Discharge of Contract Acceptance of Contract Quasi Contract Mandatory conditions to get into a Contract

1. ASSIGNMENT ON
INDIAN CONTRACT ACT, 1872
SUBMITTED BY: AMAN KUDESIA
FACULTY OF ARCHITECTURE & PLANNING
AKTU, LUCKNOW
PLANNING LEGISLATION & URBAN GOVERNANCE

2. INDIAN CONTRACT ACT - 1872
1May 28, 2020
Q1. State, in brief, the grounds on the basis of which a contract is discharged under
the provisions of the Indian Contract Act, 1872.
Discharge of a Contract
A contract under the provisions of the Indian Contract Act, 1872 may be discharged in any
of the following ways:
 Discharge By Performance: Discharge by performance will take place when there is
o Actual performance (parties fulfilling obligations within time and in the
manner prescribed),
o Attempted performance (promisor offers to perform but promise refuses to
accept it). This is known as tender.
 Discharge by Mutual Agreement: Discharge also takes place where there is
substitution (novation), rescission, alteration and remission. In all these cases old
contract need not be performed.
 Discharge by Impossibility of Performance: A situation of impossibility may have
existed at the time of entering into the contract or it may have transpired subsequently
(also known as supervening impossibility). Situations are destruction of the subject
matter, incapacity, declaration of war, etc.
 Discharge by Lapse of Time: Performance of contract has to be done within certain
prescribed time. In other words it should be performed before it is barred by law of
limitation. In such a case there is no remedy for the promise. For example where the
debt is barred by law of limitation.
 Discharge by Operation of Law: Where the promisor dies or goes insolvent there is
a discharge of contract by operation of law.
 Discharge by Breach of Contract: Where there is a default by one party from
performing his part of contract on due date then there is breach of contract. Breach of
contract can be actual breach or anticipatory breach. Where a person repudiates a
contract before the stipulated due date, it is anticipatory breach.
 Discharge by Remission or Satisfaction: A promisee may remit the performance of
the promise by the promisor. Here there is a discharge. Similarly the promise may
accept some other satisfaction. Then again there is a discharge on the ground of accord
and satisfaction.

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 Under the arrangements of the Indian Contract Act, 1872 as contained in Section 67,
when a promise dismisses or will not bear the cost of the promisor sensible offices or
open doors for execution, promisor is pardoned by such disregard or refusal.
Q2. Explain in brief the rules relating to 'Acceptance' of an offer under the provisions
of the Indian Contract Act - 1872.
Following are the general rules regarding acceptance under the Indian Contract Act, 1872:
 Acceptance must be absolute and unqualified. As per section 7 of the Act, acceptance
is valid only when it is absolute and unqualified or unconditional.
 Acceptance must be in the prescribed manner. If the offer is not accepted in the
prescribed manner, then the offeror may reject the acceptance within a reasonable time.
 Acceptance must be communicated to the offeror. If acceptance is communicated to
the person, other than the offeror, it will not create any legal relationship. Thus, to
conclude a contract between the parties, the acceptance must be communicated in
some perceptible form.
 Acceptance must be given by the party to whom the offer is made.
 Acceptance must be given within the prescribed time or within a reasonable time.
 Acceptance cannot be given before communication of an offer
 Acceptance must be made before the offer lapses or is withdrawn.
 Acceptance must show intention to fulfill the promise.
 Acceptance cannot be presumed from silence
 Acceptance by conduct/performance of condition: Acceptance may also be by
performance of some condition / act as required by the offeror
Q3. What do you understand by 'Quasi-Contract'? Discuss.
Quasi – Contracts
Even in the absence of a contract, certain social relationships give rise to certain specific
obligations to be performed by certain persons. In such circumstances the law presumes the
existence of contract even though no agreement was made between the parties. These are
known as quasi contracts as they create same obligations as in the case of regular contract.
Quasi contracts are based on principles of equity, justice and good conscience. A quasi or
constructive contract rests upon the maxims, “No man must grow rich out of another
person’s loss”.

