UNIT 2

INTRODUCTION

According to Oxford English Dictionary the word law means, “Rule made by authority for the proper regulation
of a community or society or for correct conduct in life”,Indian Contract Act of 1872 came into effect from 1st
September, 1872. It extends to the whole of India except the state of Jammu and Kashmir. The law of contract is
the branch of law which determines the circumstances in which promise made by the parties to a contract shall
be legally binding on them. All of us enter into a number of contracts everyday knowingly or unknowingly. Each
contract creates some right and duties upon the contracting parties. Indian Contract Act deals with the
enforcement of these rights and duties upon the parties.

DEFINITION, MEANING AND NATURE OF CONTRACT

The term Contract has been defined under Section 2(h) of Indian Contract Act, 1872 as, “an agreement,
enforceable by law is a contract”.

A Contract therefore, is an agreement the object of which is to create a legal obligation, i.e. a duty enforceable
by Law .

Two main elements –

1. Agreement‐ As per Sec 2 (e) “ Every promise and every set of promises, forming the consideration for each
other, is an agreement”
2. Legal Obligation‐ An agreement to become a contract must give rise to a legal obligation that is duty
enforceable by law.

ESSENTIALS OF VALID CONTRACT

1‐AGREEMENT: To form a contract there must be an agreement between the parties. Agreement is created by
offer and acceptance. It is result of mutual exchange of promises between the parties.
Ex: an agreement between the tenant and the owner.
2‐CREATION OF LEGAL RELATIONSHIP: Agreement made between parties must create legal
relationship. Legal
relationship consists of rights and obligations which can be claimed by the parties in the court of law.
3‐LAWFUL CONSIDERATION: Agreement is a mutual exchange of promises between parties. Each party
making a
promise gets something in return of his promise. It constitutes a consideration for his promise .
4‐CONTRACTUAL CAPACITY: Parties making an agreement must have contractual capacity. Lack of
contractual
capacity would invalidate contract. Contractual capacity of the party means he or she must be legally competent
for making a contact. The person to have contractual capacity must satisfy the following conditions:
a) He must not be a minor.
b) He must be of a sound mind and not lunatic, idiot or drunkard.
c) He must not have been declared disqualified by law from contracting such as insolvent, convict and alien
enemy etc.
5‐FREE CONSENT OF THE PARTIES: State of mind of parties is involved in making offer and giving
acceptance for it.
As soon as offer is accepted it becomes a binding promise having a legal consequences. Two or more persons are
set to have consent if they agree upon same thing in the same sense. And their consent is said to be free if it has
not been induced by anyone one of the following factors;
a) Coercion b)undue influence c)misrepresentation d)fraud e)mistake
6‐LAWFUL OBJECT OF AGREEMENT: Agreement is made for some object or purpose such object is
formed on the
basis of promises made by the parties. These promises are made either for doing or not doing anything.
7‐AGREEMENT, NOT DECLARED EXPRESSLY VOID: There are certain agreements which have been
expressly
declared void by the law. Thus an agreement made by parties should not fall in that category. If it is so it would
also meet same fate and cannot be enforced in the court of law.
8‐CERTAINITY IN THE MEENING OF AGREEMENT: Agreement made by the parties must be certain or
capable of
being made certain in its meaning. It is because agreement would result in creating rights and obligations
between the parties.
9‐OTHER LEGAL FORMALITIES: agreement to be enforced, needs to satisfy other conditions of being in
writing,
registered and duly stamped. Generally Indian contract act does not make any discrimination between written
and oral agreement. Oral agreements are as good as written agreement.

OFFER, ACCEPTANCE AND CONSIDERATION

1)OFFER:

Offer is one of the essential elements of a contract. According to Sec 2(a) of Indian Contract Act 1872,
defines the term Offer or Proposal “When one person signifies to another his willingness to do or to
abstain, from doing anything with a view to obtaining, the assent of that other to such act or abstinence,
he is said to make a proposal”

CLASSIFICATION OF OFFER:

1.) SPECIFIC OFFER: Sometimes an offer is made to a particular person, part or org. , such offer is known
as a specific offer. This specific offer can be accepted only by that particular person or org.
2.) GENERAL OFFER: It is an offer which is made to a group of people or public at large. Such offer can be
accepted by any member of that group or public.
3.) CROSS OFFER: Two parties exchange identical offers with each other. They are ignorant about each
other’s offers.
4.) COUNTER OFFER: Incomplete and conditional acceptance of an offer is known as a counter offer. In
other words, the acceptor, instead of accepting the offer as such along with all its terms and conditions
deviates from it. Such acceptance becomes a counter offer.

ESSENTIALS OF VALID OFFER:

1.) Offer must create a legal relationship and consequence: The whole concept of contract is based on
legal relationships or obligations of legal consequences .Thus the formation of contract with starts with an
offer, its acceptance followed by the legal relationships and its consequences means the party making an
offer must have clear intention to establish the legal relationship with other party.
2.) Offer may be express or implied: The offer may be made either by the word of mouth or in writing.
Such an offer is known as an express offer. On the other hand if the offer is inferred, or indirectly
understood either from the conduct of parties or from the circumstances, such offer is known as implied
offer.
3.) Offer may be specific or general: The offer being made to a particular individuals or orgs. Is known as
specific offer. On the other, if an offer has been made to a group of people or public at large is known as
general offer.
4.) Offer must be communicated: An offer is made with a view to create, legal relationships so it must be
communicated to the person to whom it is made. Without communications the offer is incomplete and
cannot be accepted.
5.) Offer must be distinguished from a mere expression of intention or invitation: Sometimes one party
merely shows his intention for making an offer or invites other party for making it. Such intention or
invitation for making an offer will not be considered as a valid offer.
6.) Offer maybe conditional: While making an offer the offeror may impose conditions for the acceptor,
such conditional offer is valid subject to the following conditions:
a.) Offeror cannot impose any such condition the non‐fulfillment of which would lead to acceptance of
that offer.
b.) The terms and conditions imposed by the offeror must be mentioned in the offer in such a way that a
person of a reasonable prudence may find indication for those conditions and those conditions must be
reasonable eyesight.

REVOCATION OF OFFER:

Revocation of offer means withdrawal, cancellation or lapse of offer.

According to Sec 6 of this act, Offer can be revoked under the following circumstances:
a) By notice, b) By lapse of time, c) Death or insanity of offeror
d) Non‐fulfillment of prerequisite conditions, e) by counter offer, f) by compliance of prescribed mode or manner

2.) ACCEPTANCE

According to Sec 2(b) of Indian contract act 1872, defines the term acceptance “as a proposal or offer is
said to have been accepted when the person to whom the proposal is made signifies his assent to the proposal”.

