SUBMITTED TO

MD MOBARAK KARIM
SR.LECTURER

SUBMITTED BY
KAZI ABDUR RAHMAN RAFI
ROLL: 3932
BATCH: 56/D
 Answer To The Question No : 1

a) “No consideration no contract”-Explain this statement.

Answer:   Consideration is essential for the validity of a contract. "A
promise without consideration is a gift. A promise without consideration is a
gratuitous undertaking and cannot create a legal obligation. Under English
law simple contracts must be supported by consideration but specially
contracts require no consideration. 

There are exceptional cases where a contract is enforceable even though

there is no consideration. They are as follows: 

 Natural love and affection: An agreement made without

consideration is valid. An agreement without consideration is valid, if
the following requirements are complied with: 

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. 

 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:'-Sec. 25(2).  

 
 

Section 25(2) applies when there is a "Voluntary act by one party and there
is a subsequent promise (by the party benefited) to pay compensation to the
former. The term 'voluntarily' signifies that the act was done, "otherwise
than at the desire of the promisor". 

Time-barred debt: A promise to pay, wholly or in part, a debt which is

barred by the law of limitation can be enforced if the promise is in writing
and is signed by the debtor or his authorized agent. -Sec. 25(3). A debt
barred by limitation cannot be recovered. Therefore, a promise to repay such
a debt is, strictly speaking, with6Ut any consideration. But nevertheless,
such a promise can be enforced if the debtor or his authorized agent- makes
written and signed promise to repay it. 

Agency : No consideration is required to create an agency.-Sec. 185. 

Completed gift: The rule "no consideration, no contract" does not apply to
completed gifts. Explanation I, to Section 25 states that, "Nothing in this
section shall affect the validity as between the donor and the donee of any
gift actually made." Thus, if a person gives certain properties to another
according to the provisions of the Transfer of Property Act (i.e .. by a written
and registered document) he cannot subsequently demand the property back
on the ground that there was no consideration.

B) An agreement entered into by a husband with his wife,

during quarrels and disagreement, whereby the husband
promised to give some property to the wife. Is it void
agreement or not. Explain.

Answer: As mentioned above an agreement was entered into by husband

with his wife during their quarrels, whereby the husband agrees to pay the
maintenance allowances to his wife provided she stays separately.
In the above case the agreement held to be void because, under the
circumstances, there was no natural love and affection between parties.
As per the exceptions under the consideration section 25(1) love and
affection states that agreement has to be made out of natural love and
affection and it should be between the parties standing in relationship to
each other.
As we see in this case nearness of relationship, however, does not
necessarily import love and affection.
Therefore there is no consideration made by the husband hence it is only an
agreement and not a contract.
Therefore it is a void agreement hence the husband need not have to pay
compensation for the separation.

Answer To The Question No 2

2. a) How may offer be terminated?

A) Answer : There are a number of ways for an offer to be terminated.

They are events that may occur after an offer has been made which
bring it to an end so that it can no longer be accepted. An offer is
terminated in the following circumstances:

 Revocation
 Rejection
 Lapse of time
 Conditional Offer
 Operation of law
 Death
 Acceptance
 Illegality

REVOCATION

Revocation means an offer is withdrawn by the offerer. The general rule was
established in Payne v Cave  that an offer can be revoked at any time before
acceptance takes place. However, the revocation must be communicated
effectively directly or indirectly to the offeree before acceptance . This is
supported by Byrne v Van Tienhoven  , where the withdrawal of an offer
sent by telegram was held to be communicated only when the telegram was
received.  Further, sufficient communication does not need to be made by
the offeree personally but through a third party in Dickinson v Dodds  . In
Routledge v Grant  , the offer may still be able to withdraw even if it
specifically stated that it would remain open for a fixed period when such
promise to leave an offer open was not supported by any consideration given
by the offeree.  However, once the offeree accepted the offer by post,
namely, letter, the postal rule would strictly apply and would not permit such
withdrawal. Contrary, once the offer has been accepted and acted upon, it
cannot be revoked, the incompliance of it would be a breach of contract. In
Errington v Errington , where a unilateral offer was made, the courts decided
that so long as the repayments were being made by the son and daughter-in-
law, the father’s offer could not be revoked. The rationale given by Lord
Denning is that “…They have acted on the promise and neither the father
nor his widow, his successor in title, can eject them in disregard of it.” In
such scenario, once the offeree relied on the offer and embarked upon it, the
offer cannot be terminated.

