Indian Contract Act, 1872

Topics: Contract, Contract law, Breach of contract Pages: 37 (7396 words) Published: February 27, 2013
What is Law ?
Law means a ‘set of rules’ which governs our behaviours and relating in a civilized society. So there is no need of Law in a uncivilized society.

Why Should One Know Law ?

One should know the law to which he is subject because ignorance of law is no excuse.

Introduction to Indian Contract Act

Definition of a Contract :-

Sec. 2(h) of the Act defines the term contract as "An agreement enforceable by law is a contract”.

Flow of the definition :-
Contract Agreement Promise Accepted proposal Proposal/offer

Contract as defined by Eminent Justists :-

1.“Every agreement and promise enforceable at law is a contract.” – Pollock

2.“A Contract is an agreement between two or more persons which is intended to be enforceable at law and is contracted by the acceptance by one party of an offer made to him by the other party to do or abstain from doing some act.” – Halsbury

3.“A contract is an agreement creating and defining obligation between the parties” – Salmond

The Indian Contract Act consists of the following two parts :-
a)General Principals of the Law of Contract :-

The general principals of the Law of Contract are contained in Sections 1 to 75 of the Indian Contract Act. These principles apply to all kinds of contracts irrespective of their nature.

b)Special kinds of contracts :-

Special contracts are contained in Sections 124 to 238 of the Indian Contract Act. These special contracts are Indemnity, Guarantee, Bailment, pledge and Agency.

Section 1 of the Contract :-

Section 2 of the Contract :-

Section 2 – Definitions :-

1.Offer (i.e. Proposal) [Sec. 2(a)] :-

“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 person either to such act or abstinence, he is said to make a proposal”.

Acceptance :-

“When the person to whom the proposal is made, signifies his assent there to, the proposal is said to be accepted”.

2.Promise 2(b) :-

“A Proposal when accepted becomes a promise. In simple words, when an offer is accepted it becomes promise”.

3.Promisor and promise 2(c) :-

“When the proposal is accepted, the person making the proposal is called as promisor and the person accepting the proposal is called as promise”.

4.Consideration 2(d) :-

When at the desire of the promisor, the promisee or any other person has done or abstained from doing something or does or abstains from doing something or promises to do or abstain from doing something, such act or abstinence or promise is called a consideration for the promise.

5.Agreement 2(e) :-

“Every promise and set of promises forming the consideration for each other. In short, agreement = offer + acceptance”.

6.Reciprocal Promises 2(f) :-

“Promises, which form the consideration or part, of the. consideration for each other are called reciprocal promises”.

Promises which form the consideration or part of consideration for each other as called reciprocal promises.

7.Void agreement 2(g) :-

“An agreement not enforceable by law is said to be void”.

8.Contract 2(h) :-

“An agreement enforceable by Law is a contract”.

9.Voidable contract 2(i) :-

“An agreement is a voidable contract if it is enforceable by Law at the option of one or more of the parties there to (i.e. the aggrieved party), and it is not enforceable by Law at the option of the other or others”.

Essentials of a valid contract :-
1.Proper offer and proper acceptance with intention to create legal relationship

2.Lawful consideration

3.Capacity :-

The parties to a contract must have capacity (legal ability) to make valid contract. Section 11 of the Indian contract Act specify that every person is competent to contract provided.

4.Free consent :-

Consent of the parties must be genuine consent...

References: :
Indian Contract Act, 1872
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