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Wednesday, 10 August 2011

Write a note on the following 1. Continuing Guarantee 2. Wagering Contract 3. Promise and Reciprocal Promises

Continuing Guarantee :-
Its define in the following words, " A guarantee which extends to a series of transaction is called continuing guarantee."

Guarantee is not only limited for a single credit or transaction.

This guarantee is revoked when the surety's liability is discharged. It may also at any time be revoked by the surety as to future transactions by notice to the creditor.

Wagering Contract :-
"Wager" and "Bet" both words are used in the same sense. The word wager is defined in the following words, "A promise to give money or money's worth upon the determination or ascertainment of an uncertain event."

A wager depends upon uncertain event. It is a game of chance. One can suffer a loss earn a money. All the wagering contracts are void. No body can file a suit for the recovery of anything won by wager. For the wagering contract it is necessary that each party may win or loss.

Note : An agreement to subscribe a sum of Rs. 5000/- or upwards to be awarded to the winner of any horse race is not unlawful.

Example :- Suppose there is a match between the Indian and Pakistan Cricket team. Mr. Danial promises to pay Mr. Amir Rs. 10,000 if Indian cricket team wins the match. Now this contract is void in the eyes of law and no body can file a suit for the recovery of winning amount.

Promise :-
The word promise is defined in the following words, "A proposal when accepted, becomes a promise."

Generally two parties are involved in the promise. The person who makes the offer is called promisor. While a person who accepts the offer is called promisee.

Example :- Suppose Mr. Tariq offer to sell his car for Rs. 700,000 to Mr. Jhony. Mr. Jhony accepts the offer. Now it will become a promise.

Reciprocal Promises :-
Reciprocal means mutual. Those promises which form consideration for each other are called reciprocal promises. Following are the important kinds of reciprocal promises :

1. Mutual and Independent :- It is the important kind of reciprocal promises. In these contracts each party has to perform his part without waiting the readiness of the other party.

2. Simultaneous Performance :- In this case reciprocal promises are performed simultaneously. If one party is ready to perform a promise other party should also perform the same time. If one party is ready to pay the amount demanded and other party is not ready to deliver the particular good. The performance of the contract will be not possible.

3. Order of Performance :- In this case first of all order is performed and then its reciprocal is received.

Example :- Mr. Jmaes contracts with Mr. Kane to build his bath room for Rs. 40,000. As promise to build the bath room must be performed before payment.

4. Legal and Illegal :- In these cases first set of promises is legal and other set is illegal. So first part is a valid and second is void agreement.

Example :- Mr. Cena agrees to sell his gun to Mr. Nehra for Rs. 25,000 but Mr. Nehra uses it in killing the animals, pay Rs. 10,000 for it. The first set of promises is legal and other is illegal.

5. Conditional Contracts :- In these cases if the prior condition is not performed by one party, the other party can not be called upon to perform his promise.


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