Here are some definitions and their explanations related to Legal Aptitude for CLAT as Legal Aptitude is an important section of CLAT exam. Try to learn these. I hope it will help you in your exam.

Void Agreements

Section 2(g) says, an agreement not enforceable by law is said to be void. There are some agreements which have been specifically or expressly declared as void by the Indian Contract Act. These are:

Agreements of which the consideration or object is unlawful (Sec. 23 and 24)

Agreements without consideration (Sec. 25)

Agreements in restraint of marriage (Sec. 26)

Agreement in restraint of trade (Sec. 27)

Agreements in restraint of legal proceedings (Sec. 28)

Agreements which are uncertain and ambiguous (Sec. 29)

Agreements by way of wager (Sec. 30)

Wagering agreements

An agreement by way of wager is void, but it's not immoral. The term 'wager' means a 'bet'.

In a wagering agreement, two parties have opposite views regarding an uncertain event and they stipulate that upon the determination of the event in a certain way the parties shall win or loss from each other a certain sum of money and the parties have no other interest in the event except winning or losing a bet.

Essentials:

Uncertain event,

Mutual chances of gain or loss,

Neither party to have control over the event,

No other interest in the event.

Contingent Contract

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. Thus, the contract is dependent or conditional upon the happening or non-happening of a future event or contingency.

For example, A contracts to pay B Rs. 10,000 if B's house is burnt, this is a contingent contract. The payment of the amount is contingent on the happening of the collateral event i.e. burning of the house.

All contracts of insurance or indemnity and guarantee are contingent contracts.

 

Breach of Contract

When a party having a duty to perform a contract fails to do that, or does an act whereby the performance of the contract by him becomes impossible, or he refuses to perform the contract, there is said to be a breach of contract on his part. On the breach of contract of contract by one party, the other party is discharged from his obligation to perform his part of obligation,, and also gets a right to sue the guilty party for damages.

The breach of contract may be either:

Actual or present i.e. non-performance of the contract on the due date of performance, or Anticipatory i.e. before the due date of performance has come.

Anticipatory Breach of contract: according to section 39, anticipatory breach of contract could be made by promisor, either by refusing to perform the contract, or disabling himself from performing the contract in its entirety.

When one person makes the anticipatory breach of contract, the other party has two alternatives open to him:-

He may rescind the contract immediately and may bring an action for the breach of contract without waiting for the appointed date of the performance of contract,

He may not put an end to the contract but treat it as still subsisting and alive and wait for the performance of the contract on the appointed day.

Quasi Contracts

The term quasi-contract refers to the relation wherein the obligation to pay arises neither on the basis of a contract nor a tort, but because a person has obtained an unjust benefit at the cost of another.

The quasi-contractual obligations are based on the principle that the law as well as justice should try to prevent unjust enrichment, i.e. enrichment of one person at the cost of another.

Remedies for Breach of Contract

A breach of contract occurs when:-

A party renounces his liability under the contract, or

By his own act makes it impossible that he should perform his obligations under the contract, or

Totally or partially fails to perform his part of the contract.

The remedies for breach of contract are:

Rescission and Damages;

Specific Performance and Injunction; and

Quantum Meruit.

Damages

It is the most common remedy. The party who is injured by the breach of a contract may bring an action for damages. 'Damages' means compensation in terms of money for loss suffered by the injured party.

Specific Performance and Injunction

Specific Performance requires the defendant to actually perform the contract according to its terms and stipulations.

An injunction restrains the other party from making a breach of the contract. It is a preventive relief and is appropriate in cases of anticipatory breach of contract where damages would not be an adequate relief.

Quantum Meruit

It literally means "as much as is earned" or "in proportion to the work done". When the injured party has performed a part of his obligation under the contract before the breach of contract has occurred, he is entitled to recover the value of what he has done, under this remedy.

The party in default cannot sue upon quantum meruit.

Legal Aptitude for CLAT: Contract