NATIONAL LAW UNIVERSITY ODISHA

Cuttack Naraj Road, CDA, Cuttack-753015

PROJECT

Subject- Contracts I

Topic- Comparative Analysis of ‘Acceptance, Consideration and Voidable

Contracts’ under Indian and English Contract Laws

Submitted to: Submitted by:

Mayank Tiwari Mrinal Gupta (2016/B.A.LL.B./062)

(Asst. Prof. of Law) Niyati Maheshwari (2016/B.A.LL.B./070)

Nanditta Batra Shivangee Aggarwal (2016/B.A.LL.B./092)

(Asst. Prof. of Law) Shreni Taran (2016/B.A.LL.B./096)

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 ACKNOWLEDGEMENT

We would like to express our special thanks of gratitude to our teacher Mr. Mayank Tiwari
and Ms. Nanditta Batra as well as our Vice Chancellor Prof. Srikrishna Deva Rao for giving
us this opportunity of doing a project on “Comparative Analysis of ‘Acceptance,
Consideration and Voidable Contracts’ under Indian and English Contract Laws”. This
project helped us in research work and we came to learn many new things about the English
Contract Law. The library resources as well as the e-resources came to great use to us.

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 TABLE OF CONTENTS

Introduction.................................................................................................................4

Objectives.........................................................................................................................6

Scope of Research............................................................................................................6

Research Methodology....................................................................................................6

Hypothesis........................................................................................................................6

Research Questions.........................................................................................................6

Chapters

1. Chapter 1- Acceptance......................................................................................7
2. Chapter 2-Consideration..................................................................................12
3. Chapter 3-Voidable Contract...........................................................................17
Conclusion......................................................................................................................22
Bibliography...................................................................................................................24

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 INTRODUCTION

An agreement enforceable by law is known as contract. Legal action arises in case of their
breach. They are promise or set of promises. Contracts form part and parcel of our daily lives.
Every day, without realising we enter into a large number of contractual transactions, for
example, a contract of travel by bus or train, a contract for sale of goods (like purchase of
groceries) or for supply of services etc. All these contracts form a basic part of our lives as
we need such transactions for our sustenance. So, to avoid breach of contracts and protect the
rights of the parties involved, law of contract has evolved from times ancient.

The Indian Contract Act, 1872 is a statutory code comprising of law related to India
contracts. The British Parliament passed the Act and it is based upon the Common Law
principles. This Act applies to all states of India except for Jammu and Kashmir. The Act
prescribes the circumstances under the parties make promises and when shall the contracts be
legally binding. It also tells about enforcement of the rights and duties of the parties.

Third Law Commission of India made the first draft of the Indian Contract Act, 1872
but,discrepancies an clash of views arose between the legislature and the commission
resulting in the resignation of the commission. In its drafting, a few proposals of the
commission were rejected and some were borrowed from the draft New York Code, 1862.Sir
Fitz James Stephen made the final draft. Sir Fredrick Pollock is of the opinion that the
framers borrowed from various codes of other countries leaving an incongruous effect. But,
he says after allowing for all drawbacks, the result was generally sound and useful one.

The Indian Contract Act 1872 operates by the virtue of the Indian Constitution, Article 372
(1) and its provisions are subject to the Constitution. A continued to be in operation by virtue
of Article 372 (1) of the Constitution of India. However, the provisions of the Act are subject
to the provisions of the Constitution. All provisions which violate the fundamental rights are
violative of the Article 13 of the Constitution. Also, Contracts of Services under the state also
need to be in consistence with Constitutional Provisions.

The theory of law of Contract has had new developments since 1872.The Common Law
Since 1872 there have been new developments in the Develop- theory of the law of Contract.
The preamble of the Contract Act itself says that it is not a complete code for law of
Contract. It wasn’t the intention of the legislature to entirely codify the law relating to

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Contracts applicable in India. It has also been held that Sections 124 and 125 do not lay down
the whole of the law of indemnity. Therefore wherever the Act is silent, Common Law
principles of justice, equity and good conscience are followed. Due to such reliance, it is
deemed necessary to add these principles in our law so that we don’t have to rely on English;
aw and English cases time and again.

The English Law of Contract was created after the advent of the Industrial Revolution and
the 20th century social legislations. The principles of English Contract law are almost entirely
created by their courts and legislature has had no substantial role to play in their formation.
The access to courts throughout the Middle Ages was minimal in cases of contractual
disputes. Access to courts was restricted only for the privileged class with the requirements of
pleadings, formalities and court fees.

