Submitted To:Barrister Ishtiaque AhmedLecturer,School of Business,North South University

Course: Law 200Section: 05Semester: Fall 2013

Make up Mid term 1

Submitted By:Sarker Md. Sadman Shabab Ratul ID: 121 0458 030

Date of Submission:12th January, 2014

Contents:1. Essential Elements of a Contract2. Offer and Acceptance3. Acceptance4. Consideration5. Void and Voidable Agreements6. Capacity of Parties7. Free Consent8. Contingent Contract9. Quasi Contract

The Essential Elements of a ContractDefinition of ContractAn agreement enforceable by law is a contract. In a contract there must be two compulsory things. The first is an agreement and the second is that the agreement must be enforceable by law.An agreement is considered valid and existent whenever one or more persons promise to one or others, to do or not to do something. On the other hand, some agreements cannot be enforced through the courts of law. For Example: if two people agree to play table tennis or go watch a movie, this cannot be enforced by law. An agreement that can be enforced through the courts of law is called a contract.

The Essential Elements of a ContractWhen few conditions are fulfilled, an agreement becomes enforceable. The essential elements are as follows:1. Offer and Acceptance: There must be a lawful offer by one party and a lawful acceptance of the offer by the other party or parties. The adjective lawful implies that the offer and acceptance must conform to the rules laid down in the Contract Act of Bangladesh regarding offer and acceptance.

2. Intention to create Legal Relationship: There must be an intention among the parties that the agreement shall result in or create legal relations. An agreement to have dinner at a colleagues house is not an agreement intended to create legal relations and is not referred as a contract. But an agreement to trade goods or services or marriage are agreements intended to create some legal relationship and are therefore contracts, provided that the other essential elements are present.

3. Lawful Consideration: Apart from few exceptions, an agreement is legally enforceable only when each of the parties to it gives something and gets something in return. As mentioned earlier, and agreement to do something for nothing is usually not enforceable by law. The something given or obtained in an agreement is called consideration. This consideration can be an act of doing something or forbearance, i.e., not doing something, or a promise to do or not to do something. Consideration can be past which is something already done or not done yet. It may also be present or future. But only those considerations are valid which are lawful.

4. Capacity of Parties: The parties to an agreement must be legally capable of entering into an agreement; otherwise it cannot be enforced by a court of law. Want of capacity arises from minority, lunacy, idiocy, drunkenness and other factors. If the parties to the agreement suffer from any such disability, the agreement is not enforceable by law, except in some special cases

5. Free Consent: For an agreement to be enforceable, it must be based on the free consent of all the parties. There is absence of genuine consent if the agreement is induced by coercion, undue influence, mistake, misrepresentation and fraud. A person guilty of the coercion cannot enforce the agreement. The other party can enforce it, subject to rules laid down in the Act.

6. Legality of the Object: The object for which the agreement has been entered into must not be illegal, or immoral or opposed to public policy.

7. Certainty: The agreement must not be vague. It must be possible to ascertain the meaning of the agreement, for otherwise it cannot be enforced.

8. Possibility of Performance: The agreement must be capable of being performed. A promise to do an impossible thing cannot be enforced.9. Void Agreements: An agreement so made must not have been expressly declared to be void.

10. Writing, Registration and Legal Formalities: An oral contract is a perfectly good contract, except in those cases where writing and/or registration is required by some statute. It is sometimes difficult to prove the terms of an oral contract. Therefore, important agreements are usually entered into in writing even in cases where writing is not compulsory.ConclusionAll the elements must be present to be considered a contract. If any is missing, the agreement does not become a contract. An agreement which fulfills all the essential elements is enforceable by law and is called a contract. Every contract is an agreement but all agreements are not contracts.

Offer and AcceptanceAll contracts are made by the process of a lawful offer by one party and the lawful acceptance of the offer by the other party. For Example: When A says to B, Will you buy my car for TK.5 lacs? This is an offer. When B agrees, the offer is accepted and a contract is formed.ProposalAn offer always involves the making of a proposal. In the Contract Act, proposal is defined as 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.

OfferA proposal is also called an offer. The person making the offer, also known as promisor, is called the offerer. The offer made to a person is called offeree. For Example: A offering B to buy his car for TK.5 lacs is an offer. Here A is the offerer and B is the offeree.

