A Bank Loan Agreement begins as follows :
" THIS AGREEMENT IS EXECUTED BY BORROWER.......
............IN FAVOUR OF..............
...........XYZ BANK LTD. "
The first Clause of the Agreement begins as follows :
" XYZ BANK HAS AGREED TO GRANT AND THE BORROWER
HAS AGREED TO BORROW....... "
Even though Borrower signed this Loan Agreement, none
of the Bank Officials signed this Agreement.
Could the validity of this Loan Agreement be questioned
under Indian Contract Act,on following grounds ?
(1)This is Unilateral Contract. There is no provision for
Unilateral Contract in Contract Act.
(2)Even though Bank has made express promise to grant Loan,
Bank did not sign contract. Hence contract void.
(3)Borrower cannot enforce by Law promise made by Bank to
grant Loan,as Bank did not sign Contract.Hence Contract
void,as enforceability is not available to all parties in
the Contract.
PLEASE NOTE : Generally, all Agreements are written as
BY AND BETWEEN all concerned parties,with all concerned
parties signing the Agreement. But the aforestated
Agreement is drafted differently as shown above, surprising
the Borrower.
