WORLDTRADE 
ORGANIZATION 
Council for Trade-Related Aspects 
of Intellectual Property Rights IP/N/1/CYP/v/l 
28 January 1997 
(97-0301) 
Original: English/ 
anglais/ 
inglés 
MAIN DEDICATED INTELLECTUAL PROPERTY LAWS AND REGULATIONS 
NOTIFIED UNDER ARTICLE 63.2 OF THE AGREEMENT 
Cyprus 
The present document reproducesl the Contract Law, Cap. 149, as notified by Cyprus under 
Article 63.2 of the Agreement (see document IP/N/1/CYP/1). 
Conseil des aspects des droits de propriété 
intellectuelle qui touchent au commerce 
PRINCIPALES LOIS ET REGLEMENTATIONS CONSACREES A LA 
PROPRIETE INTELLECTUELLE NOTIFIEES AU TITRE 
DE L'ARTICLE 63:2 DE L'ACCORD 
Chypre 
Le présent document contient le texte de la Loi sur les contrats, Chapitre 1491, notifiée par 
Chypre au titre de l'article 63:2 de l'Accord (voir le document IP/N/1/CYP/1). 
Consejo de los Aspectos de los Derechos de Propiedad 
Intelectual relacionados con el Comercio 
PRINCIPALES LEYES y REGLAMENTOS DEDICADOS A LA 
PROPIEDAD INTELECTUAL NOTIFICADOS EN VIRTUD 
DEL PÂRRAFO 2 DEL ARTICULO 63 DEL ACUERDO 
En el presente documento se reproducel la Ley sobre los Contratos (capitulo 149 deI C6digo 
de Leyes), notificada por Chipre en virtud de 10 dispuesto en el pârrafo 2 deI articulo 63 deI Acuerdo 
(véase el documentoIP/N/1/CYP/1). 
lIn English oruy/anglais seulement/en inglés solamente. IP/N/1/CYP/U/l 
Page 2 
, . 
.'. CAP. 149. 
" . 
CYPRUS 
.-
CONTRACT 
CHAPTER 149 O!= TH~ LA WS 
1959 El)ITIC'" 
PRINTED BY' 
C. F. ROWORTH LI1UTED. 54, GRAFTON WAY. LONDON. W.l. 
[A ppoinJed. by the Government of Cyprus th. Gov.rnment Printers of thü EdiÛèn-­
of Law$' within. th. meaning of tM Evidenc. (ColtmiaL Statu/es) Act •. 1907.J 
1959 CAP. 149.J CONTRA CT 
CHAPTER 149. 
CONTRA.CT. 
ARRA?-:GE:'IE!'-iT OF SECïIO:\S. 
PART I. 
PRELI:,>n);"ARY 
Seclio" 
1 S~o:-: :itle 
2 G~::e:-a.J. rule of construction oi Law 
PART II. 
O? THE CO:-'!:-IC:-;-lC.-\TIO:-i, ACCEPTA);C=: A);[l 
REVOC.-\TIO:-: OF PRO?OSALS. 
3 Cc=u:licaticn, acceptance and revc<.::J.tion oi pwposal3 
4 Co=u:lication, when complete 
5 Re ... -:--...ation of proposais a::ld accepta:::ces 
6 R~'·c::a:ior.. how made 
i Acce?:ance must be absolu te 
S 'Ac:e?~nce by periormi...'1g conditions or receivi::g cO!lsideratioo 
9 Pro=ises, ex?ress and implied 
PART Ill. 
OF CO);TR..-\CT:i, VOIDABLE CO);TR.:\.CT5 AND VOID 
AGREDIE);TS. 
10 \\-r.a: agreements are con..acts 
Il Ca?2.city ta cont:aCi: 
12 Wb.: is a sot!::ld mb.d for the purposes of COOt2c-:::ls 
13 .. Co::se,,-t .. defuled 
14 .. F:~ consent" deiined 
15 .. C~:cion .. defined 
16 .. 1:!:ldue inilue::lce" defined 
li .. ::aud .. denned 
18 .. ::-l!s:epresentation .. detÎ..,ed 
19 Yoib.oility oi agreemen.t without irœ consen.t 
20 Po""e: to set aside contract lllduced oy ~ndue i:::~ue::lce IP/N/l/CYP/V/! 
Page 3 
21 .l.g-r~mect void whe:e both parties are u:::de: ::listake as to matter 
oi :ac~ <-::ld enec: oi rrü~take as t0 la w 
22 C.O!:l:::-act caused by rrUstake of one party as ta oa:-:er of fact 
:23 \\ùat eocside:ation and abjects are unlawiul a:1d woat not 
Void Agree'HtHts. 
24 .\g-re-.!ments void if considerations and objee:, ~:l!awi1l1 in part 
25 Ag-:ee::ncnt v:ithout consideration, void unless i~ is in writing, etc. 
26 .l .. g-re-:::::ner. 'Cs i.:l restraÏn t 01 marnage void 
27 Ag-:eements in res=U.nt ai t=de void, savir.gs 
28 .-\~me:lts in restraint of legal proceedings void. Sa\wg 
29 Agreements void for uncer...a.inty 
30 Agreements by way of .,.,-ager void IP/NIl/CYP/U/l 
Page 5 
CAP. 149.J COlYTRA .. CT. 
Sr:c:ioll C"r:trac!s :.JÏlicr. nad "ot be Perjormd. 
62 Effect oi novation. resciss:oa .l:ld alteration oi coat..-aCt 
63 Pror:llsee ma]" dis?ellSe \\ith or remit performance oi coat.:-:J.ct 
6+ Coasequences oi rescissior. oi "oidable COtltracc 
65 Obligation of person who has recei\"ed advantage uccler vcid agreeme::lt 
or contract chat becoces void 
66 ~(ode 01 commu!!Ïcancg or re"okmg rescission of voièable coneme. 
6 ï Eneot oi neglect oi promise ,0 a::ord Dromiso. reasoI:abie iacilities for 
performance . 
P.un VI. 
OF CERTAI);' RELATIO)iS RESê"lBLl);'G THOSE CREATED BY 
CO:-i'TRACT. 
63 Claim for necessanes suoolied to person inc:J.pahie oi ccn",--acting, o. 
on his account .-
69 Reimbursetne:lt oi person [laying mone~' due by a.::.ot::e~ in pa~'Ulent 
of which he is interested 
70 Obligation oi person enjoyic3' ~nent oi non-g!<l.tulCO\!5 "Ct 
il Responsibili-;;y oi fiI:der oi goods 
ï2 Liability of per:1on tO wb.om mont!y is paid. or thi:lg de!.ivered, b;· 
nù5take or uncier coercioa 
P.\RT VII. 
OF THE CO?:\SEQl'E::\CES OF BREACH OF CO;:\TR.-\.CT. 
ï3 Compensation for 1055 or damage C.3.used by breach oi con"'''2.ct 
i'} Compensation. for bre:a.ch of cootract '\Ohe:e penalty stipu!ated ior. 
Saving 
;3 Pa .. y righcfully ;escü:cilcg contract entitlcd to cor-pe:-:sation 
?\RT VIII. 
OF SPECIFIe PERFOR.\!A~CE OF CO:\TK-\CTS. 
ï6 Speciflc periormance oi con tracts and requisites thereoi. Savillg 
PART IX. 
OF THE REOURE:'[E::\TS OF CO);,TR.>.CTS ?.EU.TI);,G 
-TO CERT.\I-:-< ~IATTERS. 
iï l<.i:quireU1ents ior leases and t:onu:a::ts !TI.2..de in \:.o:\side:acoa of marnage 
PART X. 
OF 30:\DS 1);' CUSTO;\L\RY FOK\(. 
.. Bond in C\!sooma~v iorm " ... Debtor .. and "C:eèi~cr 
essentials ai bond' 
ï9 Bond secured by g'Jarautee, ?ledge or mortgage 
SO Conciusiveness of comems oi bond 
31 Saying 
PART XI. 
OF l::-iDDL,lTY A;:-m GUAR.-\;:-:TEE. 
82 .. Contracr of incier::.2ity .. deiined 
S3 Right 01 inde:nnit:;·holder when sued ée:iuea, and 
S+ .. Cont.."-ct of guaralltee." .. suret;:" .. principal debtor .. and" creditor" 
85 Consideration for guan.ntee 
86 Surety's liabilit)-
87 .. Continuing gua..""-'ltee·" 
S8 . Revocation of coatinuinlj' guarantee 
89 Revocation of contÏ..:luint,: guarantee by surety's death 
90' Liability of twa persans primarily liabte, not aiiected by arra.ngement 
between them that one. shall be surety on: other's deiault IP/N/l/CYP/U/l 
Page 4 
CONTRACT. 
PART IV. 
OF CO.:-in.:-iCE)iT CO~TRACTS. [CAP. 149. 
Stetion 
31 .. Con=r.ng~!:: co::.tract .. defiüej 
32 Eniorce!!1e~~ of con tracts concinge:lt on an eve:lt happeci.ng 
33 En{orce=e:l': cf cont:'acts contingent on an e\"ec.~ r..o~ ha?pe:lÏng 
34 \Vbea co::ti.:!g-!!1r:y 15 the future conclue! ci a livi::g pe:son 
35 Agreeme::t cO:-~~.:lge~t on impossible eveo.t void 
3ï 
38 
39 
40 
41 PART V. 
OF THE PERFOIDL-\!'CE OF CO~TRACTS. 
Co):trac!s u:hich 1t!US! b~ perfOT'I'J!~d. 
Obligation ci ?2.:-:ies to con:rac:s 
When. prJ:::ises binding oc. representatives of pro~sars 
Effec~ of :~:\!SaJ ta accept oiler ai petio:mance 
Effec~ 01 :e:\!sal of pany to petior:::l pror::lÏse whoUy 
By wi:on! Con/racts ",:.sl Dt pcrjQ-rmed. 
Persot:l bl' W~O::::l promise is to be petior=ed 
Efiect oi accepti=.g petiormance irom trurd persan 
Devolution of join;: liahilities 
43 Any one oi joi.:;.;: promisors may be compelled to petion:!l. Saving 
44 Effec: oi :el~ of Ot:le joint promisor 
45 Devolution 0: joint rights 
Ti",e and Plact for Performa>:ce. 
+6 Time ior ?e:'io=ce oi promise where no applic:;.tions is to be made 
and notice is speciiied 
4ï Time and ûlace oi oerionnance oi oro mise whe:e time is soec:.ned and 
no appliêation to 'be oade' • 
48 Application of pe:'iormance Ot:l cer..ai.n day to be at p:oper time and 
place 
49 Place for perio=nce of promise whe!"e no applicatiot:l is be made and 
no place iixed ior perion:::J.ance 
50 Petio=ce i.:;. :::'.anner or at time prescribed or sanc::ioned by promise 
Performa1lCt of Rtciprocal Prom':ses. 
51 Promiscr not bo=d ta petiorm. unless rec:proca! pror:lÏsee ready and 
willi:lgtope:-io:-ûl. 
52 Order of ~:'io=ce oi r~ciprDca! prcT.Ïses 
53 Liability of pa .. )" preve:lti:::Jg event on which cccrract is to take effect 
54 Effect of deiault as to that promise which should he irst petiormed 
in con trac;: consisting 01 reciprocal proraises 
55 Effect of lailt::.re to periOI"ID. at fi.:œd time, in con~ct i!l which time is 
essential 
56 Agreement to do i.mpossible act 
57 Reciprocal prodse to do th.ings legal and also o-iller ~gs Lllegal 
58 ,<\Jte.--n.a.tive pror::J..ise, one branch being illega! 
Appropriation of Pc;ymer.!s. 
59 Application of pa)=ent where debt to be discharged is bdicated 
60 Application 01 payment where debts to be discharged not indicated, 
61 Appropriation 01 payment where neithe.r party appropriates CAP. 149.] 
Section CO!.VTRACT. IP/N/1/CYP/U/l 
Page 7 
132 Pawnee not ta rcc;;.:n de":lt ar oracise acher than tb.t for which goods 
pledg~d. P;esu:::::lption i:J. càse of subsequent advances 
133 Pawnee's right as ra ex;:raordinary exp.:nses incur.ed 
13+ Pawnee's right wcere pa"'-:lor Inakes default 
135 Defaulting pawnor's cignt ta re::ee:::l 
136 Pledge br possessor of goods. or of doc:Jmentary titre ta gQods 
l3i Pledge where pawnor has only a li!:l.Ïted interest 
133 Requireme::lts for a pledge ci pills of exchange, promisory notes etc., 
or shares 
139 Pawnee's right where pa .... '1lor oakes de:ault in cont;act ci pledge made 
Voith last preceding sec:ion 
L~gal Prccadir.gs b." B.::iias or Bailors agair.s: tVror.g·do~rs. 
1+0 Legal proceedings b:~ baiior or ballee agaiost "\7ong·doe: 
1+1 Appornonoent of reliei or coope::lsation obtained by sucb. legal 
proceedings 
1+2 
143 
1++ 
1+5 
1+6 
Hi 
148 
1+9 PART XIII. 