As the Industrial Revolution progresses, the concept of “contract” became more and more a
matter of importance in the English Courts. Through this, the cruelties of feudal and
mercantile restrictions on works and business were lifted and there was huge progress in this
regard. Also, the laissez faire ideology concealed the inequality of bargaining power in
employment contracts and other like of consumer goods, services and tenancies. It was held
in the case of Printing and Numerical Registering Co v Sampson that “only those contracts
which are freely entered into by the parties will be considered sacred and enforceable by the
Courts of Justice”. This was declared as a “public policy”. However the essentials of the
English Law remained the same as an only those offers were enforceable as contracts which
had acceptance, consideration and were free from undue influence, duress or
misrepresentation.

Till today, the Contract Law for England is not codified and the English Courts rely upon
case laws and established principles as well as common law to settle the disputes among the
parties.

In this project, we tend to highlight the differences between the English and Indian Contract
laws under the principles of Acceptance, Consideration and Voidable contracts. Also we are
of the view that since Indian Contract Law is derived from English Contract Law, therefore
the points where it differs have been introduced keeping in mind the needs of the modern day
society and therefore is more adaptive to the Indian Society and is a better governing law.

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 OBJECTIVES
 To study the origin of English and Indian Contract laws.
 To examine the differences between Indian and English Contract laws.
 To adjudge and determine which one is better and adaptive to modern day society.

SCOPE OF RESEARCH
The scope of this project is limited to analysis and determination of the differences between
Indian and English Contract Law with respect to principles of Acceptance, Consideration and
Voidable Contracts.

RESEARCH METHODOLOGY
In order to understand and critically analyse the differences between the Indian and English
Contract Law, the methodology of doctrinal research has been used. The sources referred
under this project are both primary as well as secondary. The cases used are the primary
source, whereas books and other resources referred are secondary sources. The mode of
citation used is OSCOLA.

HYPOTHESIS
The Indian Contract Law (Indian Contract Act, 1872) is a better governing principle law than
English Contract Law.

RESEARCH QUESTIONS
1. What are the origins of Indian Contract Law and English Contract Law?
2. What are the differences between Indian and English Contract laws? Which law is a
better law in case of conflict between the two?
3. Whether Indian Contract Law is better than English Contract Law in terms of
governance as well as adaptability to modern society or not?

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 CHAPTER- 1
ACCEPTANCE
Acceptance means giving consent to something that is offered. It can also be called as an
assent given to a proposal. An acceptance transforms a proposal into promise. The term
Acceptance is defined under Section- 2(b) of the Indian Contract Act 1872 which says that-

“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, becomes a promise.”1

Acceptance given to an offer is the expression, by terms or action, of acquiesce to the

conditions of the proposal in the way prearranged or indicated by the offeror.2

The definition of Acceptance clearly mentions that it should be expressed to the person to
whom it is made and expression can be through any act or omission on the part of acceptor.
However it is necessary that such act or omission should have a sufficient effect of
communication to the proposer. In simple words there is a requirement of an external
manifestation (overt act) of acceptance.3 The external manifestation can be through writing,
speech or any other act that should be capable of communicating acceptance. Communication
of acceptance should be made to the offeror himself. Also acceptance is communicated by the
acceptor himself and not by any other person.

English Law and Indian law hold same position on acceptance in most of the circumstances.
Both of them recognize acceptance by conduct. They have the same principle regarding the
communication of acceptance that it should be forwarded to the person who made the offer
and is done by the same person to whom proposal was made. Both of them recognize the
concept of counter proposal and treats counter proposal as a new offer. The principle of
counter offer was given in the famous case of Hyde vs. Wrench4 where a price bargain by the
offeror was considered as a counter offer that terminated the original offer. The comparison
between English law and Indian law on acceptance and the major differences between them
are discussed further.

1
The Indian Contract Act, 1872, s 2(b).
2
J. Beatson, A. Burrows, J. Cartwright, Anson’s Law of Contract (30th edn, Oxford University Press 2016) 42.
3
Avtar Singh, Contract and Specific Relief (11th edn, Eastern Book Company 2013) 23.
4
[1840]49 ER 132.

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 1. Acceptance by conduct
Conduct implies acting on the terms mentioned in the offer. Accepting an offer by fulfilling
the terms mentioned in it or by performing the action mentioned in the proposal is a valid
acceptance. Both Indian and English law has followed the same principle. In Indian Contract
Act 1872, Section 8 provides that acting on the requirements of a proposal is a valid approval.
It should be noted that in some cases it is important that acceptance followed by conduct
should be intimated to the offeror. The principle was abided by the court in Hindustan Coop
Insurance Society vs Shyam Sunder5 where the encashment of cheque was not considered as a
sufficient conduct to make the contract binding. It was necessary that the acceptance be
communicated to the insured. The same principle was followed in General Assurance Society
Ltd. Vs Chandmull Jain6 where it was held that a valid contract comes into existence as soon
as the insurer retains the premium, however it is important that there should be an external act
by the insurer that should communicate to the insured his acceptance.