ESSENTIALS OF VALID ACCEPTANCE:

1.) Acceptance must be absolute and unconditional: Offer may be made for a specific quantity, volume
and price. It may also contain terms and conditions. It is necessary for the acceptor that he must give his
acceptance for the entire quantity and volume offered.
2.) Acceptance must be given in a prescribed mode or manner: While making an offer the offeror may
prescribe a particular mode or manner of acceptance and the acceptor must abide by it. If the acceptor
does not follow that particular mode for sending his acceptance, the offeror that further insist the
acceptor to abide by it. But if it is still not followed the offeror can reject the acceptance. On the other if
no mode is prescribed, by the offeror then the acceptor can follow the usual mode of acceptance.
3.) Time of acceptance: To make it valid acceptance, it must be given within stipulated period of time if
any. When no time is specified, acceptance must be given within reasonable period of time.
4.) Acceptance must be communicated: As the offer needs to be communicated, so does the acceptance.
Acceptance to be legally effective must be communicated and brought to the knowledge of the offeror.
Even if the acceptor has accepted the offer but if it is not communicated properly it would not result into
an agreement.
5.) Acceptance may be expressed or implied: The acceptor may give his assent for the proposed act by
the word of mouth or in writing. Such acceptance is known as express acceptance. If the acceptance is
directly understood either from conduct of the party or from circumstance, it is known as implied
acceptance.
6.) Acceptance must be made before offer is revoked: Acceptance implies mental readiness of the person
for proposed act or abstinence. Therefore, it must be given before the offer lapses or is withdrawn or
cancelled. Once the offer is dead due to any reason if it is dead for ever, and to revive it, such offer is to
be made afresh.
7.) Acceptance is not implied from silence if the party: Acceptance of offer is not implied from silence.
The offeror cannot impose condition on offered that his silence will amount to acceptance. Silence on the
part of offered regarding the offer in no case may amount to acceptance.

REVOCATION OF ACCEPTANCE:
1) Failure of acceptor
2) Death or insanity of acceptor
3) No reasonable time and manner
4) By rejection
5) By supervising impossibility

3)CONSIDERATION

According to Sec 2(d) of this act ,” When at the desire of promisor, promise or other person has done or
abstained from doing, does or abstains for doing or promises to do or to abstain from doing something,
such act, abstinence or promise is called consideration for the promise”
ESSENTIALS OF VALID CONSIDERATION:
1.) Form of consideration: The consideration will always be in the form of some act or abstinence or a
promise for doing or not doing something.
2.) Consideration must be moved or given at the desire of promisor: In agreement there are two parties
i.e. promisor and promise. The consideration is generally given by the promise to promisor. According
to this rule any act or promise will be valid consideration if such act has been done or promise is
made at the desire or request of the promisor.
3.) Consideration may be past, present or future: Promisor makes a promise and consideration is given
to him for his promise. If these two act of making promise and getting consideration are done
simultaneously, the consideration is known as present consideration. If the consideration has been
given to the promisor before he makes a promise, it is known as past consideration. Consideration
may be in the form of promise to be performed in future, such consideration is known as future
consideration.
4.) Consideration may be moved or given by promise or any other person: Generally in every
agreement consideration is given by promise to the promisor. But it is not necessary. Any other
person on behalf of promise may give consideration. Such consideration will also be valid.
5.) Consideration need not be adequate: According to Indian Contract Act it is not necessary that the
value of promise should be equal to the value of consideration. Even if the value of consideration is
less than the value of promise, the contract is valid.
6.) Consideration must be real and not be illusory: Consideration given must be real and must have
some value in the eyes of law. It must not be illusory, factious, fraudulent, uncertain and illegal.
7.) Consideration must be lawful: Agreement to be enforced in the court must be made for lawful
consideration. Any act which is illegal, immoral and against public policy will not constitute valid
consideration for the contract.

CAPACITY OF PARTIES:

Contractual capacity is an essential ingredient of a valid contract.

According to Sec 10 of this act, parties making an agreement must have contractual capacity. Contractual
capacity
means they must be legally competent for making a contract.
To have a Contractual capacity, one must fulfill the following conditions:
Elements:
1.) Age
2.)Soundness of mind
3.)Legal Disqualification
1.) Minor:
A minor is a person, male or female, who has not completed the age of 18 years. In case a guardian has been
appointed to the minor or where the minor is under the guardianship of the court of wards, the person continues
to be a minor until he completes his age of 21 years.
According to Indian Contract Act, only a major person is competent to contract. Thus, contract with or by a
minor
is altogether void. The word “Void” when used in relation to a minor, it should be understood as “ void against
the
minor”.
2.) Soundness of mind:
According to Sec 12 of this act, “ A person is said to be a sound mind for the purpose of making contract, if at
the
time, when he makes it he is capable of understanding it and forming a rational judgement as to its effects upon
his interests”.
Lunatics: A lunatic is a person who is mentally affected due to some mental strain or other personal
experience. He suffers from intermittent intervals of sanity and insanity. He can enter into a contract only
during the period when he is of sound mind.
Idiot: An idiot is a person who is permanently of unsound mind. He does not exhibit minor understanding
of even minor objects or things. An idiot cannot enter into a valid contract.
Drunken Person: A person who takes any intoxicants like alcohol or drugs etc. he is temporarily
incompetent of entering into a contract. Thus, so long as one remains under the influence of intoxicants
or drugs, he has no contractual capacity. Thus agreement made by such person are void.

