Contract Act, General Provisions, All Contracts are Agreement but all agreements are not contract.

1. Contract Act,1872
By
Dr. Neepa Vyas, Assistant Professor
GES Class II, Government Law College.

2. INDIAN CONTRACT ACT, 1872
 Section 1 to 75 General Provisions
 Section 76 to 123 Sale of Goods  1930
 Section 124 to 147 Indemnity- Guarantee
 Section 148 to 181 Bailment & Pledge
 Section 182 to 238 Agency
 Section 239 to 266 Partnership  1932
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3. CONTRACT ACT, 1872
Topics covered : (Secs. 1 to 50)
 Proposal, Acceptance, Consideration
 Valid Contracts
 Consideration
 Competency of Parties to contract
 Consent
 Agreements in restraint of Trade
 Performance of Contract
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4. Section 2 h:
“An agreement enforceable by law is a CONTRACT.”
WHAT IS CONTRACT?
Contract
Agreement Enforceable
by law

5. AN AGREEMENT IS THE ACCEPTANCE OF THE PROPOSAL.
Proposal
Offer Acceptance
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6. LEGAL REQUIREMENTS OF AN OFFER
 Either express or implied
 Consensus ad idem (Meeting of Minds in full and final
agreement)
 Offer must be definite , certain and unambiguous.
 It must be communicated (Lalman v/s Gauri Dutt)
 It should not contain a term of non compliance
 A statement of price is not an offer..
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7. LEGAL REQUIREMENTS OF AN ACCEPTANCE
 Offer must be accepted either particularly or generally.
Carlil v/s Carbolic smoke ball co.
 It must be absolute and communicated.
 Within a reasonable time and according to prescribed mode.
 It cannot precede an offer
 Acceptance cannot be implied from silence..
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8. Pre Service Training Programme : State Tax
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Offer Acceptance
Consensus
ad idem

9. WHAT IS ENFORCEABLE BY LAW
1. It should be for lawful consideration
2. It should be between competent parties
3. Parties must have expressed free consent
4. To complete lawful purpose
5. The agreement must not opposed to public policy.
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10. So
All contracts are agreement
but
all agreements are not contract.
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11. CLASSIFICATION OF AGREEMENTS
 Void Agreements : not enforceable by law are void
 Illegal Agreements : with unlawful purpose
All illegal agreements are void
But
all void agreements are not illegal.
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12. ESSENTIALS OF VALID CONTRACT (SEC.10)
1. There must be an offer and acceptance
2. There must be an intention to create legal relationship
3. the agreement must be supported by lawful consideration.
4. It must be commenced between competent parties.
5. Free consent of the parties to the agreement.
6. Lawful object
7. It must not have been declared void by law in force in the
country.
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13. CONSIDERATION SEC. 2d
 Price for acceptance
 Ex nudo pacto non ortitur action (law will not enforce a
promise given for nothing.)
 An agreement without consideration is nudum pactum
(nude contract) and is void.
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14. ESSENTIALS OF CONSIDERATION
1. It must move at the desire of the promisor.
2. It may move from the promisee or any other
person.
3. It may be an act, abstinence or a return
promise.
4. It may be past, present or future.
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15. ESSENTIALS OF CONSIDERATION
6 It must be real and not illusory.
7 It must not be illegal, immoral or opposed to
public policy..
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16. ANSWER THIS…
Hitesh was badly in need of money offered to sell his
piano worth Rs. 5000 to Chirag for Rs. 4000. Chirag
refused to buy. Hitesh gradually lowered his price until
Rs. 1000 was reached, which Chirag accepted. Before
the piano was delivered, Hitesh received an offer of a
larger sum from Tushar, and he refused to carry out the
contract with Chirag, claiming that the consideration
was inadequate.
Is Hitesh liable to pay damages to Chirag for failure to
carry out his part of the contract?
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17. YES
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18. CONTRACT WITHOUT CONSIDERATION ARE VOID- EXCEPTIONS -
SECTION 25
 Love and affection
 Compensation for voluntary services
 Promise to pay a time – barred debt
 Completed gift
 No consideration is necessary to create an agency...
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19. CAPACITY TO CONTRACT – SEC. 11
The following are incompetent to contract -
1. Minor
2. Person of unsound mind
3. Person disqualified by any law to which they are
subject.
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20. ANY GUESS ???
 An agreement with or by a minor is
a) Void
b) Voidable at the option of the minor
c) Voidable at the option of the other party
d) Valid
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21. YOU GUESSED IT RIGHT…
A) VOID
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22. ONE MORE…
The case of Mohiri Bibi v/s Dharomdas Ghosh
deals with
a) Communication of acceptance
b) Communication of offer
c) Fraud
d) A minor’s agreement
e) A lunatic’s agreement
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23. AND THE RIGHT CHOICE IS
D) A minor’s agreement
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24. CONSENT - SECS. 10,13 TO 18
 Meaning of CONSENT and FREE
CONSENT..
“Two or more persons are sais to consent
when they agree upon the same thing in
the same sense.” (13)
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25.  CONSENT IS FREE IF NOT CAUSED BY ..
Coercion
Undue influence (moral coercion)
Fraud
Misrepresentation…..
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