by sachin sharma manipal jaipur

1. Indian Contract Act, 1872

2. contract
Agreement
Offer (or
proposal)
Acceptance of
offer (or
proposal)
Enforceability
of an
agreement
Legal obligation
arising out of
an agreement

3. CONTRACT - According to sec.2(h), a contract is defined
as an agreement enforceable before the law.
AGREEMENT - According to sec.2(e), every promise or set
of promises forming consideration for each other.
For example: x offers to sell his car of Rs 100000 to Y. Y
accepts this offer after acceptance becomes promise and
this promise treated as an agreement between x and Y.
PROMISE - According to sec.2(b), when a person made
a proposal to another to whom proposal is made, if
proposal is assented there to.

4. OFFER - According to Sec.2(a), when a person made a
proposal, when he signifies to another his willingness to do or
to abstain from doing something.
AGREEMENT = OFFER + ACCEPTANCE
CONSENSUS - AD – IDEM-
According to Sec.13, meeting of minds or identity of minds or
receiving the same thing in same sense at same time.

5. ENFORCEABILITY OF AGREEMENT
• Create some legal obligation
• Can be sue or sued
• Commercial or business agreements-intend to create legal relation.
• For example: X offer to sell his car to Y for Rs. 100000. Y accepts the offer.
Such an agreement between X and Y is a contract because it creates legal
obligation . In this agreement, if X refuses to sell or Y refuses to buy, the other
party can file suit in the court of law for the breach of contract.
• Social or domestic agreements- do not intent to create legal relations.
• For example: invitation to have dinner
• Case: Balfour VS Balfour – husband promises to pay 30 pound every month.

6. Agreement Legal Obligation
Contract
“All agreements are contracts but
all
contracts are not agreements.”
CONTRACT = AGREEMENT +
ENFORCIBILITY BEFORE LAW

7. All contracts are agreement but all agreements
are not contracts:
• “The law of contracts is not the whole law of agreements.”-To create
legal obligation.
• “The law of contracts is not the whole law of obligations”-arise out of
agreements

8. Classification of Agreement
Agreements
Valid
Agreements(i.e.
legal agreement)
Invalid
agreements
SocialvoidVoidableUnenforceableIllegal
Agreement to
agree in future

9. Essential Elements Of A Valid Contract:
• Offer & Acceptance: proposal by one party that is to be offer so that it get accepted by another one
• Free Consent: same sense at the same time and should be free from coercion, fraud, misrepresentation or
undue influence
• Intention to create legal relationship: Balfour VS Balfour
• Lawful consideration (quid pro quo)
• Competency of Parties: majority & sound mind
• Free and genuine consent:
• Lawful object: object of the agreement must not be fraudulent, illegal, immoral, opposed to public policy
• Agreement not declare void:
Illustrations :
• (a) A agrees with B for good consideration that she will not marry C. It is a void agreement.
• (b) A agrees with B that she will marry him only. It is a valid contract of marriage.
• Certainty and possibility of performance
• Legal formalities

10. Classification of Contracts:
Classificati
on of
contracts
validity
Valid
contract
Void
contract
voidable
contract
illegal
agreemen
ts
Unenforce
able
contract
Invalid
contracts
Voidable
contracts
Illegal
contracts
Void
contracts
Unenforce
able
contracts
E-
commerce
contracts
Formation
Express Implied Tacit Quasi
E-
commerce
Performan
ce
Executed Executory Unilateral bilateral
Contracts
under
English
law
Formal
contracts
Contracts
of record
Contracts
under seal
Simple
contracts

11. • Valid contract: an agreement with all essential elements as per sec 10.
• Void agreement: void ab initio: According to sec 2(g), does not create legal
obligation.
• Void contract: According to sec 2(j) of the contract Act, “A contract which ceases to be enforceable by law
becomes void when it ceases to be enforceable”. Reasons are:
(a) Supervening impossibility (sec. 56) A contract becomes void by impossibility of performance
after the formation of the of contract for example, A and B contract to marry each other. Before the time fixed
for the marriage, A goes mad. The contract to marry becomes void.
(b) Subsequent illegality (sec, 56) A contract also becomes void by subsequent illegality. For example,
A agrees to sell B 100 hags of wheat at Rs. 650 per bag. Before delivery the government bans private trading in
wheat. The contract becomes void.
(c) Repudiation of a voidable contract. A voidable contract becomes void, when the party, whose
consent is not free, repudiates the contract. For example, M by threatening to murder B’s son, makes B agree
to sell his car worth Rs. 30,000 for a sum of Rs. 10,000 only. The contract, being the result or coercion, is
voidable at the option of B. B may either affirm or reject the contract. In case B decides to rescind the contract,
it becomes void.
(d)In the case of a contract contingent on the happening of an uncertain future event, if that event
becomes impossible. A contingent contract to do or not to do something on the happening of an uncertain
future event, becomes void, when the event becomes impossible (sec.32).” for example, A contracts to give Rs.
1,000 as loan to B marries C. C dies without being married to B. the contract becomes void.
•

12. • Voidable contract:
• A contract is voidable at the option of one of the parties whom consent is obtained
through coercion, undue influence, misrepresentation or fraud.
• A person prevents another person to fulfill his promise then another person can
claim for compensation and the contract becomes voidable at his option.
• If obligation does not perform with in the specified time.
• Illegal Contract:
• Contrary to law, forbidden by law, void ab initio.
• Unenforceable contract: which can not be enforced in the court of law due
to some technical defect may be:
• Absence of writing
• Time barred debt
• Absence of stamp

13. • Express contract:
• The terms are expressly agreed upon( whether words spoken or written) at
the time of formation where the offer or acceptance of any promise is made
in words.
• Tacit contracts:
• A tacit contract is one which is inferred from the acts or conduct or course of
dealings between the parties. E.g. a person enter in to a bus, there is an
implied contract to pay for travelling a particular distance.
• Implied contract:
• A contract implied by law, i.e. the law implies a contract though the parties
never intended. E.g. delivery of scooter on wrong place.

14. • Executed contracts:
• Both parties have to perform their respective obligations.
• E.g concert, paint a picture
• Executory contract:
• Both the parties have yet to perform their obligations
• Remain something to be done
• Bilateral contract
• E.g. Promise to sell scooter but pay some money and rest later on and the
other party give possession and sale deed on full payment.

15. • Unilateral contract:
• One sided contract
• Contract comes in to formation when one party already perform his task and the
other party not.
• Also called as contracts with executed consideration
• Railway coolie.
• Bilateral Contracts:
• Both the parties are prominent at the time of for formation of the contract.
• Executory contract
• E-Commerce Contract:
• Entered through internet

16. • Quasi Contracts:
• Sections 68-72
• Also called as constructive contract
• Certain contract which is not strictly speaking, contracts, though the parties
as if there is a contract
• E.g. obligation to return lost goods
• Things delivered on wrong address.