AGE:S-CY. 
Appointmer.: and .:!.:,tltority of Ag!r:ts. 
" Agent" a:ld fi pr:rlc:pal 10 d'!:5..::ed 
\\'ho ma]' e:up[oy ageo.t 
\Tho may be agent 
Consideration not ::.ecessary 
Agent's authorlr:y :::lay be expressed or implied 
Definitions oi express and i!:\plied aut!lority 
Extent oi agent's authoney 
Agent's authori~" ira an er::lergency 
SHb-a~ln/s. 
150 \\"hen agent can::lot delegace 
151 .. Sub-agen~ .. de20ed 
152 Representation oi pril',cipal by SUD-agent properly a?pointed 
Ag:::l ';'5 responsibility for su b-age!lt 
Sl!b-agent's responsibiEty 
153 Agent's rr.sponsïeiiity for sub-a'5ent a.ppointed -;ntnout authority 
13+ Relation between principal ;)':ld person duly appointed by agent to ac;: 
in .busiLl~SS of .age:lcy 
155 A'5ent's <lut y in namins suc:" person 
Rati.:ication. 
156 Right of pers0n as to acts done for him withont auttonty. Ef1ecr of 
ratiii.co.tion 
157 Ratification ffi2.y be expressed or implied 
153 Knowledge ,equisite for vaiid ratiiication 
159 Effec\: of raufying uc.authorisecl act farming part of a t;ansaction 
160 Ratification of a.n unauthorised ad cannot injure third persen 
Rmocation 0/ Au/hari/y. 
161 Termination oC agency 
162. Tennination of agency where all'ent has an interest in subject matter 
163 When principal may revokeagent's authority 
16+ Revocation where authority has been paru y exercised. 
165 Compensation foc revocation by principal oc renunciationc bY' agent 
lb Notice of revocation or renunciation: IP/N/lICYP/U/l 
Page 6 
CONTRA CT, [CAP. 149. 
Slc~:on 
91 Discharge ai suret y by varia ace of ter.ns oi contract 
92 Discharge of sure:-y by re:ease or di5charge oi principal debtor 
93 Discharge oi suret y when creditor comoounds with. gives time to. or 
agrees not to sue principal deotor ' 
<:f+ Suree:' not discharged when agreement made with ,hird person to g;\'e 
time to pr'..ncipal debror 
95 Creditar' forbearance ta sue do es not discharge suret;: 
96 Re!ease of one co,surety does not dischan:;e others 
'li Discharge ai sure':}' by creditar's act or omission impairing seret)"s 
e\'emua[ remedy 
98 ?ights ci sure:y on payment or pedormance 
99 Suret y'; right ta bene6.t o( creditor's securities. Saving 
100 Guarantee obtained by misrepresentation im'alid 
101 Guarantee obtained by concealment bvalid 
102 Guara.ntee on contract that creditor shall not act on it until co,s\!:ety 
joins 
103 Implied promise to indemn.ity suret y 
10+ Co-suret y Hable to contribu:e equally 
105 Liability oi CO-5ureties bound on different sums 
?ART XII. 
OF BAIDIE)iT. 
IC6 "Goods."" company" " :>aiiment." "bailor." and "baiIee" èe5.ned 
lOi Delh'ery ta bailee. how made 
108 Bailoc's dury to disclose (aults in gaods bailed 
109 Care ta be t:lken by baiiee 
110 Eailee wheu not liable (or loss. etc .• of thing bailed 
111 Ter;n.ination of bailment by ballee's act inconsistent with condit;or,s 
112 Liability ai bailee making unauthonzed use ai gQQds bailed 
113 EEecë of mixture. with bailee's consent. oi his gooàs \\ith bailee's 
12+ E5ect ai mL\.-ture, without bailor', consent. -,,·hen the gaods C:ln be 
se?arated " 
115 E::ect oi mixture. without bailor's conseox. ·•• .. hen the goods cannot be 
5eparated 
116 Ret'aym.ent by bailor of necessary e'--penses 
117 Re5toration oi goods lent gratuitously 
Ils R~tum oi goods bailed on expiration of time or accomplishrnent oi 
purpose 
119 Eailee's responsibility when goods are nat duly retumed 
120 Te:-:n.inatiou of gratuitous bailment by death 
121 Bailor entitled ta interest or prout from goods bailed 
122 Bailor's responsibility to baUee 
123 Bailment by several owne:-s 
12+ Bailee uot responsible ou re-delivery to bailor without title 
125 PJght of thUà pe:;on cJaiming goods bailed 
126 Right of linder of goods; m:ly sue for speciiic reward ofÏe:-ed 
127 'N'hen tinder of thing commonly on sale may sell it 
128 Bailee's particular lien 
129 General liens of bankers. bctors and wh:lrfingers 
Bai!=1s of P!edges,. " 
130-"Pledge-", " pawnor ,. and .. pawnee-"; delined 
131-Pawnee's right of retainer" IP/l'T/.l/CYP/U/l ••• • " o. _ 
Pag~'8 
CONTRACT. [CAP. 149. 
Section 
161 Revocation a:ld re:lUncb.tion cay be expressed or impUed 
163 When temlÎ.:lation of a~enc's autho:-i:y cakes effect as to age:1t and as 
to t!J..ird pe~on 
169 Ageat's dut Y on te:-z.:.na:ion oi age::::cy by pr.ncipal's death or insacity 
110 T~r=llnation of sub-agenc's au:!:l.ority 
Agen/' s du:y 10 Principal. 
li! Age:!,'; dut y on conducti:lg principal's busbess 
172 Skill and diligeace required of agen t 
113 Agenc's accouncs 
1 ï+ Agent's duty to COClCU:llCate mth pr'.ncipal 
115 Right of principal "hen agent deals on his own account irl business of 
agency withouc principal's conse::::: 
1,16 ?r.:::.cipal's right to benetitgai.:::ed bl' ageat dealing on his own account in 
business oi agency 
li1 Ageat's right of retainer out oi sums :eceived on prinCÎpal's account 
liS Agenc's dut Y to pay suros recei\'ed for Fr'.ncipal 
119 \\àen ageat's re::::J.uneration becornes due 
1S0 Agent :lOC entitled to remunention ior business m!sconduc:eci 
181 Agent's lien nn pri:!cipai's property 
Pri"c:"pai"s D~:y to .:l.ge7:t 
132 Agent to be bder:uLi..5.ed against consequences of lavriul ac:s 
lS3 Ageat to be Ùlder:uiliied agains: conseq\!ences oi acts done in good faith 
lS.J. :S-on-lia.bility of employer oi age:lt to do a crircinal act 
185 Compensation to agent for Ü'.jury ca\!sed by pri::::cipai's neglect 
EI/": of Agency on Cont",,:s urilh Third Persa"s 
186 E:l.Îorcement and co~sequences of ag~::::t's COnt:-ac~ 
lSi P:illcipal how far bound wl:e::l age!J.t exceeds authorit:y 
1SS P:illcipal not bound ",hen excess oi agent's authority not separable 
lS9 Consequences oi notice given to ag~::!t 
190 Agent ca::l.not personally enfo:ce, Dor be bound by contracts on behai! 
0; pri..:lcipJ.I 
191 PJ~ht oi parties to a contract made by agen. n0t cisdù5ed 
192 P~=iorr.lance oi contract "it!:! agent supposed to be principal 
193 RigH oi person deiling wi:h :lgeut Fe~on.J.ll:. liable 
194 Consequences oi inducmg agent or principal to act on beliei that 
principal or ag~nt v.ill be I:eld exch:si ;eiy liable 
195 Uability of pretended agent 
196 Person falsely COrltracting as ag-ent [!OC enut!ed to ~e;-fon:lançe 
197 Liability of principal inducing be!.iei tha.t agent's \!nauthorised acts 
v. ere authorised 
198 Effect on agree:neat of :ni.sreprese::l~èon or i:aud by agent 
(lst jan-uary, 1931.J 
To A~1END A)iD CONSOLIDATE THE LAW RELATING TO 
CONTR.-\CT. 
1. This Law may be cited as the Contract Law. 19+9 
Cao. 192. 
25 ·of53. 
7 of 56 
Short title. General 
rule of 
construction 
of Law 
Interpreta 
tion CAP. 149.J CONTRACT. IP/N/l/CYP/U/l 
Page 9 
2. (1) This Law shall be interpreted m accordance 
\vith the principles of legal interpretation obtaining in 
England, and expressions used in it shall be presumed, 
so far as is consistent \vith their context, and except as 
may be otherwise expressly provided, to be used \vith 
the meaning attaching to them in English law and shall 
be construed in accordance therewith 
(2) In this Law the following words and expressions 
are used in the following senses, unless a contrary intention 
appears from the context-
(a) when one person signifies to another his willingness 
to do or to abstain from doing anything, with 
, a view to obtaining the assent of that other 
to such act or abstinence, he is said to make a 
proposal; 
(b) when the person to ,vhom the proposal is made 
signifies his assent thereto, the proposal is 
said to be accepted A proposal, when accepted, 
becomes a promise ; 
(c) the person making the proposal is called the 
"promisor," and the person accepting the 
proposal is called the " promisee" ; 
(d) when, at the desire of the promisor, the promisee 
or any other person has done or abstained 
from doing, or does or abstains from doing, 
or promises to do or to abstain from doing, 
something, such act or abstinence or promise 
is called a consideration for the promise; 
(e) every promise and every act of promises, forming 
the consideration for each other, is an agree­
ment, 
(f) promises which form the consideration or part 
of the consideration for each other are called 
reciprocal promises, 
(g) an agreement not enforceable by law is said to 
be void, 
(It) an agreement enforceable by law is a contract; 
('L) an agreement which is enforceable by law at the 
option of one or more of the parties thereto, 
but not at the option of the. other or others, 
is a voidable contract; 
(i) 3.-contract which ceases to be enforceable by law 
becomes void when it ceases to b_e. enforceable. IP/NIlICYP/UI 1 
Page 10 
CONTRACT. [CAP. 149. 
(3) "representatives" means the persons who by 
operation of law succeed to the property of a deceased 
person. 
PART n. 
OF THE CmDIUNICATION, ACCEPTA).'"CE AND REVOCATION 
OF PROPOSALS 
3. The communication of proposals, the acceptance of ~~:munic;).­
proposals, and the revocation of proposals and acceptances, acc;ptance 
respectively, are deemed to be made by any act or omission ::~cation 
of the party proposing, accepting or revoking by which of proposals 
he intends to communicate such proposal, acceptance or 
revocation, or which has the effect of communicating it. 
4. (1) The communication of a proposal is complete ~~~v~~a­
\vhen it comes to the knowledge of the person to whom complete 
it is made. 
(2) The communication of an acceptance is complete­
(a) as against the proposer, when it is put in a course 
of transmission to him, so as to be out of the 
power of the acceptor, 
(b) as against the acceptor, when it comes to the 
knowledge of the proposer. 
(3) The communication of a revocation is complete-
(a) as against the person who makes it, when it is 
put into a course of transmission to the person 
to whom it is made, so as to be out of the 
power of the person who makes it , 
(b) as against the person to whom it is made, when 
it comes to his knO\vledge 
5. A proposal may be revoked at 
communication of its acceptance is 
the proposer, but not afterwards any time before the Revocation of proposals complete as against and accep-
.A..n acceptance may be revoked at any time before the 
communication of the acceptance is complete as against 
the acceptor, but not afterwards. tances. 
6~ A proposal is revoked-. - Revocation~ how made 
(a) by the communication of notice of revocation 
by the proposer to the other party; Acceptance 
must be 
absolu·te 
. \cceptance 
by per­
forming 
~onditions, 
or receiving 
considera­
tion 
Promises, 
exoress and 
implied 
What agree­
ments are 
contracts. CAP. 149.] CONTRACT. IP/N/l/CYP/U/1 
Page 11 
(b) by the lapse of the time prescribed in such proposal 
for its acceptance, or, if no time is so prescribed, 
by the lapse of a reasonable time, without 
communication of the acceptance; 
(c) by the failure of the acceptor to fulfil a condition 
precedent to acceptance; or 
(d) by the death or insanity of the proposer, if the 
fact of his death or insanity comes to the 
knowledge of the acceptor before acceptance. 
7. In order to convert a proposal into a promise, the 
acceptance must-
(a) be absolute and unqualified, 
(b) be expressed in some usual and reasonable manner, 
unless the proposal prescribes the manner in 
which it is to be accepted. If the proposal 
prescribes a manner in which it is to be accepted, 
and the acceptance is not made in such manner, 
the proposer may, \vithin a reasonable time 
after the acceptance is communicated to him, 
insist that his proposal shall be accepted in 
the prescribed manner, and not othenvise; but 
if he fails to do so, he accepts the acceptance . 