Promise and AcceptanceThe book defines a promise as When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal when accepted becomes a promise. The person making the proposal is the promisor and the person accepting the proposal is the promise.For Example: Mr. J puts an advertisement in the newspaper for the sale of a car for TK.10 lakhs. Mr. Y replies by showing interest to buy the car. Mr.Js(promisor/offerer) advertisement is an offer and Mr. Y(promise/offeree) is the acceptor.Rules regarding Offer1. An offer may be express or may be implied from the circumstances: There are two ways of making an offer. Either it is by words, spoken/written or by conduct. When an offer is made by stating so in words or writing, it is referred as an Express Offer. An offer that is implied from the conduct of a person is called an Implied Offer.

2. An offer may be made to a definite person, definite class of persons or to the world at large: An offer made to a person or a group of people is called a Specific Offer. An offer sent to a lot of people or the world at large is a General Offer.

3. Legal relationship is required: As one of the essential elements of contract, an offer must be capable of creating a legal relationship. For Example: an invitation to play football with friends does not bind a legal relationship and it does not lead to a binding contract.

4. The terms of the offer must be certain, definite, unambiguous and not vague: An offer must provide with some sort of promise that is certain and definite. Mr. X says he will pay Ms. Y some money for getting a report done. This is not a valid or definite offer since the amount of money to be paid is not specified.

5. A mere statement of intention is not an offer: Pricelists and catalogues, and enquiries for customers are merely statements of intention. They are rather regarded as invitation to others to made offers. A newspaper advertisement is usually an invitation to make offers. The price list on fast food restaurants in their menus is an invitation of an offer to be made rather than being an offer by itself.

6. An offer must be communicated to the offeree: Unless an offeree knows about the offer, the person cannot accept the offer. For Example: John offers to pay anyone TK. 5000 who finds his dog. Peter, without knowing the offer, brings the dog to John. Therefore, Peter was not entitled to the reward since he was not aware of it.7. An offer may be conditional: An offer may be made subject to conditions. The conditions must be clearly communicated to the offeree. If a person accepts an offer without knowledge of the conditions, the offerer cannot claim fulfillment of the conditions. But when the conditions are clearly stated, the offeree cannot plead for ignorance of the conditions.

8. Printed Contracts: Printed contracts contain a large number of terms and conditions which exclude liability under the contract. During a student admission in North South University, the student has to sign the form where all the rules and regulations along with the code of conduct are included. The student has a contract with the university to abide by the rules.

AcceptanceAn offer can be accepted only by the person or persons for whom the offer is intended. An offer made to a particular person can only be accepted by him because he is the only person intended to accept. Offer made to a class of persons can be accepted by any member of that class and the same goes for an offer made to the world in general.Rules regarding Acceptance1. It must be an absolute and unqualified acceptance of all the terms of the offer: When there is any variation of the terms between the time an offer is made and the offer is accepted, there is no contract. For Example: a person gets a loan from a bank of monthly payment of TK. 1000 each. After the loan has been taken, if the Bank claims that he has to pay TK. 1500 each month, the contract is invalid.

2. Conditional Acceptance: According to the English law and the terms of the Contract Act, an acceptance with a variation is no acceptance. It is a counter-proposal which must be accepted by the original promisor before a contract is made. X offers to sell his car to Y for TK. 5 lakhs but Y makes a counter proposal for buying the car at TK. 4 lakhs. On the other hand, an acceptance is not conditional if an immaterial term is added or if there occurs any misunderstanding between parties for the interpretation of collateral terms.

3. Contracts subject to condition: There are cases where an immediate binding contract is formed although some of the parties rights and obligations may be dependent upon the happening of a particular event.

4. Clarification: The seeking clarification of offer neither amounts to the acceptance of the offer nor to the making of a counter offer.

5. The acceptance must be expressed in some usual or reasonable manner: The usual methods of communicating an offer are word of mouth, telephone, telegram or by post. The offeree may express his acceptance using the modes mentioned above. An offer may be accepted by conduct. If the offeree does what the offerer wants him to do, there is acceptance of the offer by conduct.

