Contracts Act

Section Interpretation Section In this Act, unless the context otherwise requires— “ acceptance ” means an assent to an offer made by a person to whom the offer is made; “ agreement ” means a promise or a set of promises forming the consideration for each other; “ coercion ” means the commission or threatening to commit any act forbidden under any law or the unlawful detaining or threatening to detain any property, to the prejudice of any person with the intention of causing any person to enter into an agreement ; “ consent ” means agreement of two or more persons obtained freely, upon the same thing in the same sense; “ consideration ” means a right, interest, profit or benefit accruing to one party or forbearance, detriment, loss or responsibility given, suffered or undertaken by the other party; “ consideration for a promise ” means where, at the desire of a promisor , a promisee or any other person does or abstains from doing or promises to do or to abstain from doing something; “ contingent contract ” means a contract to do something or not to do something where an event, collateral to a contract , does or does not happen; “ contract ” means an agreement enforceable by law as...

Section Communication of offer, acceptance or revocation Section The communication of an offer is made by an act or omission of a party who proposes the offer , by which that party intends to communicate the offer or which has the effect of communicating the offer . The communication of acceptance of an offer is made by an act or omission of a party who accepts the offer , by which that party intends to communicate the acceptance or which has the effect of communicating the acceptance . The communication of revocation of an offer or acceptance is made by any act or omission of a party who revokes the offer or acceptance , respectively, by which that party intends to communicate the revocation or which has the effect of communicating the revocation.

Section Completion of communication Section Communication of an acceptance is complete— Communication of a revocation is complete— Communication of an offer is complete when it comes to the knowledge of the person to whom it is made. as against the offeror, when it is put in a course of transmission to him or her so as to be out of the power of the acceptor; or as against the acceptor, when it comes to the knowledge of the offeror. as against the person who makes it, when it is put into a course of transmission to the person to whom it is made, so as to be out of the power of the person who makes it; or as against the offeree, when it comes to his or her knowledge.

Section Revocation of offer or acceptance Section An offer may be revoked at any time before the communication of its acceptance is completed. An acceptance may be revoked at any time before the communication of the acceptance is complete.

Section Mode of revocation of offer Section An offer is revoked by— communication of the notice of revocation by the offeror to the other party; lapse of the time prescribed in the offer , for its acceptance , or, where time is not prescribed, by the lapse of a reasonable time without communication of the acceptance ; the failure of the acceptor to fulfil a condition precedent to acceptance ; or the death or mental illness of the offeror, where the fact of the death or mental illness comes to the knowledge of the acceptor before acceptance .

Section Acceptance to be absolute Section An offer is converted into a promise where the acceptance is— absolute and unqualified; and expressed in a usual and reasonable manner, except where the offer prescribes the manner in which it is to be accepted. Where an offer prescribes the manner in which it is to be accepted and the acceptance is not made in that manner, the offeror may, within a reasonable time after the acceptance is communicated to him or her, demand that the offer is accepted only in the prescribed manner. Where an offeror fails to demand under subsection (2) that acceptance be made in the prescribed manner, the offeror shall be deemed to have accepted the manner of acceptance offered by the offeree.

Section Acceptance by performing conditions or receiving consideration Section The performance of the conditions of an offer or the acceptance of any consideration for a reciprocal promise which may be offered with an offer , is an acceptance of the offer .

Section Express or implied promise Section A promise may be express or implied. A promise is express, where an offer or an acceptance of a promise is made either verbally or in writing. A promise is implied, where an offer or an acceptance is not made either verbally or in writing.

Section Contract contingent on event happening Section A contract to do something or not to do a particular thing where an uncertain future event on which the contract is contingent, happens, shall not be enforced except where and until that event happens, and where the event becomes impossible, the contract shall become void.

Section Contract contingent on event not happening Section A contract to do something or not to do a particular thing where an uncertain future event on which the contract is contingent does not happen, may be enforced after the happening of that event becomes impossible, but not before.

Section Contract contingent on conduct of person Section Where a future event on which a contract is contingent is the way in which a person is to act at an unspecified time, the event shall be considered to have become unattainable where that person does anything which renders it impossible for him or her to act within a definite time or under further contingencies.

