Nature of Contracts

27/12/22 5:58 PM

'Ignorantia juris not excusat = ignorance of law is no excuse.

Jus in rem = right against or in respect of thing, available to the whole world

Jus in personam = right against or in respect of specific person, available against the specific
person only

Definition:
Contract is an agreement made btw two or more parties which
the law will enforce. Sec 2(h) defines it is an agreement
enforceable by law.

Contract = Agreement + Enforceability by law

Agreement = Offer + Acceptance

Agreement is defined as every promise and every set of

promises forming consideration for each other Sec 2(e).

Promise is defined as 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. Sec
2(b)

Consensus ad idem
The essence of agreement is the meeting of the minds of the
parties in full and final agreement; there must in fact be
consensus ad idem.

Essential Element of a Valid Contract

1. Offer and acceptance

a. Offer bust be defined and acceptance must be
absolute
2. Intention to create legal relationship
3. Lawful consideration (Sec 2-d)
i. Consideration can be cash or kind or act or
abstinence or promise to do or not to do.
ii. It can be present, past, future
iii. It must be real and lawful
4. Capacity of parties -- competency (Sec 11)
5. Free and genuine consent (Sec 13)
6. Lawful object (Sec 23)
7. Agreement not declared void
8. Certainty and possibility of performance
9. Legal formalities

Classification Of Contracts:

1. Validity Voidable contract (Sec 2-i)

a. Void 1) coercion, undue influence,
b. Voidable misrepresentation or fraud

1. Formation
a. Express contracts
b. Implied contracts
c. Quasi-contracts
d. E-Commerce contracts

2. Performance
a. Executed contracts
b. Executory contracts
c. Unilateral or one-side contracts
d. Bilateral contracts

Classification of Contracts in English Law

1. Formal Contracts
a. Contracts of record
b. Contracts under seal
2. Simple Contracts