Revision Question lecture 4 void and voidable contract

1. X agrees to sell his bungalow to Y for Rm 1 . Discuss whether the agreement is valid , void or voidable .

2. X sells to Y a car which X knows to have a faulty engine . X says nothing to Y about the faulty engine . Y buys the car and later he discovers that the engine is faulty . Can Y sue X ? Advise Y .

Outline Answer .

1. If the consent of the promisor is freely given , then the agreement is a valid contract .

Under the provision of Section 26 of the Contract Act 1950 , an agreement is not void merely because the consideration is inadequate . However , the inadequacy of the consideration may be taken into account by the court in determining the question whether the promisor has given a free consent .

Section 19 of the Act provides that if consent to an agreement is caused by coercion , fraud or misrepresentation , the agreement is a contract voidable at the option of the party whose consent was so caused .

2) Y's claim against x will not be successful as the contract is not voidable .
Under the provision of Section 17 of the Contract Act 1950 , mere silence as to facts likely to affect the willingness of a person to enter into a contract is not fraud , unless the circumstances of the case are such that , regard being had to them , it is the duty of the person keeping silence to speak ,or unless his silence is , in itself , equivaalent to speech .

Under the provision of Section 23 of the Contracts Act 1950 , a contract is not voidable merely because it was caused by one of the parties to it being under a mistake as to a matter of fact .

In this case , X is not bound to inform Y about the faulty car engine . It is Y's own mistake as he did not ask X about the condition of the engine before buying the car .