The Contract Act 18721

7/25/2019 The Contract Act 18721

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INDEX

Definations.

Acceptance and Revocation of proposals.

Contracts, voidable contracts and voidagreements.

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Definations.

Proposal - When one person signifies toanother his willingness to do or to abstain fromdoing anything, with a view to obtaining theassent of that other to such act or abstinence, heis said to mae a proposal.

Promise - When the person to whom theproposal is made signifies his assent thereto, theproposal is said to be accepted. A proposal,when accepted, becomes a promise.

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!he person maing the proposal is called the"promisor and the person accepting the proposal

is called the #t promise"$ Consideration - When, at the desire of the

promisor, the promisee or any other person hasclone or abstained from doing, or does or

abstains from doing, or promises to do or toabstain from doing, something, such Act orabstinence or promise is called a considerationfor the promise.

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Continued

Agreement- %very promise and every set ofpromises, forming the consideration for eachother, is an agreement.

Contract- An agreement enforceable by law isa contract.

An agreement not enforceable by law is said tobe void.

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Contracts

Contracts

Contract- An agreement enforceable by law isa contract.

All agreements are contracts if they are made by

the free consent of parties competent to contract,for a lawful consideration and with a lawfulob&ect, and are not hereby e'pressly declared tobe void.

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Kinds of Contract.

(oid contract ) A contract which ceases to beenforceable by law becomes void when it ceases

to be enforceable. %'ecuted contract ) Where both the parties have

performed their obligations, it is e'ecutedcontract.

%'ecutory Contract - Where neither of theparties have performed their obligations, ie boththe parties are yet to perform their promises, thecontract is e'ecutory.

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Continued #mplied Contract ) !he terms of a contract

are inferred from the conduct or dealingsbetween the parties. When proposal or

acceptance of any promise is made otherwisethan in words, the promise is said to beimplied. *uch implied promise leads to#mplied Contract.

+uasi Contract ) Certain relations resemblethose created by a contract. Certainobligations which are not contracts in fact butare so in contemplation of law are +uasi

Contracts.

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Contingent Contract - #t is a contract to do or notto do something, if some event, collateral to suchcontract, does or does not happen.

(oidable Contract ) A contract is voidable whenone of the parties to the contract have not

e'ercised their free consent. *peciality Contract ) #t is a contract which is inwriting, signed, sealed delivered by the parties.

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Essential elements of a Valid Contract.

. roposal Acceptance.

/. Consideration.

0. Capacity of parties to contract.1. 2ree Consent.

3. Agreement should not be e'pressly declared

void.

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Continued

4. Writing Registration, if so re5uired by law.

6. 7egal Relationship.

8. Certainity.

9. ossibility of erformance.

:. %nforceable by law.

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Proposals

Proposal - When one person signifies toanother his willingness to do or to abstain fromdoing anything, with a view to obtaining theassent of that other to such act or abstinence, he

is said to mae a proposal.

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%ssentials of roposal$

. ;eyond e'pression of willingness, there must besomething in the nature of a re5uest.

/. roposer cannot dictate terms.

0. An offer must be intended to create capable ofcreating legal relations.

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Communication of proposals.

!he communication of a proposal is completewhen it comes to the nowledge of the person towhom it is made.

Eg- A proposes, by letter, to sell a house to ; at

a certain price. !he communication of theproposal is complete when ; receives the letter.

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Acceptance

When one person to whom the proposal is madesignifies his assent thereto, the proposal is saidto be accepted.

roposal when accepted becomes promise.

!he person maing the proposal is called thePromisor and person accepting the proposalbecomesPromisee.

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%ssentials of Acceptance.

. Acceptance must be absolute and un5ualified.

/. #t must be e'pressed in some usual reasonable manner.

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4. Acceptance must be given within a reasonabletime.

6. Acceptance must be given before the offerlapses or is revoed or is withdrawn.

8.Acceptance of proposal is acceptance of all

terms.

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Communication of an acceptance!he communication of an acceptance is

complete, - as against the proposer, when it is put in a

course of transmission to him, so as to be outof the power of the acceptor= as against theacceptor, when it comes to the, nowledge, ofthe proposer.

Eg : ; accepts A>s proposal by a letter sent bypost. !he communication of the acceptance iscomplete, as against A when the letter isposted as against ;, when the letter isreceived by A.

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Revocation of proposals and acceptances

Revocation of proposals and acceptances.

A proposal may be revoed at any timebefore the communication of its acceptance iscomplete as against the proposer, but notafterwards.

An acceptance may be revoed at any timebefore the communication of the acceptance iscomplete as against the acceptor, but notafterwards

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Capacity of parties to Contract. An agreement becomes a contract if it is

entered between the parties who arecompetent to Contract.