S. Performance of the conditions of a proposal, or the 
acceptance of any consideration for a reciprocal promise 
which may be offered \vi.th a proposal, is an acceptance 
of the proposal. 
9. In so far as the proposal or acceptance of any promise 
is made in writing or in words, the promise is said to be 
express. In so far as such proposal or acceptance is made 
otherwise than in \vriting or in words. the promise is said 
to be implied. 
PART Ill. 
OF CONTRACTS, VOIDABLE CONTRACTS AND 
VOID AGREEMENTS. 
10. (1) All agreements are contracts if they are made: 
by the· free consent of parties competent to contract, 
for a.. lawful consideration. and with a: lawful object, and. 
are not hereby expressly declared to be void, and may, 
subject to the provisions of this Law, be made in.. writing~ IP/N/1/CYP/U/1 
Page 12 
CONTRACT. [CAP. 149. 
or by word of mouth, or partly in writing and partly 
by word of mouth, or may be implied from the conduct 
of the parties. 
(2) Nothing herein contained shall affect any Law in 
force in Cyprus, and not hereby expressly repealed, by 
"vhich any contract is required to be made in writing 
or in the presence of \vitnesses, or any Law relating to 
the registration of documents 
11. (1) Subject to the provisions of subsection (2), 
every person is competent to contract who-
(a) is of sound mind; and 
(b) is not disqualified from contracting by any Law. 
(2) The law in force in England for the time being 
relating to contracts to which an infant is a party shall 
apply to contracts to which a person who has not attained 
the age of eighteen years is a party' 
Provided that a married person shall not be deemed 
to be incompetent to contract merely because such person 
has not attained the age of eighteen years. Saving 
Capacity to 
contract 
2 af7 {50 
12. A person is said to be of sound mind for the purpose Wbat is a sound mind of making a contract if, at the time when he makes it, for the 
he is capable of understanding it and of forming a rational pU!1loses. of 
judgment as to its effect upon his interests. contracting 
A person who is usually of unsound mind, but occasionally 
of sound mind, mav make a contract when he is of sound 
mind. . 
A person who is usually of sound mind, but occasionally 
of unsound mind, may not make a contract when he is 
of unsound mind. 
13. Two or more persons are said to consent when they ~ ~o~ent" 
agree upon the same thing in the same sense. enn 
14. Consent is said to be free when it is not caused by-"Freet" consen 
(a) coercion, as defined in section 15; or defined. 
(b) undue influence, as defined in section 16; or 
(c) fraud, as defined in. section. 17; or 
(d) misrepresentation, as defined ill. section 18; or 
(e) mistake subject to the provisions of sections 20, 
21. and. 22. .. Coercion .. 
defined 
Cap 15+ 
Cap 154 
.. undue 
iru1uence" 
defined CAP. 149.J CONTRACT. IP/N/1/CYP/U/l 
Page 13 
Consent is said to be so caused when it would not have 
been given but for the existence of such coercion, undue 
influence, fraud, misrepresentation or mistake . 
15. (1) "Coercion" is the cOIIlII1itting or threatening 
to commit, any act forbidden by the Criminal Code, or 
any amendment thereof, or the unlawful detaining, or 
threatening to detain, any property, to the prejudice of 
any person whatever, \vith the intention of causing any 
person to enter into an agreement. 
(2) It is immaterial whether the Criminal Code, or 
any amendment thereof, is or is not in force in the place 
where the coercion is employed . 
16. (1) A contract is said to be induced by "undue 
influence" where the relations susbsisting behveen the 
parties are such that one of the parties is in a posltlon 
to dominate the will of the other and uses that position 
to obtain an unfair advantage over the other. 
(2) In particular and \Vithout prejudice to the generality 
of the foregoing principle, a person is deemed to be in a 
position to dominate the will of another-
(a) where he holds a real or apparent authority over 
the other, or where he stands in a fiduciary 
relation to the other; or 
(b) where he makes a contract with a person whose 
mental capacity is temporarily or permanently 
affected bv reason of age, illness, or mental or 
bodily distress -
(3) 'Where a person who is in a position to dominate 
the will of another, enters into a contract with him, and 
the transaction appears, on the face of it or on the evidence 
adduced, to be unconscionable, the burden of proving 
that such contract was not induced by undue influence 
shall lie upon the person in a position to dominate the 
\vill of the other. 
.. Fraud" defined 17. (1) "Fraud" includes any of the following acts 
committed by a party to a contract, or with his connivance, 
or by his agent, with intent to deceive another party 
thereto or his agent, or to induce him to enter into the 
contract-
(a) the suggestion, as to a. fact-, of that which. is not 
true by one who does not believe it to be true; IP/NI1/CYP/UI 1 
Page 14 
C01VTRACT, [CAP. 149. 
(b) the active concealment of a fact by one having 
know·ledge or belief of the fact, 
(c) a promise made without any intention of performing 
it , 
(d) any other act fitted to deceive, 
(e) any such act or omission as the law specially· 
"declares to be fraudulent 
(2) :.\Iere silence as to facts likely to affect the willingness 
of a person to enter into a contract is not fraud, unless 
the circumstances of the case are such that, regard being 
had to them, it is the duty of the person keeping silence 
to speak, or unless his silence is, in itself, equivalent to 
speech. 
18. ":\Iisrepresentation" includes-
(a) the positive assertion, in a manner not warranted 
by the information of the person making it, 
of that which is not true, though he believes 
it to be true, 
(b) anv breach of dutv \vhich, without an intent to 
"deceive, gains "an advantage to the person 
committing it, or anyone claiming under him, 
by misleading another to his prejudice or to 
the prejudice of anyone claiming under him, 
(c) causing, however innocently, a party to an agree­
ment to make a mistake as to the substance 
of the thing which is the subject to the 
agreement. 
19" (1) \Vhen consent to an agreement is caused bv 
coerClOn, fraud or misrepresentatl0n, the agreement is a 
contract voidable at the option of the party whose consent 
was so caused. 
(2) A party to a contract, whose consent was caused 
by fraud or misrepresentation, may, if he thinks fit, insist 
that the contract shall be performed, and that he shall 
be put in the position in which he would have been if 
the representations made had been true, 
(3) If such consent was caused by misrepresentation or 
by silence, fraudulent within the meaning of section 17, 
the contract, nevertheless, is not voidable, if the party 
whose consent was so caused had the means of discovering 
the truth with. ordinary diligence:. .. :11isrepre­
sentation H 
denned 
\' oidability 
oi agree· 
ments "'ith­
out f:ree 
consent Power to 
set aside 
cont:-act 
induced b" 
undue . 
inrluence 
Agreem~nt: 
void where 
both oarties 
are under 
mistake :l.S to 
matter of 
fact 
Efiect of 
mistakes as 
to law 
Cont:-act 
caused by 
mistake oi 
one party as 
to matter 
of fact. 
What con· 
siderations 
and objects 
are lamul 
and what 
not. CAP. 149.] CONTRACT. IP/NIl/CYP/UI 1 
Page 15 
(4) A fraud or misrepresentation which did not cause 
the consent to a contract of the party on \vhom such 
fraud was practised, or to whom such misrepresentation 
was made, does not render a contract voidable. 
20. (1) When consent to an agreement is caused by 
undue influence, the agreement is a contract voidable at 
the option of the party whose consent was so caused. 
(2) .Any such contract may be set aside either absolutely 
or, if the party who was entitled to avoid it has received 
any benefit thereunder, upon such terms and conditions 
as to the Court may seem just. 
21. (1) Where both the parties to an agreement are 
under a mistake as to a matter of fact essential to the 
agreement, the agreement is void. 
An erroneous opinion as to the value of the thing which 
forms the subject-matter of the agreement is not to be 
deemed a mistake as to a matter of fact. 
(2) A contract is not voidable because it was caused 
by a mistake as to any law in force in Cyprus; but a 
mistake as to a law' not in force in Cyprus has the same 
effect as a mistake of fact. 
22. A contract is not voidable merely because it was 
caused by one of the parties to it being under a mistake 
as to a matter of fact 
23. The consideration or object of an agreement IS 
lawful, unless-
(a) it is forbidden by law, or 
(b) is of such a nature that, if permitted, it would 
defeat the provisions of any law, or 
(c) is fraudulent, or 
(d) involves or implies injury to the person or property 
of another; or 
(e) the Court regards it as immoral, or opposed to 
public-policy. 
In each of these cases,. the consideration. or object at an 
agreement is said to be-unlawful. Every agreement of­
which the object or consideration is unlawful 1::; voiJ_ IP/N/1/CYP/U/1 
Pa~e 16 
CONTRACT. 
Votd Agreel'nents. [CAP. 149. 
24. If any part of a single consideration for one or 
more objects, or anyone or any part of anyone of several 
considerations for a single object, is unlawful, the agreement 
is void. Agreements 
void. if 
considera­
tionsand 
object$ 
unlawful in 
part 
25. (1) An agreement made without consideration is 
void, unless-
(a) it is expressed in \vriting and signed by the party 
to be charged therewith, and is made on account 
of natural love and affection between parties 
standing in a near relation to each other; or 
unless ~\~reement 
without con­
sideration. 
\ oid. unless 
it is in 
writing 
(b) it is a promise to compensate, wholly or in part, or is a. -. promise to a person who has already voluntarily done compensate 
something for the promisor, or something which thifo: s~mde-. 1 all II bl d n" one, the prorrnsor was eg y compe a e to 0; 
or unless 
(e) it is a promise, made in writing and signed by or.is a pro­
the party to be charged therewith to pay mr~e to pay - 'a aebt. wholly or in part a debt of which the creditor ~arred by 
might have enforced payment but for any ;~~ltatiOn 
law for the time being in force relating to 
prescription or the limitation of actions. 
In any of these cases, such an agreement is a contract 
(2) Nothing in this section shall affect the validity, as 
between the donor and donee, of any gift actually made. 
(3) An agreement to which the consent of the promisor 
is freely given is not void merely because the consideration 
is inadequate, but the inadequacy of the consideration 
may be taken into account by the Court in determining 
the question whether the consent of the promisor was 
freely given. 
26. Every agreement m restraint of the marnage of A~reement in restrain t any person is void. of marriage 
void_ 
27. (1) Every agreement by which anyone is restrained ;\greeme.nt_ 
from exercising 3-lawful profession, trade, or business of ~~~d_ 
any kind, is to that extent void. Saving of 
agreement 
not to carry 
on business 
of which 
good-will is 
sold; 
of agreement 
between 
partners 
prior to 
dissolution, 
or during 
continuance 
of partner­
ship. 
Agreements 
in restraint 
of legal 
proceedings 
void. 
Saving of 
contract to 
refer to 
arbitration 
dispute. that 
mayanse. 
Saving of 
contract: to 
refer" 
'-luestions 
that have 
already 
ariseIt'. CAP. 149.J CONTRACT. IP/N/l/CYP/U/1 
Page 17 
(2) (a) One \vho sells the good-v .. ill of a business may 
agree with the buyer to refrain from Ca.IT}ing 
on a similar business, withill specified local 
limits, so long as the buyer or any person 
deriving title to the good-\vill from him, carries 
on a like business therein: Provided that 
such limits appear to the Court reasonable, 
regard being had to the nature of the business; 
(b) partners may, upon or in anticipation of a 
dissolution of the partnership, agree that some 
or all of them \vill not carry on a business 
similar to that of the partnership 'A-ithin such 
local limits as are referred to in the last preceding 
subsection; 
(c) partners may agree that some one or all of them 
will not carry on any business, other than 
that of the partnership, during the continuance 
of the partnership. 
28. (1) Every agreement, by which any party thereto 
is restricted absolutely from enforcing his rights under 
or in respect of any contract, by the usual legal proceedings 
in the Courts, or which limits. the time within which he 
may thus enforce his rights, is void to that extent. 
(2) This section shall not render illegal a contract by 
which two or more persons agree that any dispute which 
may arise between them in respect of any subject or class 
of subjects shall be referred to arbitration, and that only 
the amount awarded in such arbitration shall be recoverable 
in respect of the dispute so referred. 
\V'hen such a contract has been made, legal proceedings 
may be brought for its specific performance, and if legal 
proceedings, other than for such specific performance, 
or for the recovery of the amount so awarded, are brought 
by one party to such contract against any other such 
party in respect of any subject which they have so agreed 
to refer, the existence of such contract shall be a bar to 
the legal proceedings. 
(3) This section shall not render illegal any contract 
in writing; by which two or more persons agree to refer 
to arbitration any question between them which has 
already arisen-, or affect any provision of any law in force 
for the time being' as. to references to. arbitration~ IP/NIl/CYP/UI 1 
Page 18 
CONTRACT [CAP. 149. 
29. A.rrreements, the meaning- of which is not certain, Agreements 
v v void for or capable of being made certain, are void. uncertainty 
30. A£Teements bv wav of waaer are void' and no Agreements b. " -•. t> .'., by wav of legal proceedmgs shall be brougm for recovenng anything wager'void 
alleged to be \von on any w'ager, or entrusted to any person 
to abide the result of any game or other uncertain event 
on which any wager is made. 
