Syllabus

LAW OF CONTRACT I
b. a. ll. b. (hons.)
I Semester
Academic Year 2021–22

Course Teacher: RIDHIMa dikshit

INTRODUCTION

Contracts are made by ordinary people in everyday situations, often many times during a day.
For examples buying a magazine, parking a car, doing the family shopping, online subscriptions
to applications, licences and purchase of goods and services, entering competitions. Most of
these events take place quite smoothly without any awareness of a contract having been made. It
is usually not until disputes occur that the question of a possible contract arises. The majority of
people generally honour most of their promises as a matter of principle. However, situations do
arise where conflicting interests lead to dispute, and then an established system of some sort is
needed to resolve the problems and to attempt to prevent injustice. It is easy enough to imagine a
situation where an intention to trade dishonestly leads to a contract dispute, but problems may
also arise when two or more people have honest, but differing, views of a situation. For example,
those involved may have used similar language while understanding completely different things
in an agreement. Equally, an arrangement may have begun amicably, a subsequent difference of
opinion colouring a person’s view of the situation. The study of any area of law can appear
somewhat daunting to a new student no exception Contract Law.

The main aim of the law of contract is to ensure that these agreements are made in a fair way,
and to enforce them, whether it is on behalf of the owner of a large company or a consumer
buying a bar of chocolate. The rules of contract law are built on fairness and reasonableness, as
cases have been decided in court, and on top of these Parliament has formed statutes where
issues are of general concern. The subject is designed in a way that it is internalised by the
students.

Page 1 of 5
The Indian Contract Act of 1872 was enacted for the purpose of regulating for formation of
contractual relations and to provide proper and adequate remedial measure of recovery of
damages in the event of one party’s failure to keep the contractual obligations. The Specific
Relief Act of 1963, which replaced the earlier Act of 1877, provides the remedial measures for
forcing parties to perform their actual contractual commitments and not to get rid of them by just
paying compensation for their acts. In addition to the bare law the judicial pronouncements are
also included in the curriculum for better understanding and interpretation of law.

COURSE OBJECTIVES
The Course aims to provide the students:
 An exposition of the law relating to contract
 Analysis of the doctrines that make up the law of contract

 Developments in the law relating to contract in India.

LEARNING OUTCOME

On completion of this course the student will be able to-

 State, explain and understanding the law relating to contract

 Formulate the reasoning and apply the law on the practical problem

 Identify lacunas in the present legal regime in India and suggest improvements.

COURSE OUTLINE
UNIT I: INTRODUCTION
Meaning of Contract - History and Evolution – Development of Law of Contract in England
through Common Law Courts- Introduction to Indian Contract Act, 1872 – Definitions –
Contract- Agreement - Difference between Contract and Agreements)- Classification of
Contracts (based Creation – Express & Implied- duration, Execution – Executed & Executory,
Enforceability – Valid, Void, Voidable, Illegal & Unenforceable)- Essentials of Contract.

UNIT II: FORMATION OF A CONTRACT

Page 2 of 5
Intention to enter into a Contract-Family and Business matters - Proposal - Definition - Promise
-Promisor- Promisee - Communication of Proposal- Standard form of Offer -Revocation of
Proposal - General/Specific Offer - Invitation to Offer – Lapse of Offer – Notice of Revocation–
Acceptance of Offer– Essentials -Communication- Absolute and Unconditional and Revocation-
Tenders / Auctions.

UNIT II: CAPACITY TO CONTRACT

Essentials for Capacity to Contract– Free consent - Competency of Parties - Minor’s Position -
Nature / Effect of Minor’s Agreements- Doctrine of Restitution- Persons of Unsound mind-
Persons disqualified by law – Lawful consideration– Lawful object – Not expressly declared to
be void.

UNIT III: CONSENT

Meaning of Consent - Free Consent - Factors that vitiating Free Consent – Coercion - Undue
Influence - Fraud – Misrepresentation- Mistake- Mistake of fact - Mistake of Law- The Effect
when Consent is not Free.

UNIT IV: CONSIDERATION

Definition - Consideration for Promise- Essentials - Real, Imaginary, Lawful, Good and
Adequate Consideration- Executed and Executory Consideration– Importance of Consideration
in an Agreement- Privity of Consideration- Privity of Contract- Common Law position-
Exceptions to “Privity Rule”- Promissory Estoppel- Reciprocal Promises.

UNIT V: VALIDITY OF CONTRACT/ LEGALITY OF OBJECT

Valid Contract - Void Agreement - Voidable Contract -Void Agreements- Unlawful Object –
Agreement in Restraint of Marriage- Agreement in Restraint of Trade– Agreement in Restraint
of Legal Proceedings– Agreement for Uncertainty - Wagering Agreements- Exceptions - Effect
of Void Agreement - Contingent Contract.

UNIT VI: RELATIONS RESEMBLING TO CONTRACT

Page 3 of 5
Quasi Contracts- Meaning -Rationale and Effect - Supply of Necessaries - Payment by Interested
Person - Liability to Pay for Non- Gratuitous Acts – Responsibility of Finder of Goods - Mistake
or Coercion - Theory of Unjust Enrichment.

UNIT- VII STANDARD FORM CONTRACTS, GOVERNMENT CONTRACT AND E-

CONTRACTS
Standard form of contract- Unreasonable Terms- Innominate term- Fundamental Terms and
Theory of Fundamental Breach - Rule of Contra Proferentam- Government Contract – Validity,
Essentials - Types - BOT, BOTT, RFT etc. – E-contracts- Validity- Types - Essentials.

UNIT VIII: DISCHARGE AND PERFORMANCE OF CONTRACT

Discharge of Contracts – Performance - Offer to Perform- By whom Contract must be performed
- Time and Place of Performance– Reciprocal Promises - Impossibility of Performance -
Doctrine of Frustration- Discharge by Agreement - Novation, Rescission and Alteration of
contract- and Effects Novation of Contract.

UNIT IX: BREACH OF CONTRACT AND REMEDIES

Breach of Contract - Anticipatory Breach - Damages: Nature- Kinds of Damages- Measure of
Damages- Quantum Merit- Liquidated damages- Penalty- Under English and Indian laws.

UNIT X: SPECIFIC RELIEF AND PERFORMANCE

Specific Relief and Performance (meaning)- The Specific Relief Act, 1963 - Locus standi –
What Contracts can be Specially Performed - Substituted performance - Remedies by the Court –
Injunction – Temporary- Perpetual - Declaration – Recovery of Property.

Reading List

ESSENTIAL READINGS-

 POLLOCK AND MULLA, THE INDIAN CONTRACT ACT (Lexis Nexis, 2019)

Page 4 of 5
SUGGESTED READINGS-

 BEATSON J., ANSON’S LAW OF CONTRACT (Oxford publication, 2017)

 SUBBARAO G.C. V., LAW OF CONTRACT I AND II (Narendra Gogia publications,
2016)
 H.G. BEALE, CHITTY ON CONTRACTS: GENERAL PRINCIPLES VOL. 1 (Sweet
and Maxwell, 2012)
 ANDREW BURROWS, A CASEBOOK ON CONTRACTS (North America Hart
Publishing, 2013)

Page 5 of 5