6. Mental acceptance or uncommunicated assent does not result in a contract: If an offeree does not show any reply to the offer or remains silent and does nothing to show that he has accepted the offer, there is no contract.

7. The mode of acceptance: When the promisor makes a specific mode of acceptance, the offeree must follow that specific mode of acceptance. If mode of acceptance is by email, the offeree must refer his acceptance by email. The promisor may not accept the offer otherwise and force the offeree to follow the mode of acceptance.

8. Time of acceptance: If a time frame is specified in the offer, the offeree must accept the offer within the time. When no time is mentioned, the offer must be accepted within reasonable time.

9. When acceptance is complete: A proposes, by letter, to sell a house to B at a certain price. The communication of the proposal is complete when B receives the letter.

10. Before offer: Acceptance is given after an offer has been made. There cannot be acceptance before the offer is given from any party. When B shows his acceptance to buy the house before A proposes, there is no contract.

11. The acceptance must be made while the offer is in force: The acceptance must be made before the offer has been revoked or the offer has lapsed.

Communication of Offer and AcceptanceIn the book, the Contract Act states : The communication of proposals, the acceptance of proposals and the revocation of proposals and acceptance, respectively, are deemed to be made by any act or omission of the party proposing, accepting or revoking by which he intends to communicate such proposal, acceptance or revocation or which has the effect of communicating it.An offer can be communicated to the offeree via word of mouth, by writing or by conduct.

Offer and Acceptance by PostAn offer can be made by post and also can be accepted by post if no other mode of acceptance is mentioned by the proposer. The post office is usually the agent when an offer is made by post. When the acceptance is posted it is enough for the offer to be accepted even though it may take time to reach the offerer. The letter must be correctly addressed and dated for the contract to be valid.

Offer and Acceptance through TelephoneTelephone is another mode of communicating an offer. There are certain rules regarding oral communication. The offer and acceptance must be audible, heard and understood. When these conditions are met along with the essentials of a contract, the parties are bound through a telephone conversation. When two people have a deal over the phone, an offer is made and accepted by both parties, the contract is valid.

OptionsA conditional contract to do something is an option. A promise to keep an offer open to acceptance for a certain time is not binding on the proposer unless there is a consideration separately given for that promise is a conditional contract or an option.

Consideration

In a contract, consideration is an essential element. Subject to certain exceptions, an agreement is not enforceable unless each party to the agreement gets something. This something is called consideration.The Contract Act defines consideration as some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other.For Example: P agrees to sell a house to Q for TK. 80 lakhs. For Ps promise, the consideration is TK. 80 lakhs and for Qs promise, the consideration is the house.

Types of Consideration1. Past consideration: When the consideration of one party was given before the date of the promise, it is said to be past. X does an assignment for Y in the month of March. In April Y promises to pay X some money. This is referred as past consideration.

2. Present consideration: Consideration which moves simultaneously with the promise is called present consideration. Present consideration is also known as executed consideration. A buys a book form a shop and pays immediately. The consideration from A is present or executed consideration.

3. Future consideration: when the consideration is to move at a future date, it is called future consideration, also known as executor consideration. In a contract the consideration may be executor on both sides. A promise may support a promise. Therefore, a promise to pay money at a future date for goods to be delivered at a future date is a valid contract.

Rules (essential factors) of Consideration1. Desire of the promisor is essential: the act done or loss suffered by the promise must have been done or suffered at the desire of the promisor. An act done without any request is a voluntary act and does not come within the definition of consideration. For Example: X sees Qs house on fire and helps in extinguishing it. Q did not ask for help so X cannot demand payment for his services to extinguish the fire.

2. The consideration must be real: The consideration must have some value in the eye of law. It must not be sham or illusory. The impossible acts and illusory or non-existing goods cannot support a contract. Therefore, real consideration comes from good consideration.

3. Public duty: Where the promise is already under an existing public duty, an express promise to perform, or performance of, that duty will not amount to consideration. There will be no detriment to the promisee or benefit to the promisor over and above their existing rights and liabilities.