REJECTION

An offer is terminated when the offeree communicates his rejection to the

offeror. Hence, the offeree making a counter-offer and introduces a new
offer amounts to a rejection of the original offer. In Hyde v Wrench Lord
Langdale held that the counter offer offered by the offeree terminated the
original offer. Hence, “…thereby rejected the offer previously made by the
defendant (the offerer).” However, this should be distinguished from the
situation when the offeree merely seeks further information from the offeror,
and does not make a counter-offer. In Stevenson, Jacques v McLean a mere
inquiry would not be considered as rejection.

LAPSE OF TIME

As it would be impracticable if an offer could be accepted after an

unreasonable delay on the part of the offeree  , the court stated in Ramsgate
Victoria Hotel v Montefiore  that an offer will lapse if it is open for a
specific length of time and that time limit expires. Where there is no express
time limit, an offer is normally open only for a reasonable time. The length
for a reasonable time will depend on the circumstances of the case with
respect to offers involving other types of subject matter, definition of a
reasonable time depends upon the demand for the subject matters and upon
the volatility of its price.

CONDITIONAL OFFER

An offer which expressly provides that it is to terminate on the occurrence of

some condition cannot be accepted after that condition has occurred; and
such a provision may also be implied. In other words, termination of an offer
may also occur due to a condition not being met  . For example, in
Financings Ltd v Stimson  the offer was made in an implied condition,
namely the car maintaining in its undamaged state is a conditional precedent.
Since the car was stolen from the dealers and damaged, the offer was
terminated when the condition fails and became incapable of being accepted.

Another issue concerned in regards to the condition required would be the

capability of both parties for a contractual obligation. The loss of contractual
capacity by either offeror or offeree will terminate an offer and such loss of
capacity is usually evidenced by the appointment by the court. 

DEATH

The death of either the offeror or the offeree will cause such termination: the
right to accept an ordinary offer is not transferable. The unaccepted offer of
a deceased person cannot be converted into a contract binding upon his
estate. [18] In Dickinson v Dodds  Mellish LJ stated ‘if a man who makes an
offer dies, the offer cannot be accepted after he is dead.’ On the other hand,
in Reynolds v Atherton  Warrington LJ stated that an offer “made to a living
person who ceases to be a living person before the offer is accepted…is no
longer an offer at all”.

ACCEPTANCE

Once the offer was accepted by the offeree, the contract is formed and
brought the offer to an end. It can be made either orally, in writing, or by the
implication of conduct when they are received by the offeror. However, in
Felthouse v Bindley the court refuse to impose an obligation on the offeree
to reject the offer and further stated that silence does not amount to
acceptance.
Illegality

Finally, a change in the law which makes a potential contract illegal will
terminate an offer, since courts will not enforce an illegal contract. 

In conclusion, offer can be terminated by Revocation, Rejection, Lapse of

time, Conditional Offer, Operation of law, Death, Acceptance and Illegality.

B) A offers to sell B his horse for Rs. 1000 and tells B. 'This
offer will remain open one week'. The following day B
rejects the offer. Within the week B changes his mind and
notifies A that he accepts the offer. Is there a contract?-
Discuss.

 Answer: The legal definition of a contract is promise(or set of promise)

that, when breached by one party give another party a legal remedy.

The law of contract is most important part for commercial law because every
commercial transaction starts from an agreement between two or more
parties.

According to salmond " An agreeement creating and defining obligations

between two parties . "
According to Sir William: "An contract is an agreement enforceable at law
between two or more persons , by which rights are acquired by one or more
actor for bearance on the part of the other." A offers to sell B his horse for
Rs.1000 and tells this offer will remain open one week within the week B
changes his mind and A notifies  that he accepts the offer.

An agreeement without consideration is void unless it is in writing and. An

offer is an open call to anyone wishing to accept the promise of the offer or
and generally, is used for product and services. Acceptance occurs when an
offeree aggress to be mutually bound to terms of the contract by giving
consideration ,or something of value for money to seal the deal.
 Answer To The Question No 3

A)"An agreement without consideration is void unless it is in

writing and registered”. Explain.

Answer : An agreement made without consideration is void, unless-

(1) it is expressed in writing and registered under the law for the time being
in force for the registration of 9[documents], and is made on account of
natural love and affection between parties standing in a near relation to each
other; or unless

(2) 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; or unless

(3) it is a promise, made in writing and signed by the person to be charged

therewith or by his agent generally or specially authorized in that behalf, to
pay wholly or in part a debt of which the creditor might have enforced
payment but for the law for the limitation of suits.

In any of these cases, such an agreement is a contract.

Explanation 1 : Nothing in this section shall affect the validity, as between

the donor and donee, of any gift actually made.

Explanation 2: An agreement to which the consent of the promisor is freely

given is not void merely because the consideration is 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.

