Indian Contract Act 1872 Contract Agreement between 2

Indian Contract Act 1872 Contract - Agreement between 2 or more persons which law Enforce. Essentials: § 2 or more parties § Offer and Acceptance – one has to offer and other has to Ac § Identity of Minds – Agreed upon the Subject Matter § Consideration – Something in return –every contract must b by Consideration § Capacity – Competent parties to contract § Free Consent – Free from flaw, not caused by coercion / Un influence § Lawful Consideration – The consideration must be lawful § Legality of Object – recognized and approved by society.

Classification of Contract: I According to Validity – Contract based on agreement – all e Are present. If any one is missing then it is void able/ void/ i Unenforceable. Void able Contract – Enforceable at the option of one or more Eg: A promises to sell his house to B for Rs. 2 lakhs. His cons Obtained by force. The contract is void able at the option of A Void Contract – A contract which is not enforceable by law – Entered with minor. Illegal Agreement: Criminal in nature, which is immoral Unenforceable Contract – Cannot be enforced in court of law Of technical defect – Eg – Time barred, Lapse of time.

II According to Formation: Express Contract – Terms expressly agreed – by words spoke At the time of formation of contract. Implied Contract – Conduct of Parties – A lunch taken in a ho Implied that bill will be paid. III According to Formation • Executed Contract – Both Parties have performed their oblig • Executory Contract – Both parties are yet to perform their ob • Unilateral contract – One has fulfilled his obligation, other is his act. • Bilateral – Similar to Executory Contract.

Offer and Acceptance: The person making the proposal is referred as “Proposor” or The Person accepting the offer - “Offeree” or “acceptor” Legal rules relating to Offer: u/s 2(a): • It must be definite – definite terms or capable pf being defini • It must be distinguished from Quotation or invitation to offer • Must give rise to legal consequences • Can be made to the individual or entire world • An offer is different from tender. • An offer must be communicated to the offeree. Acceptance u/s 2(b) Person to whom the proposal is made signifies his assent the Proposal is said to be accepted.

Essential of Valid Acceptance: • Communicated in a reasonable manner, expressed in words written or may be conduct. • Communication of acceptance may be waived off by the offe • Acceptance must be made before offer lapses or is revoked • Acceptance must be absolute and unconditional and should with the terms of offer. • Acceptance once made concludes the Contract. Consideration: u/s 2(d) – Something in return • Consideration at the desire of the promisor – any thin done v does not constitute valid consideration • Adequacy – May not be adequate but real and lawful • Past, Present and Future Exceptions: Natural love and affection, Promise to compensa Who has voluntarily done something for the promisor, A prom Discharge a time barred debt. .

Capacity to Contract: : u/s 10 Agreement become contract if entered in to By parties competent to contract. u/s 11 following persons are incompetent to enter into contra • Minor • Person of unsound mind • Persons disqualified by law to which they are subject to • Convict • Bankrupt • Alien enemy • Foreign ambassadors • Insolvent

Free Consent: Consent – Act of accepting the offer by free will ie without any u/s 11 following are considered consent which is not free. • Coercion – u/s 15 A person is compelled to enter into contra of force – under threat, threatening to commit, unlawf forbidden by IPC 1860 • Undue influence u/s 16 unfair persuasion, one party is in dom position eg Doctor and patient, Teacher and Student • Misrepresentation – False statement (information is wrong) Person making it honestly believes to be true non-disclosure of material facts – without intention to deceiv party, positively asserts to be true.

• Fraud u/s 17 False statement made knowingly Facts are not true Active concealment of facts Intention to cheat • Mistake of Law: Law of the country – ignorance is no excuse Of Foreign Country – u/s 21, such mistake is treated as mista and agreement in such case is void. • Mistake of Fact u/s 20 • Bilateral Mistakes – Mistakes must be mutual Mistake relate to matter of fact essential to agreement Existence of subject matter, identity of subject matter Quality of subject matter.

• Unilateral Mistake u/s 22 One party is mistaken regarding the subject matter or in exp understanding the terms. Legality of the Object: Consideration and purpose of agreement must be lawful Following consideration or object is unlawful • Object forbidden by law, Object defeats provisions of law, • Court regards the object immoral, oppose to public policy • To commit crime, restrict legal proceedings, contempt of co • Interference in administration of justice, trafficking, • restraint of paternal rights, restricting personal liberty • Agreement of restraint of marriage, • Agreement in restraint of trade • Agreement to defraud creditors.

Termination and Discharge of Contract: § By Performance – Parties have fulfilled their obligations § By Agreement or Consent: Agree to substitute new contract or to rescind or alter it, th Contract is discharged and need not be performed. Novation – u/s 62 – a new contract is substituted for an exi between the same parties Rescission u/s 62 – when all or some of the terms of the co cancelled it may occur by mutual consent, where one fails performing of their obligation, the other party may rescind claim compensation for breach of contract. Alteration u/s 62 – One or more terms of contract is altered consent – old contract is discharged.

Remission u/s 63 – acceptance of less fulfillment of promise Acceptance of lesser sum than what is contacted for in disch Of whole debt. Waiver – Parties agree they shall no longer bound by the con Mutual abandonment of rights of parties to contract. § Discharge by Impossibility of Performance: Impossibility at the tike of agreement – pre contractual or i impossibility Impossibility – Subsequent to the formation of Contract – p contractual – destruction of subject matter, death, incapaci Change of law, out break of law. § Discharge by Lapse of Time – Limitation Act 1963

§ Discharge by Breach of Contract Breaking the obligation without legal excuse Remedies: Recission – may sue to treat the contract as rescinded and re Further performance – he is absolved of all his obligations Damages – monetary Compensation Ordinary Damages, Special damages, Vindictive damages, Nominal damages, Loss of reputation, Cost of decree, Liquidated damages, Payment of interest, Quantum Meruit, Specific Performance, Injunction – Stay Order.