4. Promise to a stranger: A promise made to a stranger to perform an existing contract is enforceable because the promisor undertakes a new obligation upon himself which can be enforced by the stranger. X wrote to his nephew B, promising to pay him an annuityof TK. 5000 in consideration of him marrying C. B was already engaged to marry C. The fulfillment of Bs contract with C was consideration to support Xs promise to pay the annuity.

5. Consideration need not be adequate: An agreement to which the consent of the party is freely given is not void merely because the consideration I inadequate but the inadequacy of the consideration may be taken into account by the court in determining the question whether the consent of the promisor was freely given. The reason behind this rule is that it is impossible for the court to decide what adequate consideration is. The parties to the contract must decide the quantum of consideration and if consent was freely give,, the court will enforce the agreement. If the consideration is inadequate, the Court may hold that consent of the promisor was not freely given and the agreement may become void.

6. The consideration must not be illegal, immoral, or opposed to public policy: If either the consideration of the object of the agreement is illegal, the agreement cannot be enforced. The same principle applies if the consideration is immoral or oppose to public policy.

7. The consideration may be present, past, or future: It has been discussed earlier.

8. The consideration may move from the promise or from any other person: A person granted some properties to his wife C directing her at the same time to pay an annual allowance to his brother R. C also entered into an agreement with R promising to pay the allowance to R. This agreement can be enforce by R even though no part of the consideration received by C moved from R.

No Consideration No Contract Exceptions to the RuleConsideration is essential for the validity of a contract. A promise without consideration is a gift; one made for a consideration is a bargain and is a gratuitous undertaking and cannot create a legal obligation.

ExceptionsThere are exceptional cases where a contract is enforceable even though there is no consideration. The exceptions are listed below1. Natural love and affection: an agreement made without consideration is valid if it is expressed in writing and registered under the law for the time being in force for the registration of documents and is made on account of natural love and affection between parties standing in near relation to each other. An agreement is valid when i. The agreement is made by a written document.ii. The document is registered according to the law relating to registration in force at the time.iii. The agreement is made on account of natural love and affection.iv. The parties to the agreement stand in a near relation to each other.

2. Voluntary compensation: A promise made without any consideration is valid if it is a promise to compensate wholly or in part, a person who has already voluntarily done something for the promisor, or something which the promisor was legally compellable to do. For Example: D finds Bs purse and gives it to him. B promises to give D TK. 500. This is a contract.

3. Time-barred debt: a promise to pay, wholly or in part, a debt which is barred by the law of limitation can be enforce if the promise is in writing and is signed by the debtor or his authorized agent. Therefore, a promise to repay such a debt is without any consideration.

4. Agency: There is no required consideration to create an agency.

5. Completed gift: The rule no consideration no contract does not apply to completed gifts. Nothing in this section shall affect the validity as between the donor and the done, of any gift actually made.

Stranger to a ContractA stranger to a contract, one who is not a party to it, cannot file a suit to enforce it. But a stranger to the consideration can sue to enforce it provided he is a party to the contract.

Exceptions1. Beneficiaries in the case of trust: An agreement to create a trust can be enforced by the beneficiary. D agrees to transfer certain properties to T to be held by T in trust for the benefit of C. C can enforce the agreement though he was not a party to the agreement.

2. Assignee of a contract: In considerable circumstances, a party to a contract can transfer right under the contract to third parties.

3. Family settlement: When family disputes are settled and is written down in a document, it is called family settlement. Members of the family can enforce such agreements who were not original parties to the settlement.

4. Acknowledgement or Estoppel: Where the promisor by his conduct, acknowledges himself as an agent of the third party, a binding obligation is thereby incurred towards him.

With the exception of the above cases, a contract cannot confer rights upon a person who is not a party to it. A contract cannot impose a liability upon a person who is not a party to it.

Void and Voidable AgreementsVoid AgreementAccording to the book, an agreement not enforceable by law is said to be void. It has no legal effect and confers no rights on any person and creates no obligations. An agreement which was legal and enforceable when it was entered into may subsequently become void due to impossibility of performance, change of law or other reasons. When it becomes void, the agreement ceases to have legal effect.

Voidable AgreementAn agreement which can be avoided or set aside some of the parties to it is a voidable agreement. If not avoided, the agreement is a good contract. The book defines as an agreement which is enforceable by law at the option of one or more of the parties thereto, but not an option of the other or others, is a voidable contract.