English Law holds almost the same stand on acceptance by conduct. It was decided in
Brogden vs. Metropolitan Railway Co.7 where the acceptance of coal by the rail company on
new terms of the proposal was considered as a valid acceptance based on conduct irrespective
of the fact that they had not formally communicated their acceptance.

2. Mode of Communication
There is a basic understanding that acceptance should be made in the mode as prescribed by
the offeror in the proposal. If it is not followed than the proposer has the right to revoke even
his accepted offer. Indian contract act provides that an acceptance should be absolute as well
as should be made in a common and prudent manner if mode is not specified by the proposer,
if mode is given, then that should be followed.8 However the section also provides that if the
required mode is not followed, the proposer can revoke within reasonable time and if it fails
to do so, it will become a concluded contract.

English Law follows a different stand on the issue. It states that the acceptance should be
performed in the manner as demanded by the offeror. If acceptance is not given in the
prescribed manner but made in equally expeditious way9, it should be treated as a valid

5
AIR 1952 Cal 691.
6
AIR 1966 SC 1644.
7
(1877) 2 AC 666 (HL).
8
The Indian Contract Act, 1872, s 7.
9
Avtar Singh, Contract and Specific Relief (11th edn, Eastern Book Company 2013) 29.

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acceptance. In Yates Building Co. Ltd. Vs R.J. Pedleyn & Sons (York) Ltd.10, a letter to show
interest in purchase of a building was required to be sent by a registered post but it was sent
by an ordinary post and was received within time (time registered post would have taken). It
was held that it was a valid acceptance and the contract was concluded despite the fact that
letter was sent through ordinary post.

Section 7 of the Indian Contract Act casts a duty on the offeror to accept or reject the
acceptance that was not made in the prescribed mode but in a reasonable time period. The
reasonability of time may differ according to facts and circumstances of cases but from a
general perspective, it should be reasonable for a rational man. There is a major difference
between English and Indian law on the mode of acceptance. The former doesn’t casts any
duty on the offeror and he is bound to accept if the acceptance is made within required time
while the latter gives the offeror an option to accept or reject it within a suitable time period.

In situations where no mode of acceptance is suggested, section 7 provides that it should be

sent through a reasonable and usual manner. The manner should be capable of
communicating the acceptance within suitable time. However English Law in such cases
defines a different stand. It gives that acceptance should be delivered through the same mode
in which the offer was sent. Thus if offer was made by email, acceptance should necessarily
be made through email unless other mode is specified.

3. Postal Communication
In cases where the communication takes place through post, Post office is considered to be an
agency of the parties. Both English law and Indian law hold different position in regard to
communication by post. Under English law, a contract is concluded when the letter of
acceptance is sent by the acceptor. Both the offeror and the acceptor then become bound by
the terms of the contract and are not allowed to revoke. This principle was laid down in
Adams vs Lindsell11. In the case the defendants a wool company, offered to the plaintiffs to
sell some quantity of wool on September 2, 1817 and it reached the plaintiffs on September 5.
The letter was acceptance was posted on the same day but reached the defendants only on
September 9. Meanwhile the defendants on September 8 sold the wool to some other party.
They contended that they didn’t receive the acceptance and thus were not bound. The court
decided that it would become very difficult to make contracts under such an assumption and

10
(1975) 237EG 183.
11
[1818] 106 ER 250.

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would defeat the principle of the contracts. The result of the judgment is that a full contract
emerges on the time the letter of acceptance is dispatched.

Indian Contract Act has adopted a different rule in regard to postal communication. In section
4 of the act, it is given that the proposer becomes bound by the contract just after the letter of
acceptance is posted and is not allowed to revoke. Acceptor becomes a party to the contract
when the acceptance letter reaches the offeror. The time duration is given to the acceptor to
revoke its acceptance if it wishes so.

The only distinction between English and Indian law is the difference between the positions
of the acceptor. In former the acceptor becomes irrevocably bound by posting the letter of
acceptance but in former acceptor becomes bound only when acceptance letter reaches the
offeror and he has the option to revoke his acceptance.

