chhatramani/Nepal-Legal-Text-Corpus-44laws huggingface dataset:
Contract Act 2056

Chapter – 3 Void and Voidable Contracts

Section 13 : Void Contracts
The following contracts shall be void:
(a) A Contract preventing anyone from engaging him/herself in any occupation, profession or trade which is not prohibited by prevailing law.
Provided that a contract shall not be deemed to have been concluded in preventing profession or trade in the following circumstances:
(1) A contract preventing the seller from engaging him/herself in a profession or trade at the time and place as mentioned in the contract concluded between the buyer and the seller on selling and buying of the goodwill of any trade;
(2) A contract concluded among partners to prevent their engagement in any trade or business other than those of the partnership firm, similar to those of the partnership firm or any other trade or business together with other competitors belonging to the same kind of trade or business as long as the partnership continues.
(3) A contract concluded among the partners preventing them from engaging in a trade or business under the partnership firm for the specified time or place after being separated from the partnership;
(4) A contract preventing any individual from receiving the service of any such agency, company, firm, individual or competitor of such agency, company, firm, or individual for the specified period of time after the retirement from service or during the service of such agency, company, firm or individual pursuant to a contract concluded by any individual with any agency, company, firm or individual.
(b) A contract restraining marriages other than those prohibited by the prevailing law.
(c) A contract preventing anyone from enjoying the facilities already being enjoyed by the general public.
(d) A contract seeking to prevent the legal rights of any person from being enforced by any government office or court.
(e) A contract concluded in matters contrary to or prohibited by the prevailing law.
(f) A contract concluded for immoral purposes or against Public morality or public interest.
(g) A contract which cannot be performed because the parties thereto do not exactly know about the matter in relation to which it has been concluded.
(h) A contract which is considered impossible to fulfil even at the time it is concluded.
(i) A contract which is vague as it does not provide reasonable meaning thereof.
(j) A contract concluded by an incompetent person to conclude such a contract.
(k) A contract concluded with an unlawful consideration or objective.
Contract Act 2056

Chapter – 3 Void and Voidable Contracts

Section 14: Voidable Contracts
1) The following contracts may be made void by the aggrieved party:
(a) A contract concluded through coercion:
Explanation:
A person shall be deemed to have indulged in coercion if he/she, with the objective of compelling any person to accept any contract against his/her will, withholds or threatens to withhold property belonging to him/her, or threatens to defame him/her, or takes or threatens to take any other action in contravention of prevailing law.
(b) A contract concluded through undue influence:
Explanation:
(1) Undue influence means influence exercised by a person upon another person who is under his/her influence and is amenable to his/her personal benefit or interest.
(2) Without prejudice to the generality of Clause (1), the following persons shall be deemed to be under the influence of any person and amenable to his/her wishes:
(i) A person living under his/her guardianship, protection or custody.
(ii) A person who cannot take care of their interest temporarily or permanently by reason of old age, sickness or physical or mental weakness.
(iii) A person who can be subjected to under one’s economic or ranking influences.
(c) A contract concluded through fraud:
Explanation:
A party to the contract or his/her agent shall be deemed to have committed fraud if he/she leads the other party or his/her agent to believe or takes any action to believe the
the particular matter is true, although he/she knows that it is false, suppresses any information in his/her possession, or indulges in any other fraudulent act punishable under prevailing law, with the intention of deceiving the opposite party or his/her agent.
(d) A contract concluded through deceit:
Explanation:
(1) Any of the following acts shall be taken as deceit:
(i) Submission of false particulars on any matter without a reasonable basis for doing so;
(ii) Misleading any party so as to aggrieve him/her;
(iii) Causing any wrong deliberately on the matter of contract;
(2) In the case of a voidable contract under this section, the following matters shall be dealt with as prescribed below:
(i) The party caused to enter into a contract may, instead of making the contract void, demand his/her position to remain the same as it was prior to the conclusion of the contract.
(ii) Burden of proof of innocence of undue influence shall rest in the party who claims that such contract is not concluded under an undue influence in case a contract is concluded with the person who is under one’s influence and amenable to his/her wishes.
Contract Act 2056

Chapter- 4 Contracts relating to Guarantee, Indemnity and Subrogation

Section 15 : Contracts relating to guarantee
1) A contract relating to guarantee shall be deemed to have been concluded in case it provides that if any person defaults in the repayment of the loan obtained by him or fulfilment of the obligation accepted by him/her, it shall be repaid or fulfilled by a third person.
2) In case a third party has provided a guarantee under sub-section (1) and in case the person who has to repay the loan does not repay it or fulfil the obligation to be fulfilled, the person guaranteeing such loan or obligation shall repay the loan or fulfil the condition according to the contract.
3) The contract relating to the guarantee must have been concluded in writing.