Unenforceable AgreementAn agreement which cannot be enforced in a court of law, one or both of the parties, because of some technical defect which can be nonpayment of the stamp duty.

Illegal AgreementAn illegal agreement is one which is against a law in force in the country and in our case Bangladesh.

Illegal agreement is void but void agreement is not necessarily illegal. An agreement may be void but it may not be contrary to law. If the terms are uncertain in an agreement, it is void but not illegal. On the other hand, when an agreement is illegal, other agreements which are incidental or collateral to it are void. The courts will not enforce any agreement entered into with the object of assisting or promoting an illegal transaction.In conclusion, an agreement that satisfies all the essential elements of a contract and which is enforceable through the courts is called valid contract.

Capacity of PartiesOne of the essential conditions for the validity of an agreement is that all the parties to it must have capacity to enter into contracts. The Contract Act states every person is competent to contract who is of the age of majority according to the law to which he is subject and who is of sound mind, and is not disqualified from contracting by any law to which he is subject.A person cannot enter a contract if: he has not attained the age of majority according to the law to which he is subject. he is not of sound mind. he is disqualified from contracting by any law to which he is subject.

Minority A minor is one who is not at the age of 18. After the age of 18, a person becomes a major. There are two exceptions to this rule. The first rule is when a guardian of the minors person or property is appointed by a court of law. The second rule is when a minors property is taken over by the Court of Wards for management.Minors are often exploited and ill treated. Law provides that it is the duty of the Court to protect against minors lack of knowledge and experience.

Law regarding Minors Agreement1. Minors agreement is void: An agreement by a minor is absolutely void and inoperative. A minor is supported to be incapable of judging what is good for him. He may not be mature enough and the law protects him. With few exceptions, promises made by a minor will not be enforced against him.

2. A Minor can be a Promisee: An agreement under which a minor has received a benefit can be enforced as against the other party.

3. Minors Liability for Necessaries: The minors property is liable for the payment of a reasonable price for necessaries supplied to the minor or to anyone whom the minor is bound to support. The necessary article is determined by the status and social position of the minor.

4. Law regarding compensation or Restitution: A minor cannot be compelled to compensate for or refund any benefit which he has received under a void agreement. But it has been held in a number of cases that the court may require the minor to make compensation to the other party.

5. No Estoppel: A minor who falsely represents himself to be a major and thereby induces another person to enter into an agreement with him cannot plead minority as a defense in an action on the agreement. There can be no estoppels against a minor.

6. No Ratification: A minor on attaining majority cannot ratify an agreement entered into, while he was a minor. A void agreement cannot be validated by any subsequent action and a minors agreement is void ab initio.

7. No specific performance: An agreement by a minor being void, the court will never direct specific performance of such an agreement by him.

8. No insolvency: A minor cannot be declared insolvent even though there are dues payable from the properties of the minor.

9. Partnership by minor: A minor cannot enter into a contract of partnership but can be admitted into the benefits of a partnership with consent of all the partners.

10. A minor can be an agent: A minor can draw, make, indorse, and deliver negotiable instruments so as to bind all parties except himself. A minor cannot be adjudicated an insolvent. When a minor and a major jointly enter into an agreement with another person, the minor has no liability but the contract can be enforced against the major if his liability can be separately ascertained.

11. Position of Minors Guardian: An agreement entered into by the guardian of a minor on his behalf stands on a different footing from an agreement entered into by the minor himself. An agreement by a minor is void but his guardian on his behalf is valid provided the obligations undertaken are within the powers of the guardian.12. Company shares of a minor: A minor cannot apply for and be a member of a company. If a minor is recorded as a member, the company has to rescind the transaction and remove the name from the register.

Free ConsentConsent is said to be free when it is not caused by:1. Coercion2. Undue influence3. Fraud4. Misrepresentation or5. Mistake

COERCIONCoercion is: The committing or threatening to commit any act forbidden by the Indian Penal Code, 1860. Or,The unlawful detaining, or threatening to detain any property to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement.Some important facts about Coercion Even threat to commit suicide amounts to coercion. The threat need not proceed from the party to the contract; it may proceed from a third person also. A threat to file a civil or criminal suit is not forbidden by the Indian Penal Code.