4. Instantaneous mode of communication or direct communication of parties

Postal rules are not followed in situations where parties are in direct contact to each other.
Direct contact implies where offer and acceptance are heard at the same time they are
expressed. Both English and Indian courts hold same view in this regard. The view is that the
contract is not concluded till the offeror receives the acceptance. The place of conclusion of
contract is where the acceptance is heard. Example of instantaneous modes include telephone,
video calls etc. The principle was laid down in Entores Ltd. Vs Miles Far East Corporation12
where it was decided that contract concludes when acceptance is communicated to the offeror
and the place of conclusion is where the acceptance is heard. The case was related to telex
messages. The same principle was followed by Honorable Supreme Court in Bhagwandas
Goverdhandas Kedia Vs. Girdharilal Parshottamdas & Co.13where communication was
made through telephone and majority of judges followed the rule laid down in Entores case.
They had different views on the extent of section 4 of the act. Majority of them had the view
that the postal rule should not apply to these faster modes of communication and the Entores
case rule is suitable. However Justice Hidayatullah was of the opinion that the language of
section 4 is flexible enough to include these modes and the contract is concluded as soon as
the acceptance is made. It was because of the fact that when acceptance is made on the
telephone, it becomes out of the power of the acceptor and the contract should be considered
to be concluded as acceptance was made.

12
[1955] 2 QB 327.
13
AIR 1966 SC 543.

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 5. Revocation of Acceptance
English Law and Indian law hold different stands on the revocation of acceptance. In English
law, acceptance is irrevocable. Anson defined Acceptance as “Acceptance is to offer what a
lighted match is to a train of gunpowder. Both do something which cannot be undone.” 14 The
rule laid down by Anson is followed in England especially in postal communication. The
acceptor is not granted with the power to revoke the acceptance once made. In other modes of
communication acceptance can be revoked provided that the revocation should reach before
the acceptance.

Indian law gives sufficient scope to the acceptor to revoke the acceptance. It is given in
section 5 of the contract act that “An acceptance may be revoked at any time before the
communication of the acceptance is complete as against the acceptor, but not afterwards.”15
An acceptor can revoke the acceptance till the time acceptance reaches the offeror. It should
be ensured that the revocation should reach the offeror before the acceptance. So a faster
mode for communication of revocation should be used.

14
Avtar Singh, Contract and Specific Relief (11th edn, Eastern Book Company 2013) 65.
15
The Indian Contract Act, 1872, s 5.

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 CHAPTER- 2
CONSIDERATION
A promise in itself is not enforceable in English law. Consideration is the doctrine which lays
down the fundamental of a legal Contract.16 In Currie v Misa17 Lush J. had stated:

“A consideration, in the essence of law, consisting in some interest, right, benefit or profit
which accrues to one party, or some detriment, loss, responsibility, or forbearance suffered,
given, or undertaken by the other party”.

The above principle has brought out the concept of reciprocity as the differentiating and
distinguishing feature; in other words it means the promise which is gratuitous and it is
unenforceable in the English law.

We know that the consideration has reflected a variety of policies and has also served a
number of features and functions:18

1. The enforceability depends on the content of the promise or the circumstances in which it
was made. Therefore, when one promises to do what one is already obliged to do,
specifically where a contract is renegotiated or a promise which is not made at the request
of the promise, it causes serious difficulties.
2. Consideration is said to find and identify those promises which the parties intend to
legally enforce. They may intend ‘either where there is a substantive bargain or where
they have put the transaction into the form of an exchange’. It therefore serves an formal
and evidential function.19
3. Consideration is a requirement which avers that a promisor ‘deliberately decides to
contract and prevents parties accidentally binding themselves on impulse’.20
NECESSITY FOR CONSIDERATION

Consideration is a prerequisite for the formation of a contract; a promise made without

consideration is not enforceable as a contract21 in English law (except that in a deed).

16
See Atiyah,Essays on Contract (1986).
17
[1875] LR 10 Ex 153,162.See also Thomas v Thomas [1842] 2 QB 851,859; Bolton v Madden [1873] LR 9
QB 55,56.
18
Llewellyn,’Common-Law Reform Of Consideration:Are There Measures?’[1941] 41 Col L Rev 777, 778,
863.
19
Lon L. Fuller ,’Consideration And Form’[1941] 41 Col L Rev 799.
20
Pillans v. Van Mierop [1765] 3 Burr 1663.

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In Rann v. Hughes, Skynner C.B. stated:22

All contracts by law of England have been divided into agreements by agreements by parole
and specialty; there is no any such third class as some of the counsels have tried to maintain
as contracts in writing. If they are merely written and not specialties, they are parole and a
consideration must be proved.

It is a known fact that a moral obligation to fulfill a promise is insufficient where the
consideration was entirely past. From then onwards, each and every promise not in a deed is
subject to a general and uniform test of actionability. In each case it has become imperative to
question whether the promisor obtains any such benefit or the promise suffers any such
detriment or loss, in present or in future, in respect of the promise. If not then the promise
was gratuitous and it was not binding.