Contract Act 2056

Chapter- 4 Contracts relating to Guarantee, Indemnity and Subrogation

Section 16: Surety’s liability
Except when otherwise provided for in the contract, the surety’s liability shall be as follows:
(a) Liability of the surety shall emerge from the very time when the person who has to meet the liability fails to meet it.
(b) Liability of a surely shall be similar to that of the person who has to repay the loan or fulfil any obligation. The surety shall remain responsible until the person becomes free from the liability of repaying the loan or fulfilling the obligation.
(c) The creditors may impose the surety with the liability immediately after the default by the person who is under obligation to repay the loan or fulfil the obligation.
(d) In case both security and guarantee have been provided in consideration of any loan or liability, the surety shall have no liability to the extent covered by the security so provided.
(e) The liability of a surety shall not terminate simply because the person who has to repay the loan or fulfil the liability becomes free from the liability through the mobilization of law.
Explanation:
For the purpose of this Act, the term ‘creditor’ shall denote a person who has supplied the loan, and this term also includes a person who may obtain any benefits from or have any work done by the person who has to repay the loan or fulfil the liability.
Contract Act 2056

Chapter- 4 Contracts relating to Guarantee, Indemnity and Subrogation

Section 17: Circumstance in which surety will be free from liability
1) Except when otherwise provided for in the contract, the surety shall be free from liability to the extent as mentioned in any of the following circumstances:
(a) In case the person who has to repay a loan or fulfil a liability changes the terms and conditions of the contract in such a way as to have a substantial impact on the contract without the approval of the surety, with respect to the transaction to be carried out after such changes.
(b) In case a contract is concluded to absolve from liability the person who has to fulfil the concerning matter in respect to which the guarantee has been provided.
(c) In case the person who has to repay a loan or fulfil a liability is absolved from liability, or in case the loan is waived due to the action of the creditors.
(d) In case the creditor agrees to absolve the debtor from the liability by collecting a sum less than what is due, to provide an additional time limit for repaying the loan, or not to initiate a lawsuit.
(e) In case any action of the creditors causes an adverse impact on the surety’s right to legal remedy against the person who is under obligation to repay the loan or fulfil the liability.
(f) In case the creditor loses, damages or returns any security obtained by him from the debtors to the extent of the value of that security.
(g) To the extent to which the person who is under obligation to repay a loan or fulfil a liability has repaid the loan or fulfilled the liability according to the contract.
2) Notwithstanding anything contained in Sub-section (1), the surety shall not be deemed to have been absolved from the liability, except when otherwise provided for in the contract, simply because the creditor fails to initiate legal action against the surety or try to realise the amount to be realised by him/her in time.
3) In case there are two or more sureties, and in case the creditors absolve any one of them from the liability, the other surety/sureties shall not be free from his/her/their share in the liability. In case the share in the liability of the surety/sureties can not be separated, no surety shall be deemed to have been absolved from his liability simply because; the creditor has absolved him/her from the liability.
4) With respect to a contract relating to a guarantee which concerned with the fulfilment of a liability, the surety shall not be deemed to have been absolved from the obligation of fulfilling the liability under the contract simply because a dispute has arisen among the parties in relation to that contract, except when otherwise provided for in the contract.
Contract Act 2056

Chapter- 4 Contracts relating to Guarantee, Indemnity and Subrogation

Section 18: Relationship between the Surety and the Debtors
Except when otherwise provided for in the contract, the relationship between the surety and the debtors with respect to the following matters shall be as follows:
(a) The surety shall cause a person who is under obligation to repay a loan or fulfil a liability according to the contract.
(b) In case the debtor has supplied any property or security to the surety in consideration of the guarantee provided by him/her while obtaining the loan or accepting liability, the surety may not mortgage, sell, or otherwise transfer the title thereto without the consent of the debtor.
(c) In case a guarantee has been provided in consideration of any loan obtained or liability accepted for any specific purpose, the objectives, nature or terms and conditions of that loan or liability may not be changed without the consent of the surety.

Contract Act 2056

Chapter- 4 Contracts relating to Guarantee, Indemnity and Subrogation

Section 19 : Surety to substitute creditor
1) After the surety repays the loan to be repaid by the debtor or fulfils the liability to be fulfilled by the debtors under the contract, the surety shall substitute the creditor in regard to that loan or liability and may initiate legal action against the debtor like a creditor under this Act or prevailing law.
2) Notwithstanding anything contained elsewhere in this chapter, the total amount and interest due on that amount, or any other fee or amount payable on that, shall be paid by the debtors to the surety in consideration of the loan repaid or liability fulfilled by the surety on his behalf according to the contract relating to guarantee.
3) In case it becomes necessary to take legal action because of the failure of the debtor to pay the amount payable by him/her under sub-section (2), or in case it becomes necessary to incur any other expenses in consideration of the surety may have such expenses recovered from the debtor.

