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The Indian Contract Act, 1872

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Sachin Mishra
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42 views27 pages

The Indian Contract Act, 1872

Uploaded by

Sachin Mishra
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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THE INDIAN CONTRACT ACT, 1872

CONTRACT -

According to sec.2(h), a contract is defined as an agreement enforceable before the law.

AGREEMENT - According to sec.2(e), every


promise or set of promises forming consideration for each other.

PROMISE -

According to sec.2(b), when a person made a proposal to another to whom proposal is made, if proposal is assented there to.

OFFER - According to Sec.2(a), when a


person made a proposal, when he signifies to another his willingness to do or to abstain from doing something.

AGREEMENT = OFFER + ACCEPTANCE


CONSENSUS - AD IDEMAccording to Sec.13, meeting of minds or identity of minds or receiving the same thing in same sense at same time.

ESSENTIAL ELEMENTS OF A VALID CONTRACT (Sec.10)


1.Offer & acceptance. 2.Intention to create legal relationship. 3.Consensus - ad - idem. 4.Consideration. 5.Capacity to contract. 6.Free consent. 7.Legality of object. 8.Possibility of performance. 9.Writing & registration.

TYPES OF CONTRACTS
VALID CONTRACTS
Absolute contract Contingent contract(Sec. 31-36) Express contract Implied/Quasi contract(Sec.68- 72)

Valid contract - If all the condition are


fulfilled it is called as a valid contract.

Contingent contract - In a contract to do or


not to do something, if an event is collateral, does or doesn't happen.

Express contract - When contracts are


either in writing or in oral.

Implied contract - When contracts are


neither in writing nor in oral.

Absolute contract - A contract which is


not dependent on fulfillment of any condition.

INVALID CONTRACTS
Void contract Is void(Void - ab - initio) Becomes void Voidable contract Illegal contract Unenforceable contract

Invalid contract
In a contact if any one condition is not fulfilled.

Is void (Void-ab-initio)
An agreement which is not valid from the beginning. Becomes void An agreement which is valid in the beginning but due to some supervening impossibility the contract becomes void.

Voidable contract A contract which is valid unless until avoided by either the party. Illegal contract An agreement forbidden by law. Unenforceable contract It is valid but due to some technical defect the contract becomes void. In case defects are removed the contract is enforceable.(lack of registration, lack of signature etc.,)

OTHER

TYPES OF CONTRACTS

Executed contract Executory contract Unilateral contract Bilateral contract

Executed contract - In a contract where both the parties have performed their obligation, there is remaining nothing to perform.
Executory contract - In a contract where both the parties are yet to perform their obligation. Unilateral contract - In a contract one party has performed his obligation and other person is yet to perform his obligation. Bilateral contract - In a contract where both the parties have performed their obligation. Bilateral & Executed are same and inter - changeable.

OFFER
According to Sec.2(a), when a person made a proposal, when he signifies to another his willingness to do or to abstain from doing something.

TYPES OF OFFER
Express offer Implied offer Specific offer General offer Cross offer Counter offer Standing offer

Express offer - When offer is given to


another person either in writing or in oral.

Implied offer - When offer is given to


another person neither in writing nor in oral.

Specific offer - When offer is given to a


specific person.

General offer - When offer is given to entire


world at a large.

Cross offer - When both the persons are


making identical offers to each other in ignorance of others offer.

Counter offer - When both the persons are


making offers to each other which are not identical in ignorance of others offer.

Standing offer - An offer which remains


continuously enforceable for a certain period of time.

LEGAL RULES FOR OFFER


Offer must be given with an intention to create a legal relationship Offer must be definite There is a clear cut difference between offer, invitation to offer, invitation to sale.

Offer must be communicated.


Mere statement of price of price is not an offer

ACCEPTANCE

ACCEPTANCE
According to sec.2(b), when a person made a proposal to another to whom proposal is made, if proposal is assented there to, it is called acceptance.

LEGAL RULES FOR ACCEPTANCE

Acceptance must be given as per the mode prescribed by the offerer. Acceptance must be given before the lapse of time or within reasonable time. Acceptance must be unconditional. Acceptance may be given by any person in case of general offer.

Acceptance may be given by any specific


person in case of specific offer. Acceptance must be communicated. Mental acceptance is no acceptance or acceptance must not be derived from silence. Acceptance must not be precedent to offer.

CONSIDERATION

CONSIDERATION
According to sec 2(d) consideration is defined as when at the desire of the promisor , or promisee or any other person has done or abstained from doing or does or abstains from doing ,or promises to do or to abstain from doing , something , such an act or absinence or promise is called a consideration for the promise .

When a party to an agreement promises to do something he must get something in return .This something is defined as consideration.

LEGAL RULES AS TO CONSIDERATION


1)It must move at the desire of the promisor. 2)It may move by the promisee . 3)It must be past ,present or future . 4)It need not be adequate . 5)It must be real . 6)It must not be illegal , immoral or opposed to public policy .

STRANGER TO CONTRACT
It is general rule of contract that only parties to contract can sue & be sued on that contract . This rule is known as Doctrine of privity i.e relationship between the parties to contract . Exceptions 1)A trust or a charge . 2)Marriage settlement , partition or other family arrangements . 3)Assignment of contract . 4)Contract with agent . 5)Covenants running with land.

Contract without consideration is void Exceptions


Love & affection . Compensation for voluntary service . Promise to pay a time barred debt . Completed gift . Agency sec (185) . Charity . Contract of bailment sec(148 ) .

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