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Analysis of UPSC Optional Law Syllabus of Contract and Mercantile Law

Updated: Dec 30, 2019

This page analyses the syllabus of Contract laws only in Detail as provided in UPSC law Optional for CSE Mains Examination in detail. Its do not cover Books And online Resources to follow. For that You should Look for other blog post in the website 

This blog analysis primarily aims at providing you with detail understanding of topic and what to study in individual topic and sub topic within. It also provides generically, type of questioned asked in previous papers.

The detail analysis is done by Aditya Tiwari sir. It have been taught in class of UPSC law optional at Lukmaan IAS, Delhi. You can ask direct question to him at Quora(link)


1.Nature and formation of contract/E-contract.

Under the meaning of contract including its component such as offer, acceptance acceptance there mode of communication. There is at least one question on it each year.

Also included in the topic is Type of contract, on basis of modes of formation, subject matter etc. On enforcement basis void or voidable contract read it with topic number for of contract law UPSC optional syllabus.


2. Factors vitiating free consent.

A mere consent is not enough for a valid contract. One of the essentials of a valid contract mentioned in Sec. 10 is that the parties should enter into the contract with their free consent. According to Sec. 14, consent is said to be free when it is not caused by-

(1) coercion (Sec. 15), or

(2) undue influence (Sec. 16), or

(3) fraud (Sec. 17), or

(4) misrepresentation (Sec. 18), or

(5) mistake, subject to the provisions of Secs. 20, 21 and 22.

Read individual subtopic from 1 to 5 in detail like what are its component and case law related to it. There have been direct questions on fraud and undue influence in UPSC law optional papers.


3. Void, voidable, illegal and unenforceable agreements.

For illegal Agreement, According to Sec. 23, the consideration or object of an agreement are lawful unless : (i) it is forbidden by law, or (ii) is of such a nature that it would defeat the provision of law, or (iii) it is fraudulent, or (iv) it involves or implies injury to the person or property of another, or (v) the court regards it as immoral or opposed to public policy. Read each in detail along with case law

Void Agreement subtopic, According to Sec. 2(g) says : “An agreement not enforceable by law is said to be void”. There are some agreements which have been specifically or expressly declared as void by the Indian Contract Act. Read what are expressly declared as barred.

Viodable agreement, Section 2(i) defines that “an agreement which is enforceable by law at the option of one or more parties thereto, but not at the option of the other or others is a voidable contract”. This in fact means where one of the parties to the agreement is in a position or is legally entitled or authorised to avoid performing his part, then the agreement is treated and becomes voidable. Read case laws and component in detail

Two questions are asked usually one 10 marks other 15 marker in law optional UPSC Mains examination. Some time there is question on difference between these two.


4. Performance and discharge of contracts.

When the rights and obligations arising out of a contract are extinguished, the contract is said to be discharged or terminated. A contract may be discharged in the following ways:

(1) By Performance of the contract

(2) By Breach of the contract (including anticipatory breach

(3) By Impossibility of performance

(4) By Agreement and Novation

(5) By Operation of law.

Read each section in contract act, attached with discharge of contract and go into specific case laws related to it in detail. there are multiple Supreme Court judgement on it. There have been generally a 20 marker question in UPSC law optional mains examination.


5. Quasi-contracts.

Quasi contracts are based on principles of equity, justice and good conscience. A quasi or constructive contract rests upon the maxims, “No man must grow rich out of another persons loss”.

Sections 68 to 72 deals with “certain relations resembling those created by contract”. It incorporates those obligations which are known as “Quasi-Contracts” or “Constructive Contracts” under English law. It covers cases were the obligation to pay arises neither on the basis of a contract nor a tort, but because a person has obtained an unjust benefit at the cost of another.

The principle of ‘natural justice and equity’ is thus the determining factor in such obligations. Read individual case law as what do you mean equity and where court holder certain things as equitable and what is not equitable. What courts look into for determining equitable situation in a contract.


6. Consequences of breach of contract.

Breach means failure of a party to perform his or her obligation under a contract. Breach of contract may arise in two ways: (1) Actual breach of contract (2) Anticipatory breach of contract.

Also Study remedy available in case of both types of breach actual and anticipatory breach. What factors will determine the remedy. What are different theories courts have adopted in deterring the quantum of remedy. There have been 15 marks question on above. Usually after a year or two a question is asked from this topic. So read law optional previous year paper , it might help.


7. Contract of indemnity, guarantee and insurance.

Contract of Indemnity and Guarantee are the special types of contracts given under sections 124 to 147 of the Indian Contract Act, 1872. Both the contracts are modes of compensation based on certain similar principles. However, both differs from each other on several issues.

Read there difference and component. No need to study case laws in this. Not required at all. Only direct question is asked in law optional UPSC examination. Like what is major component of contract of insurance, or contract of guarantee etc.


8. Contract of agency.

In the modern world conduct of business is not possible without the help of agents. Therefore, it is necessary to know the law relating to agency. The law of agency is contained in sections 182 to 238 of the Indian Contract Act,1872.

Generally question is on its structure. remember it with help of diagram. How it is different from sub topic in Topic- 7 Above. Difference between agency and indemnity and similar questions have been asked.


9. Sale of goods and hire purchase

Sale of Goods Act, 1930 is the Act to define and amend the law relating to the sale of goods. Sale of goods is one of the specific forms of contracts recognized and regulated by law in India. Sale is a typical bargain between the buyer and the seller. The Sale of Goods Act, 1930 allows the parties to modify the provisions of the law by express stipulations. However, in some places this freedom is severely restricted.

Read specifically meaning of conditional and warranty in sales of goods act also right of buyer, seller and unpaid seller in detail.

In hir purchase simply read its meaning and how it different from sales of goods. that with suffice there have not been much question in law optional Paper -II of UPSC main examination on this


10. Negotiable Instruments Act, 1881.

It is a simple topic and usually one question is asked. Read the meaning of negotiable instrument, What do you mean by negotiability and its component. Clearly draw the diagram as to what should be present in a negotiable instrument.

Sections related to cheque have been asked a lot. There have been recent amendment in cheque related sections of the act making it a criminal offence as well. Read that into more detail


11. Arbitration and Conciliation Act, 1996.

It is an old act and have been replaced with new one. As syllabus still have old act then I will advise to read both of them. Generally there is question on its utility in over all improvement of judicial delay in India. It can be clubbed with judicial reform topic in Paper I of the law optional Syllabus.


12. Standard form contracts. 

A standard form contract sometimes referred to as an adhesion contract or boilerplate contract is a contract between two parties that does not allow for negotiations, i.e. take it or leave it. It is often a contract that is entered into between unequal bargaining partners, such as when an individual is given a contract by the sales - person of a multinational corporation.

The consumer is in no position to negotiate the standard terms of such contracts and the company's representative often does not have the authority to do so. An example of a standard form contract is a standardized contract form that offers goods or services to consumers on essentially a "take it or leave it" basis without giving consumers realistic opportunities to negotiate terms that would benefit their interests.

When this occurs, the consumer cannot obtain the desired product or service unless he or she acquiesces to the pre-drafted terms of the contract. Standard form contract is a legally binding agreement between two parties to do a certain thing, in which one party has all the bargaining power and uses it to write the contract primarily to his or her advantage.


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