LAW OF

CONTRACT - I
Pooja Gautam
INTRODUCTION
 Freedom of contract
No liability without consent
Exception:
a. Statutory restriction
b. Compulsory transaction
c. Protection of interest of parties
d. Implied terms and standard of reasonableness
e. Standard form contract
f. Sanctity of contract
Function of Indian contract Act
1. Facilitate
2. Fix responsibilities
3. Allocate economic risk
4. Provide remedies
 General principles
sections 1 - 75

Sale of Goods
Sections 76 to 123
Indian Contract Act - 1872
Special contracts
sections 124 to 238

Partnership
Sections 239 to 266
 Formation contract

General
principles Discharge of contract
(sec. 1 - 75)

Remedies for breach

Indian Contract Act -
1872
Indemnity & guarantee

Special contracts
Bailment & pledge
(sec – 124 to 238)

Agency
 Formation contract

General
Indian Contract
principles Discharge of contract
Act - 1872 (sec. 1 - 75)

Remedies for breach

Process of Formation

OFFER PROMISE AGREEMEN Contract Sec.

Sec. 2(a) Sec. 2(b) T Sec. 2(e) 2(h)
 offer

Promise

Agreement acceptance

Consideration

Contract Capacity

Consent

Enforceability
lawful
consideration &
object

Not expressly
declared void
 Essential elements of a valid
contract
can be summarized as under:
• 1. An agreement [S. 2 (e)];
• 2. The agreement should be made by free consent of the parties (Ss 13-22);
• 3. The agreement should be entered into between parties competent to contract (Ss 11-
12);
• 4. It should be for a lawful consideration [Ss 2 (d), 23, 25];
• 5. It should be with a lawful object (Ss 23-30);
• 6. It should not have been expressly declared to be void (S. 10);
• 7. Formalities under different laws: Nothing herein contained shall affect any law in
force in India, and not hereby expressly repealed, by which any contract is required to be
made in writing or in the presence of witnesses, or any law relating to the registration of
documents (S. 10); and
• 8. Intention to create legal relationship.