The Indian Contract Act, 1872

Dr. Leena B. Dam

Learning Objectives

 Classification of Contract
 Difference between void and voidable
contract
 Difference between illegal and void
agreement
 Difference between Void and Voidable Contract

Basis Void Contract Voidable Contract

Meaning A contract which ceases A contract enforceable by

to be enforceable law by one or more parties

Reason Due to change in law or When consent of a party to

circumstances the contract is not freely
obtained
Legality No legal effect hence Can be enforced by the
cannot be enforced by party at whose option it is
either party voidable
Compensation Does not arise Any person who has
received the benefit must
compensate or restore it to
the other party.
 Difference between Illegal and Void Agreement

Basis Illegal Agreement Void Agreement

Legality All illegal agreements All void agreements need

are void. not be illegal

Penalty Illegal agreements are There is no punishment for

liable to punishments void agreements

Restitution of No restitution of money The court may grant

money is granted in case of restitution of money
illegal agreements advanced in case of void
agreements
 Learning Objectives

 Meaning of Offer
 Types of Offer
 Rules relating to Offer
 Invitation to Offer
 Difference between Offer and Invitation
to Offer
 Acceptance
 Rules regarding acceptance
 Offer

Section 2 (a) ‘A person is said to make a

proposal when he signifies to another his
willingness to do or abstain from doing
anything with a view to obtaining the
assent of that other to such act or
abstinence’.
 Rules relating to offer

 Intention to create legal relationship

 Certain and definite

Case of Lalman Shukla vs Gauri Dutt
 BASIS FOR
OFFER
COMPARISON
Meaning When one person expresses his
will to another person to do or not
to do something, to take his
approval, is known as an offer.
INVITATION TO OFFER
When a person expresses
something to another person, to
invite him to make an offer, it is
known as invitation to offer.

Defined in Section 2 (a) of the Indian Not Defined

Contract Act, 1872.

Objective To enter into contract. To receive offers from people

and negotiate the terms on
which the contract will be
created.

Essential to make an Yes No

agreement

Consequence The Offer becomes an agreement An Invitation to offer, becomes

when accepted. an offer when responded by the
party to whom it is made.
Rules Regarding Acceptance
1. Acceptance must be absolute and unqualified.
2. The acceptance must be communicated.
3. Acceptance must be in prescribed mode.
4. Mere silence is not acceptance.
5. Acceptance must be given in a reasonable time and before
the offer lapses.
6. Acceptance by conduct.
7. Cannot precede an offer.
Case Law:

Rahul Gandhi started “self service” system in his shop.

Smt. Nirmala entered the shop, took a basket and after taking
articles of her choice into the basket reached the cashier for
payments. The cashier refuses to accept the price.
Can Rahul Gandhi be compelled to sell the said articles to
Smt. Nirmala? Decide.