The document summarizes key aspects of contract law in India as governed by the Indian Contract Act of 1872. It defines a contract as an agreement that is enforceable by law. The essential elements of a valid contract are offer and acceptance, intention to create a legal relationship, competency of parties, lawful consideration, free consent, lawful object, and agreement not expressly declared void. Special types of contracts are also discussed along with important definitions, exceptions, remedies for breach, and other concepts fundamental to contract law in India.
2. CONTRACT
• Important branch
• Foundation of civilized world
• Influences everybody in trade, commerce and
industry
• Governed by Indian Contract Act, 1872
• Extends to whole of India
3. Indian Contract
Act
General
principles (sec 1-
75)
Special kinds of
contract(sec.124-
238)
Sec 76-123 repealed by Sale of Goods Act,1930
Sec 239-266 repealed and replaced by Indian Partnership
Act,1932
4. Definition of Contract
• Sec 2(h) – “Contract is an agreement enforceable by
law”
• Domestic/ social nature may not create contractual
obligation
AGREEMENT ENFORCEABLITY CONTRACT
5. IMPORTANT TERMS
Sec 2(a)When one person signifies to another his willingness to do or to abstain from
doing anything, with a view to obtaining the assent of that other to such act or abstinence,
he is said to make a proposal;
Sec 2(b) When the person to whom the proposal is made signifies his assent thereto, the
proposal is said to be accepted. A proposal, when accepted, becomes a promise;
Sec 2(c) The person making the proposal is called the “promisor”, and the person
accepting the proposal is called the “promisee”;
Sec 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, something, such act or abstinence or promise is called a consideration for
the promise;
Sec 2(e) Every promise and every set of promises, forming the consideration for each
other, is an agreement;
7. (g) An agreement not enforceable by law is said to be void;
(h) An agreement enforceable by law is a contract;
(i) An agreement which is enforceable by law at the option of
one or more of the parties thereto, but not at the option of the
other or others, is a voidable contract;
9. SEC.10 -ESSENTIAL ELEMENTS OF
CONTRACT
Offer and Acceptance
Intention to create a legal relationship
Parties must be competent
Lawful consideration
Free consent
Object of contract -lawful
Agreement must not be expressly declared to be void
10. 1. OFFER AND ACCEPTANCE
*Sec. 2(a)- offer/proposal
+ expression of willingness to do or no to do something to
obtain assent of other
+ starting point
+ offer and invitation to offer
+ types of offer- Specific offer and General offer
+ Communication of offer
+ Express/ Implied offer
• Sec 2(b) – Acceptance
+ can be revoked before it is accepted
+ communication of acceptance
11. 2. INTENTION TO CREATE LEGAL
RELATIONSHIP
• Intention to create legal relationship
• Mere trifles
12. 3.COMPETENCY OF PARTIES
• Age of majority
• Not disqualified by law
NOT COMPETENT
1. minor
2. unsound person
3. Disqualified by law
• Void ab initio
13. 4. SECTION 2(d)- CONSIDERATION
*Agreement without consideration is void
• Consideration can be past, present or future.
• Object should be lawful
Sec 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, something, such act or
abstinence or promise is called a consideration for the promise;
14. PRIVITY OF CONTRACT
*A stranger to a contract cannot
sue.
• Indian position
• Exceptions
17. 6. LAWFUL OBJECT AS AN ESSENTIAL
ELEMENT
7. AGREEMENTS SPECIFICALLY
DECLARED TO BE VOID.
-agreement in restraint of marriage
- Agreement in restraint of trade
- Agreement in restraint of legal proceedings etc.
18. QUASI CONTRACT
-Of certain relations resembling those created by
contract.
-nemo debt locuplatari ex lines justice
- Principles of natural justice and equity.