Section Contract contingent on happening of specified event within specified time Section A contract to do something or not to do a particular thing, which is contingent on the happening of a specified or uncertain event within a specified time, becomes void where— A contract to do something or not to do a particular thing, which is contingent on the fact that a specified event or uncertain event does not happen within a fixed time, may be enforced— at the expiration of the time fixed, the event has not happened; or before the time fixed, the happening of the event becomes impossible. when the time fixed for the happening of the event expires and the event has not happened; or before the time fixed expires, where it becomes certain that the event will not happen.

Section Agreement contingent on impossible event Section An agreement to do something or not to do a particular thing, which is contingent on the happening of an impossible event, is void, whether the impossibility of the event is known to the parties to the agreement or not, at the time the agreement is made.

Section Bailor entitled to increase or profit from bailed goods Section In the absence of any contract to the contrary, a bailee shall deliver to a bailor or according to the directions of a bailor , any increase or profit which may have accrued from the bailed goods.

Section Responsibility of bailor to bailee Section A bailor is responsible to a bailee for any loss which the bailee may sustain, where the bailor was not entitled to make the bailment or to receive back the goods or to give directions, in respect of the goods.

Section Bailment by several joint owners Section In the absence of an agreement to the contrary, where several joint owners of goods bail the goods, a bailee may deliver the goods back to one joint owner or according to the directions of that joint owner, without the consent of the other owners.

Section Bailee not responsible on re-delivery to bailor without title Section Where a bailor has no title to the goods and a bailee , in good faith, delivers the goods back to the bailor or according to the directions of the bailor , the bailee is not responsible to the owner, for the delivery.

Section Right of third person claiming bailed goods Section Where a person, other than a bailor , claims bailed goods, that person may apply to the court to stop delivery of the goods to the bailor and to decide the title to the goods.

Section Right of finder of goods Section A finder of goods has no right to sue the owner for compensation for trouble and expense, voluntarily incurred by him or her to preserve the goods and find the owner. Where an owner of goods offers a specific reward for the return of goods lost, the finder may retain the goods until he or she receives the compensation. Where the owner of goods offers a specific reward for the return of goods lost, the finder may sue for the reward and may retain the goods until he or she receives the reward.

Section Right of finder to sell Section Where goods which are commonly the subject of sale are found but the owner cannot with reasonable diligence be found or where the owner refuses upon demand, to pay the lawful charges of the finder of the goods, the finder may sell the goods, where— the goods are in danger of perishing or of losing the greater part of their value; or the lawful charges of the finder, in respect of the goods, amount to two-thirds of the value of the goods.

Section Lien of bailee Section Where a bailee , in accordance with the purpose of the bailment , renders any service involving the exercise of labour or skill in respect of the bailed goods, the bailee may, in the absence of a contract to the contrary, retain the goods until he or she receives the remuneration due, for the services rendered in respect of the goods.

Section General lien of bankers, brokers, warehouse keepers, advocates and insurance brokers Section A banker, a broker, a warehouse keeper, an advocate, an insurance broker or any other person authorised by law may, in the absence of a contract to the contrary, retain as a security for a general balance of account, any goods bailed to him or her. A person other than a person mentioned in subsection (1) may not retain, as a security for balance due, goods bailed to that person unless fhere is an express contract to that effect.

Section Rights of pledgee Section A pledgee may retain any goods that are pledged for the payment of— a debt or the performance of a promise ; the interest on the debt; and any necessary expenses incurred by the pledgee for the possession or preservation of the pledged goods.

Section Pledgee not to retain goods for debt or promise Section In the absence of a contract to that effect, a pledgee shall not retain any pledged goods except for the purpose for which they are pledged. In the absence of anything to the contrary, a contract referred to in subsection (1) shall be presumed in regard to subsequent advances made by the pledgee .

Section Right of pledgee to extraordinary expenses incurred Section A pledgee is not entitled to receive from a pledgor extraordinary expenses incurred by the pledgee for the preservation of any pledged goods.

Section Right of pledgee where pledgor defaults Section Where a pledgor defaults in payment of a debt or the performance of a promise within the time stipulated, in respect of the pledged goods, a pledgee may— bring a suit against the pledgor upon the debt or promise and retain the pledged goods as a collateral security; or sell the pledged goods, on giving the pledgor reasonable notice of the sale. Where the proceeds of the sale undertaken in accordance with subsection (1)(b) , are less than the amount due in respect of the debt or promise , the pledgor is not liable to pay the balance and where the proceeds of the sale are greater than the amount due, the pledgee shall pay the surplus to the pledgor .

