AIR 1983 MADRAS 169 ::(1983) 96 MadLW 88 ::(1983) 1 MadLJ467

Madras High Court

Hon'ble Judge(s): K. B. N. Singh , C.J. AND Padmanabhan , J

(A) Contract Act (9 of 1872) , S.10, S.7, S.2(h)— Construction of contract Document contemplating execution of further document - Condition, a term of bargain and not a mere expression of desire of parties - There cannot be any enforceable contract. If a document which is entered into between two parties and which is relied on as constituting a contract contemplates the execution of a further regular agreement between the parties, it is a matter of construction whether the execution of a further contract is a condition of the terms of the bargain or whether it is a mere expression of the desire of the parties as to the manner in which the original agreement should be performed. In the former case, there cannot be any enforceable contract unless the condition is fulfilled or on the ground that law does not recognise a contract to enter into a contract. The fact of a subsequent agreement being prepared may be evidence that the previous negotiations did not amount to an agreement, but the mere fact that persons wish to have a formal agreement drawn up does not establish the proposition that they cannot be bound by a previous agreement, when there is a written document which is followed by further negotiations in the form of correspondence, the entirety of the correspondence has to be looked into to find out whether there has been a completed contract or not. Ca....