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Indian contract act 1872
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Indian contract act 1872


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Indian contract act 1872

Indian contract act 1872

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  • 1. Indian Contract Act, 1872 Essential Elements
  • 2. Valid Contract: Essential Elements
    • Proposal (Offer) & Acceptance
    • Consideration
    • Capacity of parties to Contract
    • Free Consent
    • Should not be a Void agreement
    • In Writing & Registered
    • Creates Legal Relationship
    • Certainty
    • Possibility of Performance
    • Enforceable by Law
  • 3. Agreement (Sec. 2e)
    • Agreement : “Every promise and every set of promises, forming the consideration for each other is an agreement”
    • Proposal when accepted = Promise
    • That is, Proposal or Offer + Acceptance = Agreement
    • What are the kinds of Agreements?
  • 4.
    • Valid Agreement: An agreement enforceable by law.
    • Void Agreement: Not enforceable by law.
    • Enforceable Agreement: A contract enforceable by law.
    • Voidable Agreement: It is valid so long as it is not avoided by the party entitled to do so.
    • Unenforceable Agreement: It is valid but not enforceable due to some technical defect.
    • Illegal Agreement: It is void ab-initio .
  • 5. Contract (Sec. 2h)
    • “ An Agreement Enforceable by Law is a Contract.”
    • Hence, Contract is a combination of agreement and enforceability.
    • What are the kinds of Contract?
    • Voidable Contract: It is when one of the parties has not exercised his free consent.
  • 6.
    • Void Contract: That which ceases to be enforceable by law becomes void.
    • Unenforceable Contract: Valid but incapable of proof, hence not enforceable.
    • Executed Contract: When parties have performed their obligations.
    • Executory Contract: When any party has not performed his share of obligation or promise.
    • Express Contract: When terms of contract are reduced in writing.
  • 7.
    • Implied Contract: Terms of contract inferred from conduct between parties.
    • Quasi Contract: Obligations which are not contracts but fall under the purview of law.
    • Contingent Contract: Where a promise contained in the contract is conditional.
    • Contracts of Record: Contracts made on the records of a court.
    • Specialty Contract: In writing, sealed and delivered by parties. “Contract under Seal”
    • Simple Contract: Not under seal. Made in writing or spoken words.
    • Statutory Contract: All or some terms & conditions are statutory.
  • 8. Proposal (Sec. 2a)
    • “ When one person signifies to another his willingness to do so or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence he is said make a ‘proposal’.”
    • In other words, a person should offer to do something. This offer must be sufficiently communicated to the person for whom he intends to do something with a view to obtaining his assent to it.
    • Maker of the offer = Proposer = Offerer = Promisor
  • 9. Valid Proposal: Essentials
    • Proposer cannot dictate terms.
    • Intended to create a legal relation.
    • Mere statement of intention is not a binding promise.
    • Offer must be made to definite person.
    • Offer terms must be unambiguous.
    • Offer can be expressed or implied.
    • Offer must be communicated even if conditional.
    • Proposer should intend to be bound by it.
  • 10. Some Questions
    • What is a Counter-Offer?
    • It is a rejection of the original offer and making a new offer. New offer is a counter offer.
    • What is Auction Sales?
    • It is an invitation to an offer. Only when a buyer makes a bid for the item that there is an offer.
    • What is a Standing (or Open) Offer?
    • The continuous supply of a certain article at a certain rate over a definite period is called a standing offer. Unless there is an order there is no contract.
    • What is ‘Invitation to an Offer?
    • It is not an offer. It is only an aim to circulate information of readiness to negotiate business with anybody who comes to the person sending it.
  • 11. Acceptance (Sec. 2b)
    • “ 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.”
    • To make the contract binding, there must be absolute and unconditional acceptance of the terms of a proposal.
    • Performance of conditions of a proposal is an acceptance of the proposal.
  • 12. Valid Acceptance: Essentials
    • Must be absolute and unconditional.
    • Must be expressed in usual & reasonable manner.
    • Mental acceptance is not sufficient.
    • Must be communicated to Proposer.
    • Must be by a certain person.
    • Doing it by ignorance of proposal is no acceptance.
    • Must be given within a reasonable time.
    • Must accept the proposal.