Indian Contract Act 1872

Why laws are made?

->Problem, Reasons, Issues for which laws are made.

Indian Contract Act-It says that when two parties come in agreement of any
contract , which contract is valid, which contract should be chosen.
Contract starts with Offer.

Contract Act starts with an Offer-

1. Offer or Proposal and Acceptance

->Giver- Offeror(Proposer)
->Taker- Offeree(Acceptance)(Proposee)
Offer is also called as Proposal- Where a person is willingly wants to Contract
(enter)Application with a Promise.
Offer will be accepted or not it depends on the offeree.
Section 2(a)of the Indian Contract Act defines proposals or offer as – when one
person signifies to another his willingness to do or abstains form doing
anything with a view to obtaining the assent of that other such act- he is said
to make a proposal.
 When Proposal/ Offer accepted becomes a Promise.

Rules Governing Offer:

 Offer should be clear-definite, complete and final. It must not be
incomplete or Vague.
 An offer must be communicated to the offeree- Accept or Reject.
 The communication of offer may be made express, words, oral, written,
or may be implied by conduct.
 A communication of the offer may be General or Specific-It depends on
the person/offeree that he/she accepts the offer or reject the offer.
Offer-a)General Offer- Offer given to world at large
b) Specific Offer-Offer given to a specific person Or a Group of
Specific persons.
2. Laspe of Offer- It states Offer fails after a particular period of time if-
 If not accepted within Specific time-reasonable time.
 If not accepted in the Mode prescribed or if no mode is prescribed in
some usual and reasonable manner.
 The offeree rejects it by distinct refusal to accept it.
 Either the Offeror or offeree dies before acceptance.
 The acceptor fails to accept the condition.
 If offeree makes a counter offer.
(Counter Offer means the original offer is rejected and replaced with
another offer in its place. Offer ka Offer)
 The rejection of an offer by offeree.

Revocation of Offer by Offeror

An offer may be revoked by Offeror any time before Acceptance.

It must be revoked before acceptance.
 Revocation must be communicated to the offeree. Before its actual
communication the offeree may accept the offer and create binding
contract .
 An offer is valid for a specified time. After the end of that time it is not
possible to enjoy it as it is Revoked.
 An offer to keep open for a specified time is not binding until it is
Consideration (Something In return).

Acceptance

If offeree says Yes then the offer is Accepted.

Section 2(d)-Says that when a person to whom the offer is made signifies his
assent thereto, the offer is said to be Accepted.
-An offer when accepted becomes a Promise/Agreement.
Assenting-Saying Yes to the offer.

Rules Governing Acceptance

 Acceptance can be expressed or implied.
 Acceptance must be in prescribed and proper manner. It must be Acco.
to the prescribed mode if mentioned.
 Acceptance must be Unqualified and Absolute.
 A Counter offer operates as a rejection of the offer and causes it to
lapse.
  Acceptance must be communicated to the Offeror.
 Mere Silence on the part of the offeree does not amount to acceptance.
 If the offer is one which is to be accepted by being acted upon accepted
no communication of acceptance is necessary, unless communication is
stipulated for in the offer itself.
 Acceptance must be given within a reasonable time and before the offer
lapses or is revoked.

Promise + Consideration=Agreement.
Offer + Acceptance=Promise.
Offer + Acceptance + Consideration= Agreement.

Agreement

Section 2(e)-define Agreement as- Every Promise or set of Promises forming

part of consideration for each other.
Promise + Consideration=Agreement.

Contract

Section 2(h) defined Contract as “An Agreement Enforceable by Law”.

An Agreement enforceable by law is called as Valid Contract.
If an Agreement is not enforceable by law then it is not a Contract.
To be enforceable , an agreement must be coupled with an Obligation.
A contract therefore, is a combination of two elements;(1)An Agreement; and
(2) An Obligation.
Obligation means a legal duty to do.

When is the Contract Enforceable?

Section 10 of the Indian Contract Act states the Essentials of Valid Contract
 There are many Agreement which are not enforceable by law.
 Every Agreement is not a Contract.
 Every Contract is an Agreement – because in every Contract agreement
and enforceability should be present.

Types Of Rights
1. Right In Rem-Right against the whole world.
2. Right Against Personem- Right against specific person.
Essentials of/for Valid Contract
Section 10
Contract =Agreement + Enforceability
Enforceability is utmost required.
For a Valid Contract: Agreement and Enforceability is essential.

