Essentials of a valid contract


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Essentials of a valid contract

  1. 1. Essentials of a Valid contract
  2. 2. <ul><li>OFFER / PROPOSAL </li></ul><ul><li>INTENTION TO CREATE LEGAL RELATION </li></ul><ul><li>CONSIDERATION </li></ul>
  3. 3. <ul><li>U/S-2(a) PROPOSAL or OFFER :- When one person signifies his willingness to do or to abstain from doing anything, with a view to obtain the assent of that other to such act or abstinence, he is said to make a Proposal. </li></ul>
  4. 4. PROMISE
  5. 5. KINDS OF OFFER <ul><li>1.According to mode of communication </li></ul><ul><li>Express offer : when an offer is put in words. </li></ul><ul><li>Implied offer : inferred from the conduct . </li></ul><ul><li>2.On the basis of offerees: </li></ul><ul><li>Specific offer -to a particular person. </li></ul><ul><li>General offer -to the public at large generally. </li></ul>
  6. 6. <ul><li>3. on the basis of nature </li></ul><ul><li>Cross offer: when two persons without having the knowledge of other’s offer made to each other identical offers. </li></ul><ul><li>Counter offer: Rejecting an original offer and making a new offer. The new offer is counter offer </li></ul><ul><li>Standing offer: a standing offer is an offer which is open for acceptance over a period of time. This offer is also called continuing offer or open offer </li></ul>
  7. 7. Rules governing Offer <ul><li>Clear , definite ,complete and final </li></ul><ul><li>Offer must communicated to the offeree </li></ul><ul><li>Communication – words , oral or implied </li></ul><ul><li>Communication - specific or general </li></ul>
  8. 8. Lapse of offer <ul><li>U/S .6 : offer lapses if :- </li></ul><ul><li>It is not accepted within the specified time / Reasonable time (if not specified ) </li></ul><ul><li>It is not accepted in the mode prescribed / usual and reasonable manner (if not specified) </li></ul><ul><li>Either the offerer or the offeree dies before acceptance . </li></ul><ul><li>The acceptor fails to fulfill a condition precedent to acceptance . </li></ul>
  9. 9. Revocation of offer <ul><li>Before acceptance an offer may be revoked by the offeror </li></ul><ul><li>Revocation must be communicated before acceptance . </li></ul>
  10. 10. Acceptance <ul><li>“ When a person to whom the proposal is made signifies his assent thereto ,the proposal is said to be accepted .” </li></ul>
  11. 11. Rules Governing Acceptance <ul><li>Acceptance may be express :- words spoken or written or implied from the conduct of the parties . </li></ul><ul><li>If particular methord of acceptance is prescribe , the offer must be accepted in the prescribed manner </li></ul><ul><li>Acceptance must be given in a reasonable time and before the offer lapses or is revoked. </li></ul><ul><li>Mere silence on the part of the offeree does not amount to acceptance . </li></ul>
  12. 12. 2 .Intention to Create Legal Relation <ul><li>There must an intention among the parties that the agreement should be attached by the legal consequences and legal obligations </li></ul><ul><li>If there is no intention between the parties , there is no contract . </li></ul>
  13. 13. 3.Consideration <ul><li>Definition </li></ul><ul><li>Some right , interest , profit or benefit accruing to one party ,or promise thereof is the price for which the promise of the other is bought </li></ul><ul><li>Forbearance = to do or not to do </li></ul>
  14. 14. Kinds of Consideration <ul><li>Executory or future : Promise to be performed in the future , E.g. : An engagement to marry someone </li></ul><ul><li>Executed or Present : It is an act or constituting consideration is wholly or completely performed , Eg: A pays today Rs.100 toa shopkeeper for goods which are promised to be supplied the next day </li></ul><ul><li>3.Past consideration : Past act or forbearance, an act constitute consid’n which took place and is complete before the promise is made </li></ul>
  15. 15. <ul><li>Love and affection </li></ul><ul><li>Indemnify , or giving Damage </li></ul><ul><li>Payoff debt </li></ul><ul><li>Gift </li></ul>
  16. 16. <ul><li>U/S-2(C ) PROMISOR AND PROMISEE :-The person making the proposal is called the promisor. And the person accepting the proposal is called the promisee </li></ul><ul><li>or (offeror and oferee) </li></ul><ul><li>U/S-2 (e):AGREEMENT: - Every promise and every set of promises ,forming the consideration for each other, is an agreement . </li></ul>