Burden of Proof: Burden of Proof is that the consent was obtained by coercion shall lie upon the aggrieved party who wants to set aside the contract.Effect of Coercion: The contract is voidable at the option of the party whose consent was so obtained. When the aggrieved party decides to set aside the contract, it must give back any benefit received from the other party under the contract. Moreover, the other party need not perform his part of the contract. If the aggrieved party does not opt to set aside the contract, it works as a valid contract.

Elements of CoercionThe first and the foremost element is the coercion must be committing any act forbidden by Indian Penal Code. Any act which is prohibited by Indian Penal Code, if we take help of that act and compel a person, or threaten a person by that act and he or she enters into the contract that is known as contract has been entered into by the coercion. A person must be threatening to commit any act, forbidden by Indian Penal Code. Now there are two things either we are committing an act which is forbidden by Indian Penal Code or we are threatening to commit any act forbidden by Indian Penal Code. There are two things we are committing an act or we are threatening to commit an act forbidden by Indian Penal Code. Then we say the coercion has been exercised. The third element in it is coercion must be unlawful detaining or threatening to detain any property of other party then coercion is set to be exercised. When one party is unlawful detaining the property or threatening to detain the property coercion is exercised. For Example: A forcibly kidnaps the son of the B and asks the B that he will kill the son of the B if B will not execute a promissory note of rupees one lac in his favor. Now under this threatening B execute a promissory note of rupees one lac in favor of the A. Then we can say now B has given this promissory note under coercion because A has threatened to B that he will damage or he will kill the son of the B if he will not give a promissory note of one lakh rupees. Next point is coercion must be done with the intention of causing the other party to enter into the contract. This point itself explain that one party when it is exercising the coercion on the other party the intention is to enter into the contract, but we can analyze on this point that coercion has been exercised. We are threatening another party or we are committing an act but there is no intention that contract should be formulated out of it. Then it will be called that coercion was not exercised because after exercising the coercion a contract should emerge out of it. If contract is not emerging out of it by exercising the coercion then the aggrieved party will not have any sufficient ground to go in the court of law and to say that they enter into the contract on behalf of the coercion, because of the coercion because they dont have any proof to go into the court of law, therefore if one party is exercising the coercion that should lead to the emergence of the contract. The coercion may be initiated by any person. It is not necessary that offeror, if he gives an offer to the offeree, the coercion should be exercised by the offeror himself. Even coercion can be exercised by a stranger. If offeror appoint somebody on his behalf to exercise the coercion and compel the other party to enter into the contract that will be a valid ground for the aggrieved party to go in the court of law and to declare the contract either void or voidable. Meaning thereby, even a stranger can be involved, it is not necessary that party himself should be directly involved while exercising the coercion.Now next point related to the coercion is the IPC Indian Penal Code may or may not be enforce where the coercion is exercised and the next important relevant rule is that in coercion, if we are giving a threatening to file a suit against the other party then it will not be called as coercion. For Example: A has given a loan to the B and B promised to the A that he will return the loan within the three months. Now after the expiry of the three months B fails to return the loan and after repetitive requests B is not returning the loan of the A and A threatens to the B that he will go in the court of law to recover the loan. Now A in this case is threatening to the B to go in the court of law. This threatening will not be included in the coercion because it is a valid argument, it is a valid case and A is free to go in the court of law.

UNDUE INFLUENCEUndue Influence is: Where relations subsisting between the parties are such that one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other.

When is a person in a position to dominate the will of the other: Real or apparent authority. Fiduciary relation. Persons with affected mental capacity. When a transaction appears to be unconscionable, it is presumed that the stronger party has exercised undue influence over the weaker party.Some important facts about undue influence Undue influence may be exerted by a person who is not a party to the contract. Lack of foresight is not a ground for establishing a case of undue influence. The law presumes undue influence in a contract with a pardanashin woman, and the courts throw the burden on the other party to prove that undue influence was not exercised.Burden of proof: It is on the party who is in a position to dominate the will of the other.Effect of undue influence: The contract is voidable at the option of the party whose consent was so obtained. The court may direct the aggrieved party to refund the benefit whether in whole or in part or set aside the contract without any direction for refund of benefit. If the aggrieved party does not opt to set aside the contract, it works as any other valid contract.