%very person is Competent to contract

. Who is of the age of ma&ority according to thelaw.

/. Who is of sound mind.

0. Who is not dis5ualified by any law.

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ree Consent"Free consent" - Consent is said to be

free when it is not cased b! ? coercion,

/? undue influence0? fraud,1? misrepresentation,3? mistae.

Consent is said to be so caused when itwould not have been given but for thee'istence of such coercion, undue influence,fraud, misrepresentation or mistae.

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CoercionCoercion is the committing, or threatening tocommit, any act forbidden by the #ndian enalCode, or the unlawful detaining, or threatening

to detain, any property, to the pre&udice of anyperson whatever, with the intention of causingany person to enter into an agreement.

%g - A, on board an %nglish ship on the high seas,

causes ; to enter into an agreement by an actamounting to criminal intimidation under the#ndian enal Code.

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Undue influence A contract is said to be induced by "undueinfluence@ where the relations subsisting betweenthe parties are such that one of the parties is in

a position to dominate the will of the other anduses that position to obtain an unfair advantageover the other.

%g - A had given advance money to his son ; during

his minority, upon ;>s coming of age obtains, bymisuse of parental influence, a bond from ; for agreater amount than the sum due in respect ofthe advance. ere A employs undue influence.

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Fraud"2raud" means and includes any of the followingacts committed by a party to a contract, or with his

connivance, or by his agent, with intent to deceiveanother party thereto of his agent, or to inducehim to enter into the contract )

? the suggestion, as a fact, of that which is nottrue, by one who does not believe it to be true=

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Continued

/? !he active concealment of a fact by one

having nowledge or belief of the fact.

0? A promise made without any intention ofperforming.

1? Any other act fitted to deceive=

3? Any such act or omission as the law speciallydeclares to be fraudulent.

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Misrepresentation"


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Continued

0? causing, however innocently, a party to anagreement to mae a mistae as to the substance

of the thing which is the sub&ect of theagreement.

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Contingent contract"Contingent contract" defined

A "contingent contract" is a contract to do or

not to do something, if some event, collateralto such contract, does or does not happen.

Essential characteristics of a contingentContract

. !here should be e'istence of a contingency,happening or non happening of some event infuture.

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Continued

/. Contingency must be uncertain.

0. !he event must be collateral, for e'ample,incidental to the contract.

%g ) A contracts to pay ; Rs :,::: if ;Bs house isburnt. !his is a contingent contract as A will pay; only if his house burns and not otherwise.

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Waggering Contracts.

#t is agreement by mutual promises, each ofthem conditional on the happening or nothappenning of an unnown event.

All wagers are contingent but all contingentcontracts are not wagers.

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"uasi Contracts

+uasi Contract is an obligation resembling thatcreated by a contract.

#t is implied Contract.

!he essentials of formation of contracts are

absent. !here is no agreement at all.

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#ypes of "uasi Contracts.Where a person supplies neccessaries to a

person incapable of contracting, he is entitled to

be reimbursed from that property of suchincapable person.

A person who is interested in the payment of

money which another is bound by law to pay isentitled to be reimbersed by other.

A person to whom money is paid by mistae orunder coercion, must repay or return it.

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CotinuedWhen a person lawfully does anything not

intending to do so gratuitously other person

en&oys benefit thereof, the later is bound to maecompensation to the former.

A person who finds the goods belonging to

another is sub&ect to the same liabilities as abailee of goods. e is entitled to retain the goodsuntil he receives the lawful charges orcompensation.

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Disc$ar%e of Contract.

Discharge means termination of a contract.

!he contract may be discharged in any offollowing ways )

. ;y performance./. ;y death.0. ;y refusing tender of performance.1. ;y breach of Contract.3. ;y impossibility of performance.

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Continued

4. ;y agreement or by consent.

6. ;y promisee failing to offer facilities forperformance.

8. ;y operation of law.

9. ;y unauthoried material alteration of a

contract.:. Discharge by lapse of time.

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&reac$ of Contract

;reach of contract is non performance ofcontract.

Remedies for breach of contract to

Aggrieved part!.. *uit for specific performance ) !he court

directs party commiting breach to perform thepromise according to the terms of the contract.

/. *uit for in&unction ) An in&unction is an orderof Court directing person to do or refrain fromdoing some act which is sub&ect matter ofcontract.

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0. *uit for damages, for the loss sustained ) #ncase of breach of contract, in&ured party canclaim for damages caused due to breach.

1. +uantum meruit ) +uantum meruit meansas much as earned or deserved or as much asis merited. A person can claim payment forthe wor done or goods supplied.

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#'ANK ()* +++

Documents

The Contract Act 18721