Professional Documents
Culture Documents
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MODULE- II
INDIAN CONTRACT ACT, 1872
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Indian Contract Act, 1872
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and it
came into force on the first day of September 1872
The law of contract is that branch of law which
determines the circumstances in which promises made
by the parties to a contract shall be legally binding on
them.
The Act deals with:
1. The general principles of the law of contract
2. Some special contracts.
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1. Agreement- Offer and its acceptance
2. Intention should be to create legal relationship-
Balfour v. Balfour..
. Free consent of both parties
-. Mutual and lawful consideration for agreement.
Î. Parties should be competent to contract
A. Object should be lawful
7. Certainty and possibility of performance
8. Agreement not declared void or illegal.
9. Legal formalities, if any.
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According to sec. 2(a): When one person
signifies to another his willingness to do or
abstain from doing anything with a view to
obtaining the assent of the other to such act or
abstinence, he is said to make a proposal or
offer.
The person making the proposal or offer is
called proposer, offeror or promisor.
The person to whom the offer is made is called
offeree.
When the offeree accepts the offer, he is called
acceptor.
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Types of Offer
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1. Express offer.
2. Implied offer.
. Specific offer.
-. General offer.
Î. Cross offer.
A. Counter offer.
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Rules of Offer |
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By communication of notice
By lapse of time
By non-fulfillment of a condition
By death or insanity of the offeror
If offer is not accepted in usual manner
Counter offer is made
If law is changed
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An agreement with or by a minor is void
Can be a promisee or a beneficiary
NO ratification of agreement on the age of majority
If he has received any benefit under the void agreement
he cannot be asked to pay for it.
Minor can always plead minority
$) - for necessities, the item contracted for must
be necessary for minor¶s existence, the value must be up
to that of the current standard of living or financial/social
status (not excessive in value).
Minor is not liable for tort or a civil wrong which arises
out of contract.
Can act as a agent
Cannot be a partner in a firm or adjudged insolvent
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1A
Consideration |
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Legal Rules for Consideration
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1. Love and affection
2. Compensation for voluntary services
. Payment for time barred debt
-. Completed gift
Î. Charitable subscription
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U/S1. Two or more persons are said to consent when
they agree upon the same thing in the same sense.
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U/S1-. Consent is said to be free when it is not caused
by²
(@) coercion, as defined in section 1Î, or
( ) undue influence, as defined in section 1A, or
() fraud, as defined in section 17, or
() misrepresentation, as defined in section 18, or
() mistake, subject to the provisions of sections 20, 21 and
22.
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LAWFUL OBJECT |
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2 - An agreement not enforceable by law is said to be
void. [section 2(g)]. - - Note that it is 'void contract¶, as an
agreement which is not enforceable by law does not become
'contract¶ at all.
Following are void agreements ±
Both parties under mistake of fact (section 20)
Unlawful object or consideration (section 2-)
Agreement without consideration (section 2Î)
Agreement in restraint of marriage (section 2A)
Agreement in restraint of trade (section 27)
Agreement in restraint of legal proceedings (section 28)
Uncertain agreement (section 29)
Wagering agreement (section 0)
Agreement to do an impossible Act (section ÎA).
2-
Performance of contract
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The parties to a contract must either perform, or offer to perform, their
respective promises, unless such performance is dispensed with or
ex-cused under the provisions of this Act, or of any other law.
Promises bind the representatives of the promisors in case of the death of
such promisors before performance, unless a contrary intention appears
from the contract.
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Where a promisor has made an offer of performance to the promisee, and
the offer has not been accepted, the promisor is not responsible for non-
performance, nor does he thereby lose his rights under the contract.
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When a party to a contract has refused to perform, or disabled himself from
performing his promise in its entirety, the promisee may put an end to the
contract, unless he has signified, by words or conduct, his acquiescence in
its continuance, he cannot repudiate it.
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When a promisee accepts performance of the promise from a third person, he cannot
afterwards enforce it against the promisor.
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When two or more person have made a joint promise, then, unless a contrary
intention appears by the contract, all such persons, during their joint lives, and, after
the death of any of them, his representative jointly with the survivor or survivors, and,
after the death of the last survivor the representatives of all jointly, must fulfill the
promise.
2A
Discharge of contract
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BY PERFORMANCE
BY MUTUAL CONSENT
LAPSE OF TIME
OPERATION OF LAW
IMPOSSIBILITY OF PERFORMANCE
BREACH OF CONTRACT
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Promises bind the representatives of the promisor in the
case of death of such promisor before performance,
unless a contrary intention appears from a contract.
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1
TEST |
. A offered to sell his car to B for Rs. A0,000. B said, ³ I accept your
offer. Here is Rs. Î0,000 in cash and a promissory note for the
balance.´ Did a contract result? Explain.
-. A teaches his parrot to recite an offer and then sends the parrot to
B. The bird repeats the recitation. Is this a valid offer? Justify.
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