1. Offer+Promise+ Acceptance +Promise of both the parties=Agreement.

Agreement + Enforceability=Contract
Consensus-ad-idem->Something in same sense. Meeting of Mind.

2. Intention to create Legal Relationship.

3.Lawful Consideration.
4. Parties to Contract are legally capable of contracting i.e. should be a Major
(+18), should be of sound mind and not disqualified by law.
5. Genuine Consent of Parties.
6. The object and consideration of the contract is legal and is not opposed to
Public Policy.
7. Terms of the Contract are Certain.
8. The agreement is capable of being performed.

To form a Valid Contract there must be:

->An Agreement.
->Supported by lawful Consideration.
->Made for lawful object.
->Contract between Competent Parties.
It requires two or more persons to make a agreement.

Every Agreement is not a Contract but Every Contract is an Agreement.

An Agreement not enforceable by law is Void Agreement (sec. 2(g))

An Agreement which is Void form the very beginning is Void-ab-initio.

Void Contract
Section 2(j),states that, “A contract which ceases to be enforceable by law
becomes void when it cease to be enforceable.
A contract which was enforceable before but is not now due to change in
situation.
For example A throat cancer singer refuses to sing at a concert for which he
agreed at the time of making of contract without knowing this disease.
Voidable Contract
Section 2(j) defines, “A Contract which is enforceable by law at the option of
the parties but not at the option of the other or others is a Voidable Contract.
It can be Rejected by the Aggrieved or suffering party.
Voidable contract is a contract which is enforceable by aggrieved party.
It depends on the aggrieved or suffering party whether to continue or cancel
the contact.
Cases in which contract is Voidable.
 Coercion.
 Under Influence.
 Fraud.
 Misrepresentation.

Illegal Agreement

An Agreement with an unlawful Object and Consideration.

they are illegal if : they are fraudulent, Defeats any provision of law, Immoral,
Injurious to a person or property, opposed to public policy.
Agreement which is forbidden by Law.
All Illegal Agreement are Void Agreement.(Void-ab-initio).

Executed Contract
An Executed Contract is a contract between two or more parties that has been
signed and binding to all parties involved. It is fully implemented Contract.
When the Obligations are completed is becomes a Contract. It is a contract in
which both the parties have completed their obligations.

Executory Contract
An Executory Contract is one in which either of the party or both the parties
have not performed their obligations.
It is Further divided into:
1.Unilateral Executory-One of the party has not performed their obligation yet.
2.Bilateral Executory- Both the parties have not performed their obligations.

Quasi Contract
A Quasi Contract is a contract that exists by order of court, not by agreement
of the parties.
It is a contract where obligations are imposed by law.
Consideration
‘Quid pro quo’ means Something in Return.
Without Consideration contract are not Valid. Consideration is must for Valid
Contract.
Section 2(d):When a desire of Promisor, the Promisee or any other person has
done or abstained from doing, or does or abstains form doing, or promises to
do or abstain from doing something.
It was decided that consideration is must in Currie v. Misa.
Consideration must be at the desire of the Promisor.
Consideration may move from Promisee to any other person.

Kinds of Consideration

1. Future Consideration(Executory Consideration)-A consideration is said to be

future when it is to be done in future. A future Consideration is always a
promise to do or for bear or suffer at a future date.

2. Present Consideration(Executed Consideration-)-A Present Consideration is

something which is already actually done .It is done in response to some
promise by the Promisee. Example: Cash Sales.

3. Past Consideration-A Past Consideration is something that which took place

and is complete before the promise is made.

Rules Governing Consideration

a)Every contract must be supported by valuable consideration.
b)Consideration must be Mutual.
b) Must be Clear, Indefinite and not
Vague.d)Consideration need not be
Adequate. e)Consideration must be
Lawful.
f)Consideration must be something more than what Promisee is already bound
to do.

When Consideration not Necessary

1.When it is made out of Natural Love and Affection.
2. It is made to compensate a person who has already done something
Voluntarily for the Promisor, or done something which the Promisor was
legally compellable to do.
3. It is a promise in writing and signed by the person to be charged therewith,
or by his agent, to pay debt barred by the law of limitation.
4. Besdides, according to Section 185 of the Indian Contract Act, consideration
is not required to create an Agency.
5. In case of Gift actually, no consideration is necessary. There need not be
nearness of relation and even if it is, there need not be any natural love and
affection between them.

