PROJECT PROCUREMENT AND TENDERING PCC 512

CONTRACT FORMATION
AS PER THE INDIAN
CONTRACT ACT, 1872
OBJECTIVE OF STUDY ?
HOW TO ENTER INTO A VALID CONTRACT?

HOW NOT TO ENTER INTO A INVALID

CONTRACT OR VOIDABLE CONTRACT?
BASIC TERMINOLOGIES DEFINITION
• According to sec.2(h),
An agreement enforceable by law is a contract.

• According to sec.2(e),
Every promise and every set of promises, forming the
consideration for each other, is an agreement.

• According to sec.2(b),
When the person to whom the proposal is made
signifies his assent thereto, the proposal is said to be
accepted. A proposal, when accepted, becomes a
promise;
BASIC TERMINOLOGIES DEFINITION
• According to sec.2(d)
When, at the desire of the promisor, the promisee
or any other person has done or abstained from
doing, or does or abstains from doing, or promises
to do or to abstain from doing, something, such act
or abstinence or promise is called a consideration
for the promise.
• Hence, A Contract/Agreement has three basic
elements
1. OFFER
2. ACCEPTANCE
3. CONSIDERATION
DIFFERENCE BETWEEN CONTRACT &
AGREEMENT
• ALL CONTRACTS ARE AGREEEMNT, BUT ALL
AGREEMENTS ARE NOT CONTRACT.
• According to sec10.
What agreements are contracts.—All agreements
are contracts if they are made by the free consent of
parties competent to contract, for a lawful
consideration and with a lawful object, and are not
hereby expressly declared to be void.
• Hence,
CONTRACT = AGREEMENT + ENFORCEABILITY
DIFFERENCE BETWEEN CONTRACT &
AGREEMENT

AGREEMENT ENFORCEABLE

CONTRACT
 DIFFERENCE BETWEEN CONTRACT &
AGREEMENT
Agreement Contract
Offer and Acceptance together constitute Agreement and enforceability
an Agreement together constitute a Contract
Every promise and every set of promises A Contract is an Agreement
forming the consideration for each other is enforceable by law
an Agreement
Agreement may not create any legal A Contract necessarily create a legal
obligation. obligation.
All Agreement are not Contracts All Contracts are Agreements

An Agreement is a wider concept or a Contract is a specie for an

Genus Agreement

Agreement is not a conducted or a binding Contract is conducting and binding

Contract
TYPES OF CONTRACTS
TYPES OF CONTRACTS
• UNILATERAL AND BILATERAL CONTRACTS
• Based on whether one party is bound or both the parties are
bound.
• CONTINGENT CONRACT
• Section 31
• QUASI CONTRACT
• Work done without contract
• Occasionally, it so happens that a contractor executes the
work without there being a written or oral contract.
• A Quasi contract is a legal obligation imposed by law to
prevent unjust enrichment.
• Section 68 to 70
THANK YOU