Section Right of pledgor to redeem on default Section Where time is stipulated for the payment of a debt or the performance of a promise , for which a pledge is made and a pledgor defaults in the payment or the performance at the stipulated time, the pledgor may redeem the pledged goods at any subsequent time, before the actual sale of the goods. The pledgor shall, where the goods are redeemed under subsection (1) , pay any expenses which may arise from his or her default in payment or performance at the stipulated time.

Section Pledge by mercantile agent Section Where a mercantile agent is with the consent of an owner, in possession of goods or the documents of title to goods , any pledge made by the mercantile agent while acting in the ordinary course of business of a mercantile agent , shall be as valid as if the mercantile agent was expressly authorised by the owner of the goods to make the pledge . Where a pledge is made under subsection (1) , a pledgee shall be taken to act in good faith and to have no notice at the time of the pledge , that the mercantile agent had no authority to pledge . Where a mercantile agent validly pledges the documents of title to goods , the pledge shall be deemed to be a pledge of the goods. Where a pledgor obtains possession of the other goods pledged by him or her under a contract which is voidable under section 15(1) , but the contract is not rescinded at the time of the pledge , the pledgee acquires a good title to the goods, where the pledgee acts in good faith and without notice of the defect in the title of the pledgor .

Section Pledge where pledgor has limited interest Section Adhere a person pledges goods in which he or she has a limited interest, the jledge is valid to the extent of that interest.

Section Suit by bailor or bailee against wrongdoer Section Where a third person wrongfully deprives a bailee of the use of bailed goods or the possession of those goods or damages the goods, the bailee is entitled to use any remedies that the owner may have used if bailment had not been made. A bailor or a bailee may bring a suit under subsection (1) against a third person, for deprivation or damage. Anything obtained by way of relief or compensation in any suit brought under subsection (2) shall, as between the bailor and the bailee , be dealt with according to their respective interests.

Section Interpretation of Part Section In this Part, unless the context otherwise requires— “ bailee ” means a person to whom goods are delivered; “ bailment ” means the delivery of goods by one person to another for some purpose, on a contract that the goods shall when the purpose is accomplished, be returned or disposed of according to the direction of the person who delivered them; “ bailor ” means a person who delivers the goods; “ pledge ” means the bailment of goods as security for payment of a debt or performance of a promise ; “ pledgee ” means a person with whom a pledge is deposited; “ pledgor ” means a person who gives a pledge to another.

Section Bailment by person in possession of goods Section Where a person in possession of goods under another contract holds the goods as bailee , that person becomes a bailee under the existing contract and the owner becomes the bailor of goods although the goods may not have been delivered by way of bailment .

Section Delivery to bailee Section The delivery of goods to a bailee may be made by doing anything which has the effect of putting the goods in the possession of the intended bailee or of any person authorised to hold the goods on behalf of the bailee .

Section Duty to disclose fault in bailed goods Section A bailor shall disclose to a bailee , any fault in bailed goods, of which the bailor is aware and which materially interferes with the use of the goods or exposes the bailee to extraordinary risk. Where a bailor does not make the disclosure required under subsection (1) , the bailor is responsible for any damage that may arise to the bailee , directly from the fault. Where the goods are bailed for hire, a bailor is responsible for the damage, whether or not the bailor was aware of the existence of the fault in the bailed goods. Whenever practicable, the bailee shall, to protect his or her interests, inspect the goods upon delivery to him or her.

Section Duty of care by bailee Section A bailee shall take as much care of the goods bailed to him or her as a person of ordinary prudence would under similar circumstances take of his or her own goods of the same bulk, quantity and value, as the bailed goods.

Section Liability of bailee for loss Section In the absence of any special contract , a bailee is not responsible for the loss, destruction or deterioration of the bailed goods, where the bailee takes the amount of care required under section 91 .

Section Termination of bailment due to act of bailee Section A contract of bailment is voidable at the option of the bailor , where the bailee does any act with regard to the bailed goods, which is inconsistent with the conditions of the bailment .

Section Unauthorised use of bailed goods Section Where a bailee makes use of the bailed goods contrary to the conditions of the bailment , the bailee is liable to compensate the bailor for any damage to the goods arising from or during that use.

