us at https://www.licitelite.com/event-details/webinar-on-revisiting-the-ayodhya-verdict


About Organizers

LicitElite, focuses on providing assistance to Law students in self-grooming while acquiring better knowledge, by generating an exclusive learning platform through activities like law classes, blog writing, competitions etc. It also aims to connect with legal experts to design better learning opportunities


Think India is a forum of students from premier institutes like IIT, IIM, IISc, and National Law University and other such premier institutes in the various field of academia, across India. It is a pan India initiative to bring together the best talents of the country and to infuse in them a ‘Nation First’ attitude along with intellectual spirit.
For more details Whatsapp us at: +91 98107 93800, +91 83607 33180
Email-id: admin@licitelite.com, thinkindiapunjab@gmail.com

Qualities of Negotiator, and Process of Negotiation

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INTRODUCTION

This article is written by Hemant Kumar. He is a student of the Faculty of Law, Delhi University.  He has done his graduation from ARSD College, Delhi University.

Brief

The article is about how a good negotiation is done by a negotiator who is very attentive and active while discussing and bargaining things.   

What is “negotiation”?

It is a process through which parties solve disputes amicably by looking at each other’s profit. It is basically based on compromise and agreements, mutual understanding is must to negotiate between parties. From bargaining with a vegetable wander or the deals between two Nations, all these small to large contracts are based on negotiation because everyone wants the ball to favour them in their court. Negotiation starts from the time when the parties meet each other and they discuss what they want and at what cost. 

A good negotiator is one who can make the deal in his favour without harming what he wants. 

The one who has the following qualities is a good negotiator: 

  • Effective Speaker: The one who can state his views clearly in front of everyone and can state what he wants and at what terms he has to speak to the point with effective communication showing confidence that yes he is there to deal and will get the deal. 
  • Listening: He has to listen to the other party also so that he can know what they want and also that they are there for the business and want to make the profit. Effective listening can help him communicate and negotiate in the best way. 
  • Preparation: He has to prepare with all the matters and subjects he is going to negotiate where he can relax what the most important terms and what are the least important terms where he can be more flexible and give relaxations. 
  • Positive Attitude: Dealing with a positive attitude that we want the deal and will do everything to negotiate and get the deal in favour is one the important thing and makes the other party think that yes the man is really interested in the deal and will do all the work efficiently. 
  • Respect: One has to respect the other party also he must bear in mind that they are also for the business and want to earn profit and will negotiate only when they are getting something. Sense of humour plays an important role as it makes both the parties comfortable with each other, when the things get sour one has to think from the other parties view. 
  • Knowledge and Planning: It plays an important role, knowledge for the issue helps the negotiator to plan how much he can negotiate on the particular issue. Knowledge for other similar deals also helps to leave the deal at the correct time. 
  • Patience: Every detail should be analysed properly with great precaution, one has to give time to the other party also and let them decide as we want to grab the deal and also want deals in the future also a mutual understanding has to be established so that none of the party is at loss. 

Process of Negotiation

Stage wise process of negotiation:

  • Preparation: From time, place, members of the discussion team, rules etc. everything is to be kept prepared so that no last hurries are there. If preparation of thoughts and deal is at par then we will definitely get a better deal. 
  • Discussion: It involves exchange of thoughts between the parties put up by them so that they can know if they are interested or not in the deal, it saves time and also makes parties comfortable with each other. The negotiator should be confident while discussing and not arrogant with his tone. 
  • Bargaining: The start of negotiation, all the negotiations are stated by parties and the deal is finalized by stating what could be bargained and what not. 
  • Closing: Final of the deal if it is made or not then both of the parties start working on their part of the deal. 

Examples of Some of the Negotiation

Payment of dues of employees during lockdown 

The Honourable Supreme Court said that both the employer and employee must negotiate with one another on how they will solve the problem and an amicable solution should be accepted by both of them. Similar suggestions were given to the tenants and the owner of the house so that they can decide how much and when to pay the rent when they were not accommodating in the house during the period of the lockdown. 

