The document provides an overview of contract law in India according to the Indian Contract Act of 1872. It defines key terms like contract, agreement, offer, acceptance and consideration. It outlines the essential elements for a valid contract and different types of contracts. It also discusses capacity to contract and exceptions for minors and unsound persons. Specific topics covered include offer and acceptance rules, consideration and its exceptions, privity of contract, and rules governing agreements with minors.

1. THE INDIAN CONTRACT
ACT, 1872
PRESENTED BY :
HIMANSHI SHARMA
KAMAL CHAWLA
KARTIK BERIWAL
KUNAL MADAN
SHAGUN JAIN
RISHABH JAISWAL

2. 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.
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.

3. 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.

4. Agreement Legal Obligation
Contract
“All agreement are contract but all
contract are not agreement.”
Contract= Agreement+ Enforceability Before
Law

5. ESSENTIAL ELEMENTS OF A VALID
CONTRACT (Sec.10)
1. Offer & acceptance.
2. Intention to create legal relationship.
3. Consensus - ad - idem.
4. Consideration.
5. Capacity to contract.
6. Free consent.
7. Legality of object.
8. Possibility of performance.
9. Writing & registration.

6. TYPES OF CONTRACTS
VALID CONTRACTS
 Absolute contract
 Contingent contract(Sec. 31-36)
 Express contract
 Implied/Quasi contract(Sec.68- 72)

7. Valid contract - If all the condition are fulfilled it
is called as a valid contract.
Contingent contract - In a contract to do or not to
do something, if an event is collateral, does or
doesn't happen.
Express contract - When contracts are either in
writing or in oral.
Implied contract - When contracts are neither in
writing nor in oral.
Absolute contract - A contract which is not
dependent on fulfillment of any condition.

8. INVALID CONTRACTS- In a contact if any one
condition is not fulfilled
 Void contract-Is void(Void - ab - initio) Becomes
void
 Voidable contract
 Illegal contract
 Unenforceable contract

9. Is void (Void-ab-initio) - An agreement
which is not valid from the beginning.
Becomes void - An agreement which is
valid in the beginning but due to some
supervening impossibility the contract
becomes void.

10. Illegal contract - An agreement forbidden by
law.
Unenforceable contract - It is valid but due to
some technical defect the contract becomes void.
In case defects are removed the contract is
enforceable.(lack of registration, lack of signature
etc.)
Voidable contract - A contract which is valid
unless until avoided by either the party.

11. OTHER TYPES OF CONTRACTS
•Executed contract
• Executory contract
• Unilateral contract
• Bilateral contract

12. Executed contract - In a contract where both the
parties have performed their obligation, there is
remaining nothing to perform.
Executory contract - In a contract where both the
parties are yet to perform their obligation.
Unilateral contract - In a contract one party has
performed his obligation and other person is yet to
perform his obligation.
Bilateral contract - In a contract where both the
parties have performed their obligation. Bilateral
& Executory are same and inter - changeable.

13. 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

14. LEGAL RULES FOR
OFFER
 Offer must be given with an intention to create a legal
relationship
 Offer must be definite
 There is a clear cut difference between offer, invitation to
offer, invitation to sale
 Offer must be communicated
 Mere statement of price is not an offer

15. TYPES OF OFFER
 Express offer
 Implied offer
 Specific offer
 General offer
 Cross offer
 Counter offer
 Standing offer

16. Specific offer - When offer is given to a specific person
General offer - When offer is given to entire world at a
large
Standing offer - An offer which remains continuously
enforceable for a certain period of time
Express offer - When offer is given to another person
either in writing or in oral
E.g.- Job offer

17. Implied offer - When offer is given to another person neither in
writing nor in oral
E.g.- Ordering a burger at a restaurant
Cross offer - When both the persons are making identical offers to
each other in ignorance of other’s offer
E.g.- If A tells B "Will you buy my red car for Rs.5,00,000?"
But B, unaware of the A's proposition at that time, also goes ahead
and says - "Will you sell me your red car for Rs. 5,00,000?"
Counter offer - When both the persons are making offers to each
other which are not identical in ignorance of other’s offer
E.g.- A tells B "Will you buy my red car for Rs. 5,00,000?"
But B says simultaneously - "Will you sell me your red car for Rs.
4,50,000?"

19. ACCEPTANCE
 According to sec.2(b), when a person
made a proposal to another to whom
proposal is made, if proposal is
assented there to, it is called
acceptance.

