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Assignment

Assignment

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Published by: ashurpt12 on Aug 19, 2010
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09/29/2010

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ASSIGNMENT-1SUBITTED BY SUBMITTED TO
 ASHISH GUPTA MS. POONAM LUTHRA09/MBA/02 LECTURER (B. LEGISLATION)
ASSIGNMENT ON:ALL AGREEMENTS ARE NOT CONTRACT BUT ALL CONTRACTS ARE AGREEMENT.SOLUTION:
The law of contract is that branch of law which determines the circumstances in which promisemade by the parties to a contract shall be legally binding on them. All of us enter into a numberof contracts everyday knowingly or unknowingly. Each contract creates some right and dutiesupon the contracting parties. Indian contract deals with the enforcement of these rights andduties upon the parties. Indian Contract Act, 1872 came into effect from 1st September, 1872.It extends to the whole of India except the state of Jammu and Kashmir.
CONTRACT [SECTION 2(h)]:
A contract is an agreement enforceable by law.CONTRACT = AGREEMENT (+) ENFORCEABILITY BY LAW
All contracts are agreements but all agreements are not contractsAGREEMENT [SECTION 2(e)]:
An agreement means, Every promise or every set of promises, forming consideration for each other.AGREEMENT = PROMISE(S) BY ONE PARTY (+) PROMISE(S) BY THE OTHER PARTY
PROMISE [SECTION 2(b)]:
When the person to whom the proposal is made signifies his assentthereto, the proposal is said to be accepted. A proposal when accepted becomes a promise.PROMISE = PROPOSAL + ACCEPTANCE
However,
promise cannot be one sided. Only a mutual promise forming consideration for eachother is agreement. - - For example, A agrees to pay Rs 100 to B and B agrees to give him abook which is priced at Rs 100. This is set of promises which form consideration for each other.However, if A agrees to pay Rs 100 to B, but B does not promise anything, it is not set of promises forming consideration for each other and hence not an agreement.
 
PROPOSAL/OFFER [SECTION 2(a)]:
A person is said to make a proposal when he signifies toanother his willingness to do or to abstain from doing anything with a view to obtaining assentof that other to such act or abstinence
CONSIDERATION [SECTION 2(d)]:
When, at the desire of the promisor, the promise or anyother person has done or abstained from doing, or does or abstains from doing or promises todo or to abstain from doing something, such act or abstinence is called consideration. In otherwords, consideration is something in return.It should be noted that the term agreement as defined in Contract Act requires mutualconsideration. - - Thus, if A invites B to dinner and B agrees to come, it is not an agreement asdefined in Contract Act.
Hence
on the basis of following following essentials are needed to make all the agreements tobe a contract.According to
Section 10,
All agreements are contracts if they are made by free consent of parties, competent to contract, for a lawful consideration and with a lawful object and are nothereby expressly declared to be void. The essential elements of a valid contract are:
Agreement:
To constitute a contract there must be an agreement. There must be two partiesto an agreement, i.e. one party making an offer (offeror) and the other party accepting theoffer (offeree).
Intention to create legal relationship:
When the two parties enter into an agreement, theremust be an intention by both parties to legally bind the other as a result of such agreement.Thus, agreements of social or household nature are not contracts.
Capacity of parties (competence):
The parties to the agreement must be capable of enteringinto a valid contract. According to Section 11, every person is competent to contract if he orshe,1. is of the age of majority;2. is of sound mind; and3. is not disqualified from contracting by any law to which he is subject.
Lawful Consideration
: An agreement to form a valid contract should be supported byconsideration. Consideration means something in return (quid pro quo). It can be cash, kind,an act or abstinence. It can be past, present or future. However, consideration should be realand lawful.
Free consent:
To constitute a valid contract there must be free and genuine consent of theparties to the contract. It should not be obtained by misrepresentation, fraud, coercion, undueinfluence or mistake.

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