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report on law of contract

report on law of contract

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Published by acidreign

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Published by: acidreign on Feb 28, 2013
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06/30/2013

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LAW OF CONTRACT
Chapter 1Introduction
Only the simple term of law does not cover the whole area of society. As a result law hasverification in their respective areas. Such as: Civil Law, Criminal Law etc. Such like that in business sectors there are laws passed by the legislature which is named as Business Law or Commercial Law. This is also known as Mercantile Law. The parliament of Bangladesh has passed some laws regarding business in Bangladesh. One of the Commercial Laws which areavailable in Bangladesh is “
The Contract Act, 1872
”.
1.1 Law of contract in Bangladesh
Contract act 1872 governs the law of contract in Bangladesh. The Act came into force in the thenBengal on 1 September of 1872, and was adopted in Bangladesh without change. It contains thecommon rules relating to contracts and differentiates them. It begins with the preliminaryaspects, including a short preamble and title, extent and date of commencement andinterpretation of words and expressions used in the act. All contracts in Bangladesh are governed basically by the contract act.
1.2 Contract
An agreement enforceable at law, made between two or more persons, by which rights areacquired by one or more to acts or forbearances on the part of the other or others, is a contract.Section 2(h) of the Contract Act, 1872, provides the authoritative definition of a contract, “anagreement enforceable by law is a contract”. It is a simple definition of the term contract given by the Act. From the definition, it is found that, to be a lawful contract, an agreement isnecessary and that agreement must be lawful that is enforceable by law. A contract is thus acombination of two ideas— agreement and obligation.Obviously, every agreement does not create obligation. When A offers to sell his horse to B for Tk. 5000.00, there is an obligation on A to sell and on B to buy the horse at the stipulated price.Such an agreement is therefore, enforceable by law. But an agreement between A and B to gotogether to a picnic does not create any obligation on either side and is not, therefore, enforceablein law. The former agreement is, therefore, a contract, while the latter is not.
1.3 A Valid Contract
To understand what these factors are we have to turn to judicial exposition of the definition of contract as given in the Contract Act, 1872. "The definition of contract appears to be built upon a
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succession of definition of the elements which go to make a contract, such as proposal,acceptance, promise, consideration, agreement. The requirements for formation of contract aremainly
agreement
and
consideration
. Analyzing the statutory definition of contract in the lightof the above judicial decisions, we find that in order to be treated as a contract, an agreementmust satisfy certain conditions.From the definition of the Contract of section 2(h), it is expedient that a lawful agreement is a prerequisite of the formation of the contract. To form a contract the following steps are the basicsteps those should be followed-
Firstly a proposal has to be accepted to be a promise;
Secondly then the promise is to be considered to form an agreement;
Finally the agreement should have the enforceability of law to form a lawful contractTo understand the term contract more evidently, the following diagram can be drawn,Figure 1: Diagram shows the creation of a contract
1.4 Scope of a contract
The Contract Act covers a wide range of contractual rules which cover the law of variety of contracts. From this point of view the Act describes two types of law of contracts; general lawsand special laws.
1.General laws relating to contract
(i)Laws relating to formation of contract;(ii)Laws relating to performance;
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Contract [Section2(h)]
Agreement [Section 2(e)]Enforceability [Section 10]
Promise[Section2(b)]
Consideration[Section 2(d)]
Competency of parties Free consent  Lawful object  Lawful consideration Not unlawful 
Proposal[Section 2(a)]Acceptance[Section 29b0]
 
(iii)Laws of remedy for a breach of contract.
2.Laws relating to some particular types of contract
(i)Contract of agency;(ii)Contract of indemnity and guarantee;(iii)Contract of bailment and pledge.
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