Final Term Project Report

Subject Business Corporate Law

Submitted by Shayan Udin Haider

Sap No. 13468

Date 25 -06- 22
 Law Of Contract

According to the Contracts Act of 1872, a contract is a form of

agreement in which one party (promissory) proposes to perform
certain acts and another party (promissor) accepts the same in
exchange for legal consideration.

Three special types of contract

Indemnity & Guarantee

A guarantee is an agreement to honor someone else's agreement to do

something, usually to make a payment. An indemnity is an agreement
to pay a cost or reimburse a loss suffered by another person.

Bailment

An act of delivery of goods to a depositary for a particular purpose,

without transfer of ownership.

Agency

A company or organization that provides a particular service on behalf

of another company, person or group.

The Origin Of Contact

Definitions

Proposal

"When a person indicates to another person his or her willingness to do

or not do something (refrain) in order to obtain that person's assent to
such act or abstinence, he is said to be making a proposal or an offer."
• The person making the offer / proposal is called a "promising" or
"bidder". And the person who can accept such an offer will be the
"promising" or "acceptor".

• The bidder must express his willingness to perform or refrain from

performing an act. Will alone is not enough. Or simply the desire to do /
not do something will not constitute an offer.

• An offer can be positive or negative. It can be a promise to do some

act, and it can also be a promise to refrain from (not doing) some act /
service. Both are valid offers.

Invitation to Offer

Invitation to Offer: An invitation to offer is not an offer, but rather an

indication of a person's willingness to negotiate a contract. Offer: When
a person expresses their willingness to do or refrain from doing
something in order to obtain the consent of another person, it is called
an offer.

Standing Offer

An offer that remains open for acceptance for a period of time is called
a permanent offer. Tenders called for the supply of goods constitute a
sort of Permanent Offer.

Acceptance

In contract law, acceptance refers to the buyer's promise or willingness

to be bound by the terms and conditions set out in the seller's offer.
Acceptance is a necessary element of a legally binding contract. If there
is no acceptance, there is no agreement.
Promise

when the person to whom the proposal is addressed expresses his or

her consent, the proposal is said to be accepted. A proposal, when
accepted, becomes a promise.

Reciprocal Promise

Some contracts consist of one or more reciprocal promises that must

be kept simultaneously. In such cases, the promissory is not required to
keep his promise unless the promissory is willing to keep his mutual
promise.

When you go to a store, the merchant agrees to give you the product in
exchange for money. This is an example of a mutual promise where you
promise to pay for the value of the product and the merchant agrees to
deliver the goods upon receipt of the payment.

Promisee

Person to whom a promise has been made.

In general, the promise can keep an act on a promise made to him, but
when the consideration does not move from the promise, but from
another person, this person, and not the promise, it has cause for
action, because it is the person. for the use of which the contract has
been concluded.

Promisor

He who makes a promise.

The promisor is obligated to keep his promise, unless it is against the

law, such as a promise of theft or assault and beatings; when fulfillment
is hindered by the work of God, as when one has agreed to show
another design and loses sight, so that he cannot show it; when the
promised prevents the promissory from doing what he promised to do;
when the promoter has been dissolved from his promise by the
promise, when the promise has been made without sufficient
consideration; and, perhaps, in some other case, the promissory's
duties have ceased.

Agreement

An agreement is a manifestation of the mutual consent of two or more

people to each other. It is a meeting of minds in a common intention,
and it happens through offering and acceptance. Agreement can be
demonstrated by words, behavior and, in some cases, even silence.

Consent

In basic terms, consent is the understanding of the contract by the

parties. Both contracting parties must give their consent voluntarily. In
the presence of certain errors, or if one party attempts to deceive or
pressure the other, the consent will not be considered voluntary or
genuine.

Contract

A contract is an agreement between two or more parties that can be

enforced by law as a binding legal agreement. The contract is a branch
of the law of obligations in the jurisdictions of civil tradition. Contract
law refers to the rights and obligations that arise from agreements.

6 Essentials Of Contract
A contract is valid and legally binding if the following 6 essential
elements are present:

• Offer.

• Acceptance.

• Consideration.

• Intention to create legal relationships.

• Legality and capacity.

• Certainty.

Types Of Contract

1-Valid Contracts

A valid contract, as discussed in the "Essentials of a Contract" topic, is a

legally binding and enforceable agreement. You must qualify all the
essential elements of a contract.

2-Void contract

"A contract that ceases to be enforceable by law becomes void when it

ceases to be enforceable." This invalidates all contracts that are not
enforceable by a court.

Example: A agrees to pay B a sum of Rs 10,000 after 5 years against a

loan of Rs. 8,000 A die of natural causes in 4 years. The contract lapses
and lapses due to inapplicability of the agreed terms.