Now we shall see the grounds on which the English law holds different from that of the
Indian Law:

I. PAST CONSIDERATION
Position in English law

It is an adage of English law that the consideration should be contemporaneous and

coexistent with the promise. Consideration is the price for the promise and it should be given
as an inducement and in response to for the promise. So if any act is committed before any
promise is made, it is called past consideration and it is thus no consideration at all. We mean
to say that it confers no advantage or benefit on the promisor, and causes no loss or detriment
in return of the promise to the promisee.

It is simply an act of commission or the act of forbearance in time past by which a person has
benefited without incurring any legal liability. Afterwards if whether from good feeling or
interested motives, ‘the person who has benefited out of act or forbearance makes a promise
to the person whose act or forbearance led to the benefit, and that promise is made upon no
other consideration than the past benefit, it is gratuitous an cannot be actionable. In the case

21
A.T Denning,’Recent Developments in Doctrine of Consideration’[1952] 15 MLR,1-10.
22
[1778] 7 TR 350. It should be noted, however, that the only report of the actual decision of the House of
Lords states that the case was decided on the ground of failure to comply with the Statute of Frauds: [1778] 4
Brown PC 27.

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of Roscorla v. Thomas23 this principle was distinctly mentioned. But the convention involves
hardships and inconvenience. If a person has promised to pay for a past act, he intends to
recognize the past consideration and therefore he should not be permitted to break his
promise voluntarily made. Therefore the Law Reform Committee of England has suggested
the abrogation of this principle.

1. Past Act at Request Good Consideration

However we have an exception to this principle. It was established in 1616 in the case of
Lampleigh v. Brathwait24 that a past act done at request will be a good consideration for a
promise subsequently made.

The rule which holds good today is that ‘in such cases it is simply in the contemplation of the
parties that the services which are rendered and performed at the request will be ultimately
paid for and that subsequent promise made is merely a fixation of reasonable compensation
for the service’.

Besides this two more exceptions have been added:

 Promise to pay a time-barred debt, and

 A negotiable instrument issued for a past consideration.
Both of these are valid.

Position in Indian law

The courts in India as to the past consideration do not follow the English rule.25 A past
consideration may arise in two ways. It may either consist of services rendered at request but
without any promise or it may consist of services voluntarily offered. Let us have a detailed
look on these two:

1. Past Service at Request

The area of uncertainty is about requested services because this is not sufficiently covered
either under Section 2(d) or under section 25(b)26. Section 2(d) states that ‘the act shall be
done at the promisor’s desire’. This presupposition that ‘the existence of a promise to pay for
an act and even when interpreted literally (when the text is read plainly) the provision cannot

23
[1842] 3 QB 234.
24
[1615] EWHC KB J17.
25
Devukutty Amma v. Madhusudanan Nair, 1995 2 KLT 118, where it was observed that past consideration is
good consideration under the Indian Contract Act and that it is a deviation from the English common law.
26
Indian Contract Act, 1872.

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apply to an act done at the request but without any promise to pay’. But the provision can be
understood to include an act which is done at the request and for which a subsequent promise
to pay is given.

2. Past Voluntary Service

It is sufficiently covered under the Section 25(2). A service which is rendered without any
request or promise and there is a subsequent promise to pay for the same, it is known as a
voluntary service. For example, below is an illustration for further description:

‘If A saves B from drowning and B later promises to reward A, then A is rewarded.’

In English law ‘A cannot rely on the actions he committed as consideration for the promise
which B made for it is past in point of time.’27

But in India the scenario is different. Here the promise would be enforceable and actionable
by virtue of section 25(2) which provides that ‘a promise to compensate, wholly or in part, a
person who has already voluntarily done something for the promisor’ is enforceable.

II. PRIVITY OF CONSIDERATION

Position in English law:

1. In English law, consideration should move from the promise only. If it be furnished by
any other person, the promisor therefore becomes a stranger to the consideration and thus
cannot enforce the promise.28
2. A contract cannot be enforced by any person who is not a party to the contract even
though it is made for his/her benefit. He/she is a stranger to it and cannot claim any rights
under the aforesaid contract.29
The rules of privity and consideration don’t always coincide. The rule of privity describes
about as to who can enforce the contract and that of consideration states about the types
of promises which can really be enforced.

27
William Reynell Anson,Principles of English Law of Contract (23rd edn,Oxford University Press 1972)86.
28
William Reynell Anson,Principles of English Law of Contract (23rd edn,Oxford University Press 1972)89.
29
William Reynell Anson,Principles of English Law of Contract (23rd edn,Oxford University Press 1972)370.

15
 Under privity of consideration, there are two different factual situations that may arise.
Either ‘the plaintiff may be a party to an agreement without furnishing any consideration
or there may be another scenario where the person wishing to enforce a contract may not
be a party to the agreement at all’.