Essentials of undue influenceNow we will talk about somehow the essentials and legal rules for valid undue influence, when we can say that undue influence was exercised? The first and the foremost point is that one party must be in a position to dominate the will of the other party and that I have explained the party should be in a dominating position to impose its condition. Take the example of a doctor, take the example of a lawyer, and take the example of a preacher. So they are in a dominating position by using the dominating position you have taken the advantages out of it. Now when we talk about the dominating position it means that dominating position sometime comes to you because of the authority you have got. It can be called as an apparent authority. The authority which is available and we are exercising the authority over the weaker party. Had undue influence be not exercised? The weaker party would not have entered into the contract. So we have got the apparent authority and by exercising that apparent authority that is giving us a dominating position. Another important point is that the dominating party uses its superior position to obtain the undue advantage. Suppose I am a stronger party but I am not using my position. Then it will be called that I am not exercising the undue influence. All the three conditions of the undue influence should be fulfilled simultaneously. The dominating position should be hold by the party. He should exercise that dominating position and should have taken the advantage. I am in a dominating position, as a University teacher I am in a dominating position before the students. Students has to obey whatever I say but suppose I am not using my dominating position then it will not be called that undue influence was exercised. So dominating position should be used in spite of being having a dominating position it should be used and it should be used to take the undue advantage out of it. The weaker party is come to the pressure on unwillingly following the stronger partys instruction. Now these are the three very important elements in an undue influence.

Effects of Undue Influence Now we come to the effect of the undue influence. The effect is also the same. The weaker party can go in the court of law and can declare the contract voidable. Then when we say voidable meaning thereby the same logic will be applicable here also, when weaker party exercises this option which was available in the coercion. The same rule is applicable here. The weaker party has to go in the court of law and has to prove here the burden of proof is on weaker party. Weaker party will say that if the undue influence would not have been exercised on him the party would not have entered into the contract. The contract emerged; contract kept up, contract got framed, contract was enacted, contract was coined, contract was enter into by the weaker party because stronger party dominated the will of the weaker party and burden of proof lies on the weaker party.Contingent ContractContingent contract is a contract to do or not to do something if some event. Collateral to such contract does or does not happen. Insurance contract provide the best example of contingent contracts. The performance of a contingent contract depends upon the happening or non-happening of some future event.

Law of Contingent contractAccording to the section 31 of the contract Act 1872, 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.A Contingent contract contains a condition promise. A promise is absolute or unconditional when the promise undertakes to perform it in any event. A promise is conditional when performance is due only if an even, collateral to the contract, does or does not happen. Collateral means subordinate but from same source, connected but aside from main line.

Characteristic of Contingent contractFrom the above discussion it follows that there are two essential Characteristics of Contingent contract The performance of such contracts depends on a Contingency on the happening or non happening of the future event. In a Contingent contract, the event must be collateral incidental to the contract. The Contingency is uncertain. If the Contingency is bound to happen, the contract is due to be performed in any case and is not therefore a Contingent contract.

Contingent contractWagering contract

A contingent contract has been defined as a contract to do or not to do something, if some event collateral to such contract does or does not happen. A contingent contract is wider in scope.

A wager is a promise to pay money or money's worth on the happening or non-happening of an uncertain event.

A contingent contract thus includes a wager. In other words a wagering agreement is a contingent agreement (contract).

A contingent contract need not necessarily be a wager. Thus we can say that all wagering agreements are contingent but all contingent contracts are not wager.

In a contingent contract mutual promises are not necessary.Example: A promises B to pay Rs. 1,000 if a ship does not return. Here A is making a promise to pay but B is not making a similar promise to pay A. thus there is no mutuality of promises in a contingent contract.

In case of a wagering agreement promise must be mutual.Example: In wagering agreement A agrees to pay B 20 rupees if it rains on Monday and if it does not rain B will pay 20 rupees to A. In the above example there is mutuality of agreement but this mutuality of promises is not necessary in case of a contingent contract.

In a contingent contract there is an independent interest.

