Onerous gifts

Section 127 of the Transfer of Property Act, 1882 deals with onerous gifts. Where a gift is in the form of a single transfer to the same person of several things of which one is, and the others are not, burdened by an obligation, the done can take nothing by the gift unless he accepts it fully. The Act came into force on 01 Jul 1882.

Where a gift is in the form of a single transfer to the same person of several things of which one is, and the others are not, burdened by an obligation, the done can take nothing by the gift unless he accepts it fully.

Where a gift is in the form of two or more separate and independent transfers to the same person of several things, the done is at liberty to accept one of them and refuse the others, although the former may be beneficial and the latter onerous.

Onerous gift to disqualified person.-- A done not competent to contract and accepting property burdened by any obligation is not bound by his acceptance. But if, after becoming competent to contract and being aware of the obligation, he retains the property given, he becomes so bound.

Illustrations

(a) A has shares in X, a prosperous joint stock company, and also shares in Y, a joint stock company, in difficulties. Heavy calls are expected in respect of the shares in Y. A given B all his shares in joint stock companies. B refuses to accept the shares in Y. He cannot take the shares in X.

(b) A, having a lease for a term of years of a house at a rent which he and his representatives are bound to pay during the term, and which is more than the house can be let for, given to B the lease, and also, as a separate and independent transaction, a sum of money. B refuses to accept the lease. He does not by his refusal forfeit the money.

Section 127, The Transfer of Property Act, 1882 (Act 4 of 1882).