law of contracts-1[1]_converted

7/31/2019 Law of Contracts-1[1]_converted

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Law of ContractsIndian Contract Act 1872


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Indian Contract Act 1872

The bedrock of Indian Business law

Relevance even now Based on British Contract Act

Developed further due to important cases

Basis of other important laws


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Applicability

Section 1 : Applies to the whole of Indiaexcept the state of Jammu & Kashmir


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Meaning of Contract

An agreement enforceable by Law


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Agreement

Every promise and every set of promises,

forming the consideration for each other.


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Proposal & Promise

When one person signifies to another hiswillingness to do or to abstain from doinganything, with a view to obtaining theassent of the other to such act orabstinence,he is said to make a proposal.

When the person to whom the proposal ismade signifies his assent thereto, theproposal is said to be accepted. Aproposal, when accepted, becomes apromise.


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Promisor & Promisee

The person making the proposal is calledthe Promisor

and

The person accepting the proposal is called

the promisee


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Consideration

When at the desire of the promisor, thepromisee or any other person has done orabstained from doing, or does or abstains

from doing, or promises to do or toabstain from doing, something, such actor abstinence or promise is called a

consideration for the promise


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What agreements are Contracts

Fee consent of parties

Parties Competent to Contract

lawful consideration lawful object

Not expressly declared to be void

offer and acceptance


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Parties Competent to a Contract

Major

Sound mind

Not disqualified by law

Case : Dharmodas ghose v/s Mohori Bibi


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Acceptance

Absolute and

Unqualified

Expressed in some usual and reasonablemanner

Performance of conditions of a proposal or

Acceptance of consideration for areciprocal promise offered with a proposal


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Free Consent

When not caused by :

coercion

undue influence fraud

misrepresentation

mistake


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Lawful Consideration & Object

Unless :

Forbidden by law

If permitted defeat the provisions of law

Fraudulent

Involves or implies injury to the person orproperty of another

Court regards it as immoral

Opposed to public policy.


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How Revocation is made?

By notice

Lapse of specified time or withinreasonable time

By not fulfilling the conditions precedentto acceptance.

By the death or insanity of proposer


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Communication is complete

For Proposal / Acceptance

with regards to proposer

with regards to acceptorRevocation

with regards to proposer

with regards to acceptor in practice


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Void Agreement

Considerations and objects are unlawful

Without consideration

In restraint of marriage In restraint of trade

In restraint of legal proceedings

Uncertain Wager


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Agreements without consideration

are void except :

When made out of natural love andaffection

Promise to compensate voluntary servicesin the past or compliance of law

Promise to pay time barred debt

Gift actually made Creating an agency


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When is a Contract is Voidable?

When consent obtained by coercion fraudor misrepresentation

Undue influence


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Contingent Contract

contract to do or not to do some thing, ifsome event, collateral to such contractdoes not happen.


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Quasi Contract Claims for necessaries supplied to person

incapable of contracting or on his account. Reimbursement of a payment, for paying

money due by another, in payment of

which he is interested. Obligation of person enjoying benefit of

non-gratuitous act.

Responsibility of finder of goods. Liability of person to where money is paid

or thing delivered by mistake or undercoercion.


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Special Contracts

Governed by Indian Contract Act 1872 Indemnity & Guarantee

Bailment ( includes Pledge )

Agency


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Special Contracts Contd.

Sale of Goods

Sale of Goods Act 1930 Partnership - Indian Partnership Act 1932

law of contracts-1[1]_converted

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