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B.A. LL.B. (Five Years) Sem 4 Contract I 2012 Jan Question Paper with Solutions - KSLU

KSLU Solved Question Papers

Contract I

Previous Year Question Paper with Solution

B.A. LL.B. (Five Years) · Sem 4

2012 Jan Examination

munotes.in

Mumbai

First published on munotes.in on 21 October 2026.

Published by munotes.in, Mumbai.

Model answers written and edited by the munotes.in editorial desk.

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The question paper reproduced here is the paper as set by Karnataka State Law University at the 2012 Jan examination.

The Paper as Set

The questions in this volume are the questions asked at the 2012 Jan examination, reproduced as Karnataka State Law University set them, in the order it set them. Long reading passages are shortened to their first and last lines and our summary; the original paper prints them in full. Only the answers are ours. See the original question paper.

Duration 3 hours · Total marks 100 · 20 questions answered

Instructions printed on the paper

N.B. (1) Answer all 5 questions. (2) One essay type and one short note question or problem from each Unit have to be attempted, which is referred as Part (a) and (b) in all the units. (3) Figures to the right indicate marks. (4) Answer should be written either in English or in Kannada completely.

How to use this volume

Solve the paper first, under exam conditions and against the clock. Then read the answers here and mark your own. Reading a solution before attempting the question feels productive and teaches very little, because recognising an answer is not the same as being able to write one.

Read the original question paper

Q1

Unit I

(a)"All contracts are agreements but all agreements are not contracts". Explain.[15]

Answer

For full marks, cover: the definition of contract (section 2(h)) built from proposal, acceptance, promise and agreement (sections 2(a), 2(b), 2(e)); why every contract is an agreement but not every agreement a contract; the essentials of a valid contract, each with its section and an authority: (1) offer and acceptance (Carlill, Harvey v. Facey), (2) intention to create legal relations (Balfour), (3) free consent (sections 13 to 22), (4) capacity (section 11, Mohori Bibee), (5) lawful consideration (sections 2(d) and 25, Durga Prasad, Chinnaya), (6) lawful object (section 23), (7) not expressly declared void (sections 26 to 30, Gherulal Parakh), (8) certainty (section 29), (9) possibility of performance (section 56), (10) writing or registration where a law requires it; a summary table; a conclusion.

The definition and how it is built

Section 2(h) of the Indian Contract Act 1872 says: "An agreement enforceable by law is a contract". The definition has two parts: an agreement, and enforceability by law.

The Act builds the idea of agreement step by step.

Proposal. Section 2(a): a person signifies his willingness to do or abstain from doing something, "with a view to obtaining the assent" of another.
Acceptance and promise. Section 2(b): when the other person signifies his assent, the proposal is accepted, and "A proposal, when accepted, becomes a promise".
Agreement. Section 2(e): "Every promise and every set of promises, forming the consideration for each other, is an agreement".
Contract. Section 2(h): an agreement that the law will enforce.

So a contract is an agreement plus legal enforceability. An agreement that the law will not enforce is "void" under section 2(g).

All contracts are agreements, but not all agreements are contracts

Every contract starts as an agreement, so every contract is an agreement. But many agreements are never enforced by law. Section 10 states what turns an agreement into a contract: "All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void". The courts add an intention to create legal relations. Each of these is an essential of a valid contract.

Essential 1: offer and acceptance

There must be a lawful offer and a lawful acceptance of it. The offer must be meant to bind on acceptance, and must not be a mere invitation to make offers. The acceptance must be absolute and communicated.

Carlill v. Carbolic Smoke Ball Co., [1893] 1 QB 256. An advertisement promising 100 pounds to anyone who caught influenza after using the company's smoke ball was held to be an offer to the world. Mrs Carlill accepted it by using the smoke ball as directed. The company was bound.

Harvey v. Facey, [1893] AC 552. A telegram stating the lowest price at which a property would be sold was only an answer to a question, not an offer. So there was nothing to accept, and no contract.

Essential 2: intention to create legal relations

The parties must intend their agreement to have legal consequences. Social and domestic agreements are presumed not to.

Balfour v. Balfour, [1919] 2 KB 571. A husband's promise of a monthly allowance to his wife, made while they lived apart for his work, was held not to be a contract. The parties never meant it to be enforced in court.