PART IV. 
OF CONTI:::-<GE~T CO~TRACTS. 
31. .1... "contingent contract" is a contract to do or :0~~;:!~9;nt 
not to do something, if some event, collateral to such defined 
contract, does or does not happen 
32. Contingent contracts to do or not to do anything 
if an uncertain future event happens cannot be enforced 
by law unless and until that event has happened. 
If the event becomes impossible, such contracts become 
void. 
33. Contingent contracts to do or not to do anything 
if an uncertain future event does not happen can be enforced 
\vhen the happening of that event becomes impossible 
and not before. 
34. If the future event on ,vhich a contract is contingent 
is the way in which a person \vill act at an unspecifred 
time, the event shall be considered to become impossible 
when such person does anything which renders it impossible 
that he should so act within anv definite time, or othenvise 
than under further contingencies 
35. (1) Contingent contracts to do or not to do anything 
if a specified uncertain event happens within a fixed time 
become void if, at the expiration of the time fixed, such 
event has not happened, or if, before the time fixed, such 
event becomes impossible. 
(2) Contingent contracts to do or not to do anything 
if a specified uncertain event does not happen \Yi.thin a 
fixed time may be enforced by law when the time ll.xed 
has expired and such event has not happened, or, before 
the time fixed has expired, if it becomes certain that 
such event will not happen. 
C --141> Enforcement 
of con tracts 
contingent 
on an event 
happening 
Enforcement 
oi contracts 
contingent 
on an event 
not 
happening 
\Vhen 
contingency 
is the iu ture 
conduct of a 
living 
person 
When 
contingency 
is the 
happening 
Q( specifted 
event within 
ftxed time. Agreement 
contingent 
on impossi­
ble e\ ents 
void. 
Obligation 
of pames 
to contracts. 
When 
promise:; 
binding on 
representa­
tives oi 
promisors 
Effec~ of 
refusal 1:0 
accept offer 
of per· 
formance. 
Effect of 
refusal of 
party to 
perform 
promise­
wholly. CAP. 149.J CONTRACT. IP/NIl/CYP/UI1 
Page 19 
36. Contingent agreements to do or not to do anything, 
if an impossible event happens, are void, whether the 
impossibility of the event is known or not to the parties 
to the agreement at the time when it is made. 
PART V. 
OF THE PERFOR~fANCE OF CmHRACTS 
Contracts Whzch .Must be Perfonned. 
37. (1) The parties to a contract must either perform, 
or offer to perform, their respective promises, unless such 
performance is dispensed \vith or excused under the 
provisions of this Law, or of any other Law. 
(2) Promises bind the representatives of the promisors 
in case of the death of such promisors before performance, 
unless a contrary intention appears from the contract. 
38. (1) Whele a promisor has made an offer of perfor­
mance to the promisee, and the offer has not been accepted, 
the promisor is not responsible for non-performance, nor 
does he thereby lose his rights under the conhact. 
(2) Every such offer must fulfil the follo\ving conditions­
(a) it must be unconditional ; 
(b) it must be made at a proper time and place, and 
under such circumstances that the person to 
whom it is made mav have a reasonable 
opportunity of ascertai~ing that the person 
by whom it is made is able and \\illing there 
and then to do the whole of what he is bound 
by his promise to do , 
(c) if the offer is an offer to deliver anything to the 
promisee, the promisee must have a reasonable 
opportunity of seeing that the thing offered is 
the thing \vhich the promisor is bound by his 
promise to deliver 
(3) An offer to one of several joint promisees has the 
same legal consequences as an offer to all of them. 
39. When a. party to a contract has refused to perform. 
or disabled himself from performing, his promise in its 
entirety,. the: promisee may put an end to the contract, 
unless he has signified, by words or conduct, his acquiescenc(>­
in its continuance-. IP/NI1 ICYP/U/1 
Page 20 
CONTRA.CT. [CAP. 149. 
By Whom Contracts i.V1ust be Performed 
40. If it appears from the nature of the case that it P~rson by 
was the intention of the parties to any contract that any ;ro~se 
promise contained in it should be periormed by the promisor is ~ be d 
himself, such promise must be performed by the promisor. pe ocme . 
In other cases, the promisor or his representatives may 
employ a competent person to perform it. 
41. ',.Vhen a promisee accepts performance of the promise Effect.of 
f hi d h . d nf ' . acceonng rom a t r person, e cannot after\var s e orce It agamst penorm,ance 
the promisor. from third person. 
42. ',.Vhen two or more persons have made a joint De.v~lution . nl " b h of JOl1lt proffilse then u ess a contrary mtentlOn appears y t e lia.bilities 
contract, all such persons, during their joint lives, and 
after the death of any of them, his representative jointly 
with the survivor or survivors, and after the death of the 
last survivor, the representatives of all jointly, must fulfil 
the promise. 
43. (1) "Vhen two or more persons make a joint promise, A.n,Y.one 
h ' ' th b f ot Jomt t e proffilsee may, m e a sence 0 express agreement prornisor5 
to the contrary, compel anyone or more of such joint may be . rf h h 1 f h' comoelled proIIDsors to pe orm t e woe 0 t e promIse. to perform 
(2) Each of two or more joint promisors may compel Each pro­
every other joint promisor to contribute equally \vith ~:;efay 
himself to the performance of the promise, unless a contrary contribution. 
intention appears from the contract. 
(3) If anyone of two or more joint promisors makes ::ibaring of loss bv default in such contribution, the remaining joint promisors deiauit in 
must bear the loss arising from such default in equal shares. comribution 
(4) Nothing in this section shall prevent a surety from Saving 
recovering from his principal, payments made by the 
surety on behalf of the principal, or entitle the principal 
to recover anything from the surety on account of payments 
made by the principal. 
44. "There two or more persons have made a joint Efectof
f promise, a release of one of such joint promisors by the ~~:J:~t 
promisee does not discharge the other joint promisor: or promisor. 
joint promisors; neither does it free the joint promisor 
so released from responsibility to the other joint promiscr 
or joint promisors. 
2(2) DevoLuTIon 
of joint 
rights 
Time for 
performance 
of promise 
where no 
application 
is to be 
made and 
no time is 
opecified. 
Time and 
place for 
periormance 
of promise 
where :ime 
is specified 
and no 
application 
to be ::lade 
Application 
for pe:­
formance on 
certain cia\ 
to be at . 
proper timo 
and piace 
Place for CAP. 149.J CONTRACT. IP/N/l/CYP/U/1 
Page 21 
45. \Vhen a person has made a promise to t\VO or more 
persons jointly, then, unless a contrary intention appears 
from the contract, the right to claim performance rests, 
as between him and them, \\ith them during their joint 
lives, and, after the death of anv of them, \\ith the 
representative of such deceased person jointly \vith the 
survivor or survivors, and, after the death of the last 
survivor, with the representatives of all jointly. 
Time and Place for Performance 
46. Where, by the contract, a promisor is to perform 
his promise without application by the promisee, and no 
time for performance is specified, the engagement must be 
performed \,ithin a reasonable time. 
The question "w'hat is a reasonable time 11 is, m each 
particular case, a question of fact. 
47. \ Vhen a promise is to be performed on a certain 
day, and the promisor has undertaken to perform it \\ithout 
application by the promisee, the promisor may perform 
it at any time during the usual hours of business on such 
day and at the place at which the promise ought to be 
performed. 
48. \\"hen a promise is to be performed on a certain 
day, and the promisor has n.ot undertaken to perform it 
without application by the promisee, it is the duty of the 
promisee to apply for performance at a proper place and 
within the usual hours of business 
The question" what is a proper time and place" 1S, m 
each particular case, a question of fact 
performance 49. \Vhen a promise is to be performed without appli-o( promise 
whe~e n? cation by the promisee, and no place is ti.xecL for the 
~;b~c~~~~ performance of it, it is the duty of the promisor to apply 
::nd no place to the promisee to appoint a reasonable place for the 
~~:1~~rance_ performance of the promise, and to perform it ,at such place~ IP/N/1/CYP/U/1 
Page 22 
CONTRACT [CAP. 149. 
50. The performance of any promise may be made in 
any manner, or at any time, which the promisee prescribes 
or sanctions 
Performance of Reczprocal Pronnses. 
51. \vnen a contract consists of reciprocal promises to 
be simultaneously performed, no promisor need perform 
his promise unless the promisee is ready and willing to 
perform his reciprocal promise. 
52. \Vhere the order in which reciprocal promises are 
to be performed is expressly fixed by the contract, they 
shall be performed in that order, and, where the order 
is not expressly fixed by the contract, they shall be 
performed in that order which the nature of the transaction 
requires 
53. 'When a contract contains reciprocal promises, and 
one party to the contract prevents the other from per­
forming his promise, the contract becomes voidable at the 
option of the party so prevented; and he is entitled to 
compensation from the other party for any loss which he 
may sustain in consequence of the non-performance of 
the contract 
54. When a contract consists of reciprocal promises, 
such that one of them cannot be performed, or that its 
performance cannot be claimed till the other has been 
performed, and the promisor of the promise last mentioned 
fails to perfonn it, such promisor cannot claim the per­
formance of the reciprocal promise, and must make 
compensation to the other party to the contract for any 
loss which such other party may sustain by the non­
performance of the contract. Periormance 
in manner 
<lr at time 
prescribed <lC 
sanctioned 
by promise 
P~omisor not 
bound to 
periorm. 
unless 
reciprocal 
promisee 
ready and 
willing to 
periorm 
Order of 
periormance 
cd reciprocal 
promises 
Liability of 
party 
pre\ euting 
e\'ent on 
which 
con tract is to 
take effect 
Effect of 
default as to 
that oromise 
"hich should 
be nrst 
periorrned in 
contract 
consistin.~ of 
reciprocal 
promises. 
55. (1) \Vhen a party to a contract promises to do a Efiect of , f" d failure to certam thing at or be ore a specifie time, or certain things periorm at 
at or before specified times, and fails to do any such.. thing ?"ed time. 
t b f h ID d t· th t III contract a or e ore t e spec e Ime, e contrac , or so much in. which 
of it as has not been perfonned, becomes voidable at the time i~ 
option of the promisee, if the intention of the parties essentlaL 
was that time should be of the essence of the contracL Effect oi 
such failure 
when time 
is not 
""-"ential 
E5ect oi 
acceptance 
oi perionn­
ance at 
time other 
than that 
agreed upon. 
Agreement 
to do im­
possible act. 
Contract to 
do act 
aiterwards 
becomins; 
imoossible or 
uniawiul. 
Comoensa­
tion for loss 
through non 
periormance 
of act known 
to be im­
possible or 
unlawful 
Reciprocal 
promise to 
do things 
le.:;al, and 
also other 
things 
illegal. CAP. 149.J COlv7RACT IP/N/l/CYP/U/l 
Page 23 
(2) If it was not the intention of the parties that time 
should be of the essence of the contract, the contract does 
not become voidable by the failure to do such thing at 
or before the specified time; but the promisee is entitled 
to compensation from the promisor for any loss occasioned 
to him by such failure. 
(3) If, in case of a contract voidable on account of the 
promisor's failure to perform his promise at the time 
agreed, the promisee accepts performance of such pLOmise 
at any time other than that agreed, the promisee cannot 
claim compensation for any loss occasioned by the non­
performance of the promise at the time agreed, unless, 
at the time of such acceptance, he gives notice to the 
promisor of his intention to do so. 
56. (1) .. '-ill agreement to do an act impossible in itself 
is void. 
(2) A contract to do an act which, after the contract 
is made, becomes impossible, or, by reason of some event 
which the promisor could not prevent, unla\vful, becomes 
void when the act becomes impossible or unlawful. 
(3) Where one person has promised to do something 
which he knew, or, \V-ith reasonable diligence, might have 
known, and which the promisee did not know to be 
impossible or unlawful, such promisor must make com­
pensation to such promisee for any loss which such promisee 
:3ustains through the non-performance of the promise. 
57. \Vhere persons reciprocally promise, firstly, to do 
certain things which are legal, and, secondly, under specified 
circumstances, to do certain other things which are illegal, 
the first set of promises is a contract, but the second is a 
void agreement 
Alternative 58. In the case of an alternative promise, one branch promise, one 
branch being of which is legal and the other-illegal, the legal branch 
illegal alone can be enforced. 
Application 
of payment 
where debt 
to bedis­
charged is 
indicated. Approprzation of Payments. 
59. 'Nhere a debtor, o\ving several distinct debts to 
one person, makes a. payment to him, either \vith express 
intimation, or under cilcumstances implying that the 
payment is to be applied to the discharge of some particular 
debt, the payment, if accepted, must be applied accordingly. IP/N/lICYP/U/l 
Page 24 
CONTRACT. [CAP. 149. 
