INDIAN CONTRACT ACT

1872
Made By:
Deepakshi Sharma
2022PBM5003
 BACKGROUND OF ACT
• Enacted on: September 1, 1872
• Total number of sections: 238
• Extent of the Act: Applicable to the whole of nation except Jammu &
Kashmir and Ladakh
• Agreement is the building block of any Contract
• Offer {Section 2(a)} + Acceptance {Section 2(b)} = Agreement {Section
2(e)}
• Agreement {Section 2(e)} + Enforceability of Law {10} = Contract
{Section 2(h)}
 VALID OFFER
• When one person signifies to another his willingness to do or abstain
from doing anything, he is said to make a proposal/offer.
• Some features of a valid offer include:
1. An offer may be general or specific
2. An offer should be made with an intention of creating legal
obligation
3. An offer must be definite and certain
4. An offer must be communicated to the offeree.
5. The terms and conditions of offer should also be communicated
 TERMINATION OF OFFER
• Lapse
• Failure to fulfill a condition mentioned in the offer
• Rejection
• Destruction of subject matter
• Revocation
 CONTRACT
• Contract, according to Section 2(h), is “an agreement enforceable by
law”
• Thus a contract must be:
1. An Agreement: According to Section 2(e), “every promise and set
of promises forming the consideration for each other is an
agreement”
2. Legal Obligation: duty enforceable by law
• All Contracts are agreements, but all agreements are not contracts.
 ESSENTIALS OF A VALID CONTRACT
• Offer and acceptance
• Intention to create a legal relationship
• Lawful consideration
• Capacity of parties — Competency
• Free and genuine consent
• Lawful object
• Agreement not expressly declared void
• Certainty and possibility of performance
• Legal formalities
 TYPES OF CONTRACT
On the basis of Execution

• Executed Contracts: where both the parties to the contract have

fulfilled their respective obligations, the contract is said to be executed

• Executory Contract: Where one or both the parties have still to

perform certain things in the future. Example: Payment for the
contractor due until work remains unfinished.
 TYPES OF CONTRACT
On the basis of Mode of Creation

• Express Contracts: Contracts entered into between the parties by

words spoken or written. The terms and conditions are mentioned.
Example: Website designer has his own TnC applied.

• Implied contract: Terms and conditions are inferred by the actions of

the parties involved. Example: providing any service and being paid
on the 1st of every month.
 TYPES OF CONTRACT
On the basis of Enforceability
• Valid Contract: It is a contract that satisfies all the requirements provided
for under sec. 10

• Void Contract: It creates no rights or obligations. It ceases to be enforceable

by law. For example, A takes loan from B to be repaid at the end of 5 years.
However, if A dies before the completion of 5 years, then the contract
becomes void.

• Voidable Contract: It is a valid contract. At most, one party to the contract

is bound. Any contract with a minor is thus a voidable contract. If a minor
were to enter into a contract with an adult, the adult would be bound by the
contract, whereas the minor could choose to avoid performing the contract.
• Illegal agreement: It is one that the courts will not enforce because
the purpose of the agreement is to achieve an illegal end. It involves
decisions that don’t conform to societal norms or public policy.
Example: Contract for sale of drugs etc.

• Unenforceable contract: It is one that the courts will not enforce.

Contracts may be unenforceable because of their subject matter, like
lack of proof, one party taking unfair advantage of the other party in
agreement, etc it becomes unenforceable.
 REFERENCES
• https://www.learnpick.in/prime/documents/ppt/1359/indian-contract-a
ct-1872
• https://www.netlawman.co.in/ia/indian-contract-act
• https://www.geektonight.com/indian-contract-act-1872/
• https://www.dacc.edu.in/wp-content/uploads/2020/11/PPT_TY-BBA_
503_Business-Law.pdf