3.)Legal Disqualification:
Alien enemy: A person who lives in and is a citizen of a foreign country is known as an alien. He may be a
friend or an enemy to the citizen of our country. Alien friend can make an agreement with indian
citizen. But is war is declared between the two countries, the citizens of those countries become alien
enemies to each other. And agreements made with alien enemies are void.
Foreign sovereign: Ambassadors, high commissioners or foreign diplomatic staff do represent their country
. Therefore they have been provided some immunities. They can make an agreement with Indian citizens
and can enforce those agreements against Indian citizens in India. But Indian citizens to sue upon them
for the rights arising out of an agreement has to seek prior permission from central govt.
Corporations: A corporation is an artificial person created by law, eg: A company registered under
Companies act. A corporation exists only in contemplation of law and has no physical shape or form.
The indian contract act does not sleak about the capacity of a corporation to enter into a contract. But if
properly incorporated , it has a right to enter into a contract. It can sue and can be sued in its own
name. There are some contracts into which a corporation cannot enter without its seal.
Insolvent: Generally, when the assets of person fall short of liablities and liablities cannot be paid fully,
such state of affair is called insolvency. The person is declared as an insolvent by the court. He has to
handover his property to the official receiver. He cannot enter into contracts relating to his property. It is
only when the court issues order of discharge in favour of that person he becomes competent.
Married women: they have no right to make agreements regarding joint property of husband and wife,
unless she is authorised to do so by husband. She is free to make any agreement to deal with their
personal property such as bank balance in her name and jewelleries etc on the failure of husband, to
fulfill the basic necessities of her life, she becomes an agent of her husband by necessity. For the supply
of such basic necessities she can make agreements binding on the property of her husband.
Convict: A convict is incapable of entering into a contract during the continuance of sentence of
imprisonment. However, he can enter into a valid contract after the expiration of his term of
imprisonment. A convict can also, enter into, or sue on, a contract when on parole, bail or when he has
been pardoned by the court.

FREE CONSENT

Sec 13 Indian Contract act, “two or more persons are set to consent when they agree upon the same thing in the
same sense.”
Sec 14 of this act states that, consent is said to be free when it is not caused by :
1. Coercion: Application of physical force
2. Undue influence: Use of mental pressure
3. Misrepresentation: Innocent false representation
4. Fraud: Cheating or deceiving
5. Mistake: Wrong impression about anything

ELEMENT OF FREE CONSENT:

1. COERCION: it implies use of some kind of physical force by doing some act forbidden by law to seek
consent of other party.
2. UNDUE INFLUENCE: It implies unfair use of dominating position to cause the consent of other party for a
contract. In undue influence some kind of mental and moral pressure is brought upon a party to cause his
consent.
3. MISREPRESENTION: While making a contract, one of the party may make any statement regarding the
subject matter of a contract. Such statement, if turns to be untrue amounts to misrepresentation. It is a
misstatement of material facts.
4. FRAUD: An intentional misrepresentation of the facts amounts to fraud. Fraud is always committed with a
view to deceive to cheat another person . Thus, when one person does anything or makes false statement
knowing to induce other for causing this consent , it is known as fraud.
5. MISTAKE:It maybe defined as a wrong impression or erroneous opinion in the mind of a person about any
subject matter, event or it may consent something .

LEGALITY OF OBJECT

Every contract is made for object or purpose . The object of a contract is formed on the basis of promises made
by the parties. The contract to be legally valid , must contain lawful object . When the contract is made for
doing
something illegal defeating provisions of the law such contract is not valid in the eyes of law.
According to sec 23 of this act the unlawful acts are :
1. Forbidden by law
2. Prohibited by special legislation
3. It would defeat the provisions of any law
4. It is fraudulent
5. Involves enquiry to person/property if another
6. Courts to public policy
7. Opposed to public policy
8. Trade with alien enemies
9. Interference with course of justice
10. For supersing prosecution
11. For sale of public titles/offices and honors
12. Marriage brokerage

Unlawful Agreements :

According to the Indian Contract Act (Sec. 23), “The consideration or object of an agreement is lawful, unless
it is forbidden by law; or is of such a nature that, if permitted, it would defeat the provisions of any law; or is
fraudulent; or involves or implies injury to the person or property of another; or the court regards it as immoral,
or opposed to public policy.

Let us see the provisions of Sec. 23 which make an agreement unlawful.

1. Forbidden by law: If the object of the agreement or the consideration of the agreement is the doing of an act
which is forbidden by law, the agreement is void.

2. If it is of such a nature that, if permitted, it would defeat the provisions of any law: i.e. it would
indirectly lead to a violation of the law.
3. If it is fraudulent: Any agreement whose object is to defraud others is void.

4. If it involves or implies injury to the person or property of another.

5. If the Court regards it as immoral.

6. The Court regards it as opposed to public policy

Illegal Agreements :

An illegal agreement in business law is a contract that was made for an illegal reason and is consequently
against the law. If the content of the agreement causes the parties to perform illegal actions, then the contract is
illegal.
Agreements collateral to the original are also considered void. Collateral agreements are agreements that are
connected or incidental to the original agreement. The law prohibits these kinds of agreements, and entering
into one is punishable by law.

What Is an Illegal Agreement?

Examples of an illegal contract include an agreement whose terminology is unclear or an agreement to kill
somebody. The illegality is directly correlated with what is written in the contract and is not influenced by an
outside force.
A contract that might lead to an illegal action but doesn't explicitly mention an illegal action would be
considered legal. It can be difficult at times to prove when a contract is illegal. A rule to follow is if a contract
requires either party to do something not legal, then it's not enforceable.
A person involved in an illegal agreement risks losing because their actions are not covered by the illegal
contract. Therefore, it's important to get the advice of an attorney before signing a contract, and the attorney can
tell you if the contract is illegal or not.

Exceptions to Illegal Contract

• The contract has been completed. If the obligations set forth in the contract have already been fulfilled
and the contract is no longer active, the public can't be protected anymore by the law, except by
example.
• No bad intention of the party seeking enforcement. The courts will look at the absence of bad actions by
the party seeking enforcement against the defense and will determine who is at greater moral fault.
• Unjust advancement by a party seeking enforcement. What is the likelihood that enforcement will
enable the party seeking enforcement to have an advantage at the loss of the other party?
• Forfeiture outweighs illegality. The disproportionality of the forfeiture impact is weighed against the
severity of the illegality. In other words, will enforcement cause a forfeiture that is more severe than
illegality?

Illegality is not a defense for parties not in the group that the law was created to protect.