Privity Of Contract

A stranger(Third Party) to a contract cannot sue.

A person who is not a party to contract is stranger to contract and cannot sue
upon it even though the contract is for his benefit.

Flaws in Contract
Flaw, Errors, Bugging, etc.
1. The agreement may be treated as no effect and it will then be known as Void
Agreement.
2. Thw law may be give the aggrieved party option of getting out of his bargain ,
and contract is then known as Voidable Contract.
3. The party at fault may be compelled to pay damages to the other party.

Alien Enemies
A country by which India has declared a War will become a Alien Enemy.
A contract by Alien enemy becomes unenforceable on the outbreak of War.
A contract with alien enemy makes the contract Void.
Alien Friend
A foreigner whose sovereign or State is at peace with India, has usually
contractual capacity of an Indian Citizen.

Flaws in Contract- Contractual Capacity

Section 11 provides that every person is competent to contract who is:
->Natural and Artificial Person, Partners, Company, firms, Institutions, etc.
->Eligibility- Major(+18), Sound mind and Not Disqualified by Law.
->Who cannot do contract-Minor, Drunkard, Disqualified by law, Alien Enemy.

Flaw in Consent
Consensus-ad-idem->Meeting of Minds, something in the same sense, Mutual
Consent. There should be Mutual Consent, not only consent is required but it
must be free Consent. If the consent is not free i.e. it is caused by coercion,
undue influence, misrepresentation, fraud or mistake it may affect the
Contract.
Fraud
Section 17: Fraud is an untrue statement made knowingly or without belief in
its truth or recklessly, Carelessly, whether it be true or false with the intent to
deceive. Voidable at the option of the aggrieved.

Terms of Fraud
 Suggestion-It is fact which is not true by one with believe it to be true.
 Active concealment of fact by one having knowledge or belief of fact.
 Promise made without intention of performing.
 Any other act fitted to deceive.
 Any Act or omission-Fraudulent.

Is Silence Fraud?
Mere Silence as to facts likely to affect the willingness of a person to enter into
a contract is not Fraud.
Two cases where Mere Silence is considered as fraud:
1. When it is Duty of a person to speak out-Uberrimae fidei (Contracts requiring
utmost good faith.)
2. When silence is equivalent to the speech.

There are contracts in which the law imposes a special duty to act the utmost
good faith i.e. to disclose all the material information- Contracts Uberrimae
Fidei.
Contract Uberrimae fidei are:
 Insurance Company.
 Medical Hospitals.
 Company Prospectus.
 Family Arrangement.

Coercion
Section 15 means “The committing or threatening to commit any act that is
forbidden by Indian Penal Code, OR unlawful Detaining or threatening to
detain, any property to the prejudice of any person whatever with the
intention of causing any person to enter into a agreement”.
It is Voidable Contract. Suffering is the aggrieved.
It must be proved that Coercion was applied.
Undue Influence
Section 16 – “Where the relations subsisting between the parties are such that
one of the parties is in a position to dominate the will of the other and uses
that position to obtain an unfair advantage over the other”.
It also refers to Mental Torture.
 Relationship of Trust and Confidence-Fiduciary Relation.
 Mental Harassment.
 Torture by the Dominating Party.

Misrepresentation
Section 18- A Misrepresentation is a false statement that induces someone to
enter into a Contract. Misrepresentation may be innocent or fraudulent.
Innocence Misrepresentation-Misrepresentation
Intentional Misrepresentation- Fraud.
Damages are claimed in case of fraud and Compensation is given in case of
misrepresentation.

In case of Fraud, Coercion, Undue Influence, Misrepresentation, the contract

is Voidable at the option of Aggrieved/Suffering Party, it can file a case as
well.

Mistake
Section 20 says that- A Mistake is said to have occurred where the parties
intending to do one thing by error do something else.
The Mistake will render the contract Void.
To be operative so as to render the contract void, the mistake must be:
 of fact and not to law or opinion;
 the fact must be essential to agreement;
 must be on part of both the parties.

Legality of Object
Section 23 of the Indian Contract Act,1872 provide that the consideration or
object of an agreement is lawful unless it is:
 forbidden by law; or
 it is of such nature that if permitted it would defeat the provision of law
; or
 is fraudulent; or
 involves or implies injury to the person or property of another; or
 the court regards it as immoral or opposed to public policy.
Void and Illegal Agreement

Void Agreement Illegal Agreement

-Not enforceable form the beginning -Law does not permit to do so.
itself
-Not all the Void agreement are illegal. -Every Illegal Agreement is Void.
-it is Void-ab-initio. -It is unlawful.
-An agreement not enforceable by law. -Agreement which is forbidden by law.

