Voidable Contracts in India: When Can Parties Legally Back Out?
contract clat_ug advanced discussionIn our Contract Law class, we've been discussing voidable contracts, where one or both parties can cancel the contract with valid reasons. The key issue is: what constitutes a "valid reason" to make a contract voidable? According to Section 2(i) of the Indian Contract Act, 1872, a contract is voidable at the option of the promisor if it is induced by fraud, misrepresentation, or coercion. But can this provision be extended to cases of undue influence or unconscionability?
Take Supreme Court judgments like Indian Hotels & Towers Ltd. vs. Babulal V. Wardhwa (1979) where the court recognized undue influence as a ground for voiding a contract. Can we apply this principle more broadly? When does a contract become unconscionable, and should parties have the option to back out? What are your views on this?
Agar ek contract voidable hai, to parties ko iska benefit ya loss mil sakta hai. Jaisa ki Sec 2(i) Contract Act 1872 me isharta hai, voidable contract udaaharan ke liye hoga jab ek party ke peechhe dhang se cheezein nahin di gayi hain ya wo apne man ko badlaav karne ke liye majboot nahin hai.