Study Note 1 Indian Contract Act 1872-Free PDF

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MS EDUCONZ PVT LTD LAW AUDIT,DEFINITIONS Sec 2, 1 Offer i e Proposal section 2 a When one person signifies to another his. willingness to do or to abstain from doing anything with a view to obtaining the. assent of that other person either to such act or abstinence he is said to make a. 2 Acceptance 2 b When the person to whom the proposal is made signifies his. assent there to the proposal is said to be accepted. 3 Promise 2 b A Proposal when accepted becomes a promise In simple words. when an offer is accepted it becomes promise, 4 Promisor and promise 2 c When the proposal is accepted the person making the. proposal is called as promisor and the person accepting the proposal is called as. 5 Consideration 2 d When at the desire of the promisor the promisee or any other. person has done or abstained from doing something or does or abstains from doing. something or promises to do or abstain from doing something such act or. abstinence or promise is called a consideration for the promise. Price paid by the one party for the promise of the other Technical word meaning QUID. PRO QUO i e something in return, 6 Agreement 2 e Every promise and set of promises forming the consideration for. each other In short agreement offer acceptance, 7 Contract 2 h An agreement enforceable by Law is a contract. 8 Void agreement 2 g An agreement not enforceable by law is void. 9 Voidable contract 2 i An agreement is a voidable contract if it is enforceable by Law. at the option of one or more of the parties there to i e the aggrieved party and it is. not enforceable by Law at the option of the other or others. 10 Void contract A contract which ceases to be enforceable by Law becomes void. when it ceases to be enforceable,SUJEET JHA 2 9213188188.
MS EDUCONZ PVT LTD LAW AUDIT,ESSENTIALS OF A VALID CONTRACT. All agreements are contracts if they are made, by free consent of the parties competent to contract. for a lawful consideration and,with a lawful object and. not hereby expressly declared to be void Sec 10,ESSENTIALS OF VALID CONTRACT. Offer acceptance Promise,consideration,enforceability By Law.
1 Proper offer and proper acceptance with intention to create legal relationship. Cases A and B agree to go to a movie on coming Sunday A does not turn in resulting. in loss of B s time B cannot claim any damages from B since the agreement to watch a. movie is a domestic agreement which does not result in a contract. In case of social agreement there is no intention to create legal relationship and. there the is no contract Balfour v Balfour, In case of commercial agreements the law presume that the parties had the. intention to create legal relations, an agreement of a purely domestic or social nature is not a contract. 2 Lawful consideration consideration must not be unlawful immoral or opposed to. the public policy, 3 Capacity The parties to a contract must have capacity legal ability to make valid. Section 11 of the Indian contract Act specify that every person is competent to. contract provided, i Is of the age of majority according to the Law which he is subject and. ii Who is of sound mind and, iii Is not disqualified from contracting by any law to which he is subject.
Person of unsound mind can enter into a contract during his lucid interval. An alien enemy foreign sovereigns and accredited representative of a foreign. state Insolvents and convicts are not competent to contract. 4 Free consent consent of the parties must be genuine consent means agreed upon. samething in the same sense i e there should be consensus ad idem A consent is. SUJEET JHA 3 9213188188,MS EDUCONZ PVT LTD LAW AUDIT. said to be free when it is not caused by coercion undue influence fraud. misrepresentation or mistake,5 Lawful object, The object of agreement should be lawful and legal. Two persons cannot enter into an agreement to do a criminal act. Consideration or object of an agreement is unlawful if it. a is forbidden by law or, b is of such nature that if permitted would defeat the provisions of any. c is fraudulent or, d Involves or implies injury to person or property of another or. e Court regards it as immoral or opposed to public policy. 6 Possibility of performance, The terms of the agreement should be capable of performance.
An agreements to do act impossible in itself cannot be enforced. Example A agrees to B to discover treasure by magic The agreement is void because. the act in itself is impossible to be performed from the very beginning. 7 The terms of the agreements are certain or are capable of being made certain 29. Example A agreed to pay Rs 5 lakh to B for ultra modern decoration of his drawing. room The agreement is void because the meaning of the term ultra modern is not. 8 Not declared Void, The agreement should be such that it should be capable or being enforced by law. Certain agreements have been expressly declared illegal or void by the law. 9 Necessary legal formalities,A contract may be oral or in writing. Where a particular type of contract is required by law to be in writing and. registered it must comply with necessary formalities as to writing registration. and attestation, If legal formalities are not carried out then the contract is not enforceable by law. Example A promise to pay a time Barred debt must be in writing. Agreement is a wider term than contract where as all contracts are agreements All. agreements are not contracts, All Contracts are Agreements but all Agreements are not Contracts. The various agreements may be classified into two categories. Agreement not enforceable by law Agreement enforceable by law. Any essential of All essentials of,a valid contract a valid contract.
is not available are available,SUJEET JHA 4 9213188188. MS EDUCONZ PVT LTD LAW AUDIT,Conclusion, Thus we see that an agreement may be or may not be enforceable by law and so all agreement. are not contract Only those agreements are contracts which are enforceable by law In short. Contracts Agreement Enforceability by Law, Hence we can conclude All contracts are agreement but all agreements are not contracts. Distinction between Contract Agreement,Basis Contract Agreement. 1 Section Sec 2 h Sec 2 e, 2 Definition A contract is an agreement Every promise or every set of.
enforceable by law promises forming consideration for. each other is an agreements, 3 Enforceability Every contract is enforceable Every promise is not enforceable. 4 Interrelationship A contract includes an agreement An agreement does not include a. 5 Scope The scope of a contract is limited as Its scope is relatively wider as it. it includes only commercial includes both social agreement and. agreements commercial agreements, 6 Validity Only legal agreements are called An agreement may be both legal. contracts and illegal, 7 Legal Every contract contains a legal It is not necessary for every. Obligation obligation agreement to have legal obligation. Types of contracts, On the Basis On the Basis of On the Basis of On the Basis. of creation Validity execution of Liability, a Express contract a Valid contract a Executed contract a Bilateral contract.
