How Consensual is Compulsion: Growth of 'Contract by Law' in Socialist India

National Law University Journal, 2009

26 Pages Posted: 24 Jan 2008 Last revised: 6 Apr 2009

See all articles by Raghav Sharma

Raghav Sharma

National Law University Jodhpur (NLUJ)

Date Written: January 24, 2008


Contract law is in a state of transition. From the rubble of the conceptions of absolute freedom of contract, new types of contracts like contracts of adhesion have taken shape. Socialist economies are faced with an acute problem of regulation of supply and distribution of essential commodities. The phantom of freedom of contract has been relegated to oblivion by concession of wider powers to the State to regulate, curtail and confine the contractual freedom in its various aspects bit by bit. Statutory transactions are contracts under compulsion of law whereby parties are mandated by executive orders or legal regulations to enter into either contractual relations or contract-like relations. India, as a socialist economy, has evolved the novel jurisprudence of 'contract by law' wherein the free consent of the parties is much more anterior to the contract itself. Forced sales have thus been judicially fitted into the traditional criteria of 'contract sovereignty' by redefining the boundaries of consent and freedom of contract. This has served twin purposes of augmenting the coffers of State through taxation of such forced transactions under the Sales Tax legislations and providing the parties with a wider net of protection through buyer's and seller's right and remedies under the Sale of Goods Act, 1930. The article seeks to provide a deeper understanding of these novel evolving notions in the field of contract law in India.

Keywords: Contract Sovereignty, Sale of Goods, Contract by Law, Freedom of Contract, Sale

Suggested Citation

Sharma, Raghav, How Consensual is Compulsion: Growth of 'Contract by Law' in Socialist India (January 24, 2008). National Law University Journal, 2009, Available at SSRN:

Raghav Sharma (Contact Author)

National Law University Jodhpur (NLUJ) ( email )

NH-65, Nagour Road
Kamala Nehru Nagar, Jodhpur
Mandore, Jodhpur, Rajasthan 34230

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