60. \\There the debtor has omitted to intimate and there 
are no other circumstances indicating to which debt the 
payment is to be applied, the creditor may apply it at his 
discretion to any la,vful debt actually due and payable 
to him from the debtor, whether its recovery is or is not 
barred by the law in force for the time being relating to 
prescription or the limitation of actions. _'>"pplication 
oi payment where debt to be dis­charged not indicated. 
61. \Vhere neither party makes any appropriation the 
payment shall be applied in discharge of the debts in 
order of time, whether they are or are not barred by the 
. law in force for the time being rel.ating to prescription 
or the limitation of actions. If the debts are of equal 
standing, the payment shall be applied in discharge of 
each proportionably. 
Contracts Which Need Not be Performed. 
62. If the parties to a contract agree to substitute a 
new contract for it, or to rescind or alter it, the original 
contract need not be performed. 
63. Every promisee may dispense with or remit, wholly 
or in part, the performance of the promise made to him, 
or may extend the time for such performance, or may 
accept instead of it any satisfaction which he thinks fit. 
64. ,Vhen a person at whose option a contract is voidable 
rescinds it, the other party thereto need not perform 
any promise therein contained in which he is promisor. 
The party rescinding a voidable contract shall, if he have 
received any benefit thereunder from another party to 
such contract, restore such benefit, so far as may be, to 
the person from whom it was received. -Application 
oi payment where neither party appropriates . 
E::iect of novation. 
rescission and altera­
tiun of contract. Promisee 
~a y dispense 
\\ith or remit periormance 
'li promise. 
Con­
sequences 
0i rescission 
fA ,-oidable 
cOf'~tract'. 
65. \Then an agreement is discovered to be void or Obligation of . : person who when a contract becomes vOld, any person who has recelVed has received 
any advantage under such agreement or contract is bound ad"'d'anta~ed 
t . t t ak . f -h un er VOI to res ore 1 ,or 0 m e compensatIon or It, to t e person. agreement oc' 
from whom he received it. contract that: becomes void_ 
66_ The rescission of a. voidable- contract may be COffi- Jrod~of~om-
. t d. k d' th d b' mumcating-. muruca e or revo e lIT e: same' manner, an su J ect or revoking-
to the same rules, as_ apply to the-communication or·rescission-of­voidable revocation of a proposaL contracr. Effect of 
neglect of 
promisee to 
afford 
promisor 
reasonable 
facilities for 
performance. 
Claim for 
necessaries 
supplied to 
person 
incapable of 
contracting. 
ur on his 
account. 
Reimburse­
ment of 
person 
paying 
money due 
by another in 
payment of 
which he is 
interested 
Obligation of 
person 
enjoying 
benefit of 
non-gratui­
tous act 
Responsi­
bilityof 
finder of 
goods 
Liability of 
person to 
,\hommoney 
is paid. or 
thing 
delivered. by 
mistake or 
under 
coercion 
Compensa­
tion for loss 
or damage 
caused by 
breach of 
contract CAP. 149.J CONTRACT. IP/N/1/CYP/U/l 
Page 25 
67. If any promisee neglects or refuses to afford the 
promisor reasonable facilities for the performance of his 
promise, the promisor is excused by such neglect or refusal 
as to any non-performance caused thereby. 
PART VI. 
OF CERTAIN RELATIONS RESE].IBLING THOSE CREATED BY 
CONTRACT. 
68. If a person, incapable of entering into a contract, or, 
anyone whom he is legally bound to support, is supplied 
by another person with necessaries suited to his condition 
in life, the person who has furnished such supplies is entitled 
to be reimbursed from the property of such incapable 
person. 
69. A person who is interested in the payment of money 
which another is bound by law to pay, and who therefore 
pays it, is entitled to be reimbursed by the other. 
70. \Vhere a person lawfully does anything for another 
person, or delivers anything to him, not intending to do w 
gratuitously, and such other person enjoys the benefit 
thereof, the latter is bound to make compensatiqn to the 
former in respect of, or to restore, the thing so done or 
delivered. 
71. A person \vho finds goods belonging to another and 
takes them into his custody, is subject to the same 
responsibility as a bailee 
72. A person to whom money has been paid, or anything 
delivered, by mistake or under coercion, must repay or 
return it. 
PART VII. 
OF THE CONSEQL'EKCES OF BREACH OF CONTRACT. 
73. (1) 'When a contract has been broken, the party who 
suffers by such breach is entitled to receive, from the party 
who has broken the contract, compensation for any loss or 
damage caused to him thereby, which naturally arose in 
the usual course of things from such breach, or which the 
-;::arties knc\v, when they made the contract, to be likely to 
cesnlt from the breach of it. IP/NIlICYP/UI 1 
Page 26 
CONTRACT. LeAP. 149. 
Such compensation is not to bp given for any remote and 
mdirect loss or damage sustained by reason of the breach. 
(2) \Vhen an obligation resembling those created by ~~:l~:sa­
contract has been incurred and has not been discharged, failure to .. d b h f '1 d' h ., t' 1 d discharO'e any person Injure y teal ure to ISC arge It IS en It e obliO'ati~ns 
to receive the same compensation from the party in default, rese~bling 
as if such person had contracted to discharge it and had ~o~~~;::~:d 
broken his contract. 
(3) In estimating the loss or damage arising from a ;=~n;f 
breach of contract, the means which existed of remedying remed¥ to be 
the inconvenience caused by the non-performance of the ~~~~~~~to 
contract must be taken into account. 
74. (1) vVhen a contract has been broken, if a sum is c:omfensa­
named in the contract as the amount to be paid in case of ~~e~c~rof 
such breach, or if the contract contains any other stipula- cohtract 
tion by way of penalty, the party complaining of the ;~::~y 
breach is entitled, whether or not actual damage or loss is ~tipulated 
proved to hav~ been caused thereby, to receive from the or. 
party who has broken the contract reasonable compensa-
tion not exceeding the amount so named or, as thE' case may 
be, the penalty stipulated for. 
A stipulation for increased interest from the date of Saving. 
default may be a stipulation by \'lay of penalty. 
(2) \\Then any person entels into any bailbond, Iecogni­
sance or other instrument of the same nature, or, under the 
provisions of any Law, or under the orders of the Govern­
ment of Cyprus, gives any bond for the performance of any 
public duty or act in which the public are interested, he 
shall be liable, upon breach of the condition of any such 
instrument, to pay the whole sum mentioned therein' 
Provided that a person who enters into a contract \'lith 
Government does not nece~sarily thereby undertake any 
public duty, or promise to do an act in which the public 
are interested. 
Partv 
rightfully 
7... A . 1 . d rescinding :J. person who nght y rescm s a contract is entitled contract 
to compensation for any damage which he has sustained entitled to 
through the non-fulfilment of the contract. ~f:npensa-Specific 
performance 
of contracts 
and 
requisites 
thereof. 
Saving. 
Cap. 232. 
f{equire­
l11ents for 
leases and 
~()ntracts 
made in 
consiuera­
tion of 
lnarriage. 
20.(6'5')' CAP. 149.J CONTRACT. 
PART VIII. IP/NIlICYP/UI1 
Page 27 
OF SPECIFIC PERFORMANCE OF CONTRACTS. 
76. (1) A contract shall be capable of being specifically 
enforced by the Court if-
(a) it is not a void contract under this cir any other 
Law; and 
(b) it is expressed in writing; and 
(c) it is signed at the end thereof by the party to be 
charged there'with; and 
(d) the Court considers, having regard to all the 
circumstances, that the enforcement of specific 
performance of the contract would not be 
unreasonable or otherwise inequitable or im­
practicable. 
(2) Nothing herein contained shall affect the specific 
performance of contracts for the sale of immovable property 
under the provisions of the Sale of Land (Specific Perform­
ance) Law, or any amendment thereof. 
PART IX. 
OF THE REQUIRD1ENTS OF CO::\TRACTS RELATIi\G TO 
CERTAIN )'IATTERS. 
77. (1) Contracts relating to leases of immovable pro­
perty for any term exceeding one year shall not be valid 
and enforceable unless-
(a) expressed in wliting; and 
(b) signed at the end thereof, in the presence of at 
least two witnesses themselves competent to 
contract who have subscribed their names as 
witnesses, by each party to be charged there­
with or by a person who is himself competent 
to contract and who has been duly authorised 
to sign on behalf of such party. -
(2) Contracts relating to obligations in consideration of 
marriage shall not be valid and enforceable unless-
(a) expressed in writing; and 
(b) signed at the end thereof, in the presence of at 
least two witnesses themselves competent to 
contract who have subscribed their names as 
witnesses, by each party to be charged therewith IP/NIlICYP/UI 1 
Page 28 
CONTRACT. [CAP. 149. 
or by a person who is himself competent to 
contract and who has been duly authorised to 
sign on behalf of such party: 
Provided that this subsection shall not apply to obliga­
tions in consideration of marriage between Moslems incurred 
in accordance v,rith the practice prevailing in the Turkish 
Family Courts. 
PART X. 
OF BONDS IN CUSTO~!ARY FORM. 
78. A " bond in customary form" is a promise in writing" Btond ill 
h . d b h k' h eus oman made by one person to anot er slgne y t e ma er m t e fonn." " 
presence of at least hvo \vitnesses themselves competent to .. ~ebtor" 
contract, engaging to pay, on demand or at a fixed or ~nCreditor" 
determinable future time, a sum of money to a person define? and . . h' h . fi d essentlals specIfied therem, toget er WIt mterest at a rate xe of bond 
therein not exceeding nine per centum per annum and, in 
the event of any legal proceedings thereon, the costs thereof, 
and stating therein the consideration for which it is given. 
The person who makes the promise is called the 
" debtor"; the person to whom the promise is made is 
called the "creditor." 
79,. A.bond in customary form is not void by reason only ~~~~ed b\ 
tha tIt IS secured by a guaran tee or by a pledge or by guarantee. 
mortga£e of immovable propertv and contains stipulations ple0rt'ge or 
U ... " mo O'aU'e relating thereto " ~ 
80. \Vhenever aD'" legal proceeding-s are taken on a bond L"ndu~i\t·-J ~~, ness of in customary form, the con ten ts of such bond shall be contents of 
conclusive evidence of the facts therein stated' iF.nd 
Provided. that in any such proceedings it shall be a good 
defence to prove that the signature of the debtor 01 of any 
other party to the bond is not in fact the signature of such 
debtor or party or that the bond has been obtained by, or 
in circumstances amounting to, coercion or fraud. 
81. ~()thing herein contained shall, in respect of bonds in Savin~ 
customary form, affect any power given or exercisable by 
or under the provisions of any of the following Laws or any 
amendments thereof-
(a) the Usury (Farmers) Law, (ap 101 
(b) the Dealings between ),Ierchants and Farmers Law C:lP 132 " Contract of 
indemnitv" 
defined ' 
Right of 
indemnit\­
holder when 
sued; 
" Contract of 
:{uarantee 
• f 5urct\ I 
.. principal 
<lebtr)r •. and 
. r.:rr:cii:0r ., 
C,msidcra­
tion fr,r 
~uarantee CAP. 149.] CONTRACT. 
PART XI. IP/N/1/CYP/UIl 
Page 29 
OF INDEMNITY AND GUARANTEE. 
82. A contract by which one party promises to save the 
other from loss caused to him by the conduct of the promisor 
himself, or by the conduct of any other person, is called a 
"contract of indemnity." 
83. The promisee in a contract of indemnity, acting 
within the scope of his authority, is entitled to recover from 
the promisor-
(a) all damages which he may be compelled to pay in 
any legal proceedings in respect of any matter 
to which the promise to indemnify applies; 
(b) all costs which he may be compelled to pay in any 
such legal proceedings if, in bringing or defending 
them, he did not contravene the orders of the 
promisor, and acted as it would have been 
prudent for him to act in the absence of any 
contract of indemnity, or if the promisor 
authorised him to bring or defend the legal 
proceedings ; 
(c) all sums which he may have paid under the terms of 
any compromise of any such legal proceedings, 
if the compromise was not contrary to the 
orders of the promisor, and was one which it 
would ha\'e been prudent for the promisee to 
make in the absence of anv contract of 
indemnity. or if the promisor authorised him to 
compromise the legal proceedings 
84. A " contract of guarantee" is a contract to perfom1 
the promise, or discharge the liability, of a third person in 
case of his default The person who gives the guarantee is 
called the" surety" ; the person in respect of whose default 
the guarantee is given is called the" principal debtor," and 
the person to whom the guarantee is given is called the 
" creditor." 
85. Anything done, or any promise made, for the benefit 
of the principal debtor may be a sufficient consideration 
to the surety for giving the guarantee. IP/NIl/CYP/UI 1 
Page 30 
CONTRACT. [CAP. 149. 
86. The liability of the surety is co-extensive with that Surety's 
of the principal debtor, unless it is otherwise provided by liability 
the contract. 
87. A guarantee which extends to a series of transactions .. Continuing guarantee." is called a " continuing guarantee." 
88. A continuing guarantee may at any time be revoked Re\ocation of continuin" by the surety, as to future transactions, by notice to the guarantee 0 
creditor. 