 All Illegal Agreements are not Void Agreement. But all Void Agreement
are not Illegal.
for example. A borrows 1000rs. form B for lending C a minor. The agreement
between A and C is void, B can nevertheless recover money from A. On the
other hand, A had borrowed the same amt. from B to buy pistol to shoot C,
here B cannot recover the amount as it is used for illegal purpose.
Therefore, it may be said that all illegal agreements are void but all void
agreements are not necessarily illegal.

Consequences of Illegal Agreement

(i)An illegal agreement is entirely void;
(ii)Void from the very beginning;
(iii)from an evil cause, no action arises;
(iv)Void-ab-initio;
(v)Not enforceable from the beginning.

Collateral Agreement
It is usually a single term contract, made in consideration of the party for
whose benefit the contract operates agreeing to enter into the principal or
main contract, which sets out additional terms relating to the same subject
matter as the main contract. The collateral contract co-exists side by side.
for example: A borrowed money from M for lending it to R a minor. Here the
relation between M and R is Void but Valid for A and M.

Agreement Void as being opposed to Public Policy

Agreement may offend Public Policy by tending prejudice of the state-war,
tending to:
- abuse of justice
-or by trying to impose unreasonable and inconvenient restrictions
-on free choice of individual in marriage
-or their liberty to exercise lawful trade or calling.
 Doctrine of Public Policy-Branch of common law.
 House of lords that public policy is always on unsafe and treacherous
ground for legal decisions.
 It includes (New Head of Public Policy), it should be done under
extraordinary circumstances giving rise to incontestable harm to
society.
The following agreements are void as being against public policy but not
illegal:
+ Agreement in restraint of Parental Rights.
+ Agreement in restraint to Marriage.
+ Marriage Broker/Broker Agreements.
+ Agreement in restraint of Personal Freedom.
+ Agreement in restraint of Trade.

Wagering Agreement
The literal meaning of the word ‘wager’ is a “bet”. Wagering agreement are
nothing but ordinary betting agreement.
Wagering Agreements are Void Agreement.
The essence of gaming and wagering is that one party is to win and the other
lose upon a future event which at the time of the contract is of an uncertain
nature.
Wagering is illegal in Gujarat and Maharashtra.
 It is illegal in Mumbai-act passed for wagering agreement.
 Illegal agreement if collateral is illegal.
 Void agreement if collateral is Valid.
 Wagering contract must have Mutuality.

Void Agreements
The following types of agreements are void under Indian Contract Act:
1.Agreement by Minor, Person of Unsound Mind, Disqualified in the court of
law.
2.Agreement made under mistake of fact by both the parties.
3.The one with Unlawful consideration.
4. If any single object or any part of the consideration is unlawful.
5. An agreement made without consideration subject to three exceptions.
6.An agreement in restraint of marriage.
7. An agreement in restraint of trade
8. An agreement in restraint of legal proceeding.
9. There is no certainty.
10.Agreement by way of wager.
11. An agreement to enter into an agreement in the future.
12.An act which is impossible to perform.

Contract- Void
 Contract is something which ceases to be enforceable.
 If Subject matter gets destroy, contract becomes Void.
 An agreement which was legal at the time of making it but becomes
Illegal now-Subsequent Illegality.
 Contingent Contract- Depends on happening or non- happening of an
event-Void Contract.
 Fraud- Voidable contract. If Sued –Void Contract.

Contingent Contract
Section 31 states that contingent contract is a contract to do or not to do
something, if some event collateral to such contract, does or does not happen.

Quasi Contract
A contract where the law imposes some obligations is a Quasi contract.
it Resembles to a contract. Return the objet to its owner.
No person can become rich out of the other person’s expenses.
Equity demands that such money must be paid back.

Discharge or Termination of Contract

A Contract is said to be discharged or terminated when the rights and
obligations arising out of it are extinguished.