The fundamental presupposition of the English law of contract is that a contract is defined
as a bargain. ‘If a person does not furnish consideration then he has no right to take part
in a bargain; if he does not take part in a bargain, he does not take part in a contract’. So
as long as consideration is an essential and pre-requisite feature of English law it seems to
be insignificant ‘whether a person is forbidden to sue on the ground that he has given no
consideration or on the ground that he is stranger to the contract’.

A fundamental principle in English law is that if a person, with whom a contract is made
but not under the seal, is to be able to enforce it, consideration must be given by him to
the promisor or the person at the request of the promisor.30 Under this Act, consideration
may move from the promise or any other person.

Position in Indian law

The Indian Law of Contract is crystal clear with the privity of consideration. Section 2(d)31
states that it is not necessary that consideration must be furnished by the promise. A promise
is enforceable and actionable if there is any or some consideration for it and it is immaterial
whether it moves from the promise or any other person. It was decided in the case of Madras
High Court in Chinnaya v Ramayya.32 Briefly the whole situation was this that the
defendant’s promise was given to the plaintiff, but the carrying out of consideration was by
the plaintiff’s sister. The court here came to the conclusion that the consideration given by
any other person is ‘equally effective’.

30
Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co 1915 UKHL 1.
31
Indian Contract Act, 1872.
32
(1882) ILR 4 Mad 137.

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 CHAPTER- 3
VOIDABLE CONTRACTS
A voidable contract is a contract which has the potential to be a void contract at the option of
one or both of the parties. A voidable contract is originally considered to be legal, but can be
rejected by one or both of the parties later. It is not the same as a void agreement as a void
agreement is void-ab-initio. According to section 2(i) of Indian Contract Act, 1872 a voidable
contract is an agreement which is enforceable by law at the option of one or more of the
parties thereto, but not at the option of the other or others. A contract can be voidable due to
many reasons. A major reason for which the law provides for an option of a voidable contract
is that at times the consent of one of the party is not taken freely or it may so happen that the
consent taken is not considered valid (as in the case of minor’s contract; in English Law).

According to Indian Contract Act, a contract may be declared voidable at the option of the
victim party in the following cases-

1. Coercion
2. Undue Influence
3. Misrepresentation
4. Fraud
The English contract law however provides for a contract being voidable for a lot more
reasons-

1. Duress
2. Undue Influence
3. Misrepresentation
4. Certain contracts by minor
5. Mistake
6. Unconscionable Bargain

Position of Voidable Contracts in India

1. Coercion

Coercion is defined in the Indian Contract Ac, 1872 under section 15. “Coercion” is the
committing, or threatening to commit, any act forbidden by the Indian Penal Code, or the

17
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.33 Hence we
can see that coercion explicitly contains two categories-

i. Committing or threatening to commit acts contained in the IPC.

ii. Unlawfully detaining or threatening to detain property
Hence only the acts that are mentioned explicitly in the IPC as offences come under coercion.
It was held by the way of judicial pronouncements that threatening a criminal prosecution is
not coercion per se. It could be coercion if the threat is to file false charges.34

2. Undue Influence

Undue influence is defined in section 16 of the Indian Contract Act. It states that- a contract
is said to be induced by ‘undue influence’ where the 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. Section 19 provides for the contract in
which consent is taken using undue influence to be voidable at the option of the party whose
free consent is compromised. There are many relations wherein one party can dominate the
will of another, some instances of such relations are-

i. When one party has a real or apparent authority over another

ii. Fiduciary Relation
iii. Persons taking care of person’s in mental distress
iv. Contracts with a Pardanashin Woman

3. Misrepresentation

Misrepresentation means misstatement of a fact material to the contract. In a case of

misrepresentation, there is no intent to deceive. The person who misrepresents the fact
himself believes it to be true. Any breach of duty which brings an advantage to the person
committing it by misleading the other to his prejudice is a misrepresentation.
Misrepresentation may also arise from suppression of vital facts but these facts need to be
material to the case. A mere expression of opinion cannot be regarded as a misrepresentation

33
The Indian Contract Act, 1872, s 15.
34
Askari Mirza v. Bibi Jai Kishori(1912) 16 IC 344.

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of facts even if the opinion turns out to be wrong. A party cannot complain of
misrepresentation if he had means of discovering the truth with ordinary diligence.35

4. Fraud

Intentional misrepresentation of facts, speaking broadly is called fraud. Mere silence doesn’t
result in fraud. Mere silence is just passive concealment of facts. Only active concealment of
facts leads to fraud. But there are a certain situations in which silence can lead to fraud, they
are-

i. Duty to speak
ii. When silence is deceptive
iii. Change of circumstances
iv. Half truths
These are the four situations according to the Indian Contract Act, 1872 wherein a contract
made can be declared void by one of the parties whose consent was wrongly obtained.

