lect iii the indian contarct act
TRANSCRIPT
Dr Siddharth Shimpi 1
The Indian Contract Act 1971
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Essentials of Valid Contract
According to Section 10, “All agreements are contracts if they are made by the free consent of the parties competent to contract, for a lawful consideration and with a lawful object and are not hereby expressly declared to be void.”
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Essential Elements of Valid Contract
Proper offer and acceptance Intention to create legal relationship Free consent Capacity of parties Lawful consideration Lawful object Agreement not expressly declared void Certainty of meaning
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Conti… Possibility of performance Legal formalities
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Proper Offer and Acceptance
Two parties Valid offer:a. Intend to create legal relationsb. Terms must be certain and unambiguousc. Must be communicated to the person to whom it
is made Valid Acceptance:a. Absolute and unconditionalb. Prescribed manner
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Intention to Create Legal Relationship
In commercial and business agreements, the usual presumption is that the parties intend to create legal relationship unless otherwise agreed upon
Social or domestic agreements – not intend to create legal relationship
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Free Consent Consent is said to be free when it is not
caused by1. Coercion 2. Undue influence3. Fraud4. Misrepresentation5. Mistake
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Capacity of Parties Person must be major Must be of sound mind Must not be declared disqualified from
contracting by any law to which he is subject
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Lawful Consideration Must be supported by lawful
consideration E.g.: No injury to person or property
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Lawful Object Agreement must be lawful E.g.: No immoral or oppose to public
policy
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Agreement not Expressly Declared Void
1. Agreement in restraint of marriage2. Agreement in restraint of legal
proceedings3. Agreement in restraint of trade and4. Agreement in restraint of wager
have been expressly declared void.
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Certainty of Meaning Must be certain Unambiguous
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Possibility of Performance
Must be such as are capable of performance
Agreement to do an impossible act is void
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Legal Formalities Must comply with the necessary
formalities as to writing, registration, stamping, etc.
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