undefined | unit 1 indian contract act 1872 part i

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BLAW1

UNIT – 1

INDIAN CONTRACT ACT, 1872 PART 1

Q1. Which are the steps involved within a contract?

A 1)

Proposal and its communication

Acceptance of proposal and its communication

Agreement by mutual promises

Contract

Performance of Contract

Q2) DIFFERENCE BETWEEN AGREEMENT AND CONTRACT

A 2)

CONTRACT	AGREEMENT
A contract is an agreement that's enforceable by law.	A promise or variety of promises that aren't contradicting and are accepted by the parties involved is an agreement.
A contract is merely legally enforceable.	An agreement must be socially acceptable. It should or might not be enforceable by the law.
A contract should create some legal obligation.	An agreement doesn’t create any legal obligations.
All contracts also are agreements.	An agreement may or might not be a contract.

Q3.What are the essential requirements of a contract?

A 3)

Offer and its acceptance

Free consent of both parties

Mutual and lawful consideration for agreement

It should be enforceable by law. Hence, intention should be to make legal relationship. Agreements of social or domestic nature aren't contracts

Parties should be competent to contract

Object should be lawful

Certainty and possibility of performance

Q 4) Name the types of contracts.

A 4)

On the idea of validity

Valid contract

Void contract

Voidable contract

Illegal contract

Unenforceable contract

On the idea of formation

Express contract

Implied contract

Quasi contract

On the idea of Performance

Unilateral contract

Bilateral contract

On the bases of execution

Executed contract

Executory contract

1. On the idea of validity

a) Valid contract: An agreement which has all the essential elements of a contract is named a legitimate contract. A legitimate contract are often enforced by law.

b) Void contract [Section 2(g)]: A void contract may be a contract which ceases to be enforceable by law. A contract when originally entered into could also be valid and binding on the parties. It's going to subsequently become void. -- There are many judgments which have stated that where any crime has been converted into a "Source of Profit" or if any act to be done under any contract is against "Public Policy" under any contract— than that contract itself can't be enforced under the law-

c) Voidable contract [Section 2(i)]: An agreement which is enforceable by law at the option of 1 or more of the parties thereto, but not at the option of other or others, is a voidable contract. If the essential element of free consent is missing in a contract, the law confers right on the aggrieved party either to reject the contract or to accept it. However, the contract continues to be good and enforceable unless it's repudiated by the aggrieved party.

d) Illegal contract: A contract is against the law if it's forbidden by law; or is of such nature that, if permitted, would defeat the provisions of any law or is fraudulent; or involves or implies injury to an individual or property of another, or court regards it as immoral or against public policy. These agreements are punishable by law. These are void-ab-initio.

“All illegal agreements are void agreements but all void agreements aren't illegal.

e) Unenforceable contract: Where a contract is good in substance but due to some technical defect can't be enforced by law is termed unenforceable contract. These contracts are neither void nor voidable.

2. on the idea of formation

a) Express contract: Where the terms of the contract are expressly prescribed in words (written or spoken) at the time of formation, the contract is claimed to be express contract

b) Implied contract: An implied contract is one which is inferred from the acts or conduct of the parties or from the circumstances of the cases. Where a proposal or acceptance is formed otherwise than in words, promise is claimed to be implied.

c) Quasi contract: A contract is made by law. Thus, quasi contracts are strictly not contracts as there's no intention of parties to enter into a contract. It's legal obligation which is imposed on a celebration who is required to perform it. A contract is predicated on the principle that an individual shall not be allowed to complement himself at the expense of another.

3. on the idea of Performance

a) Unilateral contract: A agreement is one during which just one party has got to perform his obligation at the time of the formation of the contract, the opposite party having fulfilled his obligation at the time of the contract or before the contract comes into existence.

b) Bilateral contract: A contract is one during which the requirement on both the parties to the contract is outstanding at the time of the formation of the contract. Bilateral contracts also are referred to as contracts with executory consideration.

4. on the bases of execution

a) Executed contract: An executed contract is one during which both the parties have performed their respective obligation.

b) Executory contract: An executory contract is one where one or both the parties to the contract have still to perform their obligations in future. Thus, a contract which is partially performed or wholly unperformed is termed as executory contract.