Quantum Meruit
On some occasions, a party can recover under quantum meruit the value of the goods or services completed
even if the contract was found to be illegal. If the services rendered were not in themselves illegal, and if one
party fails to follow their part in the contract, the other party may recover under quantum meruit for what the
party received in value. When the breach of contract is based on failure to pay for services, a plaintiff should
invoke quantum meruit to preserve the right to recover.
Difference Between Void and Illegal Contracts
A void contract may not necessarily be prohibited by law, while an illegal contract is not legal, and those
involved can be penalized for signing it. A void contract has no consequences in court because it is null from
the start.
All illegal contracts are void, but the reverse is not the case. "Void" means no legal binding, while "agreement"
means a consensus of parties on something. A void agreement is not legally binding.
A void agreement loses its legal nature when it is declared void. This kind of agreement sets forth no rights or
obligations on behalf of the parties, as well as no legal rights. A void contract's scope is wider than that of
an illegal contract, since not all void contracts are necessarily illegal, while all illegal contracts are void from
the beginning. A void contract is not punishable by law, while an illegal agreement is considered an offense.
Examples of illegal contracts include:

• Agreements for the sale and distribution of illegal substances like drugs
• Agreements for illegal activities like prostitution
• Agreements about the hiring of underage workers

Some contracts deal with subjects that are not prohibited by law but that do go against public policy and fair
dealing. These contracts are considered illegal and therefore unenforceable because they go against public
policy. Even if the subjects of the agreements are not specifically referred to in a statute, the court will still see
them as illegal.
Effects of Illegality :

[Link] transactions to an illegal agreement also becomes illegal.

[Link] action can be taken for recovery of money /property transferred under an illegal agreement.
[Link] cases of equal guilt in an illegal agreement, the position of the defendant is better than that of plaintiff.

Contingent Contracts :

The word contingent means when an event or situation is contingent, i.e. it depends on some other event or fact.

For example, making money is contingent on finding a good-paying job.

Now, the ‘contingent contract’ means enforceability of that contract is directly depends upon happening or not
happening of an event.

Section 31 of the Indian Contract Act, 1872 defines the term ‘Contingent Contract’ as follows:

‘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’.

In simple words, contingent contracts, are the ones where the promisor perform his obligation only when certain
conditions are met. The contracts of insurance, indemnity, and guarantee are some examples of contingent
contracts.

Illustration:- A contracts to pay to B Rs. 20,000 if B’s house is burnt. This is a contingent.

Essential elements of the contingent contract:

After examining the definition of the contingent contract given under section 31 of the Act, the essentials of the
term contingent contract are as follows:
There must be a valid contract to do or abstain from doing something. Section 32 and 33 of the Act talks about
enforcement of the contingent contract on the happening or not happening of the events respectively. The
contract will be valid only if it is about performing or not performing an obligation.

Essential elements of the contingent contract

After examining the definition of the contingent contract given under section 31 of the Act, the essentials of the
term contingent contract are as follows:

[Link] must be a valid contract to do or abstain from doing something

Section 32 and 33 of the Act talks about enforcement of the contingent contract on the happening or not
happening of the events respectively. The contract will be valid only if it is about performing or not performing
an obligation.

[Link] of the contract must be uncertain

The condition for which the contract has been entered into must be a future event, and it should be uncertain. If
the performance of the contract is dependent on an event, which is although a future event, but certain and sure
to happen, then it’ll not be considered as a contingent contract.

[Link] said event must be collateral to such contract

The event on whose happening or non-happening of the event on which the performance of the contract is
dependent should not be a part of the consideration of the contract. The happening or non-happening of the event
should be collateral to the contract and should exist independently.

Rules regarding Contingent Contracts :

Rule # 1 – Contracts Contingent on the happening of an Event

A contingent contract might be based on the happening of an uncertain future event. In such cases, the promisor is
liable to do or not do something if the event happens. However, the contract cannot be enforced by law unless the
event takes place.

Rule # 2 – Contracts Contingent on an Event not happening

A contingent contract might be based on the non-happening of an uncertain future event. In such cases, the
promisor is liable to do or not do something if the event does not happen. However, the contract cannot be enforced
by law unless happening of the event becomes impossible.

Rule # 3 – Contracts contingent on the conduct of a living person who does something to make the event or
conduct as impossible of happening
Section 34 of the Indian Contract Act, 1872 states that if a contract is a contingent upon how a person will act at a
future time, then the event is considered impossible when the person does anything which makes it impossible for
the event to happen.
Rule # 4 – Contracts Contingent on an Event happening within a Specific Time
There can be a contingent contract wherein a party promises to do or not do something if a future 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 fixed, the happening of the event becomes impossible. This rule is specified in Section 35 of the
Indian Contract Act, 1872.

Rule # 5 – Contracts Contingent on an Event not happening within a Specific Time

Contingent contracts might be based on the non-happening of an uncertain future event within a fixed time. In such
cases, the promisor is liable to do or not do something if the event does not happen within the said time. The
contract can be enforced by law if the fixed time has expired and the event has not happened before the expiry of
the time. Also, if it becomes certain that the event will not happen before the time has expired, then it can be
enforced by law. This rule is specified in Section 35 of the Indian Contract Act, 1872.

Rule # 6 – Contracts Contingent on an Impossible Event

If a contingent contract is based on the happening or non-happening of an impossible event, then such a contract is
void. This is regardless of the fact if the parties to the contract are aware of the impossibility or not. This rule is
specified in Section 36 of the Indian Contract Act, 1872.

Performance of Contracts :

The term “offer” has been defined under Section 2(a) of the Indian Contract Act, 1872. An offer is an
expression of willingness made by a person to do or abstain from doing any act or omission with a view to
obtaining the assent of the person to whom such an offer of act or abstinence is made.

The term performance in its literal sense means the performance of a task or action. In its legal sense
“performance” means the fulfilment or the completion of the obligations which they have towards the other
party by virtue of the contract entered into by them.
Section 37 of the Contract Act talks about performance. According to the Section, there are two types of
performance which are:

• Actual performance: Actual performance of the contract means the actual discharge of the liability
or obligation which a person has undertaken to perform and there remains no other task which he is
obliged to discharge under the promise. He is said to have made the actual performance of the
promise.
• Attempted performance: At times when the performance becomes due. The promisor is not able to
discharge his obligation or perform his duty because he is prevented by the promisee in doing so.
This situation where the promisor actually intended to perform his obligation or discharge his duty
but is prevented from doing so by an intervening disability is known as the attempted performance of
a promise.

Attempted performance is also known as Tender. A tender can be of two types:

• Tender of goods and services: The discharge of the contract to deliver goods and services is
completed when the goods are tendered for acceptance in accordance with the terms of contact. If the
goods and services so tendered are not accepted they are to be taken back by the offeror and he is
discharged from his liability.
• Tender of money: where the debtor tenders the money which is to be paid to the creditor but the
debtor refuses to accept the money. The debtor is not discharged from the lability to pay back the
money. Therefore, a tender of money can never result in the discharge of debt.
Requisites of valid tender
A tender is an offer. It is something that you invited and communicated to notify acceptance. In general terms,
the following are the requirements of a valid offer:

1. It must be unconditional.
2. It must be done in the right place.
3. They must conform to the terms of the obligation.
4. It must be done at the right time.
5. It must be done in the proper way.
6. The person making the bid must be able and willing to fulfil their obligation.
7. There must be a reasonable opportunity for inspection.
8. The tender must be made to the right person.
9. It must be of the total amount.

