THE INDIAN
CONTRACT ACT
1872
BY:
PROF NEHA SAJNANI
Law is the rule of conduct imposed by the State
on its citizens which can be enforced either
 By the State against indivi...
CONTRACT

DEFINITION &
FORMATION
•

S.2 (h) states “A contract is an
agreement enforceable by law.”
A
contract is formed if:
– There is an agreement and,
–...
“S.2(e) – An agreement is every promise & every
set
of
promises
forming
the
consideration for each other.
AGREEMENT = PROM...


RULES OF OFFER:•
•
•
•
•
•
•
•

Must be capable of creating legal relations
Must be certain, definite & not vague
May b...


RULES OF ACCEPTANCE:•
•
•
•
•
•

Must be absolute & unqualified
Must be communicated to offeror
Must be in the mode pre...




Enforceability – S.10
“ All agreements are contracts if
they are made by free consent of
parties competent to contra...
CONDITIONS:
1)
2)
3)
4)
5)
6)
7)

There should be lawful offer and lawful
acceptance.
There must be lawful consideration.
...
DEFINITION – S.2(d)
“When at the desire of the promisor,
the promisee or any other person has
done or abstained from doing...
RULES OF
CONSIDERATION:
1)
2)
3)
4)
5)
6)
7)
8)

Move at the desire of the promisor.
Move from promisee or any other
perso...
EXCEPTIONS TO THE RULE OF
CONSIDERATION:
1)
2)
3)
4)
5)

Natural love & affection.
Compensation for past voluntary service...
SUIT BY THIRD PARTY ON
AN AGREEMENT:
1)
2)
3)
4)
5)
6)

Trust
Family Settlement
Certain Marriage Contracts
Assignment
Esto...
POSITION OF MINOR’S AGREEMENT:An agreement entered into by a minor is altogether
void
Minor can be a beneficiary
Minor ca...
S.13 – Consensus ad idem
S.14 – Consent is said to
be free when it is not
caused by:
• S.15 Coercion
• S.16 Undue Influenc...
Void agreements are those entered
into:

•
•
•
•
•
•
•
•

Due to mistake of fact
By minor
Without lawful consideration
In ...


DEFINITION 










Discharge of contract means termination of the
contractual relationship between the parti...
Breach of contract means
breaking of the obligation which
the contract imposes. These are of
two types:-

 Actual Breach ...


EXPLANATION 

When one of the parties fails to perform his part of
the contract, we say that he commits a breach.



...
THE
END !!!
The contract act
The contract act
The contract act
The contract act
The contract act
The contract act
The contract act
The contract act
The contract act
The contract act
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The contract act

  1. 1. THE INDIAN CONTRACT ACT 1872
  2. 2. BY: PROF NEHA SAJNANI
  3. 3. Law is the rule of conduct imposed by the State on its citizens which can be enforced either  By the State against individuals or,  By individuals against individuals. Law of contracts is the law of merchants and law for merchants. It consists of set of basic principles of business transaction between parties in a civilized society. . When there is a dispute in relation to a business transaction, a commercial suit is filed. This is solved and decided by referring to principles provided in a codified form in the law of contract. .
  4. 4. CONTRACT DEFINITION & FORMATION
  5. 5. • S.2 (h) states “A contract is an agreement enforceable by law.” A contract is formed if: – There is an agreement and, – The agreement is enforceable by law. • Contract = Agreement + Enforceability .
  6. 6. “S.2(e) – An agreement is every promise & every set of promises forming the consideration for each other. AGREEMENT = PROMISE + CONSIDERATION “S.2(b) – Proposal when accepted becomes a promise PROMISE = OFFER + ACCEPTANCE
  7. 7.  RULES OF OFFER:• • • • • • • • Must be capable of creating legal relations Must be certain, definite & not vague May be express or implied May be specific or general Must be communicated Must be with a view to obtaining the consent of the offeree May be conditional Should not contain a term, the non-compliance of which would amount to acceptance
  8. 8.  RULES OF ACCEPTANCE:• • • • • • Must be absolute & unqualified Must be communicated to offeror Must be in the mode prescribed Must be given before the offer lapses or within a reasonable time Mere silence is not acceptance Acceptance by conduct
  9. 9.   Enforceability – S.10 “ All agreements are contracts if they are made by free consent of parties competent to contract for a lawful consideration and with a lawful object and are not hereby expressly declared to be void. ”
  10. 10. CONDITIONS: 1) 2) 3) 4) 5) 6) 7) There should be lawful offer and lawful acceptance. There must be lawful consideration. The parties should be competent to contract. There must be free consent of the parties to the contract. Their object should be lawful. Agreement should not be expressly declared to be void by any other law in force. To create a legal relationship.
  11. 11. DEFINITION – S.2(d) “When at the desire of the promisor, the 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, such an act or abstinence or promise is called consideration for the promise .”
  12. 12. RULES OF CONSIDERATION: 1) 2) 3) 4) 5) 6) 7) 8) Move at the desire of the promisor. Move from promisee or any other person. Executed & executory Abstinence is valid consideration. Adequacy of consideration. May be past, present or future Performance of what one is legally bound to perform Must not be unlawful, immoral or
  13. 13. EXCEPTIONS TO THE RULE OF CONSIDERATION: 1) 2) 3) 4) 5) Natural love & affection. Compensation for past voluntary services. Time-barred Debt Agency Promise to charities
  14. 14. SUIT BY THIRD PARTY ON AN AGREEMENT: 1) 2) 3) 4) 5) 6) Trust Family Settlement Certain Marriage Contracts Assignment Estoppel by Acknowledgment Covenant by Running with Land
  15. 15. POSITION OF MINOR’S AGREEMENT:An agreement entered into by a minor is altogether void Minor can be a beneficiary Minor can always plead minority Ratification on attaining majority is not allowed Contract by guardian – how far enforceable Liability for necessaries
  16. 16. S.13 – Consensus ad idem S.14 – Consent is said to be free when it is not caused by: • S.15 Coercion • S.16 Undue Influence • S.17 Fraud • S.18 Misrepresentation • S.20 Mistake
  17. 17. Void agreements are those entered into: • • • • • • • • Due to mistake of fact By minor Without lawful consideration In restraint of trade In restraint of judicial proceedings Based on uncertainty By way of wager Impossibility of performance
  18. 18.  DEFINITION         Discharge of contract means termination of the contractual relationship between the parties. The rights and obligations created by the contract come to an end, the parties to the contract are said to be discharged. A contract is said to be discharged – By performance. By impossibility of performance. By agreement or mutual consent. By lapse of time. By operation of Law. By breach of contract.
  19. 19. Breach of contract means breaking of the obligation which the contract imposes. These are of two types:-  Actual Breach of Contract  Anticipatory Breach of Contract
  20. 20.  EXPLANATION  When one of the parties fails to perform his part of the contract, we say that he commits a breach.  When a contract is broken i.e. breached by one party, the other party i.e. the aggrieved (injured) party has one or more of the following remedies:Rescission of the contract. Suit for damages. Suit upon ‘Quantum Meruit’ Suit for specific performance. Injunction.     
  21. 21. THE END !!!

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