Q5) Make a note on the rules of an offer.

A 5)

Offer must create Legal Relations

Offer must be clear, not vague

Offer must be communicated to the Offeree

Offer could also be Conditional

Offer cannot contain a Negative Condition

Offer is often specific or general

Offer could also be Expressed or Implied

1] Offer must create Legal Relations

The offer must cause a contract that makes legal relations and legal consequences just in case of non-performance. So a social contract which doesn't create legal relations won't be a valid offer. Say for instance a dinner invitation extended by A to B isn't a valid offer.

2] Offer must be clear, not vague

The terms of the offer or proposal should be very clear and definite. If the terms are vague or unclear, it'll not amount to a valid offer. See example the following offer – A offers to sell B fruits worth Rs 5000/-. This is often not a valid offer since what sorts of fruits or their specific quantities aren't mentioned.

3] Offer must be communicated to the Offeree

For a proposal to be completed it must be clearly communicated to the offeree. No offeree can accept the proposal without knowledge of the offer. It makes clear that acceptance in ignorance of the proposal doesn't amount to acceptance.

4] Offer could also be Conditional

While acceptance can't be conditional, an offer could be conditional. The offeror can make the offer subject to any terms or conditions he deems necessary. So A offers to sell goods to B if he makes half the payment in advance. Now B can accept these conditions or make a counteroffer.

5] Offer cannot contain a Negative Condition

The non-compliance of any terms of the offer cannot result in automatic acceptance of the offer. Hence it cannot say that if acceptance isn't communicated by a particular time it'll be considered as accepted. Example: A offers to sell his cow to B for 5000/-. If the offer isn't rejected by Monday it'll be considered as accepted. This is often not a valid offer.

6] Offer is often specific or general

As we saw earlier the offer are often to at least one or more specific parties. Or the offer might be to the public generally.

7] Offer could also be Expressed or Implied

The offeror can make an offer through words or maybe by his conduct.

An offer which is formed via words, whether such words are written or spoken (oral contract) we call it an express contract and when an offer is formed through the conduct and therefore the actions of the offeror it's an implied contract.

Q6) What are the rules for valid acceptance?

A6)

Acceptance must be absolute and unconditional

Acceptance by usual mode as desired by the offer or

Acceptance cannot precede the offer

Acceptance could also be express or implied

Acceptance must tend within an inexpensive time

Acceptance must be by an ascertained person (offeree)

Offer can't be accepted after it had been rejected unless it's renewed

Silence doesn't imply acceptance

Acceptance must be made before the lapse or revocation of the offer

Acceptance of offer means acceptance of all terms attached to the offer

An agreement not enforceable by law is claimed to be void.

Q 7) Mention the ways to terminate an offer.

A 7)

By notice of revocation

By lapse of your time

By failure of the acceptor to fulfill a condition precedent to acceptance

By failure to simply accept consistent with the mode prescribed

By death or insanity of the offeror

By rejection

Q 8) Name the different types of standing offer.

A 8)

National Master Standing Offer (NMSO): used by many departments or agencies throughout Canada.

Regional Master Standing Offer (RMSO): used by many departments or agencies within a specific geographical area.

National Individual Standing Offer (NISO): used by a specific department or agency throughout Canada.

Regional Individual Standing Offer (RISO): used by a specific department or agency within a specific geographical area.

Departmental Individual Standing Offer (DISO): used only by PWGSC on behalf of specific departments and agencies.

Q9) State the exceptions of the rule ‘no consideration no contract’

A 9)

On account of natural love & affection u/s 25(1): Such agreements are enforceable even inconsiderately.

For voluntary services u/s 25(2): A promise to compensate wholly or partially, an individual who has voluntarily done something for the promisor, is enforceable, even inconsiderately.

For promise to pay time-barred debts 25(3): A promise by a debtor to pay a time barred debt is enforceable provided it's in writing and signed by the debtor or his agent.

In the case of completed gifts: The rule no consideration no contract doesn't apply.

In the case of agency: to make workplace relationship consideration isn't necessary.

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