Discharge of Contract :

Discharge of a contract implies termination of the contractual relationship between the parties. On the
termination of the such relationship the parties are released from their obligations in the contract. And in this
way contract comes to an end.
MODES OF DISCHARGE IN CONTRACT:
1. By performance
2. By mutual agreement
3. By supervising impossibility
4. By operation of law
5. By lapse of time
6. By material alteration
7. By breach of contract

REMEDIES OF BREACH OF CONTRACT

BREACH OF CONTRACT: A formation of contract results in creating contractual obligations between the
[Link] contractual agreements are to be fulfilled by the parties on the due date as per terms and
conditions of a contract . When the party does not fulfil his obligation or refuses to fulfil it or disables himself
from fulfilling him it is known of breach of contract.

Breach of contract is of 2 types:

1) Actual breach: This contract takes place when the promiser fails to perform his obligation or refuses to do
so on the due date of performance.
2) Anticipatory breach: This contract the promiser either refuses to perform or makes himself unable to
perform a promise before the due date of performance . Anticipatory breach of contract takes place
before the date of actual performance.

REMEDIES :

RESCISSION: When a party makes breach of contract by not fulfilling his obligation, the aggrieved
party has a right to rescind such contract. To exercise this right, the aggrieved has to file a suit for
rescission of a contract. On granting rescission, the aggrieved party gets released from his
obligation in that contact. He is no more liable to perform his promise.
SUIT OF DAMAGES: On making a breach of contract by a party, the aggrieved party may suffer
monetary loss. In the event of breach he may be put in a disadvantageous position or in a
position of discomfort. In such case, the aggrieved party has a right to claim for compensation.
SUIT FOR SPECIFIC PERFORMANCE: When, breach of contract takes place and aggrieved party
suffers a loss. These losses may be of such a nature that damage granted for these by the court
maybe inadequate. It is because such losses cannot be measured in terms of money. In such
cases, the aggrieved party is entitled to claim for order of specific performance.
SUIT FOR INJUNCTION: In a contract if the party has made a promise for not doing something,
and that party takes a breach of contract by doing that thing. To prevent such party from doing
that act an order of injunction may be claimed by an aggrieved party. It is an order passed by
court of law, directing upon the party and refraining him from performing what he has promised
not to perform. An injunction is a preventive relief, which is provided to an aggrieved party where
damages would not be an advocate relief, it is negative form of order of specific performance.
SUIT UPON QUANTUM MERUIT: In a contract maybe in the process of performing his promise
before he completes it, the promise makes a breach of contract. Quantum Meruit is a Latin
dictum, which means “ as much as earned or merited”. That means under Quantum Meruit
aggrieved party can also claim for the reasonable cost of work done by him in the contract

Contract of Indemnity:

A contract of indemnity is one of the most important forms of commercial contracts. Several industries, such as the
insurance industry, rely on these contracts. This is because of the nature of these contracts. They basically help
businesses in indemnifying their losses and, therefore, reduce their risks. This is extremely important for small as
well as large businesses.

A contract of indemnity basically involves one party promising the other party to make good its losses. These losses
may arise either due to the conduct of the other party or that of somebody else.

To indemnify something basically means to make good a loss. In other words, it means that one party will
compensate the other in case it suffers some losses.

Essentials of Contract of Indemnity:

There must be two parties and, there should be an agreement between them wherein the promisor promises to
save the promisee from any kind of loss. This is the most vital element in the contract of indemnity. The loss
occurring may be due to the conduct of the promisor or any other third party. The provisions of the Act restrict
the loss to an extent because it is restricted to a human agency only and an act of God is not covered under the
contract of indemnity. Marine Insurance, fire insurance, etc. also fall into the category of the contract of
indemnity

Parties under Indemnity Contracts

There are generally two parties in indemnity contracts. The person who promises to indemnify for a loss is the
Indemnifier. On the other hand, the person whose losses the indemnifier promises to make good is the Indemnified.
We can also refer to the Indemnified party as the Indemnity Holder. For example, in the earlier example, C is the
Indemnifier and B is the Indemnity Holder.

Nature of Indemnity Contracts

An indemnity contract may be either express or implied. In other words, parties may expressly create such a
contract as per their own terms. The nature of circumstances may also create indemnity obligations impliedly. For
example, A does an act at the request of B. If B suffers some losses and A offers to compensate him, they impliedly
create an indemnity contract.
Rights of an Indemnity Holder

When parties expressly make a contract of indemnity, they can determine their own terms and conditions.
However, sometimes they may not do so. In such a case, the indemnity holder can enforce the following rights
against the indemnifier:

1) The indemnifier will have to pay damages which the indemnity holder will claim in a suit.

2) The indemnity holder can even compel the indemnifier to pay the costs he incurs in litigating the suit.

3) If the parties agree to legally compromise the suit, the indemnifier has to pay the compromise amount.

Contract of Guarantee

Apart from indemnity contracts, the Contract Act also governs contracts of guarantee. These contracts might
appear similar to indemnity contracts but there are some differences between them.

In guarantee contracts, one party contracts to perform a promise or discharge a liability of a third party. This will
happen in case the third party fails to discharge its obligations and defaults. However, the burden of discharging the
burden will first lie on the defaulting third party.

The person who gives the guarantee is the Surety. On the other hand, the person for whom the Surety gives the
guarantee is the Principal Debtor. Similarly, the person to whom he gives such a guarantee is the Creditor.

Essentials of a Contract of Guarantee

1. Concurrence of All the Parties
All the three parties namely, the principal debtor, the creditor and the surety must agree to make such a contract.

2. Liability
In a contract of guarantee, liability of the surety is secondary i.e., the creditor must first proceed against the debtor
and if the latter does not perform his promise, then only he can proceed against the surety.

3. Existence of a Debt
A contract of guarantee pre-supposes the existence of a liability, which is enforceable at law. If no such liability
exists, there can be no contract of guarantee. Thus, where the debt, which is sought to be guaranteed is already
time barred or void, the surety is not liable.

4. Consideration
There must be consideration between the creditor and the surety so as to make the contract enforceable. The
consideration must also be lawful. In a contract of guarantee, the consideration received by the principal debtor
is taken to be the sufficient consideration for the surety.