Illustrations

(a) A promises, for no consideration, to give to B Rs. 1,000. This. is a void

agreement.
(b) A, for natural love and affection, promise to give his son B, Rs. 1,000 A
puts his promise to B into writing and registers it. This is a contract.

(c) A finds B's purse and gives it to him. B promises to give A Rs. 50. This
is a contract.

(d) A supports, B's infant son. B promises to pay A's expenses in so doing.
This is a contract.

(e) A owes B Rs. 1,000, but the debt is barred by the Limitation Act. A signs
written promise to pay B Rs. 500 on account of the debt. This is a contract.

(f) A agrees to sell a horse worth Rs. 1,000 for Rs. 10. A' s consent to the
agreement was freely given. The agreement is a contract notwithstanding the
inadequacy of the consideration.

(g) A agrees to sell horse of worth Rs. 1,000 for Rs. 10. A denies that his
consent to the agreement was freely given.

The inadequacy of the consideration is a fact which the court should take
into account into considering whether or not A' s consent was freely given.

B) Suppose that X does some work for Y in the month of

January (without expecting any payment). In February Y
promise to pay him some money. Why is it past
consideration of X?

Answer: When the consideration of one party was given before the date of
the promise, it is said to be past.
X does some work for Y in the month of January(without expecting any
payment) .In February Y promises to pay him some money.
The consideration of X is past consideration. Under English law past
consideration is no consideration and a contract based on past consideration
is void.
But under Indian law a past consideration is good consideration because the
definition of consideration in section 2(d) includes the words "has done or
abstained from doing "

Answer To The Question No 4

A)Transport Company runs tramway cars along the streets.

This is an offer by the company to carry passengers at the
scheduled fares. The offer is accepted when a passenger
gets up on a tram with the intention of becoming a
passenger. Is there a general offer? Discuss.

Answer: The proposal is also called an offer. The promisor or the person
making the offer is called the offeror. The person whom to the offer is made
is called offeree.
"when the person to whom the proposal is made signifies his assent there to,
the proposal is said to be accepted. A proposal when accepted becomes a
promise. The person making the proposal is called the "promisor" and the
person accepting the proposal is called the "promisee" .
General offer:-Only the person with the knowledge/notice of the offer can
come forward and accept the offer. A general offer is the offer which is not
made to a definite person but to the world at large or public in general.It
may be accepted by any person by fulfilling the terms of the offer. In general
offer, the contract is made with the person who having the knowledge of the
offer comes forward and acts according to the conditions of the offer. An
offer of a reward made by a way of advertising for finding last article is the
most appropriate example of general offer. When the offer is not accepted in
the prescribed manner, it is up to the offerer to accept or to reject the such
acceptance. And in case he decided to reject the acceptance then he is
required to inform this to the acceptor within a reasonable time. When a
offer is made to public at large it is called general offer. This offer maybe
accepted by anyone. For example, an offer to give reward to anyone who
finds the lost horse is a general offer. Though the general offer is made to
the public at large, the contract comes to the an end when any person acts
upon the condition of the offer. A transport company runs tramway cars
along with the street. This is offer by the company to carry passengers at a
schedule fares. The offer is accepted when the passenger gets upon a to tram
with the intention to becoming a passenger. Yes, there a general offer offer
discuss it.

B) Give one example of offer and

acceptance in case of valid contract between both
parties.

Answer An offer is open call to anyone wishing to accept the promise of

the offeror and generally used for the product and service. Acceptance
occurs when an offeree accept to be mutually bound to the term of the
contract by giving consideration or something of value like money ,to seal
the deal.

A proposal is called an offer. The promisor or the person making the offer is
called the offeror . The person whom the offer is made is called the
offeree .When the person to whom the proposal is made is signifies his
assent there to, the proposal is said to be accepted. A proposal when
accepted becomes a promise. 

The person making the proposal is called the "promisor" and the person
accepting the proposal is called the "promisee" .
The definition of a offer is a fact putting something forth for consideration,
acceptance or rejection or something suggested or proposed.

An example of offer is the act of putting in a  bid on a house. An example is

the suggested sum of $30 for per hour for tutoring. A void contract does not
come into existence untill one party, the offeror has,....an offer has normally
conditional that is the offeree must do something or give... Action are
however, a special case generally.

"Offer and acceptance " are the process by which a buyer or seller create a
binding a legal contract. This process typically begins when a prospective
buyer make an offer. Then, the seller either accept it or reject it and make a
counter offer. When the one party accept the other party offeror counter
offer and communicates that acceptance to the offering party or that party's
real state agent ,a purchase contract is created. Give one example of offer
and acceptance in case of valid contract in between both parties