Position of Voidable Contracts in England

1. Duress

“Duress in contract law relates to where a person enters an agreement as a result of threats.”
Where a party enters a contract because of duress they may have the contract set aside.
Originally, the common law only recognised threats of unlawful physical violence; however,
in more recent times the courts have recognised economic duress as giving rise to a valid
claim. “In a court decision, exact difference between coercion and duress was pointed out.36
It was said that- Duress is said to consist in actual or threatened violence or imprisonment of
the contracting party or his wife, parent and child by the other par or anyone acting ith his
knowledge and for his advantage; but coercion as defined by Section 15 is much wider and
includes the unlawful detention of property also. Further coercion may be committed by any
person but not necessarily a party to the contract. It may be directed towards any person even
if he was a stranger. While in English Law, duress must be such as will cause immediate
violence and also unnerve a person of ordinary firmness of mind, these requisites are not
necessary in Indian Law.”

35
Balraj Chibbar v. NOIDA, 1995 All LJ 1513.
36
Karuppayee Ammal v. Karuppiah Pillai, (1987) 1 MLJ 138.

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2. Undue Influence

“Undue influence exists where a contract has been entered as a result of pressure which falls
short of amounting to duress, the party subject to the pressure may have a cause of action in
equity to have the contract set aside on the grounds of undue influence. Undue influence
operates where there exists a relationship between the parties which has been exploited by
one party to gain an unfair advantage.” There isn’t much difference with regards to undue
influence in Indian and English Contract law.

3. Misrepresentation

Fraud and Misrepresentation are combined under the head of misrepresentation under the
English Contract Law. Fraud is known as fraudulent misrepresentation. Apart from
fraudulent misrepresentation, there are two other types of misrepresentations under the
English contract law, namely- Negligent misrepresentation and innocent misrepresentation.
Even though the heads are not separated, the provisions are the same that is if
misrepresentation occurs, the contract is voidable at the option of the party whose consent
was compromised.

4. Certain contracts by Minors

According to English law, contracts made by a minor are voidable at the option of the minor,
either before or after becoming an adult. But these voidable contracts were divided into two
classes.

i. First contracts in which the minor acquired an interest of a permanent or continuous

nature were binding until the minor disclaimed them, either during minority or within
a reasonable time after becoming an adult. These are known as ‘positive voidable
contracts’.
ii. Secondly the common law rule for contracts which were not thus continuous in their
operation was that they were not binding on a minor unless ratified within a
reasonable time after majority. These are known as negative voidable contracts.37

37
Avtar Singh, Contract and Specific Relief (11th edn, Eastern Book Company 2013) 216.

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 According to Indian Contract Act, minor’s contract is void-ab-initio and hence a minor
cannot even ratify his contract even after becoming a major. Hence India does not provide
an option for a minor’s contract to be voidable at the option of the minor.

5. Mistake

“Mistakes are a group of rules in English contract law, which happen to share the same name.
If the law deems a mistake to be sufficiently grave, then a contract entered into on the
grounds of the mistake may be void.” A mistake is an wrong understanding by one or more
parties to contract. There are essentially three types of mistakes in contract namely-

i. Unilateral mistake- Mistake of any one of the parties

ii. Mutual Mistake- When both parties of a contract are mistaken as to the terms.
iii. Common Mistake- It happens when is where both parties hold the same mistaken
belief of the facts.
Many a times the parties have a mistake as to the identity of the other party, such contracts
may become voidable if the other party has lead the first party to continue wrongly believing
his/her identity.

6. Unconscionable Bargain

Unconscionability is a doctrine in contract law that describes conditions that are so extremely
unfair, or overwhelmingly one-sided in favour of the party who has the superior bargaining
power, that they are contrary to good conscience. Unconscionable bargains may lead to the
contract being voidable if the party at loss can prove that it was under some sort of wrongful
belief. The burden of proof lies on the plaintiff and the contract becomes voidable at his
option only.

Hence we have seen the various differences in Indian and English Contract Law in terms of
voidable contracts. English Law even though provides more grounds for a contract to b held
voidable, Indian law has tried to include almost all those points(except minor’s contracts)
under the 4 heads on Coercion, Undue Influence, Fraud and Misrepresentation.

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 CONCLUSION

In this project, we mainly highlighted the differences between Indian and English
Contract law with respect to the principles of acceptance, consideration and voidability of
contracts and wherever there is a difference, Indian law has been adjudged as a better one as
first it is a derivative of English Law so its shortcomings were kept in mind while drafting the
Indian Contract Act, 1872.Secondly, it is newer therefore is more adaptive to modern society
and Indian conditions were kept in mind while drafting it.Also Indian contract law is codified
unlike English Law which works on the basis of preceding case laws and evolved principles.
It is the supreme statutory authority and therefore avoids ambiguity. Even in the case of the
principles involved, the Indian law is more flexible.