5. Writing not Necessary

A contract of guarantee may either be oral or written. It may be express or implied from the conduct of parties.

6. Essentials of a Valid Contract

It must have all the essentials of a valid contract such as offer and acceptance, intention to create a legal
relationship, capacity to contract, genuine and free consent, lawful object, lawful consideration, certainty and
possibility of performance and legal formalities.

Differences between Indemnity and Guarantee

There are some important differences between the contracts of indemnity and guarantee.

Firstly, there are just two parties in indemnity, while there are three in contracts of guarantee.

Secondly, in a guarantee, there is an existing debt/duty which the surety guarantees to discharge. On the other hand,
liability in indemnity is contingent and may not arise at all.

Thirdly, an indemnifier might act without the debtor’s behest, while a surety always waits for the principal debtor’s
request.

Finally, the liability of an indemnifier towards the indemnity holder is primary. Whereas, in guarantee, the surety’s
liability is secondary. This is because the primary liability lies on the principal debtor himself.

Contract of Agency :

Contract of the agency is a legal relationship, where one person appoints another to perform on the transactions
on his behalf. The person who appoints the other to take care of his transactions is the principal. Whereas, the
person who looks after the transaction of the principal is the agent.

Essentials of Agency :

There are certain requirements that are necessary for an agency. The following are the requirements:

Principal Must be Competent to Contract

Any person of sound mind and with the age of majority by law can employ an agent.

Competence of Agent is not Mandatory

Any person can become an agent between the principal and the third person. Generally, an agent does not have
any personal liabilities towards the principal while contracting. Therefore the agent doesn’t need to be
competent to contract.

No Consideration is Necessary
No remuneration is necessary while appointing an agent. The agent receives payment by the way commission
for the rendered services.

Creation of Agency :

An agency can be created by:

Direct (express) appointment– The standard form of creating an agency is by direct appointment. When a
person, in writing or speech appoints another person as his agent, an agency is created between the two.
Implication– When an agent is not directly appointed but his appointment can be inferred from the
circumstances, an agency by implication is created.

Necessity– In a situation of necessity, one person can act on behalf of another to save the person from any loss
or damage, without expressly being appointed as an agent. This creates an agency out of necessity.

Estoppel– An agency can also be created by estoppel. In a situation where one person behaves in such a manner
in front of a third person, as to make someone believe he is an authorized agent on behalf of someone, an agency
by estoppel is created.

Ratification– When an act of a person, who acted as another person’s agent (on his behalf) without his knowledge
is later ratified by that person, this creates an agency by ratification between the two.

Types of Agents

1. Special Agent- Agent appointed to do a singular specific act.

2. General Agent- Agent appointed to do all acts relating to a specific job.
3. Sub-Agent-An agent appointed by an agent.
4. Co-Agent- Agents together appointed to do an act jointly.
5. Factor- An agent who is remunerated by a commission (one who looks like the apparent owner of the
things concerned)
6. Broker- An agent whose job is to create a contractual relationship between two parties.
7. Auctioneer- An agent who acts a seller for the Principal in an auction.
8. Commission Agent- An appointed to buy and sell goods (make the best purchase) for his Principal
9. Del Credere- An agent who acts as a salesperson, broker and guarantor for the Principal. He guarantees
the credit extended to the buyer.

Rules governing agency:

The law of agency is based on the following two general rules:

1. The principal is bound by the acts of his agent and can get the benefit of such acts as if he had done
them himself. The acts of the agent shall, for all legal purposes, be considered to be the acts of the
principal.
2. Whatever a person can lawfully do himself, he may also do the same through an-agent except in case
of contracts involving personal services such as painting, marriage, etc.
Scope and extent of an Agent’s authority :

Section 188 of Indian Contract Act 1872 : "Extent of agent's authority"

188. An agent having an authority to do an act has authority to do every lawful thing which is necessary in order
to do such act.

An agent having an authority to carry on a business has authority to do every lawful thing necessary for the
purpose, or usually done in the course, of conducting such business.

Section 189 of Indian Contract Act 1872 : "Agent's authority in an emergency"

189. An agent has authority, in an emergency, to do all such acts for the purpose of protecting his principal from
loss as would be done by a person of ordinary prudence, in his own case, under similar circumstances.

Rights of an agent against principal :

An agent has the following 5 rights:

1. Right of retainer– An agent has the right to retain any remuneration or expenses incurred by him
while conducting the Principal’s business.
2. Right to remuneration– An agent, when he has wholly carried out the business of the agency has the
right to be remunerated of any expenses suffered by him while conducting the business.
3. Right of Lien on Principal’s property- The agent has the right to hold (keep with himself) any
movable or immovable property of the Principal until his due remuneration is paid to him by the
Principal.
4. Right to be Indemnified– The agent has the right to be indemnified against all the lawful acts done
by him during the course of conducting the Principal’s business.
5. Right to Compensation– The Agent has the right to be compensated for any injury or loss suffered
by him due to the lack of skill and competency of the Principal.

Duties of an Agent to Principal:

1. He has to conduct the business of the Principal according to the directions of the Principal.
2. An agent is bound to conduct the business he is supposed to conduct with as much skill as a person on
his position ordinarily holds.
3. An agent is supposed to show the relevant accounts to the Principal as and when the Principal demands.
4. An agent has the duty to communicate any difficulty whatsoever he may come across while doing the
Principal’s business. He is supposed to perform due diligence in this regard.
5. If any material fact has been concealed or the business is not carried out in the manner that the Principal
directed, the Principal can repudiate the contract between them.
6. If the agent carries out the business in the manner he wanted to perform it, rather than on the directions
of the Principal, the Principal may claim from the agent any benefit he may have achieved through
doing so.

Revocation of Agent’s authority

There are certain rules regarding the revocation of an agent’s authority.

1. It can be revoked any time before the authority has been exercised.
2. If according to the terms of the contract between the two, the agency has to continue upto a certain
time, any prior revocation by the Principal shall be compensated for, to the agent.
3. The termination does not take effect before it has been communicated to the agent.
4. Termination of the authority of an agent terminates the authority of all the sub-agents under him.
Termination of Agency

An agency can be terminated or is terminated in 5 different ways:

1. When the agent’s authority is revoked by the Principal

2. When the agent renounces the business of the agency
3. When the business of the agency is completed
4. When either of the parties dies or becomes mentally disabled
5. When the Principal is adjudicated an insolvent

Sale of Goods Act,1930 :

It is one of the special types of contract. Initially, it was the part of the Indian Contract Act, 1872. Later it was
deleted and a separate sale of Goods Act was passed in 1930. It came into force on 1st July, 1930. It extends to
whole of India except the State of Jammu & Kashmir.

