Corporate Law

Law of Contract
Presented by Group 1
Dawood Sakarwala – 100
Bhavesh Singhvi – 110
Siddhant Shah – 95
Nivedita Bekal – 86
Lisa Pereira – 29
Shritika Jaiswal – 13
Manish Tiwari - 43

Agreements & Contracts
The Indian Contract Act 1872
The Indian Contract Act was passed and implemented to control various
kinds of commercial and business activities.
It deals with general principals of the law of contract and special
contract.

Proposal Acceptance Consideration
Agreement
All Contracts are Agreements. But all Agreements are NOT Contracts
Agreement = Offer + Acceptance
Contract = Agreement + Enforceable by Law

Essential Elements of aValidContract
Offer and Acceptance
Intention to create legal
relationship
Law consideration
Capacity of parties
Free consent
Lawful object
Legal formalities
Certainty of meaning
Possibility of performance
Not to be declaredVoid or Illegal

Offer or Proposal
When one person signifies to another his willingness to do or to
abstain from doing anything, with a view to obtaining the
assent of that other to such act or abstinence he is said to make
a Proposal
Counter offer is the rejection of the Original Offer. It is a New Offer.

Acceptance
When the person to whom a proposal is made signifies his assent
thereto, the proposal is said to be accepted. A Proposal when
accepted becomes a Promise.

Essentials ofValidAcceptance
 Acceptance Must be absolute and unqualified
 Acceptance must be expressed in some usual and reasonable manner
 Mental acceptance is not sufficient in law
 Acceptance must be communicated to the offerer
 Acceptance of the proposal
Acceptance

Acceptance of the proposal need not always be expressed in words
Acceptance must be by a certain person
If the act is done in ignorance of the proposal, it is no acceptance of the
proposal
Acceptance must be given within a reasonable time
Acceptance must be given before the offer lapses or is revoked or is
withdrawn
Essentials of Valid Acceptance
Acceptance

Consideration
When at the desire of the promisor, the promise has done, or abstained
from doing or does or abstains from doing or promises to do or to
abstain from doing something, such act or abstinence or promise is
called Consideration for the Promise

Essentials ofValidConsideration
 Consideration must move at the desire of the promisor
 Consideration may move from the promise or any other person –
Stranger to the contract
 Consideration may be Past, Present or Future
 Consideration need not be adequate
 Consideration must be real and not illusory
Consideration

Capacity to Contract
 Who is of the age of majority according to the law to which he
is subject
 Who is of sound mind
 Who is not disqualified from
contracting by any law to
which he is subject

Rules Related to Minors
 Minor contract is absolutely void (Mohori bibee V. Dhurmodas
Ghose)
 Ratification of a minor’s contract
 False representation by the minor - Estoppel (Leslie Ltd V. Sheill)
Exceptions
Promisee or Transferee
Agency
PartnershipNecessaries
Gift

Contracts by Persons of Unsound Mind
 When person is usually of unsound mind but occasionally of
sound mind, he can enter into the contract when he is of sound
mind.
 When person is usually of sound mind but occasionally of
unsound mind, he cannot enter into the contract when he is of
unsound mind.

Free Consent
Two or more person are said to consent when they agree upon
the same thing in the same sense
Consent is Free, when there is:
No Coercion
No Undue influence
No Fraud
No Misrepresentation
No Mistake

Void Agreements
A Void Agreement is not enforceable by Law. It has no Legal
existence or sanctity.

Void Agreements
Types of Void Agreements
 Agreements made by incompetent persons
 Agreements made under mutual mistake as to a matter of fact
essential
to the proposal
 Agreement, the consideration or object of which is unlawful / unlawful
in
part
 Agreement made without consideration
 Agreement made under a mistake as to a law not

Void Agreements
 Agreements in restraint of Marriage
 Agreements in restraint of Trade
 Agreement in restraint of Legal Proceedings
 Agreements, the meaning of which is Uncertain
 Agreements by way of Wager

Void Agreements
 Agreements contingent on an Impossible event
 Agreements to do an Impossible Act
 Agreements to do an Act which subsequently becomes impossible
 Agreements contingent on an uncertain future event, if the event
becomes impossible
When the Agreement is void, the party who has received any benefits
must restore or compensate the other party for the value or benefit
received

Communication
 The communication of a proposal is complete when it comes to the
knowledge of the person to whom it is made.
 The communication of an acceptance is complete, as against the
proposer, when it is put in a course of transmission to him so at to be
out of the power of the acceptor; as against the acceptor, when it
comes to the knowledge of the proposer.
 The communication of a revocation is complete, as against the
person who makes it, when it is put into a course of transmission to
the person to whom it is made, so as to be out of the power of the
person who makes it; as against the person to whom
it is made, when it comes to his knowledge.

Contingent Contracts
 The word contingent ordinarily means ‘subject to chance’
 A contingent contract is a contract to do or not to do something, if
some event, collateral to such contract does or does not happen.
Example: A contracts to pay to B
Rs.1,00,000, if B's house is burnt.

Quasi Contracts
Obligations between parties that is Not Contractual but one which is
treated as Contractual by Law

Quasi Contracts
 Claim for supply of necessaries (sec.68)
 Reimbursement of money paid (sec. 69)
 Obligation of person to pay for enjoying benefit of non-gratuitous
act (sec.70)
 Responsibility of finder of goods (sec.71)
 Liability of a person to whom money is paid or thing delivered by
mistake or under coercion (sec.72)
Types of Quasi Contracts

Discharge of Contract
Discharge means “TERMINATION” of a contract. By discharge the
rights & obligations of the parties come to an end.

Discharge of Contract
Ways of Discharging Contracts
 By Performance
 By Breach
 By Frustration
 By Agreement
 By Accord & Satisfaction
 By Lapse of Time
 By Death
 By Unauthorized Material Alteration
 By Operation of Law

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