Essential 3: free consent

Section 13 defines consent as agreeing "upon the same thing in the same sense". Section 14 requires that consent be free, that is, not caused by coercion, undue influence, fraud, misrepresentation or mistake. Consent caused by the first four makes the contract voidable under sections 19 and 19A. A mutual mistake about an essential fact makes the agreement void under section 20.

Essential 4: capacity of the parties

Section 11: a person is competent if he "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".

Mohori Bibee v. Dharmodas Ghose, (1903) 30 IA 114. A minor's mortgage was held absolutely void, so the lender could not recover even the money he had advanced.

Essential 5: lawful consideration

Each party must give something in return for the other's promise. Section 2(d) defines consideration as what is done or promised "at the desire of the promisor", by "the promisee or any other person". Section 25 makes an agreement without consideration void, subject to three exceptions.

Durga Prasad v. Baldeo, (1880) ILR 3 All 221. A promise of commission to a man who had built shops at the Collector's request was void. Nothing had been done at the desire of the promisors.

Chinnaya v. Ramayya, (1882) ILR 4 Mad 137. Siblings of a woman who had gifted land to her daughter could sue the daughter on her promise to pay them an annuity. The consideration had moved from the donor, and section 2(d) allows that.

Essential 6: lawful object

Section 23 makes the consideration or object unlawful if it is forbidden by law, would defeat any law, or is fraudulent. It is also unlawful if it injures another's person or property, or is immoral or opposed to public policy. "Every agreement of which the object or consideration is unlawful is void". Illustration (f): a promise to pay money for obtaining a job in the public service is void.

Essential 7: not expressly declared void

The Act itself declares some agreements void, even where the other essentials are present. Among them are agreements in restraint of marriage (section 26), of trade (section 27) and of legal proceedings (section 28), and wagers (section 30).

Gherulal Parakh v. Mahadeodas Maiya, AIR 1959 SC 781. The Supreme Court held that a wagering agreement is void under section 30, though it is not forbidden by law.

Essential 8: certainty of meaning

Section 29: "Agreements, the meaning of which is not certain, or capable of being made certain, are void". An agreement to sell "a hundred tons of oil", with nothing to show which oil, is void under illustration (a).

Essential 9: possibility of performance

Section 56: "An agreement to do an act impossible in itself is void". An agreement to discover treasure by magic is void, as illustration (a) to that section shows.

Essential 10: writing and registration, where required

Section 10 adds that it does not affect any law requiring a contract to be in writing, attested or registered. For example, a promise under section 25(1) must be in writing and registered. A sale of land worth one hundred rupees or more must be made by a registered instrument. That is required by section 54 of the Transfer of Property Act 1882.

Applying the test

Take four agreements. A agrees to sell his car to B for Rs 3 lakh, and B agrees: every essential is present, so it is a contract. A invites B to his son's wedding, and B accepts: there is no intention to create legal relations, so it is only an agreement. A, aged sixteen, agrees to sell his bicycle: the party is incompetent, so the agreement is void. A and B bet Rs 1,000 on a cricket match: section 30 declares the agreement void.

The essentials at a glance

Essential	Provision	Effect if missing	Authority
Offer and acceptance	sections 2(a), 2(b), 7	no agreement	Carlill; Harvey v. Facey
Intention to create legal relations	judge-made	no contract	Balfour
Free consent	sections 13 to 22	voidable, or void for mutual mistake	sections 19, 19A, 20
Capacity	section 11	void	Mohori Bibee
Lawful consideration	sections 2(d), 25	void	Durga Prasad; Chinnaya
Lawful object	section 23	void	illustration (f)

Essential	Provision	Effect if missing	Authority
Not declared void	sections 26 to 30	void	Gherulal Parakh
Certainty	section 29	void	illustration (a)
Possibility	section 56	void	illustration (a)
Formalities where required	section 10, other laws	unenforceable	section 25(1)

Conclusion. Section 2(h) defines a contract as an agreement enforceable by law. Every contract is therefore an agreement. But an agreement becomes a contract only if it meets the conditions of section 10. The courts also require an intention to create legal relations. The parties must make a real offer and acceptance, intend legal consequences, and consent freely. They must be competent, and give a lawful consideration for a lawful object. The agreement must not be one the Act declares void, it must be certain and possible, and it must meet any formality a law requires. The leading cases show what happens when one of these is present or missing. They run from Carlill and Balfour to Mohori Bibee, Durga Prasad and Gherulal Parakh.

B.A. LL.B. (Five Years) Sem 4 Contract I 2012 Jan Question Paper with Solutions

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