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Salient features of quasi contracts are:
 In the first place, such a right is always a right to money and generally, though not
always, to a liquidated sum of money.
 Secondly, it does not arise from any agreement of the parties concerned, but it imposed
by the law.
 Thirdly, it is a right which is available not against all the world, but against a particular
person or persons only, so that in this respect it resembles a contractual right
Circumstances Identified As Quasi-Contracts:
 Claim for necessaries supplied to persons incapable of contracting: Any person
supplying necessaries of life to persons who are incapable of contracting is entitled to
claim the price from the other person’s property. Similarly, where money is paid to such
persons for purchase of necessaries, reimbursement can be claimed.
 Right to recover money paid for another person: A person who has paid a sum of
money which another person is obliged to pay, is entitled to be reimbursed by that other
person provided that the payment has been made by him to protect his own interest.
 Obligation of person enjoying benefits of non-gratuitous act: Where a person
lawfully does anything for another person, or delivers anything to him not intending to
do so gratuitously and such other person enjoys the benefit thereof, the latter is bound
to pay compensation to the former in respect of, or to restore, the thing so done or
delivered.
 Responsibility of finder of goods: A person who finds goods belonging to another
person and takes them into his custody is subject to same responsibility as if he were a
Bailee.
 Liability for money paid or thing delivered by mistake or by coercion: A person to
whom money has been paid or anything delivered by mistake or under coercion, must
repay or return it. In all the above cases contractual liability arises without any
agreement between the parties.

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Q4. What are the conditions which are mandatory to get into a contract?
There are certain elements that, when fulfilled, would constitute a valid contract and
contrary to that it would be considered null and void depending on the circumstances.
Section-10 of “the act” enumerates certain conditions which must be fulfilled in order to
constitute a valid contract.
 Offer and acceptance: There needs to be a lawful offer and acceptance to form a
contract. The term 'lawful ' means that, in relation to this, the offer and acceptance must
meet the requirements of the contract act. The offer or proposal is defined
under section-2(a) of the Contract Act. Section-2(b) of the Act provides that when an
offer is accepted then it becomes a promise.
Mere knowledge of the contract does not constitute acceptance, it must be expressed as
was held in the case of Lalman Shukla v Gauri Dutt.
 Intention of creating a legal relationship: There must be a clear intention among the
parties that the agreement should be attached by legal consequences and create a legal
obligation. What this means are those arrangements which are not enforceable by law,
e.g. social or domestic agreements between spouses or friends, which cannot be
enforced in a court of law would not constitute contract. Legal relationship will be
implied when failure of a said act mentioned in the contract would result in legal
consequences.
 Lawful Consideration: In Currie v. Misa, Justice Lush defined consideration, “A
valuable Consideration in the sense of law may consist either in some Rights, Interest,
Profit or Benefit accruing to one party or some forbearance detriment, loss or
responsibility given, suffered or undertaken by the other”. Consideration means '
something in return ' which means that the parties have to accrue in some form, whether
it be profit, rights, interest, etc. or agree to have some form of beneficial
"consideration."
Section-25 states that any contract without consideration is void as it is considered the
essence of a contract. However under section-23 there are certain considerations that
would be unlawful as:
o They are forbidden by law.

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o It is of such a nature that, if permitted, it would defeat the provisions of any
law, or is fraudulent.
o It involves or implies injury to the person or property of another.
o The Court regards it as immoral or opposed to public policy.
If even one of these conditions is fulfilled, it will further render the agreement illegal.
 Parties must be competent to contract: In order to constitute a contract, the parties
engaging in the same must be competent to contract. Section 11 of “the act” states the
criteria of parties who are competent to contract:
o The parties must attain the age of majority i.e. 18 years. An agreement with a
person who is a minor, will be considered void ab intio(Mohri Bibi v
Dharmodas Ghose, 1903)
o The person must be of sound mind i.e. not an insane person.
o He/she should be disqualified from the law to engage in a contract.
 Free consent by the parties: This implies to the fact that parties entering into a contract
shall enter with their free will and their decision of engaging should not be influenced
by any external factors. Section-14 of “the act” deals with free consent and provide
certain factors, if so found, would deem a contract invalid. These factors are-
o Coercion: Committing any act forbidden by the Indian Penal Code or unlawful
detain of property, or threatening to commit these acts.
o Undue influence: The use of one party’s dominant position to hold an unfair
advantage over other party.
o Fraud: When a party makes presentation of the terms of contract with the
intention to cause damage to the other party, it amounts to Fraud.
o Misrepresentation: False representation of facts
o Mistake: While engaging in a contract, there should not be any mistake (either
of fact or law) from both or either of the parties.
Further, for a contract to be valid in the eyes of law , it shouldn’t be expressly declared
void for example agreement without consideration(Section-25), agreement in restraint
of marriage(Section-26), agreement in restraint of trade(Section-27), agreements in
restraint judicial proceedings(Section-28), an agreement by way wager(Section-30) etc.