.Introduction .Pre -Requisites to form a contract .What contract means ? .Who are competent to contract .Free consent .Classification of contracts .Conclusion

1. LAW OF CONTRACT
Prof.V.R.Hiremath

2. Contents
 Introduction
 Pre -Requisites to form a contract
 What contract means ?
 Who are competent to contract
 Free consent
 Classification of contracts
 Conculsion

3. Introduction
 We enter into the contract in our daily walks of our
life.
Ex: Taking a seat in bus amounts to entering into a
contract.
 We even do not realize that we are making a contract.
 The people engaged in trade,commerce and
industry,they will carry on their business by entering
into the contracts.

4. REQUISITES TO FORM A
CONTRACT
 Offer /Proposal-section 2(a)
“when one person signifies to another his
willingness to do or abstain from doing
anything ,with a view to obtaining the assent of
the other to such act or abstinence he is said to
make a proposal”

5. Essentials of a valid offer
 An offer must be one to give rise to legal
consequences
 The terms of offer must be definite or capable of
being made definite
 An offer must be distinguished from an invitation
to offer.
 Every offer must be communicated to the offeree.

6. Offer and invitation to offer
Types of offer
 General offer
Carlill v/s carbolic smoke ball co.
 Specific offer
 Cross offer
 Counter offer

7. Acceptance
 section-2(b) Acceptance means
 “when the person to whom the proposal is made
signifies his assent thereto, the proposal is said
to be a accepted”

8. Essentials of a valid Acceptance
 Acceptance must be absolute and unqualified.
 Acceptance must be communicated to the
offeror.
 Acceptance must be according to the mode
prescribed.

9. Consideration
 Section-2 (d) consideration means
 “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 promises to abstain
from doing something,such act or abstinence
or promise is called a conisderation for the
promise.”

10. Rules as to consideration
 Consideration must move at the desire of the promisor
 Consideration may move from the promisee or any
other person
 Consideration must be real and competent
 “No consideration no contract”

11. Revocation of proposal and
Acceptance
Section 5 provides that a proposal may be revoked at any time
before the communication of its acceptance is complete as
against the proposer, but not afterwards.
Ex: A proposes, by a letter sent by post , to sell his house to
B.B accepts the proposal by a letter sent by post.
A may revoke his proposal at any time before or at the moment
when B posts his letter of acceptance, but not afterwards.
B may revoke his acceptance at any time before or at the
moment when the letter communicating it reaches A, but not
afterwards

12. What contract means?
 Every promise and every set of promises, forming the
consideration for each other,is an agreement
 Section-2(h)Contract as an agreement enforceable by
law
 Section-10 “All agreements are contracts if they are
made by free consent of parties competent to contract,
for a law full consideration and with lawful object, and
are not hereby expressly declared to be void”
 “All contracts are agreements but all agreements are
not contracts”

13.  According to salmond
“A contract is an agreement creating and defining
obligations between the parties”
 According to Sir Fredrick Pollock
“Every agreement and promise enforceable by law
is contract”
Definition of contract

14. Contract=agreement + enforceability
by law

15. In simple words
 A contract is an exchange,
 Between two are or more persons,
 A promise made by a person,
 In response to a promise made by the other
person,
 Giving birth to an obligation to do, and
 Refrain from doing a particular,
 Recognized and enforceable act.

16. Who are competent to contract
 Who as attain the age of majority
 Who is of sound mind,
 And is not disqualified from contracting by
any law to which he is subject.
(Persons who are incompetent to contract)
 Minor

17. Essential elements of a valid
contract
 Agreement
 Intention to create legal relationship
 Free and genuine consent
 Parties competent to contract
 Lawful consideration
 Lawful object
 Agreements not declared void or illegal
 Certainty of meaning
 Possibility of performance
 Necessary legal Formalities.

18. Free consent (sec-14)
 Sec-15 Coercion
 Sec-16 Undue influence
 Sec-17 Fraud
 Sec-18 Misrepresentation
 Sec-20 Mistake

19. Classification of contracts
 Valid contract
 Voidable contract
 Void agreement
 Illegal agreement

20.  Voidable contract
Sec-2(i) “ Voidable contract is an agreement which
is enforceable by law at the option of one or more
parties but not at the option of the others is voidable
contract.”
 Void agreement
Sec-2 (g) “An agreement not enforceable by law is
void.”
 “Void ab initio”
 Ex- Ramesh lends Rs-10,000 to Satish ,a minor for
the mortgage of his house. The mortgage agreement
is “void ab initio” due to minority of Satish.

21.  Illegal agreements
“An illegal agreement is one the consideration
or object of which is forbidden by law or,
 Defeats the provisions of law; or
 Is fraudulent; or
 Involves or implies injury to the person or
property of another; or
 The court regards it as immoral, or opposed to
the public policy.”
 Ex-contract to commit crime

22.  What is offer and acceptance?
 Mention the types of offer?
 Difference between offer and invitation to
offer?
 What do you mean by consideration?
 What contract means?
 Essentials conditions of contract?
 Who are competent to contract?
 What do you mean by free consent?
 Mention types of contracts?
 Why we should study contract?

23. Conclusion
 The contract has become an
necessary part of our lives and this
cast a number of duties, obligation
and responsibilities on the parties.
So the increased responsibities
raises the maturity to question the
legitimacy of the agreement.