Justice PS Narasimha of the Supreme Court of India said contract law principles may need reevaluation as artificial intelligence and smart contracts reshape obligations, speaking at the launch of A Historical Introduction to the Indian Contract Act.
NEW DELHI: Supreme Court Justice PS Narasimha remarked that the fundamental principles of contract law may require reevaluation as artificial intelligence and smart contracts begin to impact the understanding of contractual obligations.
He made these comments at the launch of “A Historical Introduction to the Indian Contract Act,” a book by Shiv Swaminathan, Dean of the School of Law at Shiv Nadar University, which focuses on private law and the historical roots of contract law.
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Justice Narasimha stated that emerging technologies prompt critical questions regarding how core contractual concepts such as proposals, promises, and consideration should be interpreted.
He noted,
“As artificial intelligence is going to take over and smart contracts begin to operate, how we understand concepts such as proposal, promise, consideration and agreements enforceable through law will have to be revisited,”
He emphasized that the book encourages legal professionals to explore the intellectual foundations of the Indian Contract Act rather than merely accepting it as a fixed body of doctrine. “Don’t be misled by the name of the book.
He remarked,
‘Historical Introduction to the Contract Act’ is not a simple history of contract law at all. Much less is it even an introduction. It is, in a way, a biography of Indian contract law,”
Justice Narasimha observed that while the statutory text of the Contract Act has largely remained stable, the interpretation by courts has evolved.
He pointed out,
“The text remained as it is, but its interpretation changed,”
He further emphasized that scholarship like Swaminathan’s can assist courts in reevaluating fundamental contractual concepts.
He stated,
“Every expression, be it a proposal, be it a promise, be it a consideration, an agreement enforceable through law, we need scholars such as Shiv to redefine them and ensure that we do not stray away from the original requirement of abiding by the rule of law,”
Additionally, the judge referred to a work by political psychologist Ashis Nandy while reflecting on the intellectual impacts of colonialism.
He asserted,
“Ashis Nandy’s ‘The Intimate Enemy’ very clearly tells us that the reality, even after colonialism is over, (it) is the mindset which we need to overcome and move away from.”
Justice Narasimha also discussed the incorporation of Indian philosophical traditions into legal interpretation. He shared insights from an exercise with scholars from Indian and Jain philosophy, exploring whether Indian logical frameworks could be applied to interpret sections of the Indian Evidence Act.
He recalled,
“At one stage, I had read a little bit of Indian logic and Jain logic and wondered how such an interpretation could be applied to the Indian Evidence Act,”
According to him, interpreting a Western legal text through Indian logical traditions yielded very different perspectives.
He remarked,
“For the first time, we had finished interpreting a Western text through an Indian logical framework. It was phenomenally different,”
The judge further observed that the lines between private law and public law are increasingly blurred in contemporary governance. Contracts related to sectors like spectrum allocation, airport development, and highways often raise significant public law concerns.
He stated,
“These are contracts affecting public law. There needs to be nuance in how we interpret contract law, and there also needs to be nuance in administrative law,”
The author of the newly launched book, Shiv Swaminathan, explained that the book outlines how key concepts of Indian contract law evolved from nineteenth-century English jurisprudence and how Indian courts later interpreted these ideas.
He said,
“The central argument of this book can be summed up in two simple points. The drafters did not need to simply glorify nineteenth-century English law… Second, even though the drafters sought to move away from English law, the Indian courts just kept on applying English law,”
The panel discussion following the book’s launch was moderated by Professor Umakant Varottil. Panelists included Swaminathan, Senior Advocate Gaurav Pachnanda, and contract law scholar Neelima Bhadbhade. They discussed the significance of historical scholarship on contract law for contemporary legal practice and education. Pachnanda expressed that practitioners often encounter uncertainty due to a lack of consistent theoretical foundations in Indian contract jurisprudence.
Noting that historical analysis could aid courts and lawyers in establishing a clearer framework for precedents,he said,
“One of the biggest challenges that I face as a practitioner in commercial law is the lack of consistency in the theoretical basis on which our contract law has evolved,”
Bhadbhade emphasized the importance of doctrinal scholarship in an area often overshadowed by constitutional law. She suggested that the book’s historical approach could inspire scholars, judges, and lawyers to reexamine established interpretations.
Bhadbhade stated,
“Any teacher, any student, any researcher, any lawyer or a judge will definitely want to re-look at the concepts having read what he has written in the book. It makes you think,”
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