Contract Act 2056

Chapter- 4 Contracts relating to Guarantee, Indemnity and Subrogation

Section 20 : Guarantee related viable contract
The surety may cause to declare void the contract relating to the guarantee in the following circumstances:
(a) In case the creditors him/herself, or any other person with his/her consent, has obtained the guarantee by supplying wrong or misleading information or notice to the surety in connection with the matter connected with the transaction in respect to which the guarantee has been provided;
(b) In case the subject matter, property (cash or kind) involved, or facts relating to the guarantee have been concealed or not mentioned:
(c) In case the contract has been concluded with a provision for a third person as a surety, and the third person has not given his/her consent to provide the guarantee.
Contract Act 2056

Chapter- 4 Contracts relating to Guarantee, Indemnity and Subrogation

Section 21 : Equal liability of co-sureties
1) In case two or more persons have jointly or separately provided a joint guarantee for any loan or liability, and in case the debtor fails to repay the loan or meet the liability, the co-sureties shall repay the loan or meet the liability or the requirements of the contract on an equal basis, except when otherwise provided for in the contract.
2) In case the guarantee has been provided on a sector-wise basis while providing a joint guarantee under sub-section (1), a surety shall be required to meet only the liability for that sector for which he/she has provided the guarantee.

Contract Act 2056

Chapter- 4 Contracts relating to Guarantee, Indemnity and Subrogation

Section 22 : Contract relating to indemnity
1) In case a person has entered into a contract relating to indemnity with a provision to pay any party to a contract or a third person for any loss or damage that may result from his/her actions while working under the direction of that party to that contract, he/she may realize as compensation all or any of the following amounts, subject to that contract:
(a) The indemnity amount mentioned in the contract;
(b) In case any loss or damage has been caused to a third person, the amount to be paid or borne in consideration thereof;
(c) The amount spent on the case filed or defended by him/her in connection with the contract relating to indemnity;
(d) The amount spent on the legal action if it becomes necessary to initiate such action for failure to pay the amounts mentioned in Clause (a) to (c).
2) Notwithstanding anything contained in sub-section (1), in case any person, while working under the direction of the other party, works negligently or with the intention of causing any loss or damage to that party or a third person, and in case the concerned party or the third person suffers a loss damage as a result thereof, he/she shall him/herself be responsible for such loss or damage.
Contract Act 2056

Chapter- 4 Contracts relating to Guarantee, Indemnity and Subrogation

Section 23 : Provision concerning subrogation
1) In case any person has concluded a contract with any other person against any loss or damage that could be caused by a third person to his/her property, facilities, rights, or profits that could result from his/her business, the other person who has signed the contract shall him/herself bear any such loss or damage irrespective of who is responsible.
Provided that, in case the contract has been signed with a provision to have any such loss or damage borne by any other person, such loss or damage shall be realized from that person.
2) In case the amount or compensation to be paid for any loss or damage under sub-section (1) has been mentioned in the contract, it shall be done accordingly, and in case no such provision has been made in the contract, an appropriate amount or compensation shall be paid, or arrangements be made for payments, to the person affected by the loss or damage, or to his/her heir in case he/she is dead.
3) In case there has been any loss or damage, as mentioned in sub-section (1), the person paying the amount or compensation under sub-section (2) shall be deemed to have subrogated the person who has sustained the loss or damage, and, accordingly, the subrogation may have the amount of compensation in consideration of such loss or damage recovered from the person causing such loss or damage.

Contract Act 2056

Chapter- 4 Contracts relating to Guarantee, Indemnity and Subrogation

Section 24 : Rights of subrogator
The rights and liabilities of a subrogator shall be as mentioned in the contract, if any, and if not, it shall be as follows:
(a) All the rights of the person who has sustained the loss or damage shall devolve on the subrogation.
(b) The subrogator mentioned in Clause (a) may realize from the person who has caused the loss or damage, or from the party to a contract concluded in that connection, if any, the amount or reasonable compensation paid by him/her to the person who has suffered the loss or damage, as well as the expenses incurred in contesting a case, if any.

Contract Act 2056

Chapter- 5 Contracts Relating to Bailment

Section 25: Contract relating to Bailment
A contract relating to bailment shall be deemed to have been concluded in case any person delivers any property to another person on a returnable basis or for handing it over to any other person or selling it as ordered by him/her.
Provided that a deed must be executed while bailing any property worth more than Rs.5,000.00.
Explanation
: For the purpose of this chapter, the term ‘property’ includes any movable property and title to such property.
Contract Act 2056

Chapter- 5 Contracts Relating to Bailment

Section 26 : Process of bailment to be deemed completed
1) The process of bailment shall be deemed to have been completed after the bailee receives the bailment property for being kept as such.
2) In case any property is already being kept by any person or a person authorised by him/her under his/her custody or control, the concerned property shall be deemed to have been taken by him/her as a
bailed property.

