The document discusses the Indian Contract Act 1872 and key concepts in contract law. It provides an overview of the sources of Indian mercantile law, the scope covered by the Contract Act, and what the Act aims to do. Key definitions from the Act are presented, such as proposal, promise, consideration and agreement. The essential elements for forming a valid contract - proposal, acceptance, consideration and enforceability - are outlined.

1. CONTRACTS BUSINESS LAW
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC, MARTHANDAM

2. SOURCES OF THE INDIAN
MERCANTILE LAW
•English Mercantile Law
•Indian Statute Law like Indian Contract Law
•Judicial Decisions
•Customs and Usages
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC, MARTHANDAM

3. SCOPE OF THE INDIAN CONTRACT
ACT, 1872
General Principles of law of
Contract
1. Elements of contracts
2. Performance of contracts
3. Breach of contracts
4. Remedies for breach of
contracts
Special Kinds of contracts
1. Indemnity and Guarantee
2. Bailment and Pledge
3. Agency
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC, MARTHANDAM

4. WHAT DOES INDIAN CONTRACT
ACT DO?
•Indian Contract Act frames and validates the contracts or agreements
between various parties.
•Contract Act is one of the central laws that regulate and oversee all
the business wherever there is a case of a deal or an agreement.
•It lays the rights and obligations arising out of the mercantile transactions.
•The Indian Contract Act, 1872 defines the term “Contract” under its section 2
(h) as “An agreement enforceable by law”.
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC, MARTHANDAM

5. S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC, MARTHANDAM

6. KEY DEFINITIONS
Proposal [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 the
other person to such act or abstinence, he is said to make a proposal.
Promise [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.
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC, MARTHANDAM

7. S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC, MARTHANDAM

8. KEY DEFINITIONS
Promisor and Promisee [sec 2(c)]
The person making the proposal is called the Promisor. The person accepting
the proposal is called the Promisee.
Consideration [sec 2(d)]
When at the desire of the promisor, the promise or any other person has done or
abstained from doing OR does or abstains from doing OR promises to do or
abstain from doing something, such act or abstinence or promise is called a
consideration for the promise. Eg.: Money, Land deed, goods, etc.
Agreement [Sec 2(e)]
Every promise and every set of promises forming consideration for each other is
an agreement.
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC, MARTHANDAM

9. KEY DEFINITIONS
Reciprocal promises [sec 2(f)]
Promises which form the consideration or part of the consideration for
each other are called reciprocal promises.
Void agreement [sec 2(g)]
An agreement not enforceable by law is said to be void.
Contract [sec 2(h)]
An agreement enforceable by law is a contract.
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC, MARTHANDAM

10. KEY DEFINITIONS
Voidable agreement [sec 2(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.
Void contract [sec 2(j)]
A contract, which ceases to be enforceable by law becomes void when
it ceases to be enforceable.
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC, MARTHANDAM

11. HOW A CONTRACT IS FORMED?
1. There must be a proposal
2. Proposal + Acceptance =
Promise
3. Promise + Consideration =
Agreement
4. Agreement + Enforceability =
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC, MARTHANDAM

12. HOW A CONTRACT IS FORMED?
PROPOSA
L
PROMISE
AGREEMENT
CONTRACT
+
CONSIDERATION
+ ACCEPTANCE
+
ENFORCEABILITY
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC, MARTHANDAM