Contract of Sale of Goods:

As per Section 4(i) of the Sale of Goods Act, 1930, Contract of sale of Goods is a contract whereby the seller
transfers or agrees to transfer the property in goods to the buyer for a price

Essential Elements:

- There must be at-least two parties. (Bilateral Contracts)

- The subject matter of the contract must be goods.

- A price in money should be paid or promised.

- A transfer of property in goods from seller to the buyer must take place.

- It must be absolute or conditional.

- All other essentials of a valid contract must be present

GOODS – MEANING :

As per Sec 2(7), it means every kind of movable property other than actionable claims and money; and includes
stock and shares, growing crops, grass and things attached to or forming part of the land which are agreed to be
severed before sale or under the contact of sale.

Classification of Goods :

1. Existing Goods (this type is further divided into three types

mentioned below)
1.1 Specific Goods
1.2 Ascertained Goods
1.3 Unascertained Goods

2. Future Goods

3. Contingent Goods
1. Existing Goods (Goods which exist physically at the time of
contract of sale)
Goods which are existent at the time of formation of the contract of sale are called existing goods.
Example: You want to buy biscuits and you went to the shop and the same was available there. So, here
biscuits will be called existing goods.
1.1 Specific Goods
These are those goods which are separately identified and agreed upon at the time of sale.
Example: You want to buy good day biscuit and went to the shop, paid for it and taken the delivery. So, here
good day biscuits will be called specific goods. As you bought specifically this brand’s biscuits.
1.2 Ascertained Goods
These are those goods which are separately identified and agreed after sale transaction.
Example: You want to buy good day biscuit and went to the shop, paid for it and later on after paying for it you
decided to buy Oreo biscuit so, here this will be the case of ascertained goods because the change is getting
done after the sale transaction/ after payment is made.
1.3 Unascertained Goods
Example: You want to buy any biscuit from the large variety of biscuits available in the shop. So, this will be
the case of unascertained goods as you are ready to buy any brand from the large variety available and it’s not
certain that which brand you will get. The goods are in bulk and not separated yet.
Example: A agrees to sell B, 10 litres of Mustard Oil from the 100 litres of oil available with A. B agrees and
paid the price for the same to A. So, here till the time 10 litres oil is separated from the 100 litres of oils
available, it will be called unascertained goods. Once, 10 litres is separated then 10 litres will be called
ascertained goods.
2. Future Goods
Goods which will come into existence at a future date/time. They don’t exist at the time of sale.
Example: A goes to buy bike on 11th April, 2020 at the showroom and made payment but A was promised the
delivery of bike on 15th May, 2020 due to it’s unavailability right now. So, here the goods will be in existence
in future so, it will be called future goods and there will be an agreement to sell.
3. Contingent Goods
Those goods whose existence is dependent on the future uncertain event/ contingent event.
If goods come into existence then the sale transaction will happen, if goods don’t come into existence then the
sale transaction will not happen
Example: A milkman, agrees to sell 5kg of milk provided cow yields the milk. This will be called a contract of
contingency goods as it is dependent on the condition of cow yielding the milk.

- If cow yields the milk then sale will be completed

- If cow don’t yield the milk then sale will not completed

Contract to Sale vs Agreement to Sell :

Conditions:

A condition is a stipulation (stipulation means to demand something):-

1. Which is essential to the main purpose of the contract
2. The breach of condition gives the aggrieved party a right to terminate the contract,
reject the goods and recover the price

Non fulfillment of condition upsets the contract.

Types of Conditions

a) Express Conditions
These are conditions which are expressly incorporated/ mentioned by the parties in the contract. It can be oral
or written.
b) Implied Conditions
These are such conditions which are automatically incorporated/ applicable by the law/ conduct/ behaviour in
the contract.

Various implied conditions are mentioned below:

1. Condition as to title/ ownership
Seller has the right to sell the goods when seller has the title/ownership of the goods. If seller is selling the
goods which are stolen then that means seller has no right/title/ownership of the goods. Hence, buyer can cancel
the contract, return the goods and can recover the price of the goods.
2. Condition as to sale by description
The implied condition is that if seller is selling the goods by giving/ stating the description to the buyer then the
goods must correspond with the description.
3. Condition as to sale by sample
The implied condition is that if seller is selling the goods by giving sample to the buyer first then buyer must be
supplied with goods corresponding with the sample as well for all the orders placed later on.
4. Condition as to sale by sample as well as by description
Section 15 of the Sale of Goods Act, 1930 explains that when a buyer intends to buy goods by description, the
goods must correspond with the description given by the buyer at the time of formation of the contract, failure
in which the buyer can refuse to accept the goods.
5. Condition as to quality/ fitness
As a normal rule buyer is responsible to examine the goods and see whether it’s suitable for him or not. But
when buyer specifically informs the seller about the purpose and relies on the skills and judgement of the seller
so, in this case seller is responsible to provide quality product to the buyer.
If seller cheats with buyer then there will be a breach of implied condition as to quality/ fitness.
6. Condition as to merchantability (means there should be no defects in the goods
supplied).
7. Condition as to wholesomeness (goods supplied should not be adulterated or goods should be suitable for
consumption).

Warranties

Meaning- A warranty is a stipulation (stipulation means to demand something):-

1. Which is not essential to the main purpose of the contract

2. The breach of warranty gives the aggrieved party a right to claim for damages but
not the right to reject the goods
3. Even if there is breach of warranty, the main contract can be completed

4. Breach of warranty can’t be treated as breach of condition

Difference between guarantee and warranty:

Types of Warranties

a) Express Warranties
Warranty which is expressly incorporated/ mentioned by the parties in the contract. It can be oral or written.
b) Implied Warranties
These are such warranties which are automatically incorporated/ applicable by the law/ conduct/ behaviour in
the contract.
An implied warranty is a lot like an assumption. For example, when you buy a new car from a car dealer, the
implied warranty is that the car works. When you order a burger at a restaurant, it comes with the implied
warranty that it is edible.