Joint Comprehensive Plan of Action (JCPOA) 

Two permanent Permanent members of the UN and Iran were parties to the deal, where Iran said that they will use nuclear power only for power generation and restrict the use of Uranium. The deal was finalized in the year 2015, but after some time Iran started testing nuclear missiles which led to breach of trust hence the U.S. unanimously pulled itself out from the deal and made sanctions on Iran also on the countries who will do business with Iran. Proper negotiation and follow of the rules could have avoided sanctions and would have been better for the citizens of the country of Iran. 

Denuclearization of North Korea

Where the U.S. and North Korea were the parties and the deal was very near to finalization after three decades of talks between the officials but America wanted complete denuclearization without giving any relief in sanctions to North Korea hence the deal was not finalized. This was a very important deal for the whole world which could have benefitted all if finalized. 

Babri Masjid

To settle the dispute amicably outside every possible negotiation was decided by the parties but it was not finalized and hence decided by the Supreme Court of India. 

Conclusion

Most of the international deals fail to be compromised along with the negotiation as they are bound by restriction and have a force of sanctions but negotiation at a local level or company level are excellent sources of solving the dispute amicably outside the court as it is time-saving and economically efficient. 

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Article Writing Competition by Home of Youth for Development and Rendering Awareness: No Registration Fee

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About  H.Y.D.R.A.

Home of Youth for Development and Rendering Awareness (H.Y.D.R.A) is a trust created by young and energetic  Under Graduate students from different colleges, created to increase political and social awareness among youth by organizing various events like Mock Parliament, Debates, Exhibitions, Symposiums, etc. It is a non-profit , non-political and secular organization. Its aim to spread and promote public awareness and promote social service among youth. It works to develop the skills like public speaking , leadership quality and communication skills etc. 

About the Competition 

Throughout an attempt to enhance the production and distribution of scientific facts, H.Y.D.R.A. is hosting the 1st National Article Writing Competition to promote intellects’ perspectives on a range of daily issues. When achieving our priorities, we remain dedicated to working with members of the public to insure that they represent their best interests.

Theme- 

  • Gender Sensitive Indian Society is Prerequisite for Queer Empowerment.
  • How do you think will this year 2020 shape the year 2021?
  • Rise of Artificial Intelligence : The threat of jobless future OR Better job opportunities through re-skilling and up-skilling

NOTE: THERE SHALL BE NO CHARGES FOR PUBLICATION.

Schedule 

01 August 2020  ———– Registration Begins

08 August 2020  ———–Registration Closed

15 August 2020 ———- Date of Submission of the Manuscript 

05 September2020   ————-Result Declaration*

Date is subject to change  

Eligibility

Any person from the legal fraternity, journalism, commerce, management, economics or any other social science knowledge seeker are also welcomed to submit their articles of original work for publication on the blog. 

Assessment

A jury of respected professors / luminaries from diverse backgrounds will judge the entries

Submission Guidelines

  • The body of the article  shall be in Times New Roman, size 12, 1.5 line spacing 
  • Submission should be made only in .docx/.doc format.
  • Alignment of the article must be justified.
  • The article must be an original and unpublished work of the author.
  • The article must not exceed 1000 words, exclusive of footnotes. 
  • For Citation and Referencing BLUEBOOK, 20th Edition must be referred 
  •  Uniform method for citation may be followed; moreover an article with plagiarism more than 15% will lead to immediate disqualification.
  • The name of the file must be the exact title of the article. 
  • The author must submit the article on time otherwise late submission will not be entertained.
  • Co- Authorship is not allowed. 
  • Any submission made not in consonance with the guidelines will automatically leads to disqualification.

How to Submit?

  • After the registration all the participants will get a google form link on their Email id for the submission of the manuscript.  Participants need to fill the given detail on the google form and attach their document.
  • The details of the authors, including their names, contact details (email id and phone number), name of the institution or their designation (as the case may be), shall be provided in a separate MS Word file.