Like past consideration is not considered in English Law whereas it amounts to good
consideration inIndia. This is a better approach as there are times when a person out of good
conscience does something voluntarily in bargain for his position. So, such past action should
be acknowledged so as to provide that person with gratuity for his act.

Similarly, in determining mode of acceptance Indian law provides a wider and a

reasonable ambit where it considers any reasonable mode of communication as acceptable
and if it is not as per the requirement, it is entirely the will of the party to revoke the contract
or accept it. Whereas, English Law renders the contract void if it deters from the mode
prescribed. This shows the rigidity of English Law.

There are other differences too in the approach of both laws like a contract entered
into by a minor is voidable at his option under English Law. On attaining majority, the minor
can ratify the contract he entered into when he was a minor.However,Indian Law has a
different whwere a minor is absolutely incapable of entering into a contract.The agreements
with a minor are void ab initio.Such contract can neither be ratified nor are binding when the
minor attains majority.Similarly,contracts without consideration are valid under English
Lawe English Law recognizes contracts without consideration whereas under Indian
Law,consideration is necessary and a contract without consideration is void and cannot be
legally binding or enforceable. This is, however, subject to an exception made under Section
25, which mentions instances of contracts which are valid even without consideration.

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 All these differences show the flexibility of Indian Contract law and how it serves the
purpose of fair treatment to both the parties where English Contract Law is mainly biased
towards the offeror.

English Contract law is an age old law which is based on common law principles and
has therefore become outdated and rather rigid in various places with respect to today’s
society. It needs to be rectified to suit the present day requirements of our modern day
society.

However, this does not mean that Indian Contract law is perfect. It too is flawed in
various regards. No legislation is perfect and law is an ever evolving concept as per the
requirements of the society from time to time. Also, contractual transactions are a major part
of our day to day lives. Withoutrealising, we enter into a large no of contracts on daily basis.
So, we cannot have ambiguous and flawed laws in such regards which can cause injustice to
our people. Therefore, Indian Contract Act, 1872 needs timely rectification too.

But overall when compared to English Contract Law, Indian Contract law is a better
governing law with more flexible principles and is more adaptive and fair in many ways.

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 BIBLIOGRAPHY
CASES

1. Hindustan Coop Insurance Society vs. Shyam Sunder AIR 1952 Cal 691
2. General Assurance Society Ltd. Vs. Chandmull Jain AIR 1966 SC 1644
3. Brogden vs. Metropolitan Railway Co. [1877] 2 AC 666 (HL)
4. Yates Building Co. Ltd. vs. R.J. Pedleyn & Sons (York) Ltd. [1975] 237EG 183
5. Adams vs Lindsell [1818] 106 ER 250.
6. Entores Ltd. Vs Miles Far East Corporation [1955] 2 QB 327.
7. Bhagwandas Goverdhandas Kedia vs. Girdharilal Parshottamdas & Co. AIR 1966
SC 543
8. Currie v Misa [1875] LR 10 Ex 153,162
9. Pillans v. Van Mierop [1765] 3 Burr 1663
10. Rann v. Hughes [1778] 7 TR 350
11. Roscorla v. Thomas [1842] 3 QB 234
12. Lampleigh v. Brathwait [1615] EWHC KB J17
13. Devukutty Amma v. Madhusudanan Nair 1995 2 KLT 118
14. Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co 1915 UKHL 1
15. Chinnaya v Ramayya (1882) ILR 4 Mad 137
16. Askari Mirza v. Bibi Jai Kishori(1912) 16 IC 344
17. Balraj Chibbar v. NOIDA,1995 All LJ 1513
18. Karuppayee Ammal v. Karuppiah Pillai, (1987) 1 MLJ 138

BOOKS

1. J. Beatson, Anson’s Law of Contract (30th edn, Oxford University Press 2016)

2. Avtar Singh, Contract and Specific Relief (11th edn, Eastern Book Company 2013)

3. Dr. RG Padia, Pollock & Mulla Indian Contract and Specific Relief Acts, vol 1(13th
edn)
4. Andrew Burrows, A Casebook on Contract (2nd edn, Hart Publishing 2009)

5. Richard Stone, The Modern law of Contract (8th edn, Taylor & Francis, 2009)

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6. Jack Beatson & Daniel Friedmann, Good faith and fault in Contract Law (Clarendon
Press, 1995)

7. Edwin Peel & G.H. Trietel, The Law of Contract (12th edn, Sweet & Maxwell, 2007)

8. Michael P. Furmston, Geoffrey Chevalier Cheshire, Cecil Herbert Stuart Fifoot, Law
of Contract (OUP Oxford, 2012)

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