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Question
Legal Principle: An agreement entered into by way of a wager/bet is unenforceable in law.
Fact Situation: Thomas is very good at predicting the outcomes of cricket matches. Raja and Hoja give him rupees thousand each to enable him to bet with others about the outcome of a cricket match. Thomas wins rupees three lakh after betting three thousand rupees.
Which of the following statements is the most appropriate in relation to the legal principle stated above?
Options
Thomas must share rupees three lakh with Raja and Hoja equally.
Thomas must return rupees thousand each to Raja and Hoja.
Thomas need not share the three lakh with Raja and Hoja since it is the outcome of an unenforceable agreement.
If Thomas does not pay them rupees two lakh each, Raja and Hoja can sue him to recover their share.
Solution
Thomas need not share the three lakh with Raja and Hoja since it is the outcome of an unenforceable agreement.
Explanation:
Effects of wagering agreement-According to the section 30 of contract act, "agreements by way of wager are void; and no suit shall be brought for recovering anything alleged to be won on any wager, or entrusted to any person to abide the result of any game or other uncertain event on which any wager is made". Thus in the case presented before us, there is no agreement and even If there was an agreement, it was by way of wager, so it is void under section 30 of the contract act. Hence option (c) is the most appropriate and Thomas is not required to share his winnings with Raja and Hoja as there was no enforceable agreement between them.
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Legal Principle: Contract is an agreement freely entered into between the parties. But when consent to an agreement is obtained to undue influence, the contract is voidable at the option of the party whose consent was so obtained.
Factual Situation: The Pragya had been worked for a businessman Anurag since the age of 18, working for a range of Anurag's businesses. In 2000, (aged 21) Pragya purchased a flat. In 2005, Mr. Anurag's business was facing financial difficulties, and he asked Pragya to offer up her flat as a financial security against an overdraft facility for the business. In July of that year, the bank's solicitors wrote to Pragya, advising that she should take Independent legal advice before putting her property up as a security for the debt. The bank also notified Pragya that the guarantee was unlimited in both time and financial amount. Having discussed the arrangement with Anurag, Pragya was unaware of the extent of the borrowing but was assured that her mortgage would not be called upon and that his own properties which were also used as security would be looked at first. A charge was executed over the Pragya's property in August 2005. In 2009, Mr. Anurag's business went into liquidation and the bank formally demanded ` 60,24,912 from Pragya. Pragya raised the defense of undue influence – stating that Mr. Anurag had induced her to enter into the agreement, and the bank had full knowledge/notice of this undue influence which should set aside the bank's right to enforce the debt recovery against Pragya. The bank is contending that there is no undue influence.
Whether the consent to offer the flat as financial security obtained through undue influence?
