Indian contract law

The joys of looking at other legal systems

I’m very proud to have contributed to this book, edited by KV Krishnaprasad, Niranjan Venkatesan, Shivprasad Swaminathan and Umakanth Varottil, Foundations of Indian Contract Law (Oxford University Publishing 2024).

In the Preface, the editors say that they instituted this project, first, because “scholarship examining the conceptual foundations of Indian contract law is rare, and an examination of the legislative history of particular provisions of the Contract Act is rarer still”¹ and secondly, “because India has largely been a bystander to the vigorous debates elsewhere in the common law world about contract law.”² They continue:

The purpose of this project is to address these gaps. This is why each chapter pays close attention to the legislative history of the relevant provision of the Contract Act, and none aims to survey every single Indian case in the area (probably an impossible exercise in any event). The result, we hope, is an overview of the foundational concepts of Indian contract law, derived from an analysis of what the legislator set out to achieve and the leading (but not all) authorities. Whether we have succeeded in that aim is for readers to judge.³

The authors in the volume come from many different common law jurisdictions.

Part I General Themes

• 1 History and Drafting of the Indian Contract Act 1872 - Warren Swain

• 2 Legislative Design and the Codification Project - Jeannie Marie Paterson and Elise Bant

• 3 Contractual Interpretation - Goh Yihan

• 4 Migration of the Indian Contract Act 1872: The Case of Malaysia - May Fong Cheong

Part II Core Concepts

• 5 Formation - Stelios Tofaris

• 6 Consideration - Nigam Nuggehalli and Ragini Surani

• 7 Parties and Assignment - Shantanu Naravane

• 8 Incapacity and Its Consequences - Neel Maitra

• 9 Coercion, Undue Influence, and Unconscionability - Shivprasad Swaminathan and Veda Singh

• 10 Fraud, Misrepresentation and Mistake - KV Krishnaprasad

• 11 Illegality - Thomas Sebastian and Aman Ahluwalia

• 12 Restraint of Trade in India: Reason (Un)restrained? - Zhong Xing Tan and Umakanth Varottil

• 13 Performance, Breach, and Termination - Mihir Naniwadekar

• 14 Frustration - Nilima Bhadbhade

• 15 The Duty of Good Faith - Manasi Kumar and Poorna Mysoor

• 16 Damages - Katy Barnett

• 17 Stipulated Sums and Limitation Clauses - TT Arvind

• 18 The Action for the Agreed Sum and Specific Performance in Indian Law - Niranjan Venkatesan

• 19 Rescission of Contracts Voidable for Lack of Free Consent - Steven Elliott KC and Divya Behl

Part III Special Contracts

• 20 Indemnity and Guarantee - Wayne Courtney

• 21 Bailment and Pledge - Gail Pearson

• 22 Shareholder Agreements in India: An Unsettled Jurisprudence - Nemika Jha and Vikramaditya S Khanna

• 23 Contracting with the State - Chintan Chandrachud

Part IV Conclusion

• 24 Concluding Remarks - Hugh Beale

I became interested in the private law of the subcontinent as a result of my ongoing obsession with Lord Cairns’ Act provisions (ie, those provisions which allow for a payment of damages in lieu of an award of specific performance or an injunction). I researched to see which common law regimes had such provisions, on what terms they had it, and which did not. It was in this way that I discovered that the Lord Cairns’ Act provision in the Indian Specific Relief Act 1877 (still law in Pakistan and Bangladesh) was really different to the very broad-brush one common in many common law jurisdictions such as Australia. It was far more finely crafted, and reflected the original intention of the pre-Judicature Act legislation. I had been vaguely aware of the mid-nineteenth century Indian contract law codification project, but now I was fascinated.

I never intended to become a comparative lawyer. It’s just that to understand my own laws, I keep finding myself looking at other laws in other countries. I read an article by the late Italian scholar, Rodolfo Sacco: “Only through comparison do we become aware of certain features of whatever we are studying. … The primary and essential aim of comparative law as a science, then, is better knowledge of legal rules and institutions.”⁴ This struck me as very true.

As an Australian, I must necessarily be a comparativist to an extent, in that I must have knowledge of the laws of England and Wales, or of the United Kingdom more broadly. Our laws of contract, property, tort, trusts and remedies are built on English law, both case law and statute. I find myself having to explain to overseas students that no, Australia definitely isn’t part of England, but yes, some English law remains part of our law. And if an academic wishes to be published in top English journals—which are very highly regarded—it is necessary to know English law well, even if, like me, you have not studied at an English university.

Sometimes students ask me why I teach approaches taken by other countries. If another country has taken a particular approach, and we have not, we can start from a presumption that they have reasons for doing so. It can be instructive to consider and compare. If Australia has taken a different path to other jurisdictions, is it a better one? Can we learn from others? Also, as Sacco says, we understand our own law better by comparing.

Certainly, by learning about the contract law of India and beyond, I have begun to understand my own law more deeply. I have also met many excellent people from all around the world. Such is my passion for encouraging further study and comparison with the law of the subcontinent, that I have become an editor at the Indian Law Review, a journal which discusses the law of the subcontinental region of Asia generally.

In conclusion, I commend the editors of the volume above for their hard work and dedication, and thank them very much for inviting me to contribute to such an excellent book.

1. KV Krishnaprasad, Niranjan Venkatesan, Shivprasad Swaminathan and Umakanth Varottil (eds), ‘Preface’ in Foundations of Indian Contract Law (Oxford University Publishing 2024) v.

2. Ibid, vi.

3. Ibid.

4. Rodolfo Sacco, ‘Legal Formants: A Dynamic Approach to Comparative Law (Installment I of II)’ (1991) 39(1) The American Journal of Comparative Law 1.