89. The death of the surety operates, in the absence of 
any contract to the contrary, as a revocation of a continuing 
guarantee, so far as regards future transactions. 
90. Where two persons contract with a third person to 
undertake a certain liability, and also contract with each 
other that one of them shall be liable only on the default 
of the other, the third person not being a party to such 
contract, the liability of each of such two persons to the 
third person under the first contract is not affected by the 
existence of the second contract, although such third person 
mav have been aware of its existence. 
91. .-\11\' variance, made \\ithout the suret\"s consent. in 
the terms of the contract between the principal and the 
creditor, discharges the surety as to transactions subsequent 
to the variance, 
92. The surety is discharged by <:Lny contract between the 
creditor and the principal debtor, by which the principal 
debtor is released, or bv any act ur omission of the creditor, 
the legal consequence' of 'which is the discharge of the 
principal debtor 
93 .. \ ullllracl bet" <cell the creditor and the principal 
debtor, by which the crcrlitor makes a composition \vith, or 
promises to give time to, or not to sue, the principal debtor, 
discharges the surety, unless the surety assents to such 
contract. Revocatiun 
of continuing 
guarantee by 
surety's 
death. 
Liability 01 
t\\ 0 persons, 
primarily 
liable, not 
affected by 
arrangement 
between 
them that 
one shall be 
suretvon 
other",s 
default 
Dbcharge u1 
surety by 
\ ariance in 
tenns of 
contract 
Disc.harge IJi 
::urctv bv 
:t!ease ur 
nischarge ()! 
principal 
dehtor 
lJischarge ul 
'uret) when 
, reditor 
'~ompoullus 
with, gh es 
time to, or 
a~rees not ttl 
sue principal 
debtor Surety not 
discharged 
\vhen agree· 
ment made 
with third 
person to 
gi\ e time to 
principal 
debtor 
Creditor's 
forbearance 
to sue does 
not discharge 
surety, 
Release oi 
one co­
surety does 
not discharge 
others 
Discharge I,f 
suren' b,' 
creditor ·s act 
or omission 
impairins­
surety's 
eventual 
remedy 
Hight,lIi 
surety on 
payment ur 
performance 
Surety's 
right to 
beneti.t oi 
creditor ;; 
securities 
Savin~ 
(<LP 6 
Guaran~ee 
flbtained by 
misrepre­
sentation 
invalirJ CAP. 149.J CONTRACT. IP/NIlICYP/UI 1 
Page 31 
94. \Vhere a contract to give time to the principal debtor 
is made by the creditor \vith a third person, and not with 
the principal debtor, the surety is not discharged. 
95. Mere forbearance on the part of the creditor to sue 
the principal debtor or to enforce any other remedy against 
him does not, in the absence of any provision in the 
guarantee to the contrary-, discharge the surety. 
96. Where there are co-sureties, a release by the creditor 
of one of them does not discharge the others; neither does 
it free the surety so released from his responsibility to the 
other sureties, 
97. If the creditor does any act which is inconsistent with 
the rights of the surety, or omits to do any act which his 
duty to the surety requires him to do, and the e\~entual 
remedy of the surety himself against the principal debtor is 
thereby impaired, the surety is discharged. 
98. \Vhere a guaranteed debt has become due, or default 
of the principal debtor to perform a guaranteed duty has 
taken place, the surety, upon payment or performance of 
all that he is liable for, is invested with all the rights \vhich 
the creditor had against the principal debtor. 
99. (1) A surety is entitled to the benefIt of enry security 
\\-hich the creditor has against the principal debtor at the 
time when the contract of suretyship is entered into, whether 
the surety knows of the existence of such security or not; 
and, if the creditor loses or, without the consent of the 
surety, parts with such security, the surety is discharged to 
the extent of the value of the security 
(2) Nothing in this or in the last preceding section con­
tained shall affect the provisions of the Civil Procedure Law, 
or any amendment thereof. 
100. Any guarantee which has been obtained by means 
of misrepresentation made by the creditor, or 'with his 
knowledge and assent, concerning a material part of the 
transaction, is invalid. . IP/NIlICYP/UI 1 
Page 32 
CONTRACT. [CAP. 149. 
101. 'Any guarantee which the creditor has obtained by ~~t~~~~~\­
means':'of keeping silence as to material circumstance is concealment 
invalid. invalid 
102. Where a person gives a guarantee upon a contract 
that the creditor shall not act upon it until another person 
has joined in it as co-surety, the guarantee is not valid if 
that other person does not join. 
103. In every contract of guarantee there is an implied 
promise by the principal debtor to indemnify the surety; 
and the surety is entitled to recover from the principal 
debtor whatever sum he has rightfully paid under the 
guarantee, but no sums which he has paid wrongfully. 
104. \Vhere two or more persons are co-sureties for the 
same debt or duty, either jointly or severally, and whether 
under the same or different contracts, and \vhether with or 
without the knowledge of each other, the co-sureties, in the 
absence of any contract to the contrary, are liable, as 
between themselves, to pay each an equal share of the whole 
debt, or of that part of it which remains unpaid by the 
principal debtor. Guarantee 
on contract 
that creditor 
shall not act 
on it until 
co-surety 
joins. 
Implieu 
promise tol 
indemnify 
surety 
Col-sureties 
liable to 
contribUte 
equally 
105. Co-sureties who are bound in different sums are Liability oi co-sureties liable to pay equally as far as the limits of their respective bound in 
obligations permit. different sums 
PART XII. 
OF BAIDIENT. 
106. (1) In this Part of this Law-
(a) " goods" means every kind of movable property 
and includes bills of exchange, promissory 
notes, bonds whether in customarv form or not 
uther than those secured by J mortgage of 
immovable property, share certificates or share 
warrants for shares in a company; 
" company" means a limited liability com­
pany formed under the provisions of the 
Companies Law, or any amendment thereof, 
or an anonyme company originally formed 
under the provisions of the Ottoman Com­
mercial Code; .. Good:;," 
"company .. 
.. bailment," 
.. bailor," 
and 
.. bailee' 
defined 
lap J 13 Deliyery to 
bailee. how 
made 
Bailor's duty 
to disclose 
faults in 
goods bailed 
lale tu be 
to ken In" 
bailee . 
Bailee" hen 
not liable for 
loss. ctc . "f 
thinr; hailed 
I ermination 
"f bailment 
by bailee's 
a.ct incon~i.;­
tent \\ ir.h 
conditiun, CAP. 149.J CONTRACT. IP/NI 1 ICYP/UI 1 
Page 33 
(b) a "bailment" is the delivery of goods by one 
person to another for some purpose, upon a 
contract that they shall, when the purpose is 
accomplished, be returned or othemise dis­
posed of according to the directions of the 
person delivering them. The person delivering 
the goods is called the "bailor." The person 
to whom they are delivered is called the 
" bailee." 
(2) If a person already in possession of the goods of 
another contracts to hold them as a bailee, he thereby 
becomes the bailee, and the owner becomes the bailor, of 
such goods although they may not have been delivered by 
way of bailment. 
107. The delivery to the bailee may be made by doing 
anything which has the effect of putting the goods in the 
possession of the intended bailee or of any person authorised 
to hold them on his behalf. 
108. (1) The bailor is bound to disclose to the bailee 
faults in the goods bailed, of which the bailor is aware, and 
which materially intel fere with the use of them, or expose 
the bailee to extraordinary risks; and, if he does not make 
such disclosure, he is responsible for damage arising to the 
bailee directly from such faults 
(2) If the goods are bailed for hire, the bailor is responsible 
for such damage, whether he \vas or was not aware of the 
existence of such faults in the goods bailed. 
109. In all cases of bailment the bailee is bound to take 
as much care of the goods bailed to him as a man of ordinarv 
prudence would, u;;-der similar circumstances, take of his 
own goods of the same bulk, quality and value as the 
goods bailed. 
110. The bailee, in the absence of any special contract, 
is not responsible for the loss, destruction or deterioration 
of the thing bailed, if he has taken the amount of care of 
it described in the last preceding section. 
111. A contract of bailment is voidable at the option of 
the bailO!, if the bailee does any act with regard to the goods 
bailed, inconsistent with the conditions of 'the bailment IP/NIlICYP/U/l 
Page 34 
CONTRACT. [CAP. 149. 
112. If the bailee makes any use of ,the goods bailed, 
which is not according to the conditions of the bailment, he 
is liable to make compensation to the bailor for any damage 
arising to the goods from or during such use of them. 
113. If the bailee, with the consent of the bailor, mixes 
the goods of the bailor with his O"wn goods, the bailor and 
the bailee shall have an interest, in proportion to their 
respectiYe shares, in the mixture thus produced. Liabilitv of 
bailee' 
making un­
authorised 
use of g()ods 
bailed. 
Effect of 
mixture, 
with bailor's 
consent, of 
his goods 
\\ith bailee·s. 
114. If the bailee, without the consent of the bailor, Effect of 
mixes the goods of the bailor with his own goods, and the ~f~~~~' 
goods can be separated or divided, the property in the goods ~ailor'~ 
remains in the parties respectively; but the bailee is bound ~\?hn:~~he 
to bear the expense of separation or division, and any goods ctadn be 
d . . l' . .,ep:ua e . amage ansmg from t 1e mlxture. 
115. If the bailee, without the consent of the bailor, E~e~t of 
mixes the goods of the bailor with his own goods, in such a ~il~~~~, 
manner that it is impossible to separate the goods bailed ~~~I~:~~ 
from the other goods and deliver them back, the bailor is when the 
entitled to be compensated by the bailee for the loss of the ~~~~~~~~t~~~ 
goods. 
116. \\There, by the conditions of the bailment, the goods 
are to be kept or to be carried, or to ha\'e work done upon 
them by the bailee for the bailor, and the bailee is to 
recein no remuneration, the bailor shall repay to the bailee 
the necessary expenses incurred by him for the purpose of 
the bailment. 
117. The lender of a thing for use may at any time require 
its return, if the loan was gratuitous, even though he lent 
it for a specified time or purpose. But, if, on the faith of 
such 16an made for a specified time or purpose, the borrower 
has acted in such a manner that the return of the thing 
lent before the time agreed upon would cause him loss 
exceeding the benefit actually derived by him from the 
loans, the lender mnst, if he compels the return, indemnifv 
the borrower for the amount in which the loss so occasione~l 
exceeds the benefit so derived. 
C.-149 Hepayment 
by bailor oi 
necessary 
expenses. 
l{e!:itoratiIJu 
of goods lent 
gratuitously. Return of 
goods bailed 
on expiration 
o(time or 
accomplish­
ment of 
pnrpose 
BaiJee:; 
responsi­
bility when 
goods are not 
dui.,. 
letUrned 
Termination 
of gratuitous 
bailment by 
death -
BailOl 
~ntitled to 
increase or 
profit from 
goods bailed 
Bailor's 
re5ponsi· 
bility to 
hailee 
Bailment by 
se\'eral joint 
t)\\"11er~ 
Hailel nut 
respon,ibl€, 
on rc-
rlelh en' to) 
bailor -
without titl< 
1(;l<lIt "I 
third per" ,11 
daimin v· 
~0nds h':..iled 
H.ight 01 
linder ,,1 
~{J()ds; nUl Y 
'ue for 
specific 
reward 
"fieretl CAP. 149.] CONTRACT. IP/NIlICYP/UI 1 
Page 35 
118. It is the duty of the bailee to return, or deliver 
according to the bailor's directions, the goods bailed, 
without demand, as soon as the time for which they were 
bailed has expired, or the purpose for which they were 
bailed has been accomplished, 
119. If, by the default of the bailee, the goods are not 
returned, delivered or tendered at the proper time, he is 
responsible to the bailor for any loss, destruction or 
deterioration of the goods from that time, 
120. A gratuitous bailment is terminated by the death 
either of the bailor or of the bailee. 
121. In the absence of any contract to the contrary, the 
bailee is bound to deliver to the bailor, or according to his 
directions, any increase or profit which may have accrued 
from the goods bailed. 
122. The bailor is responsible to the bailee for any loss 
which the bailee may sustain by reason that the bailor was 
not entitled to make the bailment, or to receive back the 
goods or to give directions respecting them. 
123. If several joint o\vners of goods bail them, the 
bailee may deliver them back to, or according to the 
directions of, one joint O\vner without the consent of all. 
in the absence of any agreement to the contrary 
124. 'If the bailor has no title to the goods, and the bailee, 
in good faith, delivers them back to, or according to the 
directions of, the bailor, the bailee is not responsible to 
the owner in respect of such delivery 
125. If a person other than the bailor, claims goods 
bailed, he may take legal proceedings to stop the delivery 
of the goods to the bailor, and to decide the title to the 
goods 
126. The finder of goods has no right to sue the owner for 
compensation for trouble and expense voluntarily incurred 
by him to preserve the goods and to find out the owner; 
b11t he may retain the goods against the owner until he 
receives such compensation; and, where the owner has 
offered a specific reward for the return of goods lost, the IP/NIl/CYP/UI 1 
Page 36 
CONTRACT. [CAP. 149. 
finder may sue for such reward, and may retain the goods 
until he receives it. 
