Recently, the Supreme Court made a landmark decision on oral agreements in India. The case in question was between two parties who had entered into an oral agreement regarding the sale of a property. The buyer paid partial amount and was in possession of the property. However, the seller later refused to honour the agreement and demanded the property back.
The buyer filed a case in the lower court, but the judgement was in favour of the seller as oral agreements are not enforceable under the Indian Contract Act, 1872. The buyer then appealed to the High Court, which also upheld the lower court`s decision.
Finally, the case reached the Supreme Court, where a five-judge bench heard the arguments. The bench, headed by Justice Rohinton Nariman, ruled that an oral agreement could be enforced if it could be proved. The court also set down certain conditions that would have to be met.
The first condition is that the terms of the agreement must be clear and unambiguous. The second condition is that there must be evidence to establish the existence of the agreement. The third condition is that the agreement must be capable of specific performance.
This judgement is a significant development in Indian contract law. Earlier, courts had been reluctant to enforce oral agreements, and parties had to depend on written contracts. However, in many cases, parties may not have a written contract, and oral agreements are the only evidence of the agreement.
The Supreme Court`s decision now provides a way for such agreements to be enforced. However, parties must ensure that they meet the conditions set down by the court. It is also advisable for parties to have a written contract to avoid disputes and have clarity in terms of the agreement.
In conclusion, the Supreme Court`s judgement on oral agreements is a progressive step in Indian contract law. It provides a way for parties to enforce their agreements, even if they are in the form of oral agreements. However, parties must ensure that they meet the conditions set down by the court to avoid any future disputes.