Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more ➡
Download
Standard view
Full view
of .
Add note
Save to My Library
Sync to mobile
Look up keyword or section
Like this
18Activity
×
P. 1
The Indian Contract Act

The Indian Contract Act

Ratings: (0)|Views: 18,097|Likes:
Published by Louie Hansen

More info:

Published by: Louie Hansen on Jan 19, 2012
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, DOC, TXT or read online from Scribd
See More
See less

04/15/2013

pdf

text

original

 
THE INDIAN CONTRACT ACT, 1872Contract
Sec.2 (h) an agreement enforceable by law give rise to legalobligation. Social obligation, no contract.
Agreement
 – Sec.2 (e) -
 
every promise and set of promises, forming consideration for each other. Proposal – assent thereto – proposal accepted - promise – agreement.
Consensus ad idem:
meeting of minds in full and final agreement – agree upon thesubject matter of the agreement in same sense and at the same time. No consensus adidem - no contract.Example: A offers to sell his old Fiat car to B. B thinks that he is purchasing A’s newScoda car. There is no consensus ad idem and consequently no contract.
Essential characteristics of a valid contract:
1.Offer and acceptance – two parties, one making the offer and other acceptingit – offer must be definite – acceptance must be absolute and unconditional – acceptance must be communicated to the offeror.2.Intention to create legal relationship – intention of parties to the agreement tocreate legal relationship must – no such intention, no contract – social or domestic agreements do not contemplate legal relationship, as such nocontract.
 Balfour v Balfour 
– husband promises to pay household allowance to wife – separated – wife sues for allowance – domestic agreement – no contract.
V.Rao Vs. A. Rao
 – old widow asked her niece to move in with her - promisedto will some property in exchange – niece moved in and stayed till widow’sdeath – Held, intention to create a legal relationship – niece entitled to share in property.
 Rose & Frank Co. v Crompton Bros.
 – agency agreement between R and C -clause in agreement stated that agreement not entered into as formal or legal – not subject matter of legal jurisdiction no intention to create legalrelationship - no contract.3.Lawful consideration - both parties give and get something in return – noconsideration, no contract - consideration may be past, present or future – incash or in kind – must be real and lawful.4.Competent parties – must have attained age of majority – of sound mind – notdisqualified by any law – so, minor, lunatic, idiot, drunkard, etc not competentto contract.5.Free and genuine consent – parties are of same mind when they agree aboutthe subject matter in same sense and at the same time – if induced by coercion,undue influence, fraud, misrepresentation, etc, there is no free consent - nocontract.
 
6.Lawful object object must not be illegal, immoral or opposed to public policy – if any legal flaw, not enforceable by law.7.Agreement not declared void – must not have been declared void by any lawin force.8.Certainty and possibility of performance terms must be certain and notvague – not possible to ascertain the meaning, it cannot be enforced – must becapable of being performed – agreement to do impossible act, no contract.Example : (a) A agrees to sell “100 bales of cloth” to B. There is nothing toindicate the kind of cloth intended to be sold. The agreement isvoid for uncertainty.
Scammel v Ouston
– purchase of motor van on hire purchase – hire purchase price payable over two years - no rate of interestor mode of payment indicated – Held, the word ‘hire purchase’has not been precisely defined – no contract.9.Legal formalities essential to complete legal formalities to make theagreement binding e.g. agreement may require payment of stamp duty,require registration, etc.
Types of contracts
:1.Void contract – a contract ceases to be enforceable by law, becomes void – originally valid when entered into – by change of law, may subsequently become void – e.g. contract to deal with a foreign country will become voidwhen war breaks out between the importing and exporting country.Void agreement – agreement which does not create legal rights or obligations – a nullity – void ab initio – e.g. agreement without consideration.2.Voidable contract - enforceable at the option of one party and not the other – free consent is missing – party whose consent is not free may repudiate/rescind/avoid/cancel the contract, if so elects remains valid till it isrepudiated.Contract voidable also in following circumstances – (i)prevent promisor to fulfil his part of promise – voidable at theoption of promisor.(ii)Promisor fails to perform his part of obligation – voidable at theoption of other party/promise.3.Illegal contract which is against public policy, is criminal in nature, isimmoral – collateral transaction/agreement also becomes illegal – 
all illegal agreements are void but all void agreements are not illegal 
.Example : A enters into an agreement with B to manufacture prohibited goods – A takes loan for the purpose from C who knows about the purpose of theloan agreement between A and C is collateral to the main agreement between A and B, which is illegal – collateral agreement is also illegal.
 _____________________________________________________________________ 
2
 
4.Unenforceable contract – cannot be enforced in a Court of law due to technicaldefect - may be carried out by the parties, but no legal remedies in case of  breach by either party - e.g. non-registration, non-payment of stamp duty, etcmakes the contract unenforceable.5.Express contract – terms agreed upon at the time of formation - may be writtenor oral.6.Implied contract – contract inferred from the act or conduct of the parties –  proposal or acceptance made otherwise than by words – e.g. when a persongets into bus, lets a porter carry his luggage at the railway station, takes foodat a restaurant, there is an implied contract.
Upton Rural District Council v Powell 
- P’s farm did not come under the freeservice zone of the fire department - fire at P’s farm – P called up Upton FireBrigade which arrived and put out the fire – Held, P was liable to pay for theservice rendered as implied promise to pay.7.Quasi contract resembles a contract however, no express offer or acceptance - legal obligation on a party who is required to perform it – Example : A leaves his goods at B’s place by mistake – B consumes the goodsas his own – B is bound to pay for the goods to A as there was a quasi contractunder which B was under a legal obligation to return A’s goods.8.Executed contract both the parties have performed their respectiveobligations.9.Executory contract may be partly or wholly executory either or both parties have yet to fulfil his/their part of obligation.10.Unilateral contract – one-sided contract – one party has to fulfil his part of obligation – other party has already fulfilled his obligation before or at thetime of formation of the contract – also known as contracts with executedconsideration.Example : A permits a porter to carry his luggage to the railway carriage – contracts comes into existence when the porter places the luggage in thecarriage – at that time porter has already fulfilled his obligation – A yet tofulfil his obligation.11.Bilateral contract- both the parties have yet to fulfil their obligations – contract with executory consideration.* * * * *
 _____________________________________________________________________ 
3

Activity (18)

You've already reviewed this. Edit your review.
1 hundred reads
hahire liked this
Ash Momoiez liked this
Shah Jubaer liked this
niranjanusms liked this
Faiza Mehmood liked this
Neeraj Pandey liked this
Pallavi Ganesh liked this
Pallavi Ganesh liked this

You're Reading a Free Preview

Download
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->