Section 32 The Indian Contract Act, 1872
Certainly! Here's a detailed explanation of Section 32 of the Indian Contract Act, 1872:
⚖️ Section 32 – Effect of voiding agreement
Text of Section 32:
When a contract is rescinded or a contract is otherwise avoided, any person who has received any advantage under such contract is bound to restore it, or to make compensation for it, to the person from whom he received it.
Explanation:
If a contract is rescinded (cancelled) or declared void,
Then any person who has obtained any benefit or advantage under that contract
Must return the benefit or compensate the other party
This is to ensure fairness and prevent unjust enrichment.
Example:
A contract is formed for sale of goods.
Later, the contract is rescinded because it was based on fraud.
If the buyer has already received the goods, he must return the goods or pay compensation.
If the seller has received payment, he must refund the money.
Purpose:
To undo the effects of an invalid or cancelled contract.
To ensure that no one benefits unfairly when the contract is voided.
Protects the rights of the innocent party.
Relation with other sections:
Related to Section 27 (Contracts which are expressly declared to be void).
Works alongside Sections 65-72 of the Indian Contract Act dealing with restitution and consequences of breach.
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