Example: A gets his house insured. It is a contingent contract as A has independent interest in this case.In a wagering agreement there is no independent interest apart from the money to be won or lost.Example: A promises to pay Rs. 100 to B if it rains on Monday. It is a wagering agreement as A has no independent interest.

In a contingent contract determination of an uncertain event is not the sole condition.

In a wagering agreement determination of an uncertain event is the main condition of the contract.

A contingent contract is valid.

A wagering agreement is void/ illegal.

Quasi ContractA valid contract contains certain essential elements. It is possible that law under certain circumstance, conduct and relationship of parties may impose obligations on one party and give right to other party. There is no offer and acceptance. In fact quasi contracts are not contracts are not contracts at all. The law considers them as relations resembling those of contracts. These relations are enforceable as if they were contracts in real sense. As per English law these contracts are called quasi contracts or implied contracts. Quasi contract is a kind of contract by which one party pays money for something done or expense incurred by another party. There is no contract between parties but law makes out a contract for them. Such contract is called quasi contract. The basis of such contract is that no man should become rich at the wealth of other.

Claim for necessaries suppliedIf a person, incapable of entering into a contract, or any one whom he is legally bound to support, is supplied by another person with necessaries suited to his conditions in life, the person who as furnished such supplies is entitled to be reimbursed from the property of such incapable person.Illustration:A supplied B, a lunatic, with necessaries suitable to his condition in life. A is entitled to be reimbursed from Bs property.Illustration:A supplies the wife and children of B a lunatic with necessaries suitable to their condition in life. A is entitled to be reimbursed from Bs property.1. Payment by interested person: A person, who is interest in the payment of money which another is bound by law to pay, and who therefore pays it, is entitled to be reimbursed by the other.Illustration:B holds lands in Bengal in a lease granted by A the zamindar. The revenue payable by A to the Government being in arrear, his land is advertised for sale by the Government under the revenue law, the consequence of such sale will be the annulment of As lease. B, to prevent the sale and the consequent annulment of his own lease, pays to the Government the sum due from A. A is bound to make good to B the amount so paid.2. Liability to pay for non-gratuitous Acts: Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore the thing so done or delivered. [Section 70]Illustration:A, a tradesman, leaves goods at Bs house by mistake. B treats the goods as his own. He is bound to pay for them.Illustration: A saves Bs property from fire. A is not entitled to compensation from B, if the circumstance show that he intended to act gratuitously.3. Responsibility for finder of goods: A person, who finds goods belonging to another and takes them into his custody, is subject to the same responsibility as bailee. [Section 71]Illustration:H picked up a diamond on the floor of Fs shop and handed it over t F to keep it till the true owner appeared. In spite of the wide advertisement in newspapers no one appeared to claim it. After the lapse of some week H tendered to F the cost of advertisement and an indemnity bond and requested to him to return the diamond to him. F refused to do so. Held, F must return the diamond to H as he was entitled to retain goods as against everyone except the true owner.4. Liability for payment of money or delivery of anything by mistake or under coercion: A person to whom money has been paid or anything delivered by mistake or under coercion must repay or return it.Illustration:A and B jointly owe 100 rupees to C. A alone pays the amount to C and B, not knowing this fact, pays 100 rupees over again t C. C is bound to repay the amount to B.Illustration: A railway company refuses to deliver up certain goods to the consignee, except upon the payment of an illegal charge for carriage. The consignee pays the sum charged in order obtain the goods. He is entitled to recover so much of the charge as was illegally excessive.

Bibliography(2013). Retrieved 2013, from businesslaw web site: http://businessinlaw.com/tag/contingent-contracts-in-business/assignmentpoint. (2013). Retrieved 2013, from assignment point web site: http://www.assignmentpoint.com/arts/law/law-of-contingent-contract.htmlbusinesslawfaculty.blogspot. (2013). Retrieved 2013, from http://businesslawfaculty.blogspot.com/2012/09/contract-law-part-iv-consent.htmlcec.sakshat. (2013). Retrieved 2013, from cec.sakshat.ac.in/cec/B.Compreservearticles. (2013). Retrieved 2013, from preservearticles web site: http://www.preservearticles.com/2012012621520/distinction-between-a-contingent-contract-and-a-wagering-agreement.html

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