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Core Concept — Types of Agreements & Contracts
⚖️✔ Valid Contract S. 2(h)
An agreement enforceable by law.Amjad sells his car to Habib; either can sue the other on default.◐ Voidable Contract S. 2(i)
Enforceable at the option of one or more parties but not of the others — option lies with the aggrieved party, not the defaulting party.Consent obtained by threat to kill → voidable at victim's option.⏳ Void Contract S. 2(j)
A contract which ceases to be enforceable becomes void when it ceases to be enforceable — valid at formation, void later.Music hall burns before the concerts → contract becomes void.✖ Void Agreement S. 2(g)
An agreement not enforceable by law — void ab initio (from the beginning). Enforceable by none of the parties.Loan + mortgage by a minor.2
Essentials of a Valid Contract S. 10
🧱An agreement is a contract if it meets ALL the following conditions:
1. Free consent of the parties
+2. Parties competent to contract
+3. Lawful consideration
+4. Lawful object
+5. Not expressly declared void by law
=VALID CONTRACT
Writing: A verbal promise to sell a book is valid (law doesn't require writing), but an oral arbitration agreement is unenforceable because the law requires it to be in writing.
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Competence to Contract S. 11
🧑⚖️Every person is competent who is: (a) of the age of majority under the law to which he is subject; (b) of sound mind; and (c) not disqualified from contracting by any law.
🧒 Minor
Majority Act, 1875: age of majority = 18 years; 21 years where a guardian is appointed by the court.Agreement with a minor = void ab initio.
- No estoppel — not liable even if he falsely claims to be major
- Cannot ratify on attaining majority (second pro-note also void)
- Cannot be declared insolvent
- Joint promise with a major → enforceable against the major only
- Necessaries suited to his condition → liability limited to minor's property
🧠 Sound mind S. 12
At the time of contracting, capable of understanding it and forming a rational judgment as to its effect on his interests.- Unsound: idiots (permanent), lunatics (with lucid intervals), drunken/delirious persons
- Usually unsound, occasionally sound → may contract when sound
- Usually sound, occasionally unsound → may not contract when unsound
🚷 Disqualified by law
- Alien enemy — citizen of a country at war with Pakistan
- Foreign sovereigns & ambassadors — may contract but can claim immunity from being sued (unless they submit to jurisdiction)
- Convict while imprisoned — disability ends on expiry of sentence or on parole
- Insolvent — property dealt with by official assignee / receiver
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Consideration S. 2(d)
💱When, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains, or promises to do or abstain, something — such act, abstinence or promise is consideration.
Forms
Act · Abstinence (forbearance) · PromiseNot suing a debtor for a year = abstinence.At promisor's desire
Must move at the desire of the promisor.Saving goods from fire unasked → no claim.From anyone
From promisee or any other person.Annuity case: consideration moved from Arif → Noman can sue.Timing
Past (service in Aug, promise in Sep) · Present (simultaneous) · Future✖ Not already bound
Doing what the promisor is already bound to do adds nothing.Payment promised to a summoned witness for giving evidence → no valid consideration.✖ Real, not illusory
Must be real and possible.Promise to bring a dead wife back to life → void.5
No Consideration, No Contract — & its Exceptions S. 25
🎁Rule: An agreement without consideration is void — e.g. a bare promise to give Rs. 5 million. Exceptions:
1. Natural love & affection
- Expressed in writing
- Registered under relevant law
- Between parties in near relation, on account of natural love & affection
2. Past voluntary service
Promise to compensate (wholly/partly) a person who voluntarily did something for the promisor, or did what the promisor was legally compellable to do.Finder of purse promised Rs. 5,000.3. Time-barred debt
- Promise in writing
- Signed by debtor or his agent
- To pay wholly/partly a debt barred by limitation
4. Completed gift
Gift actually made (voluntary transfer of existing property, accepted by donee) — valid without consideration; executed by registered deed.⚖️ Adequacy of consideration S. 25
An agreement freely consented to is not void merely because consideration is inadequate — but the court may consider inadequacy when deciding whether consent was freely given.Car worth Rs. 3m sold for Rs. 1m with free consent → valid.6
Unlawful Object or Consideration S. 23
🚫Every agreement whose object or consideration is unlawful is void. Both must be lawful. They are unlawful if:
| Ground | Illustration from the study text |
|---|---|
| 1. Forbidden by law | Sale of snow leopard cubs whose capture is prohibited under local laws |
| 2. Defeats provisions of any law | Defaulter (barred from bidding) appoints agent to buy his auctioned house |
| 3. Fraudulent | Dividing tax refunds obtained on fake documents |
| 4. Injury to person/property | Payment for publishing a defamatory article |
| 5. Immoral / opposed to public policy (as Court regards) | Guardian selling influence over ward · money to obtain divorce and marry lender · hush money for not exposing a theft · withdrawing criminal proceedings in return for repayment (stifling prosecution) |
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Application to Scenarios
🧩Minor buys vintage car
Shoaib (15) buys a vintage Mercedes ➜ void ab initio; not a necessary. Seller can only seek restitution of the car. Father not liable (unless joint contract or son acted as his agent).Grandfather's oral gift promise
Promise of Rs. 1m, not paid, not written, not registered ➜ neither completed gift nor love-&-affection exception ➜ not recoverable.Thief repays, owner withdraws case
Agreement to withdraw criminal proceedings ➜ void (unlawful object / public policy); owner not bound.Paying another's bill
Karim voluntarily pays Pervez's electricity dues; Pervez verbally promises to repay ➜ enforceable (past voluntary service).Promise to return gifted property
Wife's promise to re-transfer gifted property if husband suffers loss ➜ void for lack of consideration.Endangered cubs + free cat
Sale of prohibited snow leopards ➜ illegal consideration; whole agreement void — cat cannot be demanded.8
Common Exam Traps
⚠️Minor's agreement is voidable / unenforceable → void ab initio.
Agreement without consideration is unlawful / voidable → void (subject to 4 exceptions).
Voidable at option of both / one party → the aggrieved party.
Past voluntary service promise need not be in writing; time-barred debt and love & affection require writing.
A contract is never void at formation — a void contract was valid and later ceased to be enforceable.
Supply on 20 Jan, payment on 15 Mar (agreed 1 Jan) → future consideration, valid.
Consideration must be adequate / equal → need not be adequate.
"Immoral" is judged by the Court — not people / society.
Consideration must move from promisee only → promisee or any other person; but at desire of the promisor.
Ambassador's lease: cannot be sued in local courts due to diplomatic immunity.
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Quick Revision Box
⚡5Essentials of valid contract (S. 10)
18 / 21Age of majority / with court-appointed guardian
4Exceptions to "no consideration, no contract"
5Grounds of unlawful object/consideration (S. 23)
- S. 2(h) Contract · 2(i) Voidable · 2(j) Void contract · 2(g) Void agreement
- S. 10 Essentials · S. 11 Competence · S. 12 Sound mind
- S. 2(d) Consideration · S. 25 No consideration & exceptions, adequacy
- S. 23 Unlawful object or consideration
Exceptions in one line: Love (written + registered + near relation) · Past voluntary service · Time-barred debt (written + signed) · Completed gift.
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