hi chegg team pls send me answer of this ques. this is commercial law subject. q

Question

hi chegg team pls send me answer of this ques. this is commercial law subject.

ques-Assume you are the Minister of Justice. Several colleagues have expressed an interest in providing a policy document to Canadians describing current issues in contract law. You have been asked to prepare a section of the document on illegal contracts. In particular, you have been asked to provide four (4) examples of different types of illegal contracts (contracts formed illegally) and whether such contracts are void or voidable. You must provide a very brief scenario demonstrating each of the 4 illegal contracts.

Question-Explain the duty to mitigate damages when a contract is breached. Provide one example where the victim of a breach did not mitigate the damages, and one example where the victim of a breach did mitigate the damages.

Explanation / Answer

ILLEGAL CONTRACTS:

In a contract if the object or consideration for the object is illegal or un lawful or if it violates the law then it is said to be an illegal contract. If the contract is made for illegal purpose then it is said to be illegal contract.

The Indian Contract Act 1872, Sec 24 states that in the following cases the object or considerations is illegal, then the agreement is said to be illegal.

VOID CONTRACT & VOIDABLE CONTRACTS:

EXAMPLES :

1. LACK OF CAPACITY :

In a contract one party to the contract lacks capacity to make an agreement means then the contract is said to be voidable. If an agreement is between a major and a minor or lunatic or specially challenged people that is they are not capable of understanding the terms of an agreement what they are signing then it is automatically voidable. The other party has to honor the contract because there is no choice for the contact.

Example: Ram leads 1,00,000 to Shyam, a minor for the mortgage of his house by fraud. The mortgage agreement is void due to minority and by fraud. In this contract Ram who makes agreement by fraud, is fully responsible for his contract and he has to mitigate the damages or losses and Shyam, a minor, is not mitigate for any losses or damages.

2. ILLEGAL PURPOSE:

The contracts object or consideration is for the illegal purpose means then it is said to be illegal.

Example: If two parties enters into an oral agreement to deal with illegal drugs it is automatically void. But if any of the party breaches the oral agreement the other cant go to court for the claim.

3. MIS UNDERSTANDS THE TERMS:

Both the parties are eligible to enter into contract but one of the party misunderstands the terms noted in the contract and this may invalidate the contract. In this type there is error in understanding but anyhow they signed the contract. This is also unenforceable contract. But the party has accepted the risk and undersigned the agreement hence he can not claim for the damages or losses.

Example: An insurance policy,without proper stamp duty by fraud,cannot be produced as evidence of a contract in the court. These types of contracts,the parties cannot enforce them through the courts.

4. FRAUD AND/OR MISREPRESENTATION:

If in the contract one of the party knowingly gives false statements for a fake work related with gambling it is said to be fraudulent and illegal. These type of agreements are automatically void.

Example: A,B and C enters into an agreement for the division among them of gains acquired or to be acquired,by them from gambling by fraud and B gives wrong statements knowingly it is said to be illegal and void. Here they cant claim for losses in court.

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