Section Mixture of goods of bailee and bailor Section Where a bailee with the consent of a bailor , mixes the goods of the bailor with his or her own goods, the bailor and the bailee shall have an interest, in proportion to their respective shares, in the goods produced. Where a bailee without the consent of a bailor , mixes the goods of the bailor with his or her own goods and the goods in the mixture can be separated or divided, the property in the respective goods remains in the parties individually. A bailee who mixes the goods of a bailor with his or her own goods without the consent of the bailor under subsection (2) , shall bear the expenses of the separation or division and any damage which arises from the mixture. Where a bailee without the consent of a bailor mixes the goods of the bailor with his or her own goods in such a manner that it is not possible to separate the bailed goods from the other goods and to deliver them back, the bailor is entitled to compensation by the bailee for the loss of the goods.

Section Repayment by bailor of necessary expenses Section Where under the conditions of a bailment , the goods are to be kept or carried or where work is to be done upon the goods by a bailee for a bailor and the bailee is to receive no remuneration, the bailor shall repay to the bailee the necessary expenses incurred by him or her for the purpose of the bailment .

Section Return of bailed goods Section A bailee shall return or deliver without demand from a bailor , according to the directions of the bailor , the bailed goods, as soon as the time or the purpose for which the goods were bailed expires.

Section Failure to return goods Section Where by the fault of a bailee , the goods are not returned, delivered or tendered at the proper time, the bailee is responsible to the bailor for any loss, destruction or deterioration of the goods, from that time.

Section Termination of gratuitous bailment Section A gratuitous bailment terminates in any of the following circumstances— where the goods bailed are returned; where the time of bailment expires; by agreement of the parties; where the subject matter of the bailment is destroyed; or upon the death of the bailor or bailee .

Section Claim for necessaries supplied to person incapable of contracting Section Where a person incapable of entering into a contract or anyone whom that person is legally bound to support, is supplied by another person with necessaries suited to the condition in life of that person or of anyone that that person is legally bound to support, the person who furnishes the supplies is entitled to reimbursement from the property of the person who is incapable of entering into a contract .

Section Obligation of person enjoying benefit of non-gratuitous act Section Where a person lawfully does anything for another person or delivers anything to another person, not intending to do so gratuitously and the other person enjoys the benefit, the person who enjoys the benefit shall compensate the person who provides the benefit in respect of or to restore, the thing done or delivered. Compensation shall not be made where the person sought to be charged had no opportunity of accepting or rejecting the benefit.

Section Responsibility of finder of goods Section A person who finds goods that belong to another and takes them into his or her custody shall be subject to the same responsibilities as a bailee , as provided in Part IX of this Act.

Section Liability of person to whom money is paid or thing is delivered by mistake Section A person to whom money is paid by mistake or to whom anything is delivered by mistake shall repay or return the money or thing delivered.

Section Compensation for loss or damage caused by breach of contract Section Where there is a breach of contract , the party who suffers the breach is entitled to receive from the party who breaches the contract , compensation for any loss or damage caused to him or her. The compensation referred to in subsection (1) is not to be given for any remote and indirect loss or damage sustained by reason of the breach. Where an obligation similar to that created by contract is incurred and is not discharged, any person injured by the failure to discharge it is entitled to receive the same compensation from the party in default, as if that person had contracted to discharge it and had breached the contract . In estimating the loss or damage arising from a breach of contract , the means of remedying the inconvenience caused by non-performance of the contract , which exist, shall be taken into account.

Section Compensation for breach of contract where penalty is stipulated Section Notwithstanding subsections (1) and (2) , a person shall be liable, upon breach of the condition of an instrument, to pay the whole sum mentioned in the instrument, where that person— Where a contract is breached, and a sum is named in the contract as the amount to be paid in case of a breach or where a contract contains any stipulation by way of penalty, the party who complains of the breach is entitled, whether or not actual damage or loss is proved to have been caused by the breach, to receive from the party who breaches the contract , reasonable compensation not exceeding the amount named or the penalty stipulated, as the case may be. The penalty stipulated under subsection (1) may provide for an interest on the amount of compensation to be paid. enters into any bail, bond, recognisance or other instrument of the same nature; or gives a bond for the performance of a public duty or an act in which the public is interested, under any law or under the orders of the central government or of any local government.

Section Party rightfully rescinding contract entitled to compensation Section A party who rightfully rescinds a contract is entitled to compensation for any damage which that person sustains through the non-fulfilment of the contract .