Various implied warranties are mentioned below:

1. Implied warranty of quiet (undisturbed) possession of goods

Once the goods are sold to buyer then there should be no disturbance by the seller or any third party to the
buyer.
2. Implied warranty to disclose the dangerous nature of the goods
In case of selling the goods of dangerous nature to the buyer, there is an implied warranty that seller should
disclose all the relevant information to the buyer. If seller fails to do the same, then seller will be liable to pay
for the damages to the buyer.
Example of dangerous goods: Disinfectant, chemicals etc.
3. Implied warranty as to quality/ fitness
An implied warranty as to the quality or the fitness for a particular purpose should be made know to the buyer
in advance. Example: any damage to goods which can happen should be made known to the buyer in advance,
otherwise it will be considered breach of warranty.
4. Implied warranty as to free from liability/ loan charges
Any goods which are being sold by the seller to buyer should be free from loan/ liability.
Example: A took loan from bank for Rs. 1,00,000 by pledging the bike with bank. There was a loan going on
and A sold the bike to C, here in this case there is an implied warranty that A can’t sell the bike to C as the bike
is not free from liability/ loan. So, C has the right to recover the damages from A.

Doctrine of Caveat Emptor (buyer is responsible for what he do)

Here, Caveat means beware and emptor means buyer. So, Caveat Emptor means buyer beware.
This concept says that let the buyer beware (alert to risks or dangers). Which means buyer is responsible for
wrong selection made by him during buying something. Seller is not responsible or bound to disclose any
defect in the goods i.e buyer is liable for his/ her acts.

Essentials of Doctrine of Caveat Emptor:

1. It is the duty of the buyer to thoroughly examine the goods

2. Buyer can’t blame anyone if goods turn out to be defective or do not serve his purpose
3. Seller is under no obligation to reveal defects
4. There is no implied undertaking by the seller that he shall supply the goods which will suit the buyer’s
purpose

Exceptions to Doctrine of Caveat Emptor: (seller is responsible not the buyer)

Here, exceptions means buyer is not responsible for the actions taken. Only the seller will be
responsible in below mentioned cases:

1. Buyer relies on the seller’s judgement regarding the quality

Where buyer has made known the particular purpose to the seller and relies on him for the purchase. So, in this
case if any issue arises regarding the purpose then seller will be held responsible for the same.
2. Sale as sample
3. Sale as per the description
4. Sale by both sample as well as description
5. Sale by fraud or misrepresentation
6. Goods must be free from adulteration
Otherwise seller will be responsible in case adulterated goods are supplied to the buyer
7. Goods must be of merchantable quality (there should be no defects or goods should be fit for the purpose
they are bought for)
Example: Cold drinks or chocolates- If seal of the cold drink selling in the market is opened
or wrapper of the chocolate is damaged. Then these goods will not be called as goods of merchantable quality.

Performance of Contract of Sale :

Performance of contract of sale means delivery of goods by seller and acceptance of delivery of goods and
payment for the same by buyer.
• Seller’s main duty:-
Is to deliver the goods to the buyer
• Buyer’s main duty:-
To accept the goods and pay the price to the seller as per the terms of the contract.
The parties are free to provide any terms in their contract regarding time, place, delivery, payment of goods and
so on. But if the parties are silent and no terms are mentioned in the contract then rules contained in the sale of
goods act will be applicable.
Meaning of Delivery

Voluntary transfer of possession from one person to another.

Types of Delivery:-

1. Actual Delivery
It means actual physical delivery of the goods to the buyer or his authorized agent by the seller or his authorized
agent.
2. Symbolic Delivery
When goods are not physically delivered but the means of obtaining possession of goods is delivered to buyer.
Symbol is used for delivery.
Example: Handing over of keys of go-down where goods are safely kept etc.

3. Constructive Delivery
Third party is involved in delivery. Seller don’t deliver the goods directly.

Rules relating to delivery of Goods:

1. Payment and delivery are concurrent (performed at the same time)

Payment and delivery are concurrent, which means both should be performed at the same time unless otherwise
agreed.
Example: Cash sale (this is not applicable for credit sale)
2. Delivery may be actual, symbolic or constructive
3. Effect of part delivery
If the order placed is so big and delivery of goods takes place in parts so when buyer accepts the part delivery
then that means, buyer is giving the acceptance to the whole delivery.
4. Buyer to apply for delivery
Buyer should ask the seller to deliver the goods.
5. Place of delivery
Place of delivery should be specified by the parties, in case when no agreement is there/ parties are silent about
it then place of contract will be considered as place of delivery.
Example: If place of contract is factory then place of delivery will also be considered as
factory.
6. Time for delivery of goods
Delivery should be done within specified time. If no time is specified then delivery should be completed within
a reasonable time.
7. Goods in possession of third party
If goods are in possession of third party like warehouseman/ warehouse keeper then seller needs to
acknowledge the sale to third person like warehouseman who will then deliver the goods to buyer.
8. Expenses of delivery
Seller will borne all the expenses to bring the product to deliverable state and for obtaining the delivery, buyer
will borne all the expenses.
9. Delivery of wrong quantity- either short/ excess/ mixed delivery
a) Short Delivery
Received amount is less than the ordered quantity.
Example: Ordered 100 quantity from seller Received 90 quantity
In this case, buyer has below mentioned options:
i) Reject the goods
ii) Accept the goods- But if he accepts the goods so delivered then he is bound to pay for them at the contract
price.
b) Excess Delivery
Received amount is more than the ordered quantity.
Example: Ordered 100 quantity from seller. Received 110 quantity
In this case, buyer has below mentioned options:
i) Reject the whole goods
ii) Accept the whole goods
iii) Accept the contracted quantity of goods i.e 100 and reject the rest i.e 10
c) Mixed Delivery
It means goods delivered have the goods of different description as well then contracted for.
Example: Ordered 100 quantity from seller Received 50 quantity matches to the specified description during
the contract and 50 quantity does not match with the description
In this case, buyer has below mentioned options:
i) Reject the whole goods
ii) Accept the contracted goods and reject the rest- If the buyer accepts the whole goods then he can’t sue the
seller for delivering the mixed goods
10. Instalment Deliveries
If parties agree to get the goods in instalments then buyer is bound to accept the delivery thereof by instalments.
Parties are not bound to deliver the goods in instalments unless agreed.
11. Delivery to the carrier/ courier company
If seller gives the goods to carrier/ courier company to deliver the same to the buyer then that does not means
that goods are delivered to buyer, it will be considered in transit unless delivered to the buyer actually.
12. Buyer has the right to examine the goods
After examining, if buyer is satisfied then buyer can keep the goods.
After examining, if buyer is not satisfied then buyer can reject the goods

******THE END*****