Discharge by Mutual Agreement or Consent

Novation-When a new contract is substituted for existing contract .
Alteration-Change in one or more material terms of the contract.
Recession-Cancellation of contract by the agreement between the parties at
any time before it is discharged by performance.
Remission- Acceptance of lesser sum than what was contracted for or a lesser
fulfilment of the promise made.
Waiver-Giving up of a right which a party is entitled to under a contract.
Discharge Lapse of Time
The Limitation Act, lays down a contract should be performed within a
specified period, called period of limitation. If it is not performed no action is
taken by the Promisee within the period of limitation. He is deprived of his
remedy at law.
The period of limitation is of Three years for the enforcement of most types of
rights.

Discharge Operation of Law

Discharge under this may take place as follows:
a) By Merger- when parties embody the inferior contract into superior contract.
b) By Alteration-If any of the parties make any material changes in contract
without the consent of the other taken.
c) By Insolvency-If any of the party is declared insolvent by the court.

Discharge by Impossibility
A contract which is entered into to perform something that is clearly
impossible is Void. The nature of the Promise made must be impossible to
perform.

A contract to do an act which , after the contract made, becomes impossible ,

or by reason of some event which was legal at the time of making of the
contract becomes illegal pr Unlawful is Discharge by Illegality.
In Satyabarta Ghose v. Mugnuram it was decided that there should be a Valid
reason that the performance is impossible to perform.

Breach of Contract
Where the Promisor neither performs his contract nor does hr tender
performance, or where the performance is defective, there is Breach of
Contract.
The breach of contract may be:
a) Actual Breach-The actual breach may take place either at the time the
performance id due, or when actually performing the contract.

b) Anticipatory Breach-Anticipatory breach means a breach before the time for

the performance has arrived. He may either sue for breach of contract
immediately after repudiation or wait till the actual date when performance
is due and then sue.
Remedies for Breach of Contract
1.Rescind the contract and refuse further performance of the contract.
2. Sue for damages.
3. Sue for specific performance.
4. Sue for an injunction to restrain the breach of a negative term-Injuction
means to restrict someone from doing a particular act.
5. Sue for Quantum Merit-It means “as much as earned”.

Contract of Indemnity and Guarantee

Indemnity
A contract of indemnity is a contract by which one party promises to save the
other party from loss caused to him by the conduct of the Promisor himself,
or by the conduct of any other person.
The person who promises to indemnify or make good the loss is called as
Indemnifier
The person whose loss is made good is called the Indemnified(Indemnity
Holder).
The contract of Indemnity is form of Contingent contract.

Guarantee
A contract of guarantee is a contract to perform the promise, or discharge the
liability of a third person in case of his default.
The person who gives the guarantee is called Surety, the person for whom the
guarantee is given is called Principal Debtor, and the person to whom the
guarantee is called Creditor.

Distinction between Indemnity and Guarantee

Indemnity
-Two people are involved.
-Indemnifier and Indemnified.
-The liability of the indemnifier is
primary.
-It depends on the contingency.
-Indemnifier cannot sue on third
party.
Guarantee
-Three people are involved.
-Guarantor(Surety), Debtor & Creditor.
-The liability of Debtor is primary,
Secondary liability is that of Surety.
-There is an existing debt.
-Surety can hold Principal debtor liable
if he failed to pay.
Law of Agency
An Agent is a person who is employed to bring his principle into contractual
relations with third-parties. During the period an agent is acting for his
principal, he is clothed with the capacity of his principal

Creation of Agency
1.Express Agency- A contract of agency may be oral or written. The usual form
is the Power of Attorney., which gives him the authority to act on behalf of the
Principal with some terms and conditions.

2. Implied Agency-
 Agency by Estoppel-Estoppel arises when you are precluded from
denying the truth of anything which you have represented as a fact,
although it is not a fact.
 Wife as Agent-Where husband and wife are living together, the wife is
presumed to have her authority to pledge his credit for purchase of
necessities according to their standards.
But the husband is not liable if:
a) he had expressly warned the trademan not to supply goods to his wife
b) he had expressly forbidden the wife to pledge his credit
c) his wife was already sufficiently supplied with the articles in question
d) she was supplied with sufficient allowance.
 Agency of Necessity-A person who has been entrusted with another
property, may have incur unauthorised expenses to protect or preserve
it. Such an agency is called and agency of necessity.
 Agency by Ratification-Where a person having no authority purports to
act as an agent, or a duly appointed agent exceeds his authority, the
principal is not bound by the contract supposedly based on his behalf.
Ratification is effective only if the following conditions are satisfied:
-The agent must expressly contract as agent for a principal who
competent to contract.
-The principal must be competent to contract.
-The principal at the time of ratification has full knowledge of material
facts.
-Ratification cannot be made for the benefit of the third party
-Only lawful acts can be ratified.
Classes of Agent
Agents may be Special or General:
Special Agent-He is the one who is appointed to the specified act, or to
perform a specified function. Any act of the agent beyond that authority will
not bind the principal.
General Agent-He is the one who is appointed to do anything within the
authority given to him by the principal in all transactions, or in all transactions
relating to a specified trade or matter. In this Case principal is liable.

