Contract Law & The Indian Contract Act

This assignment delves into the intricacies of contract law with a specific focus on the Indian Contract Act 1872. It examines various aspects of contract formation, breach of contract, and remedies available under the Act. Students are tasked with analyzing case studies and legal precedents to demonstrate their understanding of how contract law operates in practice, particularly within the context of Indian corporate governance reforms.

Running head: LEGAL STUDIES
Law of Contract
Name of the student:
Name of the university:
Author note

1LEGAL STTUDIES
Answer to Question 1
(a)
The present case is based on the doctrine of agent-principal relationship1. It is a kind
of an agreement made between principal and the agent. In this process, agent is appointed by
the principal to act on his behalf. In the relationship, the maxim Qui Facit Per Alium, Facit
Per Se is applicable. The meaning of the maxim is that the duty of the agent is to act for the
interest of the principal2. The law of agency has been discussed under section 194 of the
Indian Contract Act 1874. It is a kind of contract. The purpose of the relationship is to make
legal transaction by the agent to avoid the conflict of interest3.
There are certain responsibilities exist in this relation. It is the duty of the agent to
prioritise the principal’s will as in this relationship; the principal is holding fiduciary post. In
this present case, Vera told Siddo not to sell the painting less than $40,000. However, Siddo
sold it out for $20,000. Therefore, Siddo had breached the contract and will be held liable for
that.
(b)
According to section 194 of the Contract Act, the principal appoints an agent. In the
legal system of India, the relationship between the principal and agent is contractual in
nature4. The agents are acting on behalf of the principal. The competency regarding the
1 McKendrick, Ewan. Contract law: text, cases, and materials. Oxford University Press (UK), 2014
2 Ayres, Ian, and Alan Schwartz. "The no-reading problem in consumer contract law." Stan. L. Rev. 66 (2014): 545
3 Swaminathan, Shivprasad JGLS. "Eclipsed by orthodoxy: the vanishing point of consideration and the forgotten ingenuity
of the Indian contract act 1872." (2017).
4 Roy, Tirthankar, and Anand V. Swamy. Law and the Economy in Colonial India. University of Chicago Press, 2016.

2LEGAL STTUDIES
agency has been described under section 184 of the Contract Act. It has been stated that a
minor has also the capacity to become an agent5.
Under the Contract Act, certain provisions have been mentioned regarding the duties
of the agent. An agent is required to execute the mandates properly and should have to abide
by the instructions of the principals6. An agent has to give the will of the principal on priority
and taken possible steps to avoid any conflicts of interest7. In this case, it has been observed
that Siddo bought the picture for himself and later sold the same to the other person.
Therefore, a conflict of interest arose regarding the picture. Thus, it can be stated that Siddo
has breached the duty of an agent8.
(c)
The principle of the law of agency is based on the mutual agreement between the
principal and agent9. The objective of the relation is to appoint someone who can act on
behalf of the principal and complete certain work. A fiduciary relationship has been observed
in this relation. It is the utmost duty of the agent to work for the interest of the principal10. As
the agent does the work on behalf of the principal, he has certain chances to make secret
5 Rankin, George Claus. Background to Indian law. Cambridge University Press, 2016.
6 Chen-Wishart, Mindy, Alexander Loke, and Burton Ong, eds. Studies in the Contract Laws of Asia: Remedies for Breach
of Contract. Oxford University Press, 2016.
7 Andrews, Neil. Contract law. Cambridge University Press, 2015.
8 Jain, Sankalp. "Contracts of Sale: Terms, Conditions and Warranties with Special Reference to Sale of Goods Act, 1930."
(2015).
9 Jain, Sankalp. "Types of Contracts: General and Specific Contracts." (2015).
10 Knapp, Charles L., Nathan M. Crystal, and Harry G. Prince. Problems in Contract Law: cases and materials. Wolters
Kluwer Law & Business, 2016.

3LEGAL STTUDIES
profit11. There are certain duties prescribed under the Indian Contract Act. It is the duty of the
agent not to make any secret profit. Therefore, an agent is barred under the law to take any
kind of extra money from the product given to him12.
In this present case, it has been observed that Siddo got certain amount of extra
money from the customer. It is the duty of him to let the principal know about the profit13.
Answer to Question no. 2
The present case is based on breach against the contractual agreement and
misrepresentation. Under the Indian Contract Act, section 17 and section 18 deal with the
misrepresentation and section 28 of the Act deals with the breach for contractual agreement14.
In the case of Joan, it has been observed that an agreement was made in between her
and the car dealer, Frank. It was stated under the agreement that the car that is owned by Joan
could not meet any major dispute within 12 months. The payment for the car was paid by
way of a loan and Joan told that she will pay the loan by 12 consecutive months. However,
the car was met with certain major problem and Joan stopped the payment to Frank.
Under section 28 of the Contract Act, it has been observed that contract is an
agreement that is enforceable by law15. In a contract, there should be certain essentials that to
11 Ivanov, Andrei, and S. Maslova. "Applying modelling in the process of anti-corruption expertise of legal regulation of
public procurement." (2014).
12 Latimer, Paul, and Philipp Maume. "Promoting Information Under Broker/Client Rules at Common Law and in
Equity." Promoting Information in the Marketplace for Financial Services. Springer International Publishing, 2015. 85-116
13 Rankin, George Claus. Background to Indian law. Cambridge University Press, 2016.
14 Courtney, Wayne. "Indemnities and the Indian Contract Act 1872." Nat'l L. Sch. India Rev. 27 (2015): 66.
15 Abraham, Santhosh, Claire Marston, and Edward Jones. "Disclosure by Indian companies following corporate governance
reform." Journal of Applied Accounting Research 16.1 (2015): 114-137.