20. LEGAL RULES FOR
ACCEPTANCE
Acceptance must be given as per the
mode prescribed by the offerer.
• Acceptance must be given before the
lapse of time or within reasonable time.
• Acceptance must be unconditional.
• Acceptance may be given by any
person in case of general offer

21. • Acceptance may be given by any specific
person in case of specific offer.
• Acceptance must be communicated.
• Mental acceptance is no acceptance or
acceptance must not be derived from
silence.
• Acceptance must not be precedent to
offer.

22. Eliason v Henshaw (1819) 4
Wheaton 225, Supreme Court
(USA)
 D offered to buy a quantity of flour from P, and wrote asking for a
reply "by return of wagon".
 P replied by post to D's other address, which took considerably
longer, by the time the letter arrived D had already bought from
other sources all the flour he needed.
 D refused to accept the purported contract as binding, and the court
supported his view.
 The court said that the actual mode of reply was unimportant, and
that any means might be used as long as the reply was received no
later than would be expected by the method specified, but a different
address and a substantial delay were enough to invalidate the
acceptance.

24. According to sec 2(d) consideration is defined as “when
at the desire of the promisor , or 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 an act or absinence or
promise is called a consideration for the promise .
CONSIDERATION

25. When a party to an agreement promises to do
something he must get “something” in return
.This “something” is defined as consideration.
LEGAL RULES AS TO CONSIDERATION
1)It must move at the desire of the promisor.
[Durga Prasad v. Baldeo ]
2)It may move by the promisee .
[Chinnaya v. Ramayya ]
3)It must be past ,present or future .
4)It need not be adequate .
5)It must be real .
6)It must not be illegal , immoral or opposed to
public policy .

26. STRANGER TO CONTRACT
It is general rule of contract that only parties to
contract can sue & be sued on that contract.
This rule is known as ‘Doctrine of privity’ i.e
relationship between the parties to contract.
Exceptions
1) A trust or a charge .
2) Marriage settlement , partition or other
family arrangements .
3) Estoppel
4) Assignment of contract .
5) Contract with agent .
6) Convenants running with land .

27. Contract without consideration is void –
Exceptions
Love & affection .
[Venkataswamy v. Rangaswamy]
Compensation for voluntary service .
Promise to pay a time – barred debt .
Completed gift .
Agency sec (185) .
Charity .
Contract of bailment sec(148 ) .

28. No consideration no contract
 [Abdul Aziz v. Masum Ali]
 [Kedarnath v. Gauri Mohamed ]

29. CAPACITY
TO
CONTRACT

30. Capacity to contract
Following are the condition for a person to
enter into contract
 He must be major
 He must be sound mind
 He must not be disqualified by any other
law.

31. Disqualified persons to enter into a
contract
a) Minor
b) Unsound person
c) Others
i.e alien enemy,
insolvent,
convict,
company/corporationagainst MOA / AOA .

32. Minor
According to Indian majority act sec(3) minor is
defined as any person under the age of 18 years
. In the following cases a person is said to be
minor if he does not complete the age of 21
years
a) Any person under the guardian & wards
act,1890
b) Any person which comes under
superintendence of law/legal representative

33. Rules governing minors
agreement
 Rule 1 : Judges are counselors, jury is the
servant , law is the guardian .
 Rule 2: In case minor entered into a
contract which is unlawful , illegal ,
immoral he is also prosecutable &
punishable under the relevant law.

34. Legal rules
 An agreement with minor is void ab initio
[Mohiri Bibi v. Dharmadas Ghase]
 Minor can be promisee
[Shrafat Ali v. Noor Mohd]
 Minor cannot ratify his agreement on
attaining the age of majority
[Indra Ramaswamy v. Anthiappa Chettier]

35.  Minor as a shareholder ,
 Minor as a partner,
 Minor as a agent ,
 Minor as a member of trade union ,
 No estoppel against minor ,
 He can plead his minority ,
 He can enter into contract for his
necessary
[Robert v. Gray ]
 On behalf of minor his parents , guardian
or any other person can enter into void
contract to acquire movable property.

36. Unsound person
 According to sec(12) a person generally
sound , occasionally unsound can enter into
a contract when he of sound mind
 A person generally unsound occasionally
sound can enter onto contract when he is
sound mind .

37. Persons of unsound mind
1) Lunatic
2) Idiots
3) Drunken or intoxicated persons.

38.  https://www.youtube.com/watch?v=HrZDpDvxq
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 https://www.youtube.com/watch?v=RgpyqUCch
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 https://www.youtube.com/watch?v=PLStHYD1e
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