True or false: void contract; adequacy of consideration; strikes and discharge

(i)False A void contract is not void from the beginning. Under section 2(j) of the Indian Contract Act, 1872, “a contract which ceases to be enforceable by law becomes void when it ceases to be enforceable”. Such a contract was valid when made and becomes void later, for example when its performance becomes impossible. What is void ab initio is a void agreement: under section 2(g) an agreement not enforceable by law is void, and it is not enforceable from the very beginning.

(ii)True Consideration must be real and lawful, but it need not be adequate: inadequacy of consideration is not relevant to the validity of the agreement. By law, an agreement freely consented to is not void merely because the consideration is inadequate; the court may only take inadequacy into account in deciding whether the consent was freely given. So a horse worth ₹1,000 may validly be sold for ₹10 if the seller consents freely.

(iii)True A contract is discharged by supervening impossibility under section 56 only when, after it is made, the act becomes impossible or, by an event the promisor could not prevent, unlawful. Strikes, lockouts and civil disorders may make performance more difficult, costly or delayed, but they do not make it impossible in this sense. The contract therefore subsists, and the party who fails to perform is liable for the breach.