4LEGAL STTUDIES
be meet to make the contract valid16. The essentials are offer, acceptance, intention of the
parties, consideration and competency of the parties. In this case, every essential are fulfilled.
Therefore, it can be stated that the parties are bind by law17. If there is any breach regarding
the agreement occurred, any of the party has the right to revoke the contract18.
In this case, it is observed that the conditions of the agreement regarding the dispute
of the car have been violated as there was a major problem cropped up within six months.
Therefore, Joan has every right to repudiate the contract or validity of the agreement. She can
claim damage under section 73, 74 and section 75 of the Contract Act, 187219.
The problem regarding the parents of Joan is highlighted in the sections of 18 and
section 19 of the Contract Act 1872. Under the provision of section 18 of the Contract Act,
the term misrepresentation has been defined. When certain statements are wrong but the
person to whom the statements have been made believed it to be true, it will be stated that the
person was misrepresented.
Under section 19 of the Contract Act it has been stated that if any person signed in an
agreement by misrepresentation, he has a right to make the agreement void20. In the present
case, it has been observed that Joan misrepresented her parents regarding the loan amount
and they had signed the agreement. Therefore, as per the Contract Law, Karl and Maria has
16 Deep, Shumank, Deepak Singh, and Syed Aqeel Ahmad. "A review of contract awards to lowest bidder in Indian
construction projects via case based approach." Open Journal of Business and Management 5.1 (2017): 159-68.
17 Saxena, I. C. "54_Case and Material on Contract (1983)." (2016).
18 Minattur, Joseph. "008_The Indian Contract Act: Its Wanderlust and Warmer Climes." (2016).
19 Diamond, Aubrey L. "Codification of the Law of Contract." The Modern Law Review 31.4 (1968): 361-385
20 Patra, Atul Chandra. "HISTORICAL BACKGROUND OF THE INDIAN CONTRACT ACT, 1872." Journal of the
Indian Law Institute 4.3 (1962): 373-400.

5LEGAL STTUDIES
right to repudiate the contract as they are misrepresented by their daughter. Even, the fact was
known to Frank.

6LEGAL STTUDIES
Reference:
Abraham, Santhosh, Claire Marston, and Edward Jones. "Disclosure by Indian companies
following corporate governance reform." Journal of Applied Accounting Research 16.1
(2015): 114-137.
Andrews, Neil. Contract law. Cambridge University Press, 2015.
Ayres, Ian, and Alan Schwartz. "The no-reading problem in consumer contract law." Stan. L.
Rev. 66 (2014): 545.
Chen-Wishart, Mindy, Alexander Loke, and Burton Ong, eds. Studies in the Contract Laws
of Asia: Remedies for Breach of Contract. Oxford University Press, 2016.
Courtney, Wayne. "Indemnities and the Indian Contract Act 1872." Nat'l L. Sch. India
Rev. 27 (2015): 66.
Deep, Shumank, Deepak Singh, and Syed Aqeel Ahmad. "A review of contract awards to
lowest bidder in Indian construction projects via case based approach." Open Journal of
Business and Management 5.1 (2017): 159-68.
Diamond, Aubrey L. "Codification of the Law of Contract." The Modern Law Review 31.4
(1968): 361-385.
Ivanov, Andrei, and S. Maslova. "Applying modelling in the process of anti-corruption
expertise of legal regulation of public procurement." (2014).
Jain, Sankalp. "Contracts of Sale: Terms, Conditions and Warranties with Special Reference
to Sale of Goods Act, 1930." (2015).
Jain, Sankalp. "Types of Contracts: General and Specific Contracts." (2015).

7LEGAL STTUDIES
Knapp, Charles L., Nathan M. Crystal, and Harry G. Prince. Problems in Contract Law: cases
and materials. Wolters Kluwer Law & Business, 2016.
Latimer, Paul, and Philipp Maume. "Promoting Information Under Broker/Client Rules at
Common Law and in Equity." Promoting Information in the Marketplace for Financial
Services. Springer International Publishing, 2015. 85-116.
McKendrick, Ewan. Contract law: text, cases, and materials. Oxford University Press (UK),
2014.
Minattur, Joseph. "008_The Indian Contract Act: Its Wanderlust and Warmer Climes."
(2016).
Patra, Atul Chandra. "HISTORICAL BACKGROUND OF THE INDIAN CONTRACT
ACT, 1872." Journal of the Indian Law Institute 4.3 (1962): 373-400.
Rankin, George Claus. Background to Indian law. Cambridge University Press, 2016.
Rankin, George Claus. Background to Indian law. Cambridge University Press, 2016.
Roy, Tirthankar, and Anand V. Swamy. Law and the Economy in Colonial India. University
of Chicago Press, 2016.
Saxena, I. C. "54_Case and Material on Contract (1983)." (2016).
Swaminathan, Shivprasad JGLS. "Eclipsed by orthodoxy: the vanishing point of
consideration and the forgotten ingenuity of the Indian contract act 1872." (2017).