The vendor and vendee in respect of two properties entered into a gentlemen’s agreement that the vendee would recover the property sold to the vendors if within a period of three years the consideration money along with some money solatium is paid. The contract is a :
Valid contract unless it yield legal obligations
Under Section 10 of the Indian Contract Act, 1872, an agreement made by free consent of competent parties for lawful consideration and object is a contract. An intention to create legal relations is presumed in business and property dealings (Rose and Frank Co. v. J.R. Crompton, 1925).
Here the parties dealt with property, a fixed period of three years, and repayment of consideration with solatium. Such terms are commercial in nature, so calling the arrangement a 'gentlemen's agreement' does not by itself take away its binding character; it remains a valid contract as long as it yields legal obligations.
It is not void, because nothing in it is unlawful or uncertain; it is not voidable, as there is no coercion, undue influence, fraud or misrepresentation; and it is not a mere social agreement, since social or domestic arrangements (Balfour v. Balfour, 1919) lack property-based commercial terms.
Hence, the answer is Valid contract unless it yield legal obligations.
Similar Questions
In bank guarantee, the number of parties involved in the agreement are ..................... .
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Read Assertion (A) and Reason (R) and with the help to codes given below, point out the correct explanation :
Assertion (A) :
An acceptance is to a proposal what a lighted match is to a train of gunpowder.
Reason (R) :
Acceptance converts the offer into a promise and then it is late to remove.
Breach of contract can result in for :
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Important Questions from Indian contract acts, 1872
Which is the term used for a contract where both the parties to the contract have fulfilled their obligations under the contract?
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