3-Voidable Contract
 "An agreement which is enforceable by law at the option of one or
more parties, but not at the option of the other or others, is voidable.
Contract." It may seem difficult to understand, but consider the
following example: Suppose Person A agrees to pay a sum of Rs. 10,000
to person B for an antique chair. This contract would be valid, the only
problem is that person B is a minor and cannot legally enter into a
contract, so this contract is a valid contract from A's point of view and a
"voidable" contract from B.'s point of view. commander, you may or
may not accept the terms. Therefore, it is a voidable contract. A
voidable contract is a valid contract. In a voidable contract, at least one
of the parties must be bound by the terms of the contract. contract. For
example, person A in the example above. The other party is not bound
and may choose to repudiate or accept the terms of the agreement. If
he chooses to repudiate the contract, the contract lapses. If not, a
voidable contract is a valid contract.

4-Illegal contract

An agreement that leads one or all of the parties to violate a law or not
conform to the company's rules is considered illegal by the court. A
contract contrary to public policy is also illegal. Several examples can be
cited to illustrate an illegal contract.

For example, A agrees to sell drugs to B. While this contract contains all
the essential elements of a valid contract, it is still illegal. Illegal
contracts are considered null and void and unenforceable by law. "An
agreement that is not enforceable by law is considered null and void".
So we can say that all illegal contracts are void but the opposite is not
true. Both void contracts and illegal contracts cannot be enforced by
law. Illegal contracts are actually void ab initio (from the beginning or
from the beginning). Also due to the criminal aspects of illicit contracts,
they are punishable by law. All parties who have accepted an illegal
promise are prosecuted in court.

5-Unenforceable Contract

Inapplicable contracts become inapplicable by law due to some

technical aspects. The contract cannot be enforced against any of the
parties. For example, A agrees to sell 100 kg of rice to B at 10,000 / -.
But there was a major flood in the United States and all rice crops were
destroyed. Now, this contract is unenforceable and cannot be enforced
against either party.

6-Contingent Contract

A "contingent contract" is a contract to do or not to do something, if an

event, guaranteed by that contract, happens or doesn't happen.

For example , A agrees to pay B Taka 10,000 if B's house is on fire. This
is a contingent contract. Execution of contracts subject to the
occurrence of an event.

7-Quasi Contract

A quasi-contract is an a posteriori contract between two parties who

otherwise would not have a mutual legal commitment. This type of
contract is ordered by a judge who tries to deal with a situation where
one party benefits from something at the other's expense.

8-Quantum Merit

"Obligation of the person who enjoys the benefit of the non-gratuitous

act: when a person legitimately does something for another person, or
gives him something, without wanting it free of charge, and that other
person enjoys the benefit, this the latter is required to compensate the
first with respect to, or to return, the thing so made or delivered ".

Communication , Acceptance & Revocation

Of Proposal

Communication Of Proposal

The communication of a proposal is complete when it reaches the

knowledge of the person to whom it is addressed. against the
proponent, when he is put on a course of transmission to him, so that
he is out of the power of the one who accepts; against the acceptor,
when the proposer becomes aware of it.

Communication Of Acceptance

The communication of acceptance, in contract law, is one of the two

main details of a binding agreement, an offer and an acceptance of the
offer. To simplify the definition of a contract, it can be called an
agreement that legally binds two or more parties.

Communication Of Revocation

The communication of revocation is complete, towards the person who

does it, when it is being transmitted to the person to whom it is made,
so that it remains outside the power of the person who does it; as
against the person to whom it is made, when it comes to his
knowledge.

Example: A makes an offer to sell her house to B and B accepts it and

sends a letter of acceptance to A. But, if B wants to cancel the
acceptance, B must communicate with A to revoke her acceptance
before the acceptance letter is received by A.

Essentials Of Valid Contract

• Offer & Acceptance

Offer :

An offer can be expressed or implied. An express offer is one made by

words, spoken or written, such as a letter, telegram, telex, fax message,
email or on the Internet. An implied offer is one that can be inferred
from the party's conduct or the circumstances of the case.

• The offer must be communicated to the recipient: The offer is only

finalized when it has been communicated to the recipient. Until the
offer is communicated, it cannot be accepted. Therefore, an offer
accepted without your knowledge does not confer any legal rights on
the acceptor.

• The offer must be made in order to obtain the consent of the

counterparty. An offer must be distinguished from a simple
manifestation of intent. The offer must be true, definitive and
unambiguous: no contract can be born if the terms of the offer are
vague or imprecise and indefinite. Both parties must be clear about the
contract, its terms and the legal consequences that may arise from a
particular contract.

• The offer must be capable of creating a legal relationship: the offeror

must intend to create a legal relationship. You must understand that if
your offer is accepted it will result in a legally binding agreement. A
social, moral or domestic agreement without the intention of
establishing a legal relationship is not a contract because it is assumed
that the parties do not intend to derive legal consequences from the
breach of the contract. For example, A invited B to a dinner and B
accepted the invitation. It is a simple social invitation. And A will not be
liable if he does not provide dinner to B.

• An offer may be conditional: an offer may be subject to a condition.

In this case, the offer can only be accepted on this condition. A
conditional offer expires when the condition is not accepted.

