Syllabus

LAW OF CONTRACTs 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

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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.

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 on

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Creation – Express & Implied- Duration, Execution – Executed & Executory, Enforceability –
Valid, Void, Voidable, Illegal & Unenforceable)- Essentials of Valid Contract.

UNIT II: FORMATION and OF A CONTRACT

Intention to enter into a Contract - Family and Business matters – Proposal; Definition - Promise
-Promisor- Promisee - Communication of Proposal - General/Specific Offer - Invitation to Offer
– Tenders / Auctions - Lapse of Offer –Revocation of Offer– Acceptance of Offer– Acceptance;
Meaning- Essentials -Communication of Acceptance – Nature: Absolute and Unconditional-
Revocation of Acceptance.

UNIT iii: Competency AND CONSENT OF THE PARTIES

Competency of Parties to the Contract - Minority – Nature and Effect of Minor’s Agreements-
Doctrine of Restitution- Unsoundness of mind (Legal and Medical) - Persons disqualified by law
–Meaning of Consent - Free Consent - Factors that vitiate Free Consent – Coercion - Undue
Influence - Fraud – Misrepresentation- Mistake- Mistake of fact - Mistake of Law- Effect when
Consent is not Free.

UNIT IV: CONSIDERATION

Definition - Essentials – Nature (Real, Imaginary, Lawful) - Importance of Consideration -
Adequacy of Consideration- Executed and Executory Consideration–Privity of Consideration-
Privity of Contract- Common Law position- Exceptions to “Privity Rule”- Promissory Estoppel-
Reciprocal Promises.

UNIT V: Conditions of VALID CONTRACT

Valid Contract - 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 - Effect of Void Agreement - Wagering Agreements-
Exceptions - Contingent Contract.

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UNIT VI: RELATIONS RESEMBLING TO CONTRACT
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: DISCHARGE AND PERFORMANCE OF CONTRACT

Discharge of Contracts – Performance - Offer to Perform - Time and Place of Performance–
Reciprocal Promises - Impossibility of Performance- Initial Impossibility- Subsequent
Impossibility - Force Majeure -Doctrine of Frustration- Discharge by Agreement - Novation,
Rescission and Alteration of contract.

UNIT VIII: BREACH OF CONTRACT AND REMEDIES

Meaning- Anticipatory Breach- Actual Breach- Remedies for breach- Suit for Damages- Nature
and Kinds of Damages- Ordinary Damages- Special Damages- Exemplary or punitive or vindictive
damages- Nominal Damages- Damages for inconvenience- Liquidated Damages and Penalty
Under English and Indian laws - Measure of Damages - Quantum Merit.

UNIT IX: SPECIFIC RELIEF AND PERFORMANCE

Specific Relief and Performance (Meaning)- Provisions under the Specific Relief Act, 1963 (Act
No. 47 of 1963) - Locus standi – Contracts that can be Specially Performed - Substituted
Performance - Remedies by the Court – Injunction – Temporary- Perpetual - Declaration –
Recovery of Property.

Unit X: Emerging issues:

Standard form of Contract - Government Contract; Essentials - Types – BOT, BOOT, RFT etc. –
E-contracts- Validity- Types – Essentials – Law of Contracts and E-Contracts- Issues in Online
Contracting - International Commercial Contracts- Doctrine of Contra - Proferentem in Contracts.

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 Reading List

ESSENTIAL READINGS-

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

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)

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