(a) State the circumstances of supervening impossibility and frustration of contract in the light of the decided cases. (20…

(a) Supervening impossibility and frustration

Section 56, Indian Contract Act, 1872: an agreement to do an impossible act is void. A contract that later becomes impossible, or unlawful through an event the promisor could not prevent, becomes void at that point. A promisor who knew of the impossibility must compensate a promisee who did not, and benefits received must be restored (s.65).

***Satyabrata Ghose v Mugneeram Bangur* (1954)** held that s.56 is a positive rule, so English implied-term theories are not needed, and that "impossible" means impracticable or useless in view of the object of the parties, not merely physically impossible. Wartime requisition did not frustrate a development contract with no time limit. Where the contract itself covers the event, as in a force majeure clause, s.32 applies instead (Energy Watchdog v CERC 2017).

Circumstances of frustration:

1. Destruction of subject matter: Taylor v Caldwell (1863), a music hall burnt down.
2. Death or incapacity in personal contracts: Robinson v Davison (1871), Morgan v Manser (1948).
3. Failure of the foundational event: Krell v Henry (1903) was frustrated when the coronation procession was cancelled, but Herne Bay Steam Boat v Hutton (1903) was not, since the cruise was still possible.
4. Change of law or government action: Metropolitan Water Board v Dick, Kerr (1918), and any later illegality.
5. War, which dissolves or suspends contracts with alien enemies.
6. Fundamental change: in Sushila Devi v Hari Singh (1971) an agreement to lease land that went to Pakistan was frustrated, but s.56 does not apply to a completed lease (Raja Dhruv Dev Chand 1968).

What does not frustrate: rising cost or hardship (Alopi Parshad 1960, Davis Contractors 1956, Energy Watchdog 2017 on coal prices), a longer route (Tsakiroglou 1962), obstacles that can be overcome (Naihati Jute Mills 1968), self-induced frustration (Maritime National Fish 1935) and COVID-19 as cover for earlier default (Halliburton v Vedanta, Delhi HC 2020). Frustration applies only when the foundation of the contract disappears.

(b) The IT Act, 2000 and confidence in e-commerce

Aims and achievements: based on the UNCITRAL Model Law (1996), the Act recognised electronic records (s.4) and signatures (s.5), e-governance (ss.6-8), attribution and receipt rules (ss.11-13) and electronic contracts (s.10A, 2008, applied in Trimex v Vedanta 2010). It set up Certifying Authorities, compensation for unauthorised access (s.43), a data security duty (s.43A), cyber offences including identity theft (s.66C) and cheating by personation (s.66D), and safe harbour for intermediaries (s.79, read in Shreya Singhal 2015). Electronic evidence is admissible under BSA s.63 (earlier Evidence Act s.65B, Anvar P.V. 2014, Arjun Panditrao 2020).

Why confidence stayed weak:

• Traders: the First Schedule excluded instruments such as wills, trusts and property sales, there was no framework for payments or marketplaces, and the Cyber Appellate Tribunal was idle for years before merging with TDSAT in 2017.
• Consumers: there was no consumer redress, no data protection law until 2023, low cybercrime convictions, weak enforcement against foreign sellers (s.75), and misuse of s.66A until it was struck down.

Gaps since filled: the Consumer Protection Act, 2019 and E-Commerce Rules, 2020, RBI payment rules and UPI, the IT Rules, 2021, the DPDP Act, 2023 with Rules notified in 2025, CERT-In directions and the 1930 cybercrime helpline. A Digital India Act has been proposed to replace the 2000 Act.

The statement is partly true. The Act laid the legal foundation, without which e-contracts and signatures would lack validity, but it was a validation statute rather than an e-commerce code, and confidence has come from later laws.

(c) Agreement without consideration and its exceptions

Under s.25 an agreement without consideration is void. Consideration (s.2(d)) may move from the promisee or any other person (Chinnaya v Ramayya 1882).

Statutory exceptions:

1. Natural love and affection (s.25(1)): valid if written, registered and made between near relations out of affection. A registered promise by A to give his son Rs 1 lakh is enforceable. Estranged parties fall outside it (Rajlukhy Dabee v Bhootnath 1900).
2. Past voluntary services (s.25(2)): a promise to compensate someone who has already voluntarily done something for the promisor. If A returns the lost purse of B and B promises A Rs 500, it is a contract (Sindha Shri Ganpatsinghji v Abraham 1895).
3. Time-barred debt (s.25(3)): a written, signed promise to pay all or part of it. If A signs a promise to pay Rs 500 of a barred Rs 1,000 debt, it binds.

Other exceptions and qualifications:

• A completed gift stands (Explanation 1).
• No consideration is needed for agency (s.185) or gratuitous bailment, and a benefit to the principal debtor supports a guarantee (s.127).
• Charitable subscriptions bind only where the promisee acted on the promise (Kedarnath Bhattacharji 1886, but not Abdul Aziz v Masum Ali 1914).
• Inadequate consideration does not void an agreement but bears on free consent (Explanation 2).

The rule stands, subject to narrow exceptions guarded by writing, registration or signature.