127, When a thing which is commonlv the subject of \\ he~ tinder 
al . 1 'f h . h -bl d'l' b ofthlllg S e IS ost, 1 t e owner cannot Wlt reasona e 1 Igence e commonly 
found, or if he refuses, upon demand, to pay the lawful ~~l~le may 
charges of the finder, the finder may sell it-
(a) \vhen the thing is in danger of perishing or of losing 
the greater part of its value; or 
(b) when the lawful charges of the finder, in respect of 
the thing found, amount to two-thirds of its 
value 
128. \Vhere the bailee has, in accordance \vith the purpose 
of the bailment, rendered any service involving the exercise 
of labour or skill in respect of the goods bailed, he has, in 
the absence of a contract to the contrary, a right to retain 
such goods until he receives due remuneration for the 
sen' ices he has rendered in respect of them. 
129. Bankers, factors and wharfingers, may, in the 
absence of a contract to the contrary, retain, as a security 
for a general balance of account, any goods bailed to them; 
but no other persons have a right to retain, as a security 
for such balance, goods bailed to them, unless there is an 
express contract to that effect. 
Bailments of Pled~es. 
130 The bailment of goods as security for payment of a 
debt or performance of a promise is called" pledge." The 
bailor is in this case called the" pawnor." The bailee is 
called the" pawnee " 
131. The pawnee may retain the goods pledged, not only 
for payment of the debt or the performance of the promise, 
but for the interest of the debt, and all necessary expenses 
incurred by him in respect of the possession or for the 
preservation of the goods pledged 
132, The pawnee shall not, in the absence of a contract 
to that effect, retain the goods pledged for any debt or 
promise other than the debt or promise for which they are 
pledged, but such contract, in the absence of anything to 
the contrary, shall be presumed in regard to subsequent 
rtdvances made by the pa\Y"Uee. Bailee's 
particular 
lien 
l;ener"l lien 
of bankers, 
iactors and 
wharrinsers 
.. Pledge,' 
.. pa\\nor " 
and 
. pawnec .. 
(lChned 
lJa\\net> S 
ri!!ht oi 
rete! iner 
P<1\\ nee Jl(,t 
rl) retain (fir 
deht or 
promi~c 
other than 
that for 
\\ hich gond:-:. 
pledged 
Presumption 
in case of 
sub,equent 
;ld\ anccs Pawnee's 
right as to 
extra­
ordinary 
expenses 
incurred 
Pavmee s 
right where 
pawnor 
makes 
default 
Dcfauiting 
pawn~r's 
right to 
redeem 
Pledge tJy 
pussessvr 0t 
goods, (Jf of 
uocumento.r",· 
title to • 
goods 
Pledge \I here 
pawn or has 
Qnlya 
limited 
interest CAP. 149.] CONTRACT. IP/NIl/CYP/UI 1 
Page 37 
133. The pawnee is entitled to receive from the pawnor 
extraordinary expenses incurred by him for the preserva­
tion of the goods pledged. 
134. (1) If the pa\'lUor makes default in payment of the 
debt, or performance, at the stipulated time of the promise, 
in respect of which the goods were pledged, the pawnee 
may bring legal proceedings against the pa\vnor upon the 
debt or promise, and retain the goods pledged as a collateral 
security; or he may sell the thing pledged, on giving the 
pawnor reasonable notice of the sale. 
(2) If the proceeds of such sale are less than the amount 
due in respect of the debt or promise, the pa\mor is still 
liable to pay the balance. If the proceeds of the sale are 
greater than the amount so due, the pawnee shall pay over 
the surplus to the pawnor. 
135. If a time is stipulated for the payment of the debt, 
or performance of the promise, for which the pledge is made. 
and the pa\vTIor makes default in payment of the debt or 
performance of the promise at the stipulated time, he may 
redeem the goods pledged at any subsequent time before the 
actual sale of them; but he must, in that case, pay, in 
addition, any expenses which have arisen from his default 
136. A person who is in po~~ession of any goods, or of any 
bill of lading, dock-wan-ant, \\'arehouse-keeper's certificate, 
wharfinger's certificate, or wan-ant or order for deli\'ery, or 
any other document of title to goods, may make a valid 
pledge of such goods or documents. 
Proyidecl that the pawnee acts in good faith. and under 
circumstances which are not such as to raise a reasonable 
presumption that the pa\\'nor is acting improperly 
Provided also that such goods or documents have not 
been obtained from their lawful ov·;ner, or from any person 
in lawful custody of them, by means of an offence or fraud. 
137. \Vhere a person pledges goods in which he has only 
a limited interest, the pledge is valid to the extent of that 
interest. IP/NIl/CYP/UI 1 
Page 38 
CONTRACT. [CAP. 149. 
138. (1) A pledge of- Require-ments for a 
(a) bills of exchange, or pledge of 
bills of (b) promissory notes, or excha:nge, 
. promissory (C) bonds, whether In customary form or not, other notes, etc. 
than those secured by mortgage of immovable 
property, or 
(d) share certificates or share \van-ants for shares in 
a company, as security for payment of a debt 
or performance of a promise, 
shall not be valid and enforceable unless the contract of 
pledge-
(i) is expressed in \vriting, and 
(ii) is signed at the end thereof by the pawnor, and 
(iii) is made in the presence of at least two witnesses 
themselves competent to contract and sub­
scribed by them with their names as witnesses. 
(2) A pledge of share certificates or share warrants for Addi.tionaJ 
shares in a company transferable otherwise than by delivery f~i~f:~!n;~ 
shall not be valid and enforceable unless, in addition to the shares 
requirements of the preceding subsection-
(a) notice of such pledge, together with a certified 
copy of the contract of pledge, is given by the 
pawnee to the company, and 
(b) the company shall have made a memorandum of 
such pledge in the register of shareholders 
against the shares in respect of which the notice 
shall ha\'e been given, and 
(c) the cump2.ny shall have deJi\'ered to the pawnee a 
certificate that a memorandum of such pledge 
has been made in the register as aforesaid 
139. In the absence of any stipUlations to the contrary Pawnee's , d' t t f 1 d d' d . h right where contame m a con rac 0 p e ge ma e m accor ance \\'it pawn or 
the provisions of the last preceding section, the pa\mee ~~ke~t' 
shall, in case the pawnor makes default in the payment of ~~n~~ac~~f 
the debt or the performance of the promise at the stipulated pledge made 
time, have the same rights and remedies on the pledge ~~cordance 
against third parties as the pawnor himself would have had with ld,,:st 
f 1 prece mg but for the contract 0 p edge, and all payments made to section. 
the pawnee by third parties on such pledge shall be as valid 
and effective as if made to the pawnor himself Legal pro­
ceedings by 
bailor or 
bailee 
against 
wrong-doer 
Apportion­
ment of 
relief or 
compensa­
tion 
obtained by 
such legal 
proceedings 
. _l.gent' 
and 
.. principal .. 
defined 
\\ho may 
employ 
agent 
\'iho ma) be 
an agent 
( {)I1siderr:.­
tivn nut 
necessar: 
Agent :-, 
auth(,rit\ 
may be 
''',pre ssed or 
implied 
Definitiun~ 
fJi express 
and implied 
;LUthorit" CAP. 149.j CONTRACT. IP/NI1/CYP/UI1 
Page 39 
Legal Proceedings by Bailees or Batlors against ltVrong-doers. 
140. If a third person wrongfully deprives the bailee of 
the use or possession of the goods bailed, or does them any 
injury, the bailee is entitled to use such remedies as the 
owner might have used in the like case if no bailment had 
been made; and either the bailor or the bailee may bring 
legal proceedings against a third person for such deprivation 
or injury. 
141. vVhatever is obtained by way of relief or compensa­
tion in any such legal proceedings shall, as between the 
bailor and the bailee, be dealt with according to their 
respective interests. 
PART XIII. 
AGENCY. 
A ppointment and A uthority of Agents . 
142. An " agent" is a person emploY'ed to do any act for 
another or to represent another in dealings with third 
persons. The person for whom such act is done, or who is 
so represented, is called the " principal." 
143. Any person who is competent to contract mav 
employ an agent 
144. As between the principal and third persons any 
person may become an agent, but no person who is not 
competent to contract can become an agent, so as to be 
responsible to his principal according to the pro\-isions in 
that behalf herein cuntained 
145. 1\0 consideration is necessary to create an agency. 
146. The authoritv of an agent may be expressed or 
implied 
147. An authority is said to be e::-..press when it is given 
by \vords spoken or written_ An authority is said to be 
implied when it is to be inferred from the circumstances 
of the case; and things spoken or written, or the ordinary 
course of dealing, may be accounted circumstances of the 
case. IP/N/lICYP/u/l 
P_age-;W:-
CONTRACT. [CAP. 149. 
148. (1) An agent having an authority to do an act has 
authority to do every lawful thing which is necessary in 
order to do such act. 
(2) An agent having an authority to carry on a business 
has authority to do every lawful thing necessary for the 
purpose, or usually done in the course of conducting such 
business. Extent of agent's authority 
149. An agent has authority, in at;-eme.rgen~y,. to do all ~t~;~ty 
such acts for the purpose of protectmg hIS pnncIpal from in an 
loss as would be done by a person of ordinary prudence, in emergency 
his own case, under similar circumstances. 
Sub-agents. 
150. An agent cannot lawfully employ another to per-~~tagent 
form acts which he has expressly or impliedly undertaken delegate. 
to perform personally, unless by the ordinary custom of 
trade a sub-agent may, or, from the nature of the agency, 
a sub-agent must, be employed_ 
151. A " sub-agent 11 is a person competent to contract, ~;;;;~gent" 
employed by, and acting under the control of, the original 
agent in the business of the agency. 
152. (1) \\11en a sub-agent is properly appointed, the ~~~r~rnta­
principal is, so far as regards third persons, represented by principal by 
h b d· b d b d 'bl ~ h' t sub-arrent t ~ su -agent, an IS O':!r: y an r~sponsl e lor .IS ':-C s, prope;ly 
as 1£ he were an agent ongmally appomted by the prmClpal. appointed_ 
(2) The agent is responsible to the principal for the acts ~;~~~:. 
of the sub-agent. bilitv for sub-agent 
(3) The sub-ae:ent is responsible for his acts to the ae:ent, Sub-agent's 
........, '-.J responsi-but not to the principal. except in case of fraud or wilful bility 
wrong 
153. \~here an agent, 'without having authority to do so, ~~~~;::i­
has appomted a person to act as a sub-agent, the agent bility for 
stands toward~ such pe:-son in t~e relation of a princ~pa! to ~~~~~~~~ 
an agent, and IS responsIble for hIS acts both to the pnnClpal withou,t 
and to third persons; the principal is not represented by or authonty 
responsible for the acts of the person so employed, nor is 
that person responsible to the principal, Relation 
between 
principal and 
person duly 
appointed by 
agent to act 
in business 
of agency 
Agent's duty 
in naming 
such person 
Right of 
person as to 
acts done 
for him 
without his 
authority 
Effect of 
ratification 
Ratification 
maybe 
expressed or 
implied 
Knowledge 
requisite 
for valid 
ratification 
Effect of 
ratifying 
unauthorised 
act forming 
part of a 
transaction 
Ratification 
of unauthor­
ised act 
cannot injure 
third person 
Termination 
of agency CAP. 149.J CONTRACT. IP/N/lICYP/U/1 
Page 41 
154. \Vhere an agent, holding an express or implied 
authority to name another person to act for the principal 
in the business of the agency, has named another person 
accordingly, such person is not a sub-agent, but an agent of 
the principal for such part of the business of the agency as 
is entrusted to him, 
155. In selecting such agent for his principal, an agent is 
bound to exercise the same amount of discretion as a man 
of ordinary prudence would exercise in his own case; and 
if he does this he is not responsible to the principal for the 
acts or negligence of the agent so selected. 
Ratificatioll_ 
156. \Vhere acts are done by one person on behalf of 
another, but \vithout his knowledge or authority, he may 
elect to ratify or to disown such acts. If he ratify them, the 
same effects will follow as if they had been performed by 
his authority, 
157. Ratification may be expressed or may be implied in 
the conduct of the person on 'whose behalf the acts are done. 
158. No valid ratification can be made by a persun whose 
knowledge of the facts of the case is materially defective. 
159. A person f0.tifying any unauthorised act done on 
his behalf ratifies the whole of the transaction of \vhich such 
act formed a part. 
160. An act done by one person on behalf of another, 
\vithout such other person's authority, which. if done with 
authority, 'would have the effect of subjecting a third person 
to damages, or of terminating any right or interest of a third 
person, cannot, by ratification, be m2.de to han such effect 
RevocatIOn of A utlzonty 
161. An agency is terminated by the principal revoking 
his authority; or by the agent renouncing the business of 
the agency, Of bv the business of the 2.gency being com­
pleted, or by either the principal or agent dying or 
becoming of unsound mind, or by the principal being 
adjudicated a bankrupt or insolvent under the provisions 
of any Law for the time being in force relating to bank­
ruptcy or insolvency. IP/NIlICYP/UI1 
Page 42 
CONTRACT. [CAP. 149. 