Contract Act 2056

Chapter- 5 Contracts Relating to Bailment

Section 27 : Particulars of bailed property to be mentioned
1) In case the bailee knows that the bailed property must not be used due to any defect in it, or because it could cause any loss or damage or because separate arrangements or provisions be made for its protection, he/she shall inform the bailee about all such matters to the best of his/her knowledge.
2) In case any information to be supplied under sub-section (1) is not supplied even while knowing about it, the bailer must bear the loss or damage caused by that property or because of that property to the bailee.
3) Notwithstanding anything contained in sub-section (1), in case any property given on rent or as collateral or for sale causes any loss or damage while using it due to its defect, the bailer must bear such loss or damage even if he/she has no knowledge about the defect in the property.
Contract Act 2056

Chapter- 5 Contracts Relating to Bailment

Section 28: Bailee’s liability
1) A bailee shall look after and arrange for the safety of the property received by him/her as bailed property as mentioned in the terms and conditions of the contract or as his/her own property in case nothing has been mentioned in the contract.
2) Except when otherwise provided for in the contract, in case any bailed property depreciates or is lost, stolen, damaged, destroyed, decreased or harmed because of natural calamities despite taking care and arranging for its security under sub-section (1), the bailee need not return such property.
Provided that, in case the property is depreciated or is lost, stolen, damaged, destroyed, decreased or harmed because of the negligence or
malfide
intention of the bailee, or of his/her failure to take care or ensure its safety according to the terms and conditions of the contract, he/she must return the property or pay an equivalent amount to the bailer.
3) In case the bailee uses the bailed property without having the right to do so under the contract or in a manner contrary to the terms and conditions of the contract, and in case such use causes any loss, damage, destruction, depreciation or harm to the property, the bailee shall pay for compensation to the bailer.
4) Except when otherwise provided for in the contract, the bailee shall not mix up the bailer’s property with his/her own property.
Provided that, in case the bailee has mixed up his/her own property with that of the bailer, both parties shall have the title on that property, as well as to the income accruing therefrom, in proportion to their respective shares.
5) In case the bailee has mixed up his/her own property with the bailer’s property and the property so mixed up can be separated, the two parties shall have title to their respective property so separated, and the expenses incurred for separating the property so mixed and the loss, if any caused, to the bailer while mixing-up such property in that manner shall be borne by the bailee.
6) In case the bailee has mixed up his/her own property with the bailer’s property without the consent of the bailer and their property cannot be separated as mentioned in Sub-section (5), the title of the bailer to the bailee’s property shall terminate if he/she agrees to obtain his/her share from the property so mixed-up. In case the bailer does not agree to take his/her share from such property the bailee shall be required to pay compensation for his/her property.
Contract Act 2056

Chapter- 5 Contracts Relating to Bailment

Section 29 : Bailed property to be returned
1) After the expiry of the period prescribed while bailing a property or fulfilment of the objectives with which the property has been bailed, the bailee shall return the bailed property to the bailer.
2) In case the property is not returned under sub-section (1) within the prescribed period, or within a reasonable period according to the nature of the property where no such period has been prescribed, or in case the bailer does not take it back and the property is lost, stolen, damaged, destroyed or reduced after that date or bailer suffers any loss or damage due to that property after that date the party because of which the loss or damage has resulted shall bear the loss or damage.
3) Except when otherwise provided for in the contract, in the case of a bailed property owned by several persons, it may be handed over to any one of such owners or to the person ordered by them, and the handover of the property in that manner shall be deemed to have been done duly.
4) Except when otherwise provided for in the contract, the property raised or earned through the bailed property shall also belong to the bailer.

Contract Act 2056

Chapter- 5 Contracts Relating to Bailment

Section 30 : Person bailing other’s property to be held responsible
In case any person bails any property on which he/she has no title, right or ownership to any other person to keep as a bailed property, and the bailee has to bear any claim of a third party or any loss, damage or any expenses in for accepting that bailment the bailer shall be required to bear such expenses as well.

Contract Act 2056

Chapter- 5 Contracts Relating to Bailment

Section 31: Found property may be kept after notifying the police
In case person finds any property in any way, he/she may keep it safely with him/herself until the concerned owner is found out after notifying the police. The expenses incurred for finding out the owner of the property and for keeping the property shall be borne by the concerned owner and the person who has found the property may keep it with him/herself until the owner pays such expenses.