When one person signifies to another hiswillingness to do or to abstain from doinganything, with a view to obtaining the assent ofthat other to such act or abstinence, he is said tomake a proposal FOR EXAMPLE A asked B if he wants to buy his car for 5 Lac.A is making a proposal to B
When the person to whom the proposal ismade signifies his assent thereto, the proposalis said to be accepted. A proposal, whenaccepted, becomes a promise.The person making the proposal is called the"promisor” and the person accepting theproposal is called the “promisee"E.g., B agreed to buy car from A
Every promise and every set of promises, formingthe consideration for each other, is an agreement.Consideration:When, at the desire of the promisor the promiseeor any other person has clone or abstainedfrom doing, or does or abstains from doing, orpromises to do or to abstain from doing, something,such Act or abstinence or promise is called aconsideration for the promise.
An agreement enforceable by law is a contractAll agreements are contracts if they are made bythe free consent of parties competent to contract, fora lawful consideration and with a lawful object, andare not hereby expressly declared to be void.
“ESSENTIALS OF A VALID CONTRACT”
1. Proposal & Acceptance.2. Consideration.3. Capacity of parties to contract.4. Free Consent.5. Agreement should not be expressly declared void.
6. Writing & Registration, if so required by law.7. Legal Relationship.8. Certainty.9. Possibility of Performance.10. Enforceable by law.
Proposal - When one person signifies toanother his willingness to do or to abstain fromdoing anything, with a view to obtaining theassent of that other to such act or abstinence,he is said to make a proposal.
1. Beyond expression of willingness, there must be something in the nature of a request.2. Proposer cannot dictate terms.3. An offer must be intended to create & capable of creating legal relations.
When one person to whom the proposal ismade signifies his assent thereto, the proposalis said to be accepted.Proposal when accepted becomes promise.The person making the proposal is called thePromisor and person accepting the proposalbecomes Promisee.
1. Acceptance must be absolute and unqualified.2. It must be expressed in some usual & reasonable manner.3. Mental Acceptance is not sufficient in Law.4. Acceptance must be communicated to the offerer.5. Acceptance must be by a certain person.6. Acceptance must be given within a reasonabletime.7. Acceptance must be given before the offer lapsesor is revoked or is withdrawn.8.Acceptance of proposal is acceptance of all terms.
An agreement becomes a contract if it is entered between the parties who are competent to Contract. Every person is Competent to contract1. Who is of the age of majority according to the law.2. Who is of sound mind.3. Who is not disqualified by any law.
"Free consent" - Consent is said to be freewhen it is not caused by –1) coercion,2) undue influence3) fraud,4) misrepresentation,5) mistake. Consent is said to be so caused when itwould not have been given but for the existenceof such coercion, undue influence, fraud,misrepresentation or mistake.
Kinds of Contract.
Void contract – A contract which ceases to beenforceable by law becomes void when itceases to be enforceable.Executed contract – Where both the partieshave performed their obligations, it is executedcontract.Executory Contract - Where neither of theparties have performed their obligations, i.e.both the parties are yet to perform theirpromises, the contract is executory.
Implied Contract – The terms of a contractare inferred from the conduct or dealingsbetween the parties. When proposal oracceptance of any promise is made otherwisethan in words, the promise is said to be implied.Such implied promise leads to Implied Contract.Quasi Contract – Certain relations resemblethose created by a contract. Certain obligationswhich are not contracts in fact but are so incontemplation of law are Quasi Contracts. It isbased on the principle of equity.
Contingent Contract - It is a contract to do ornot to do something, if some event, collateral tosuch contract, does or does not happen.Voidable Contract – A contract is voidablewhen one of the parties to the contract have notexercised their free consent.Specialty Contract – It is a contract which isin writing, signed, sealed & delivered by theparties.
Discharge of Contract.
Discharge means “ termination “ of a contract. The contract may be discharged in any of following ways –1. By performance.2. By death.3. By refusing tender of performance.4. By impossibility of performance.
5. By agreement or by consent.6. By promisee failing to offer facilities forperformance.7. By operation of law.8. By unauthorized material alteration of acontract.9. Discharge by lapse of time.