162. Where the agent has himself an interest in the 
property which forms the subject-matter of the agency, 
the agency cannot, in the absence of an express contract, 
be terminated to the prejudice of such interest. 
163. The principal may, save as is otherwise provided by 
the last preceding section, revoke the authority given to his 
agent at any time before the authority has been exercised 
so as to bind the principal 
164. The principal cannot revoke the authority given to 
his agent after the authority has been partly exercised so 
far as regards such acts and obligations as arise from acts 
already done in the agency. 
165. 'Where there is an express or implied contract that 
the agency should be continued for any period of time, the 
principal must make compensation to the agent, or the 
agent to the principal, as the case may be, for any prev-ious 
revocation or renunciation of the agency without sufficient 
cause. 
166. Reasonable notice must be given of such revocation 
or renunciation, othenvise the damage thereby resulting 
to the principal or the agent, as the case may be, must be 
made good to the one by the other 
167. Revocation and renunciation may be expressed or 
may be implied in the conduct of the principal or agent 
respectively. 
168. The telmination of the authority of an agent does 
not, so far as regards the agent, take effect before it becomes 
known to him, or, so far as regards third persons, before it 
becomes known to them 
169. When an agency is terminated by the principal dying 
or becoming of unsound mind, the agent is bound to take, 
on behalf of the representatives of his late principal, all 
reasonable steps for the protection and preservation of the 
interests entrusted to him 
170. The termination of the authority of an agent causes 
the termination (subject to the rules herein contained 
regarding the termination of an agent's authority) of the 
authority of all sub-agents appointed by him Termination 
of agency, 
where agent 
has an 
interest in 
subject­
matter 
When 
princip~l 
mav re\(,j~c 
age'ut's 
authnrit~ 
Re\ ocatiun 
whcle 
authority 
has bee!i 
partly 
exercised 
Comroensa­
tion for 
re\"ocation 
by principal 
or renunci­
ation by 
ar:;:ent 
~i)tice I)f 
rc', uca tion L r 
r~nunci~Lt:.'1n 
He\ ucation 
and rei.1und­
ati~)!1 niav be 
expressed or 
impJicct 
\\ ):cn 
te:rn1ination 
of a.£;ent's 
autholitv 
t;:;.kes eff;~c~ 
as to agent, 
arld as to 
third persons 
_-\~(-nt'5 duty 
0:1 telmina­
tir)n of 
a!j:f!~Y '?} I'nnclpal ;; 
death or 
ins2.nity 
agent's 
authnl it\' Agent's 
dutv in 
~nnductUl(r 
principal's" 
business 
Skill and 
diligence 
required 
from agent. 
~\!.!ent's 
ac-counts 
. '."ent's duty 
tll com­
municate 
with 
principal 
ldght of 
principal 
when agent 
deals on his 
I)\vn account, 
in business 
()f arsency 
without 
principal's 
consent 
Principal's 
right to 
benefit 
r;ained b~ 
agent 
dealing 011 
his own 
account in 
business of 
agency CAP. 149.J CONTRACT. 
Agent's Duty to Principal. IP/NIl/CYP/UI 1 
Page 43 
171. An agent is bound to conduct the business of his 
principal according to the directions given by the principal, 
or, in the absence of any such directions, according to the 
custom which prevails in doing business of the same kind 
at the place where the agent conducts such business. When 
the agent acts otherwise, if any loss be sustained, he must 
make it good to his principal, and, if any profit accrues, he 
must account for it. 
172. An agent is bound to conduct the business of the 
agency with as much skill as is generally possessed by 
persons engaged in similar business, unless the principal 
has notice of his want of skill. The agent is always bound 
to act with reasonable diligence, and to use such skill as he 
possesses; and to make compensation to his principal in 
respect of the direct consequences of his own neglect want 
of skill or misconduct, but not in respect of loss or damage 
which are indirectly or remotely caused by such neglect, 
want of skill or misconduct. 
173. An agent is bound to render proper accounts to his 
principal on demand . 
174. It is the duty of an agent, in cases of difficulty, to 
use all reasonable diligency in communicating ,vi.th his 
principal and in seeking to obtain his instruction 
175. If an agent deals on his own account in the business 
of the agency, without first obtaining the consent of his 
principal and acquainting him with all material circum­
stances which have come to his own knowledge on the 
subject, the principal may repudiate the transaction, if the 
case shows either that any material fact has been dis­
honestly concealed from him by the agent, or that the 
dealings of the agent have been disadvantageous to him. 
176. If an agent, without the knowledge of his principal, 
deals in the business of the agency on his own account 
instead of on account of his principal, the principal is 
entit1ed, notwithstanding anything contained in Part VIII 
of this Law, to claim from the agent any benefit which may 
have resulted to him from the transaction. IP/N/1/CYP/U/l 
Page 44 
CONTRACT. (CAP. 149. 
177. An agent may retain, out of any sums received on ~:~~~~ 
account of the principal in the business of the agency all retainer out 
moneys due to himself in respect of advances made or of s~msd 
h" d' recelve on expenses properly incurred by lm m con uctmg such principal's 
business, and also such remuneration as may be payable account 
to him for acting as agent. 
178. Sub)' ect to such deductions, the agent is bound to Agent's duty to pay sums pay to his principal all sums received on his account. received for 
principal 
179. In the absence of any special contract, payment for \\hen. 
h rf f . d h '1 1 agent s t e pe ormance 0 any act IS not ue to t e agent unt! tIe remunera· 
completion of such act; but an agent may detain moneys ~~~ becomes 
received by him on account of goods sold, although the 
whole of the good consigned to him for sale may not have 
been sold, or although the sale may not be actually complete 
Agent not 180. An agent who is guilty of misconduct in the business entitled to 
of the agency is not entitled to any remuneration in respect ~f,:uf~~ra. 
of that part of the business which he has misconducted business 
181. In the absence of any contract to the contrary, an 
agent is entitled to retain goods, papers and other property, 
whether movable or immovable, of the principal received 
by him, until the amount due to himself for commission, 
disbursements and services in respect of the same has been 
paid or accounted for to him 
Princtpal's Duty to Agent. 
182, The employer of an agent is bound to indemnify 
him against the consequences of all la"wful acts done by 
such agent in exercise of the authority conferred upon him. 
183. \Vhere one person employs another to do an act, 
and the agent does the act in good faith, the employer is 
liable to indemnify the agent against the consequences of 
that act, though it cause an injury to the rights of third 
persons 
184. Where one person employs another to do an act 
which is criminal, the employer is not liable to the agent, 
either upon an express or an implied promise, to indemnify 
him against the conSE quences of that act . miscon· 
ducted 
Agent's lien 
on 
principal's 
property 
Agent to be 
indemnified 
against con· 
sequences oi 
la \\ ful acts 
Agent to be 
indemnified 
against con­
sequences of 
acts done in 
good faith 
l'on-liabilitv 
of employer' 
of agent to 
do a criminal 
act Compensa­
tion to agent 
for injury 
caused by 
principal's 
neglect. 
Enforcement 
and conse­
quences of 
agent's 
contracts. 
Principal 
how far 
bound' when 
agent 
exceeds 
authority. 
Principal 
not bound 
when excess 
of agent's 
au thori ty is 
not 
separable. 
Conse­
quences of 
notice given 
to agent. 
Agent cannot 
personally 
enforce, nor 
be bound bv 
contracts on 
behalf of 
principal. 
Presumption 
of contract 
to contrary. CAP. 149.J CONTRACT. IP/N/1/CYP/U/l 
Page 45 
185. The principal must make compensation to his agent 
in respect of injury caused to such agent by the principal's 
neglect or want of skill. 
Elfect of Agency on Contract with Third Persons. 
186. Contracts entered into through an agent, and 
obligations arising from acts done by an agent, may be 
enforced in the same manner, and will have the same legal 
consequences, as if the contracts had been entered into and 
the acts done by the principal in person. 
187. \Vhen an agent does more than he is authorised to 
do, and when the part of what he does, which is within his 
authority, can be separated from the part which is beyond 
his authority, so much only of what he does as is within his 
authority is binding as between him and his principal. 
188. 'Where an agent does more than he is authorised to 
do, and 'what he does beyond the scope of his authority 
cannot be separated ·from what is 'Nithin it, the principal 
is not bound to recognise the transaction. 
189. Any notice given to or information obtained by the 
agent, provided it be given or obtained in the course of the 
business transacted by him for the principal, shall, as 
bet\veen the principal and third parties, have the same legal 
consequences as if it had been given to or obtained by the 
principal. 
190. (1) In the absence of any contract to that eneer, an 
agent cannot personally enforce contracts entered into by 
him on behalf of his principal, nor is he personally bound 
by them. 
(2) Such a contract shall be presumed to exist in the 
following cases-
(a) where the contract is made by an agent for the sale or 
purchase of goods for a merchant resident 
abroad; 
(b) where the agent does not disclose the name of his 
principal; 
(c) where the principal, though disclosed, cannot be 
sued. IP/NIlICYP/UI 1 
Page 46 
CONTRACT. [CAP. 149. 
191. (1) If an agent makes a contract \vith a person who Rights of 
neither know~, ~or has reas0D: to suspect, that he is an ~~~c~o a 
agent, his pnncIpal may reqUlre the performance of the made by 
contract; but the other contracting party has, as against ad~enlt DOdt ,. lscose. the principal, tne same nghts as he would have had as 
against the agent if the agent had been principal. 
(2) If the principal discloses himself before the contract \Vhere 
is completed, the other contracting party may refuse to ~rinlcipal 
fulfil the contract, if he can show that, if he had known \vho ~s~~~ 
was the principal in the contract, or if he had known that beforel t' . . I 1 Id h d camp e lOn the agent was not a pnncIpa, le wou not ave entere of contract. 
into the contract. 
192. \Ynere one man makes a contract \vith another, Performance 
neither knowing nor having reasonable ground to suspect of.:ntract 
that the other is an agent, the principal, if he requires the ~~pp:s~~n~o 
performance of the contract, can only obtain such perform- be principal. 
ance subject to the rights and obligations subsisting behveen 
the agent and the other party to the contract. 
193. In cases where the agent is personally liable, a 
person dealing \vith him may hold either him or his principal, 
or both of them, liable. Right of 
person 
dealing with 
agent 
personally 
liable. 
194. \Vhen a person who has made a contract \vith an CoDse­
agent induces the agent to act upon the belief that the rnd~~i~~f 
principal only ,vill be held liable, or induces the principal ag~n~ or 
to act upon the belief that the agent only \vill be held liable, ~~~~~~~~f 
he cannot afterwards hold liable the agent or principal t~t. 
respectively ~~~~~~\. .. i11 
be held ex­
clusively 
195. A person un truly representing himself to be the tt~~ilitv of 
authorised agent of another, and thereby inducing a third pretend'cd 
person to deal with him as such agent, is liable, if his alleged agent 
employer does not ratify his acts, to make compensation 
to the other in respect of any loss or damage which he has 
incurred by so dealing. 
196. A person with whom a contract has been entered 
into in the character of agent is not entitled to require the 
performance of it if he was in reality acting, not as agent, but 
on his own account. 
C-149 Person 
falsely con­
tracting as 
agent not 
entitled to 
performance Liabilitvof 
principil 
inducing 
belief that 
agent's un­
authorised 
acts \\ere 
authoised. 
Effect. on 
agreement, 
of misrepre­
sentation or 
fraud by 
agent. CAP. 149.] CONTRACT. IP/NIl/CYP/UI 1 
Page 47 
197. When an agent has, \\-ithout authority, done acts 
or incurred obligations to third persons on behalf of his 
principal, the principal is bound by such acts or obligations 
if he has by his words or conduct induced such third persons 
to believe that such acts and obligations were within the 
scope of the agent's authoriry. 
198. Misrepresentations made, or frauds committed, by 
agents acting in the course of their business for their 
principals, have the same effect on agreements made by 
such agents as if such misrepresentations or frauds had been 
made or committed by the principals; but misrepresenta­
tions made, or frauds committed, by agents, in matters 
which do not fall within their authority, do not affect their 
principals. ~ ---------------------------------
Section 247 of this Law which repealed the Commercial Code (Amendment) Law 
191 i and some provisions of the !lIejelle and the Ottoman Commercial Code, provided 
that such repeal should not, and that nothing in the Law should. affect :-
(a) any contract. agreement. bond or instrument entered into. made or executed 
before the coming into operation of this Law; or 
(b) any right or interest acquired or accrued under the provisions of any 
enactment repealed by this Law; or 
(c) any legal proceeding or remedy in respect of any such contract. agreement. 
bond. instrument. right or interest