Prizes 

  • Top 5 articles will be published on H.Y.D.R.A. website and other social platforms.
  • Winner will get merit certificate
  • All the participants will get the certificate. (only who will submit manuscripts)

Registration link

https://bit.ly/3jlpE0b

Contact Information

Email ID: hydraclub2019@gmail.com 

Mobile Number: – 9205510739  ,  9650171443    

Limitations on the Freedom of Contract

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This research article is written by Akshat Manish Mehta, a student of the Institute of Law, Nirma University, Ahmedabad. In this article he has tried to mention when freedom to enter into the contract could be limited or restricted because of Vitiated Consent, Unlawful Consideration or Unlawful Object through some of the sections mentioned under Indian Contract Act, 1872.

INTRODUCTION TO THE GENERAL CONCEPT

With the emergence of transitions and growth in businesses each and, every transition of the business arena is governed and regulated by Contract Law, in India through the Indian Contract Act, 1872. From mergers of huge telecommunications companies like Idea and Vodafone to a small employment contract between employer and employee, there is some sought of the relevance of Contract Law. 

Although everyone is absolutely free to make a contractual relationship with anybody but there are some restrictions when it comes to contracts, where one of the parties is acting under the fear or compulsion of other party or when one of the parties is at the higher bargaining positing which could affect the interests of other party to the contract. 

As per Section 10 of the Indian Contract Act, 1872 there are three conditions or requisites of the valid contract. These are:

  1. There must be Free Consent of the competent parties entered into the contract.
  2. There must be Lawful Consideration.
  3. There must be Lawful object. 

When any of the abovementioned condition is not fulfilled the contract could not come into existence and this is called the “limitation to the freedom of contract.” In this article I will try to mention when freedom to enter into the contract could be limited or restricted because of Vitiated Consent, Unlawful Consideration or Unlawful Object through some of the sections mentioned under Indian Contract Act, 1872.

Contract with a Minor

There is a limitation on the freedom of contact with minors, as per Section 11 of the Indian Contract Act, 1872, minor is not competent to a contract and the contract with the minor is void ab initio. In the case of ‘Sri Kakulam Subrahmanyam v. Kurra Subba Rao’, it was held that as per Section 8 of the Hindu Minority and Guardianship Act, 1956 guardian of a minor can enter into the contract on behalf of minor but only on two conditions:

  • Guardian must be competent to the contract.
  • It must be for the benefit of the minor.

Contract with the Person of Unsound Mind

As per Section 12 of the Indian Contract Act, 1872 contract could not be made with the person of Unsound Mind. The test of unsoundness of mind/mental capacity is:

  • Person is incapable to understand the consequences of the transition 
  • Person is incapable of understanding the nature of the transition. 

As per Section 12, a person who usually remains of unsound mind but occasionally becomes of sound mind, he could be allowed to enter into the contract when he is of sound mind. Also, if the person is usually of sound mind but becomes occasionally of unsound mind could not enter into the contract when he is in unsound state of mind. So this is the limitation to the freedom of contract mentioned under Indian Contract Act, 1872, with the person of unsound state of mind. 

Consent Induced by Coercion

As per Section 15 of the Indian Contract Act, 1872 Contract is said to be said Voidable as per Section 19, if the consent of either of the party is vitiated due to ‘COERCION.’ Coercion essentially includes two requisites:

  1. Consent is going to be obtained by pressure exerted by either of the following techniques:
    • Committing or threatening to commit any act forbidden by Indian Penal Code. 
    • Unlawful detaining or threatening to detain any property, to the prejudice of any person.

2)   With the intention of causing any person to enter into an agreement.

So if the consent of either of the parties is taken under the ‘Coercion’, then the contract is unenforceable. 

Consent Induced by Undue Influence

Section 16 of the Indian Contract Act, 1872 defines ‘UNDUE INFLUENCE.’ As per this section consent is said to be vitiated by undue influence if:

  1. One party is in a capacity to dominate the will of other party and it is done by that party for the unfair advantage.
  2. One party is in dominating position if either it has the real or apparent authority or there is some fiduciary relationship between the two parties. Dominion could also be established if the person is mentally ill and doesn’t have the mental capacity because of his age, illness, mental or bodily distress. 
  3. The burden of proof in the cases of Undue Influence lies on the party who is in the dominating position.

