THE CONTRACT ACT, 1872

Compiled by
Dr. Md. Mosharref Hossain

 Contract Act, 1872

 Section 1 – 75 : Preliminaries of Contract

 Section 76 – 123 : (Repealed, Sale of Goods Act, 1930)
 Section 124 – 147 : Indemnity and Guarantee
 Section 148 – 181 : Bailment
 Section 182 – 238 : Agency
 Section 239 – 266 : (Repealed, Partnership Act, 1932)

 Definition of Contract

 An Agreement enforceable by law is a contract (Sec. 2h).

 An Agreement and
 The agreement must be enforceable by law

 All Agreement are contracts if they are made by the free consent of parties competent
to contract, for a lawful consideration and with a lawful object, and not hereby
expressly declared to be void. (Sce. 10)

 Agreement
 Free consent
 Competent
 Lawful consideration
 Lawful object, and
 Not hereby expressly declared to be void

 Competent to Contract (Sec. 10)

 Every person is competent to contract who is of the age of majority according to the
law to which he is subject, and who is of sound mind, and is not disqualified from
contracting by any law to which he is subject.

 Major
 Sound Mind: If he is capable of understanding the consequence of contract.
 Not Disqualified

 Classification of Contract
1. The Method of Formulation of a Contract
2. The time of its Performance
3. Its Parties
4. Its Legality or Validity

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 According to the Method of Formulation

a) Express Contract: Which is expressed in words spoken or written.

a) Implied Contract: Understood from the acts, the conduct of the parties and /or the
course of dealing between them.
a) Quasi Contract: Which are not contracts strictly, though the parties act as if there is a
contract.

 According to Time of Performance

a) Executed Contract: The parties perform their obligations immediately, i.e., as soon as
the contract is formed.
a) Executory Contract: Obligations are to be performed at a later time.

 According to Parties of the Contract

a) Bilateral Contracts: There must be at least two parties to the contract. Therefore all
contracts are bilateral or multilateral.
a) Unilateral Contracts: One party has to fulfill his obligations whereas the other party
has already performed his obligations.

 Legality or Validity

a) Valid Contract
b) Void Contract
c) Voidable Contract (Sec. 2i)
d) Illegal Contract
e) Unenforceable Contract

 Essential Elements of Contract

 Offer and Acceptance (Sec. 2)

 Communication (Sec. 3,4)
 Intention to create Legal Relationship
 Lawful Consideration (Sec. 4)
 Capacity of Parties (Sec. 11, 12)
 Free Consent (Sec. 14)
 Legality of the Object (Sec. 23, 24)
 Certainty
 Possibility of Performance
 Writing, Registration and Legal Formalities
 Should not be Void Agreements
Every Contract is an agreement but all agreements are not contracts.

 Lawful Offer

 Express or Implied (Sec. 9)

 To a Definite Person
 Legal Relationship is required
 The Terms must be certain, definite, not vague

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  Must be communicated
 A mere statement of intention
 May be Conditional

 Lawful Acceptance (Sec. 7)

 Absolute and unqualified

 Conditional acceptance
 Must be expressed in some usual or reasonable manner
 Mental acceptance or uncommunicated assent
 Time of Acceptance
 When Acceptance is complete
 Before offer

 Communication (Sec. 4)

 Proposal: When it comes to the knowledge of the person to whom it is made.

 Acceptance:
 As against the proposer, when it put in the course of transmission to him, so as
to be out of the power of the acceptor.
 As against the acceptor, when it comes to the knowledge of proposer.
 Revocation:
 As against the person who makes it, when it is put into a course of transmission
to the person to whom it is made, so as to be out of the power of the person who
makes it
 As against the person to whom it is made, when it comes to his knowledge.

 Lawful Consideration

 Past Consideration
 Present Consideration
 Future Consideration

 Consideration-Exceptions (Sec. 25)

 Natural Love & Affection

 By a written & registered document
 Natural love and affection
 Near relation to each other
 Voluntary Compensation
 Time-barred debt
 Agency
 Completed gift

 Void Agreements

An Agreement so made must not have been expressly declared to be void.

 Restraint to Marriage (Sec. 26)
 Restraint of Trade (Sec. 27)
 Restraint of Proceedings (Sec. 28)

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  Having Uncertain Meaning (Sec. 29)
 Wagering Agreement (Sec. 30)

 Revocation (Sec. 5, 6)

 A proposal may be revoked at any time before the communication of its acceptance is
completed as against the proposer, but not afterwards.
 An acceptance may be revoked at any time before the communication of the
acceptance is completed as against the acceptor, but not afterwards.
 Termination of Contract

 By performance of the promise of all parties

 By mutual consent canceling the agreement or substituting a new agreement in place
of the old
 Subsequent impossibility of performance
 By operation of law – death, insolvency, or merger
 By lapse of time
 By material alteration without the consent of the other party
 By beach made by one party

 Remedies of Breach of Contract

 Free from obligation

 Suit for damages
 Specific performance
 Injunction

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