Acceptance :

An offer can only be accepted by the person to whom the offer is made.
It cannot be accepted by another person without the consent of the
person who does so.

• Acceptance must be absolute and unconditional: acceptance must be

unconditional and without reservations. Accepting an offer with
conditions, variations and reservations is equivalent to a counter offer
and rejection of the original offer.

• The acceptor must comply with the terms of the offer. A variation or
alteration, even minimal, of the offer, will render the acceptance null
and void. Acceptance must be communicated to the bidder: If the
bidder is silent and does nothing to prove that he has accepted the
offer, no contract is formed.

•The acceptor must do something to express his intention to accept.

Therefore, when a person accepts an offer but does not send the
acceptance letter, there is no acceptance.
• Acceptance must occur within a reasonable time: Acceptance must be
made within the time allowed by the offeror to be valid and, if no time
limit is specified, it must be made within a reasonable time.

Contractual Capacity

He is competent to contract anyone who is of age according to the law

to which he is subject, and who is sane, and who is not excluded from
the contract by any law to which he is subject ". From this definition it
can be deduced that the following categories of people do not have
contractual capacity: minors, people with mental illnesses and people
prohibited by law.

• Age of Majority: the age of majority as the age of eighteen years and
over.

• 1 Sound Mind: a sound mind for contract purposes. He states: “A

person is said to be sane to enter into a contract if, by the time he does
so, he is able to understand it and make a rational judgment about its
effect on his interests. ". It implies that people who are unable to
understand the nature of a contract and its consequences in entering
into the contract would be considered foolish. It involves people who
can be crazy, crazy, idiotic, drunk, etc. The condition can be temporary
or permanent.

•Disqualified people : In addition to minors and people with mental

problems, there are other people who cannot hire. that is, they do not
have the ability to bargain. Reasons for disqualification may include
political status, legal status, etc. Some of these people are foreign
sovereigns and ambassadors, foreign enemies, prisoners, insolvent, etc.

Free Consent Of Parties

"Is when two or more people agree on the same thing and in the same
sense". So the two people must also agree on something that has the
same effect. consent is considered free when it is not caused or
affected by the following, Coercion Undue influence Fraud Falsification
Error

• Coercion: committing or threatening to commit any act prohibited by

law in the IPC illegally holding or threatening to withhold any property
with the intent to cause any person to enter into a contract

• Undue influence: when a person has real or even apparent authority

over another person. Or, if you have a fiduciary relationship with the
other person, you enter into a contract with a person whose mental
capacity is affected by age, illness or distress. Lack of mental strength
can be temporary or permanent.

• Fraud - suggesting a fact which is not true, and which it does not
believe to be true by actively concealing the facts a promise made with
no intention of keeping it any other similar act of deceit. •
Misrepresentation: A person makes a positive statement believing it to
be true. Any violation of duty gives an advantage to one who commits it
by deceiving another. But the breach of duty is without intent to
deceive when one party causes the other party to make a mistake in
the subject matter of the contract. But this is done innocently and
unintentionally.

Lawful Consideration & Object

The consideration and / or the object of a contract are considered

legitimate considerations and / or objects unless they are

•expressly prohibited by law

•of a nature that defeats the purpose of the law

• are fraudulent

•involve damage to any other person or property

•the courts they consider them immoral

• and oppose public order.

Therefore, the legitimate consideration and / or the lawful object

cannot contain any of the above. Let's take a closer look at each of
them.

Agreement Expressly Declared As Void

A void agreement such as "an agreement that is not enforceable by

law". And there can be many occasions of invalid agreements, some of
which we have covered in previous articles. But the contract does
establish some agreements which are expressly declared invalid
agreements.

• Marriage Restriction Agreement: A agrees that if B pays him 50,000 / -

he will not get married, that agreement is a void agreement.

• Trade Restriction Agreement: The agreement whereby a person is

prevented from exercising a commercial activity or exercising a legal
profession or exercising an activity of any kind is expressly void. Such an
agreement violates a person's constitutional rights.

• Restriction of the legal process agreement: an agreement that

prevents either party from enforcing its legal rights under a contract
through the legal process (of courts, arbitration, etc.), so such an
agreement is an express agreement null and void.

• An agreement whose meaning is uncertain: an agreement whose

meaning is uncertain cannot be a valid agreement, it is a null
agreement. If the essential meaning of the contract is not secured, the
contract obviously cannot go on. But if that uncertainty can be
removed, then the contract becomes valid.

• wagering contract: must contain a promise of payment or the value of

the money, it is conditional on the occurrence or otherwise of a certain
event, which must be uncertain. Neither party can have any control
over it. It must be common intention to bet at the time of the
conclusion of the agreement. The parties must have no other interest
than the bet of the bet.

Agreement In Writing & Registered

Agreements can be oral or written. When the agreement is in writing,

you must complete all legal formalities relating to attestation and
registration. If the agreement does not comply with the required legal
formalities, the law cannot apply it.