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The Indian Contract Act, 1872: page 19

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     [Exception 3.—Saving of a guarantee agreement of a bank or a financial institution.—This
     1

section shall not render illegal a contract in writing by which any bank or financial institution stipulate a
term in a guarantee or any agreement making a provision for guarantee for extinguishment of the rights or
discharge of any party thereto from any liability under or in respect of such guarantee or agreement on the
expiry of a specified period which is not less than one year from the date of occurring or non-occurring of
a specified event for extinguishment or discharge of such party from the said liability.
     Explanation.—(i) In Exception 3, the expression “bank” means—
         (a) a “banking company” as defined in clause (c) of section 5 of the Banking Regulation
     Act, 1949(10 of 1949);
         (b) “a corresponding new bank” as defined in clause (da) of section 5 of the Banking Regulation
     Act, 1949(10 of 1949);
         (c) “State Bank of India” constituted under section 3 of the State Bank of India Act, 1955
     (23 of 1955);
        (d) “a subsidiary bank” as defined in clause (k) of section 2 of the State Bank of India (Subsidiary
     Banks) Act, 1959(38 of 1959);
                                                                                    e
         (e) “a Regional Rural Bank” established under section 3 of the Regional Rural Banks
     Act, 1976(21 of 1976);                                                  od
                                                                       aC
         (f) “a Co-operative Bank” as defined in clause (cci) of section 5 of the Banking Regulation
     Act, 1949(10 of 1949);
                                                                 di
        (g) “a multi-State co-operative bank” as defined in clause (cciiia) of section 5 of the Banking
     Regulation Act, 1949(10 of 1949); and                 In
    (ii) In Exception 3, the expression “a financial institution” means any public financial institution
within the meaning of section 4A of the Companies Act, 1956(1 of 1956).]
    29. Agreements void for uncertainty.—Agreements, the meaning of which is not certain, or capable
of being made certain, are void.
                                                          Illustrations
     (a) A agrees to sell to B “a hundred tons of oil”. There is nothing whatever to show what kind of oil was intended. The
agreement is void for uncertainty.
    (b) A agrees to sell to B one hundred tons of oil of a specified description, known as an article of commerce. There is no
uncertainty here to make the agreement void.
     (c) A, who is a dealer in cocoanut-oil only, agrees to sell to B “one hundred tons of oil”. The nature of A’s trade affords an
indication of the meaning of the words, and A has entered into a contract for the sale of one hundred tons of cocoanut-oil.
     (d) A agrees to sell to B “all the grain in my granary at Ramnagar”. There is no uncertainty here to make the agreement void.
     (e) A agrees to sell B “one thousand maunds of rice at a price to be fixed by C”. As the price is capable of being made
certain, there is no uncertainty here to make the agreement void.
     (f) A agrees to sell to B “my white horse for rupees five hundred or rupees one thousand”. There is nothing to show which of
the two prices was to be given. The agreement is void.

    30. Agreements by way of wager void.—Agreements by way of wager are void; and no suit shall be
brought for recovering anything alleged to be won on any wager, or entrusted to any person to abide the
result of any game or other uncertain event on which any wager is made.




1. Ins. by Act 4 of 2013, s. 17 and the Schedule (w.e.f. 18-1-2013).

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