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8/7/2019 Law of Contract Under Contract Act 1872
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Prepared By: Kavita Ravindran Nair
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A contract is an agreement, enforceable by law, made
between at least two parties by which rights are acquired
by one and obligations are created on the part of another,
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Section 2(h) defines a contract as
an agreementenforceable by law.
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Agreement
Its enforceability by law
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Section 2(e) defines an agreement as
every promise and every set of promises forming consideration
for each other.
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Plurality of persons
Consensus ad idem
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The agreement must be such which is enforceable by law so
as to become a contract
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Offer & Acceptance
Intentions tocreate legal
relations
Lawful
ConsiderationCapacity of Parties
Free Consent
Lawful Object Certainty
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From the point of view of enforceability.
From the point of view of mode of creation.
From the point of view of the extent of execution.
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ValidContract
VoidableContract
VoidContract
UnenforceableContract
Illegal orunlawfulcontract
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Express Contract
Implied Contract
Constructive orQuasi Contract
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Executed Contract Executory Contract
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According to Section 2 (a) of the Indian Contract Act defines aproposal as,
When one person signifies to another his willingness to do or to
abstain from doing anything, with a view to obtaining the assent
of that other to such act or abstinence, he said to make a
proposal.
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Express offer
Implied offer
Offer by abstinence
Specific and general offer
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An offer may be express or implied.
An offer must contemplate to give rise to legal consequences and
be capable of creating legal relations.
The terms of the offer must be certain and not loose or vague.
An invitation to offer is not an offer.
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An offer may be specific or general.
An offer must be communicated to the offeree.
An offer can be made subject to any terms and conditions.
Two identical cross-offers do not make a contract
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An offer lapses after stipulated or reasonable time.
An offer lapses by not being accepted in the mode prescribed, or
if no mode is prescribed, in some usual and reasonable manner.
An offer lapses by rejection.
An offer lapses by the death or insanity of the offeror of the
offeree before acceptance.
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Section 2(b) states that
when the person to whom the proposal is made signifies his assent
therto, the proposal is said to be accepted.
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Acceptance must be give only by the person to whom the offer is
made.
Acceptance must be expressed in some usual and reasonable
manner, unless the proposal prescribes the manner in which it is
to be accepted.
Acceptance must be communicated by the acceptor.
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Acceptance must be given within a reasonable time and before
the offer lapses and/or is revoked.
Acceptance must succeed the offer.
Rejected offers can be accepted only, if renewed.
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when at the desire of the promisor, the 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 act or abstinence or promise is called a
consideration for the promise.
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Consideration must move at the desire of the promisor
Consideration may move either from the promisee or any other
person
Consideration must be real and competent.
Consideration must be legal
Consideration may be present, past or future.
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Forbidden by law
Defeats the provision of any law
Is fraudulent
Involves or implies injury to the person or property of another or
The court regards it as immoral or opposed to public policy
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An essential ingredient of a valid contract is that thecontracting parties must be competent to contract (Sec. 10)
Section 11 lays down that Every person is competent to
contract who is of the age of majority according to the law to
which he is subject, and who is of sound mind, and is not
disqualifies from contracting by any law to which he is
subject.
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If he is a minor, according to the law to which he is subject,
If he is of unsound mind, and
If he is disqualified from contracting by any law to which he is subject.
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According to section 3 of the majority Act 1875, as amended
by the majority (Amendment) Act, 1999, a person, domiciled
in India, who is under 18 years of age is a minor.
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An agreement by a minor is absolutely void and inoperative as
against him.
Beneficial agreements are valid contracts.
No ratification on attaining the age of majority.
The rule of estoppel does not apply to a minor.
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Alien enemies
Foreign sovereigns and ambassadors
Convict
Married women
Insolvent
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Section 13 of the Contract Act defines the term
consent and lays down that Two or more personsare said to consent when they agree upon the same
thing in the same sense.
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Free Consent defined. Section 14 lays down that Consent is said to be
free when it is not caused by-
Coercion
Undue influence
Misrepresentation
Fraud
mistake
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The object or consideration of an agreement must be lawful, in order to
make the agreement a valid contract, for section 10 lays down that all
agreements are contracts if made for lawful consideration and with a
lawful object.
The words object and consideration used in section 23 are not
synonymous. The word object here means purpose or design
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If it is forbidden by law.
If it is of such a nature that, if permitted, it would defeat the provisions
of any law.
If it is fraudulent.
If it involves or implies injury to the person or property of another.
If the court regards it as immoral
If the court regards it as opposed to public policy.
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Performance of Contract means fulfilling of their
respective legal obligations created under the contract byboth the promisor and the promisee.
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By the promisor himself
By the promisor or his agent
By the legal representatives
Performance by a third person:
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When the rights and obligations arising out of a contract are
extinguished, the contract is said to be discharged or terminated.
By performance
By mutual consent or agreement
By subsequent or supervening impossibility or illegality
By lapse of time
By breach of contract
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When there is breach of a contract, the injured party becomes entitled
to any one or more of the following remedies against the guilty party:
Recession of the contract
Suit for damages
Suit upon quantum meruit
Suit for an injunction
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THANK YOU