b Implied contract b Void contract b Executed contract b Unilateral. c Tacit contract c Voidable contract c Partly executed and contract. d Quasi contract d Unenforceable party executory,e E contract contract. e Illegal contract, a Express contract A contract made by word spoken or written According to sec 9 in. so for as the proposal or acceptance of any promise is made in words the promise is said. to be express, Example A says to B will you purchase my bike for Rs 20 000 B says to A Yes. b Implied contract A contract inferred by,The conduct of person or. The circumstances of the case,SUJEET JHA 5 9213188188.
MS EDUCONZ PVT LTD LAW AUDIT, By implies contract means implied by law i e the law implied a contract through. parties never intended According to sec 9 in so for as such proposed or acceptance is. made otherwise than in words the promise is said to be implied. A stops a taxi by waving his hand and takes his seat There is an implied contract that A. will pay the prescribed fare, c Tacit contract A contract is said to be tacit when it has to be inferred from the. conduct of the parties Example obtaining cash through automatic teller machine sale. by fall hammer of an auction sale,d Quasi Contracts are contracts which are created. Neither by word spoken,Nor written,Nor by the conduct of the parties. But these are created by the law, If Mr A leaves his goods at Mr B s shop by mistake then it is for Mr B to return the.
goods or to compensate the price In fact these contracts depend on the principle that. nobody will be allowed to become rich at the expenses of the other. e e Contract An e contract is one which is entered into between two parties via the. a Valid contract An agreement which satisfies all the requirements prescribed by law. On the basis of creation, b Void contract 2 j a contract which ceases to be enforceable by law because void. when of ceased to be enforceable,When both parties to an agreement are. Under a mistake of facts 20, Consideration or object of an agreement is unlawful 23. Agreement made without consideration 25,Agreement in restrain of marriage 26. Restraint of trade 27,Restrain legal proceeding 28.
Agreement by wage of wager 30, c Voidable contract 2 i an agreement which is enforceable by law at the option of. one or more the parties but not at the option of the other or others is a voidable. Result of coercion undue influence fraud and misrepresentation. d Unenforceable contract where a contract is good in substance but because of some. technical defect i e absence in writing barred by imitation etc one or both the parties. cannot sue upon but is described as unenforceable contract. Example Writing registration or stamping, Example An agreement which is required to be stamped will be unenforceable if the. same is not stamped at all or is under stamped,SUJEET JHA 6 9213188188. MS EDUCONZ PVT LTD LAW AUDIT, e Illegal contract It is a contract which the law forbids to be made All illegal. agreements are void but all void agreements or contracts are not necessary illegal. Contract that is immoral or opposed to public policy are illegal in nature. Unlike illegal agreements there is no punishment to the parties to a void agreement. Illegal agreements are void from the very beginning agreements are void from the very. beginning but sometimes valid contracts may subsequently becomes void. a Executed contract A contract in which both the parties have fulfilled their obligations. under the contract, Example A contracts to buy a car from B by paying cash B instantly delivers his car.
b Executory contract A contract in which both the parties have still to fulfilled their. obligations, Example D agrees to buy V s cycle by promising to pay cash on 15th July V agrees to. deliver the cycle on 20th July, c Partly executed and partly executory A contract in which one of the parties has. fulfilled his obligation but the other party is yet to fulfill his obligation. Example A sells his car to B and A has delivered the car but B is yet to pay the price. For A it is excuted contract whereas it is executory contract on the part of B since the. price is yet to be paid,On the basis of liability for performance. a Bilateral contract A contract in which both the parties commit to perform their. respective promises is called a bilateral contract. Example A offers to sell his fiat car to B for Rs 1 00 000 on acceptance of A s offer by. B there is a promise by A to Sell the car and there is a promise by B to purchase the car. there are two promise, b Unilateral contract A unilateral contract is a one sided contract in which only one. party has to perform his promise or obligation party has to perform his promise or. obligation to do or forbear, Example A wants to get his room painted He offers Rs 500 to B for this purpose B says to A.
if I have spare time on next Sunday I will paint your room There is a promise by A to pay Rs. 500 to B If B is able to spare time to paint A s room However there is no promise by B to Paint. the house There is only one promise,Difference Between Void and Voidable Contract. Matter Void contract Voidable contract,Definition It means contract which cease to. It means an agreement enforceable,be enforceable by law by one or more parties. Nature Valid when made subsequentlyIt remains voidable until cancelled by. becomes unenforceable party, Rights or remedy No legal remedy Aggrieved party has remedy to. cancel the contract, Performance of Party can t demand performance If aggrieved party does not cancel it.
contract of contract within reasonable time performance. SUJEET JHA 7 9213188188,MS EDUCONZ PVT LTD LAW AUDIT. can be demanded, Reason Due to change in law or If consent is not obtained freely. circumstances,Damages Not available Can demand in certain cases. Difference between Void and illegal Agreement,Matter Void agreement Illegal agreement. What Void agreement is not prohibited It is prohibited by law. Effect on collateral Enforced Not enforced,transaction.
Punishment No Yes, Void ab initio May not be void ab initio Always void initio. Contract of record, It is either a judgment of a court of a Recognizance. Law of contract creates jus in personem and not in jus in rem The Indian Contract Act consists of the following two parts a General principals of the Law of Contract b Special kinds of contracts The general principals of the Law of Contract are contained in Sections 1 to 75 of the Indian Contract Act These principles apply

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