Sub Agent
A person employed by, and acting under the control of the original agent in
the business of the agency. So the sub-agent is the agent of the original agent.
A sub-agent is bound by all the duties of the original agent. The sub-agent is
not directly responsible to the principal except for fraud and wilful wrong.

Mercantile Agents
A Mercantile Agent having in the customary course of business as such agent
authority either to sell or consign goods for the purpose of sale, or to buy
goods, or to raise money on the security of goods.
Mercantile Agent consists:
1. Factor-A factor is a mercantile agent employed to sell goods which have
been placed in his possession or contract to buy goods for his principal. He can
sell them in his own name and receive payment for the goods.
2. Brokers- He is an agent whose ordinary course of business is to make
contracts with other parties for the sale and purchase of goods and securities.
He gets commission called Brokerage.
3. Del Creder Agent-An agent who is considered of an extra remuneration
guarantees to his principal that the purchaser who buy on credit will pay for
the goods they take.
4. Auctioneers-Agent who sells goods by auction, i.e., to the highest bidder in
the public competition.
5. Partner-In a partnership firm, every partner is an agent of the firm and of his
co-partners for the purpose of the business of the firm.
6. Bankers-A banker is an agent of his customer when he buys and sells
securities, collects cheques, dividends, bills, etc.
Duties of Agent
 He must act within the scope of the authority conferred and carry out
strictly the instructions of the principal.
 In absence of Express instruction, he must follow the custom prevailing
in the same kind business.
 He must do the work with reasonable skills and diligence, he must
exercise the skills which is expected from the members of the profession
 He must disclose all the material information coming to his knowledge.
 He must not disclose confidential information entrusted to him by the
principal.
 He must not compete with the principal.
 He must keep true accounts and must be prepared on reasonable notice
to render an account.
 He must not make any secret profits; he must disclose any extra profit
that he may make. He agent is discovered taking secret bribe principal is
entitled:(i)dismiss the agent without notice.(ii)recover the amount of
secret profit(iii)refuse to pay agent his remuneration. If any third party is
involved in secret profit, principal can recover damages.
 An agent must not delegate hi authority to sub-agent.
Exceptions:(i)where the delegation is allowed by the principal(ii)Where
the trade custom or usage sanctions delegation.(iii)where delegation is
necessary for proper performance.(iv)where an emergency renders it
imperative .(v)where nature of the work is purely ministerial and
(vi)where the principal knows that the agent intends to delegate.

Right of Agents
 An agent is entitled to receive remuneration.
 If any damages or losses incurred to the agent during work given by the
principal, principal is liable for it.
 Certain classes of agents, have a lien on the goods or property in respect
of their remuneration and expenses and liabilities incurred.
 As the agent represents the principal, the agent has a right to be
indemnified by the principal against all charges , expenses and liabilities
properly incurred by him in the
course of the agency.
Termination of Agency
 By the performance of the contract of agency.
 By an agreement between the principal and agent.
 By expiration of period fixed for the contract of agency.
 By the death of the principal or the agency.
 By the insanity of either the principal or the agent.
 By the insolvency of the principal, and in some cases that of the agent.
 Where the principal or agent is an incorporated company, by its
dissolution.
 By the destruction of the subject-matter.
 By the renunciation of his authority by the agent.
 By the revocation of authority by the principal.

E-Contract
 Not paper based.
 Electronic form.
 Need for speed, convenience and efficiency.
 Transaction(Contracts) can be completed in seconds.
 The Information Technology Act 2000- solves some peculiar issues that
arise due to electronic contract.

Necessary Ingredients of Electronic Contract

1.Offer.
2. Needs to be accepted.
3. There has to be Lawful Consideration.
4. There has to be an intention to create legal relations.
5.The parties must be competent to the contract.
6.There must be genuine and free consent.
7.The object of the contract must be lawful.
8.There must be certainty and
possibility of performance.