Legal Aspects Of Business: Indian Contracts Act 1872

Topics: Contract, Contract law, Common law Pages: 10 (3474 words) Published: April 18, 2013
Legal Aspects Of Business –
Indian Contracts Act 1872
Indian Contract Act 1872 is the main source of law regulating contracts in Indian law. CitationAct No. 9 of 1872
Enacted byParliament of India
Date enacted25 April 1872
Date commenced1 September 1872

The law relating to contracts in India is contained in Indian Contract Act, 1872. The Act was passed by British India and is based on the principles of English Common Law. It is applicable to the All States of India except the State of Jammu & Kashmir. It determines the circumstances in which promise made by the parties to a contract shall be legally binding on them. All of us enter into a number of contracts everyday knowingly or unknowingly. Each contract creates some right and duties upon the contracting parties. Indian contract deals with the enforcement of these rights and duties upon the parties in India. History

The Indian Contract Act came into force on 1 September 1872. It Was Enacted Mainly With a View To ensure Reasonable Fulfillment of Expectation Created By the promises of the parties and also enforcement of obligations prescribed by an agreement between the parties.The Third Law commission of British India formed in 1861 under the stewardship of chairman Sir John Romilly, with initial members as Sir Edward Ryan, R. Lowe, J.M. Macleod, Sir W. Erle (succeeded by Sir. W.M. James) and Justice Wills (succeeded by J. Henderson), had presented the report on contract law for India as Draft Contract Law (1866). The Draft Law was enacted as The Act 9 of 1872 on 25 April 1872 and the Indian Contract Act, 1872 came into force with effect from 1 September 1872. Before the enactment of the Indian Contract Act, 1872, there was no codified law for contract in India. In the Presidency Towns of Madras, Bombay and Calcutta law relating to contract was dealt with the Charter granted in 1726 by King George I to the East India Company. Thereafter in 1781, in the Presidency Towns, Act of Settlement passed by the British Government came into force. Act of Settlement required the Supreme Court of India that questions of inheritance and succession and all matters of contract and dealing between party and party should be determined in case of Hindu as per Hindu law and in case of Muslim as per Muslim law and when parties to a suit belonged to different persuasions, then the law of the defendant was to apply. In outside Presidency Towns matters with regard to contract was mainly dealt with English Contract Laws; the principle of justice, equity and good conscience was followed. Development

The Act as enacted originally had 266 Sections, it had wide scope and included. General Principles of Law of Contract::::::::: 1 to 75
Contract relating to Sale of Goods::::::::::::76 to 129
Special kinds of Contracts
(includes indemnity,
guarantee, bailment & pledge:::::::::::::::::125 to 238
Contracts relating to Partnership::::::::::::239 to 266
Indian Contract Act embodied the simple and elementary rules relating to Sale of goods and partnership. The developments of modern business world found the provisions contained in the Indian Contract Act inadequate to deal with the new regulations or give effect to the new principles. Subsequently the provisions relating to the sale of goods and partnership contained in the Indian Contract Act were repealed respectively in the year 1930 and 1932 and new enactments namely Sale of Goods and Movables Act 1930 and Indian Partnership act 1932 were re-enacted. At present the Indian Contract Act includes:

General Principles of Law of Contract:::::: 1 to 75
Special kinds of Contracts
(includes indemnity, guarantee,
bailment & pledge::::::::::::::::::::::::::125 to 238
Section 2(h) of the Act defines the term contract as "any agreement enforceable by law". There are two essentials of this act, agreement and enforceability. Section 2(e) defines agreement as "every promise and every set of promises, forming the consideration for...
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