Prof. M.R.K.

Prasad

 Contract is the result of a promise Contract Act assures that the promise

so made is legally enforceable, if any one of the party fails to abide by the contract

 What is contract ? Sec. 2 (h) An Agreement Enforceable

by law

Agreement Sec.2 (e) Every promise and every set of promises forming the consideration for each other is an agreement

Offer + Acceptance = Agreement

Essentials: 1.Plurality of persons 2.Consensus ad idem 3.Capacity 4.Consideration 5.Free Consent

Essentials:
6.Lawful object
7.Intention to create Legal obligation

Balfour v. Balfour Meritt v. Meritt 8.Certain and possibility of performance 9.Terms must be clear 10.Legal formalities

Sec. 2 (a) When one person signifies his willingness to do or to abstain from

doing

anything,

with

view

to

obtaining the assent of that other to

such act or abstinence, he is said to

make a proposal

1. Terms must be certain and definite 2. Must be communicated

3. Intention to create legal obligation

4. Offer should not impose burden on

offeree

1. General or Specific Offer

2. Express or implied offer

3. Cross offer 4. Counter offer 5. Invitation to offer

Harve v. Facie

P Will you sell us Bumper hall Pen?

Telegraph lowest cash price

D Lowest price for Bumper Hall Pen, 900

P We agree to buy Bumper Hall Pen for

900

1. After stipulated time 2. Counter offer

3. Rejection
4. Death or insanity 5. By revocation

Rules
1.Offer will be treated as communicated only

when it is reached
2.Acceptance

will

be

treated

as

communicated when it is posted

3.Revocation

will

be

treated

as

communicated only when it is reached.

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. Essentials 1.Must be absolute and un conditional 2.Acceptance only by offeree 3.Must be communicated to offeror 4.In prescribed manner and in time.

Essentials for Validity

1.Contractual Document
2.Reasonable Notice 3.Notice must be contemporaneous to the contract 4.Conditions must be reasonable 5.No Fundamental Breach of contract 6.Statutory protection.

Minor Unsound Mind

Lunatics Idiots: is a person who is devoid of the ability to think. Drunkards

Persons Disqualified by Law

Alien enemies Foreign diplomats Convicts

What is consideration? The price for which a promise is brought Some thing in return - quid pro quo 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 abstain from doing, some thing, such act or abstinence or promise is called a consideration for the promise.

1. At the desire of the Promisor 2. From promisee or any other person 3. It may be past, present or future.

4. Consideration need not be adequate

Sec. 2(i) An agreement which is enforceable by law at the option of one or more of the parties thereto, but not at the option of the other or others is a voidable contract. When consent to the agreement is not free, agreement becomes voidable.

Sec. 15: committing, or threatening to commit any act forbidden by the Indian Penal Code or the unlawful detaining, or detain any property, to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement

Sec.16

1. A subsisting relation between parties

2. Relation is such that one person is in a position to dominate the will of other

Persons Holding real and apparent authority Persons in fiduciary relation Persons in mental distress 3. Uses such domination for unfair advantage

Sec: 18

1.Unwarrented statements: When a person positively asserts that a fact is true when his information does not warrant it, though he believes it to be true. 2. Breach of duty: 3. Inducing mistake about subject matter

1. False statement 2. 3. 4. 5.

Silence is fraud? Active concealment of material fact Promise made without any intention to deceive Any other act fitted to deceive Any act or omission as the law specifically declares to be fraudulent.

Mistake of law Mistake of fact 1. Unilateral mistake 2. Bylateral mistake

Mistake of law Mistake of fact 1. Unilateral mistake 2. Bylateral mistake

1. Agreement in Restraint of Marriage Sec.26

Partial restraint
Total Restraint 2. Agreement in Restraint of Trade Sec.27

Every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind is void to that extent.

1. Sale of Good will 2. Restrain on Employement 2. Trade Combinations 4. Solus agreements

Gujarat Bottling Co. Ltd v. Coca Cola Co. Stipulation restraining the franchisee(GBC) to manufacture, bottle, sell, deal or otherwise concerned with the products of other beverages of any other brands during subsistence of this agreement held valid not void.

3. Agreements which restricts absolutely the

parties from enforcing their legal rights is void 4. Agreement which limit the time within which a party may enforce his contractual rights is void.
Exceptions 1. Reference of future dispute to arbitration. 2. Reference of existing dispute to arbitration

5.Agreements which are Uncertain and

Ambiguous Sec. 29
5.Agreements by way of wager: Sec.30 6.Agreements to do impossible acts. Sec.56

1. Object of the agreement is forbidden by law 2. Defeating the provisions of law 3. Agreement for fraudulent purpose 4. Agreement to injure any person or property 5. Immoral 6. Against public policy

1. Present Breach

2. Anticipatory breach

Right to rescind the contract Option to wait till the due date

1. Recession 2. Injunction 3. Specific Performance

4. Suit for damages

Sec: 73. When contract has been broken the injured party is entitled to 1. Such damages which naturally arose in the usual course of things from such breach 2. Such damages which the parties knew, when they made the contract, to be likely to result from the breach. 3. Such compensation not to be given for any remote or indirect loss or damage sustained by reason of the breach

1. Ordinary damages

2. Special damages
3. Exemplary damages 4. Nominal Damages 5. Liquidated damages 6. Statutory damages 7. Quantum Meruit

THANK YOU
-Prof. M.R.K. Prasad V.M. Salgaocar College of Law, Miramar, Panaji, Goa prasadmandav@gmail.com