So if the consent of the party is taken by undue influence then the contract is rendered voidable under Section 19 of the said Act, at the option of the party whose consent is vitiated. 

Consent Induced by Fraud

There is a restriction in forming a contract if consent of one of the parties is taken by committing fraud. ‘FRAUD’ is defined under Section 17 of the Indian Contract Act, 1872, and it means and include any of the following acts committed by a party to the contract or his agent with the intention to deceive another party or to induce him to enter into the contract:

  1. When one party states a fact to which it knows that is not true. 
  2. Active concealment of the fact after having knowledge or belief of the fact. 
  3. A promise made by one party without the intention of performing it.
  4. Any Act done by the party which is fitted to deceive. (This clause has a much larger ambit)
  5. Any such Act or omission done by one of the parties which law specifically declares to be fraudulent.

If consent is taken under any of the five above mentioned conditions then the contract is rendered voidable as per Section 19, at the option of the party whose consent is vitiated by ‘fraud’. 

Consent Induced by Misrepresentation

Contract is voidable as per Section 19 of the Act, at the option of the party whose consent is vitiated by Misrepresentation. As per Section 18 of the Indian Contract Act, 1872, MISREPRESENTATION includes:

  1. When one of the parties to the contract makes a positive assertion about a fact which it believes to be true, but in actual it is not true. 
  2. There is no intent to deceive by that party but still the person or other person claiming under him gets an advantage and therefore that party misleads the other party to do its own prejudice. 
  3. Innocently causing another party to an agreement of the mistake which is of the very substance of the contract. (Same provision deals with Section 20 ICA, 1872)

Contract Induced with Mistake

As per Section 20 of the Indian Contract Act, 1872, when both the parties to the contract are at the mistake of matter of fact, which is very essential or substantial to the contract then the contract is Void. So this section again places a restriction on the freedom of parties to freely enter into the contract if either of the parties is induced by a mistake as to the subject matter of the agreement.

Contracts with Unlawful Considerations and Objects

Section 23 defines the consideration and object lawful only if:

  1. It is not forbidden by Law.
  2. It doesn’t defeat any of the provisions of the Law.
  3. It is not declared fraudulent.
  4. It should not involve any kind of injury to the person or property of another.
  5. It should not be regarded as immoral or opposed to the public policy by the courts.

The ambit of the 5th clause of the section i.e. ‘Public Policy’ is very large as it is a subjective term and interpreted in different ways in the court of law. So as per this section restriction or limitation on the freedom to enter into the contract is placed if the consideration or object to the contract is not lawful and comes under any of the above mentioned conditions. 

Other Contracts Debarred by Law

Freedom to enter in some specific types of contracts is forbidden by Law under some of the sections of Indian Contract Act, 1872. These are:

  • Any ‘contract in restraint of marriage’ of any person, other than minor is void as per Section 26 of the Indian Contract Act, 1872.
  • Any contract in which any individual is ‘restrained to lawfully exercising his lawful profession, trade or business’ is void as per Section 27 of the Indian Contract Act, 1872.
  • Any ‘contract in restraint of legal proceedings’ is explicitly declared void under Section 28 of the Indian Contract Act, 1872.
  • Agreements of any ‘nature of uncertainty’ are void under Section 29 of the Indian Contract Act, 1872.
  • ‘Agreements arising out by the way of wager’ is declared void under Section 30 of the Indian Contract Act, 1872. 

CONCLUSION

With the growing emergence of global business and commercial transitions there is a serious need to have a protection mechanism for the parties when one party could take undue advantage of the position of the other party. Some of the restrictions and limitations are explicitly mentioned in the Indian Contract Act, 1872 while could be found under various other statutes and legislations like Specific Relief Act, 1930 and Transfer of Property Act, 1882. 

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