ICA: - 29

ICA: - 29

AMBIGUOUS AND UNCERTAIN AGREEMENTS

(SEC. 29)

According to section 29,

Agreements the meaning of which is not certain or capable of being made certain, are void. It is necessary that there should be no ambiguity about what the parties intend. If the meaning of an agreement is neither certain, nor capable of being made certain,the agreement is void.[Illustrations (a) and (f) respectively, to sec. 29.]

1. A agrees to sell to B "a hundred tons of oil". There is nothing whatever to show what kind of oil was intended. The agreement is void for uncertainty.

2. A agrees to sell to B "my white horse for rupees five hundred or rupees one thousand". There is nothing to show which of the two prices was to be given. The agreement is void.

 

In KalyanSingh v. Ranjot Singh [A.I.R. 2002 H.P. 180.] Facts of the case:

1. there was an agreement between the plaintiff and the defendant for the sale of barberry roots to the defendant for a sum of Rs. 37,000,

2. there was payment through a cheque for Rs. 37,000/- by the defend and purchaser

3. against an alleged undertaking by the purchaser that he would not enforce the payment of the chaque till goods were received.

4. The said cheque was dishonored due to insufficiency of funds.

The question arose as to whether there was a valid contract against which payment was made.

It was held thatthere was uncertainty as regards the period when amount of the cheque was to be received and hence, the agreement was void for uncertainty, under section 29.

 

In PushpabalaRay v. Life Insurance Corporation of India,53[A.I.R. 1978Cal. 221.]

Facts of the case:

1. one Radheshyam Roy, was the Managing Director of Peerless Life Insurance Co.

2. On account of paucity of funds, he had not drawn his remuneration as Managing Director of that company from Jan., 1943 to Dec, 1947.

3. The company by a resolution dated July 2, 1948 agreed to pay a sum of Rs. 26,000 to

 

The resolution was as under:

"Resolved unanimously that the sum of Rs. 26,000, being the amount of remuneration foregone by the Managing Director, Mr. R. Roy up to Dec, 1947, be paid to him in a lump sum or in one or more  installments in one or more years as and when the company is in a position to do so."

The Life Insurance business having been nationalized in1956,Radheshya Roy, brought an action against the Life InsuranceCorporation as successor in interest of the said Insurance Company,to recover the sum of Rs. 26,000.

On the death of the original plaintiff, the action was pursued by his widows and children.

It was held that the resolution, or the promise or agreement contained therein  was void for vagueness or uncertainty and, therefore, the suit was dismissed.

 

In KeshavlalLallubhai Patel v. LalbhalTrikumlalMills Ltd. [A.I.R 1958 S.C. 512.],

Facts of the case:

1. the respondents agreed to supply some textile goods to the appellants

2. Due to strike by the workers in the respondent mills in sympathy with the Quit-India Movement in 1942, the mill was closed.

3. The respondent then wrote to the appellants for extension of time.

4. The letter requesting for extension stated that as on account of present political situation "entire working of our Mills is closed….. under the circumstances please note that the delivery time of all your pending contracts with us shall be automatically understood as extended for the period the working is stopped and till the normal state of affairs recurs."

The question in this case was that whether the time of the performance of this contract had been extended by acceptance of this letter by the buyer.

It was held: Conditions mentioned by the respondent in its letter asking for extension of time were so vague and uncertain that it is not possible to ascertain definitely the period for which the time for performance of the contract was really intended to be extended. In such a case, the agreement for extension must be held to be vague and uncertain and as such void under s. 29, Contract Act."55at p. 517.]

If the meaning of the agreement is certain, or capable of being made certain, the agreement is not void, but valid.This may be clear from the following illustrations:56[Illustrations (b), (c), (d) and (e) respectively, to sec.29 Also see utham singh 

(i) A agrees to sell to B one hundred tons of oil of a specified description, known as an article of commerce. There is no uncertainty here to make the agreement void,

(ii) A, who is a dealer in coconut oil only, agrees to sell to B "one hundred tons of oil". The nature of A's trade affords an indication of the meaning of the words, and A has entered into a contract for the sale of one hundred tons of coconut oil

(iii) A agrees to sell to B "all the grain in my granary at Ram nagar." There is no uncertainty here to make the agreement void,

 

(iv)A agrees to sell to B "one hundred maunds of rice at a price to be fixed by C." As the price is capable of being made certain, there is no uncertainty here to make the agreement void.