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

(b) "The Information Technology Act, 2000 aimed at e-commerce development, but failed to satisfy growth-building trade

Question

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

(b) "The Information Technology Act, 2000 aimed at e-commerce development, but failed to satisfy growth-building traders and consumer confidence." Comment. (15 marks)

(c) "An agreement without consideration is void." Is there any exception to it? Discuss by giving suitable illustrations. (15 marks)

UPSC Answer Check · Accepted Answer

(a) Supervening impossibility and frustration 
Supervening impossibility under Section 56 discharges a contract when, after formation, an event beyond the parties’ control makes performance impossible or illegal, not merely difficult. An impossible agreement is void ab initio; a valid contract may become void when a supervening event destroys its foundation. The English coronation cases, including Krell v Henry, historically framed frustration through an implied term, but Satyabrata Ghose v Mugneeram Bangur & Co. held that Section 56 is a positive statutory rule and the implied-term theory is not applicable in India. The circumstances are: destruction of the subject matter (Taylor v Caldwell, music hall burned); death or permanent incapacity of a party whose personal skill is essential; government action such as requisition or legislation, which may frustrate if it makes performance impossible or illegal, though Satyabrata Ghose shows a wartime requisition did not itself frustrate the contract; non-existence of the state of things forming the contract’s foundation (Krell v Henry, coronation procession cancelled); outbreak of war, where it prevents or makes performance illegal; and failure of the source or essential object, as examined in Sushila Devi v Hari Singh, where damage to a painting showed that mere impairment is not enough. Frustration is thus a narrow statutory discharge, not an escape from hardship.

(b) IT Act, 2000 
The Information Technology Act, 2000, aimed to promote e-commerce by giving legal recognition to electronic records and digital signatures and by creating a cyber-security framework. Its achievements are real: Sections 4 and 5 validate electronic records and digital signatures, while Sections 65 to 74 punish cyber offences, giving traders a basic legal infrastructure. But it did not fully build trader and consumer confidence. For much of its life, including before 2019, it lacked a comprehensive data-protection framework. Consumer protection in e-commerce remained inadequate, with no dedicated e-commerce dispute-resolution mechanism and serious jurisdictional difficulties in cyber crimes, where servers, sellers and buyers may be in different territories. Section 66A, intended to curb misuse, was misused against speech and struck down in Shreya Singhal v Union of India. Thus, the Act laid a necessary foundation but only partially satisfied its growth-building promise; stronger data protection, consumer redress and cyber-crime jurisdiction are needed.

(c) Consideration and exceptions 
Section 25 states the general rule: an agreement without consideration is void. Consideration is the price for a promise; without it, a contract is ordinarily unenforceable. Under Section 25(1), a written and registered promise on account of natural love and affection between near relations is valid; for example, a father’s registered written promise to pay his daughter ₹50,000. Under Section 25(2), a promise to compensate a person who has already voluntarily done something for the promisor or at his desire is valid; if A voluntarily saves B’s goods from fire, B’s promise to pay A ₹10,000 is valid. Under Section 25(3), a written and signed promise to pay a time-barred debt is valid; if A’s debt to B is barred by limitation, A’s signed promise to pay it creates a new obligation. Other recognised exceptions include agency under Section 185, which may be gratuitous; A may appoint B as agent without commission. A completed gift is valid without consideration; if A delivers a book to B as a gift, the transfer is complete. A gratuitous bailment is also valid; if A leaves a car with B for safekeeping without charge, B’s obligation arises. Finally, a promise made for a charitable purpose, such as A’s promise to pay B’s debt to a charitable hospital, is treated as valid without consideration. Thus, the rule is strict but not absolute, preserving fairness and public utility.

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

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