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The Indian Contract Act (Ica), 1872
The Indian Contract Act (Ica), 1872
Promise/(s) Promise/(s)
= Agreement
(in exchange for)
Promise?
Section 2(b)
Promise = Proposal/Offer + Acceptance
Proposal?
Section 2(a)
Expression of willingness
With a view to seek the assent of the other
Thus, mere expression of willingness doesn’t
constitute offer/proposal.
Acceptance
Section 2(b)
Giving of assent to the proposal.
Enforceability by Law
Agreements which are not enforceable
Illegal/unlawful agreements, e.g., to
smuggle/to kill
Social Agreements (Balfour vs. Balfour)
Agreements Declared Void
under ICA
e.g.
Agreement with or by a minor
Agreement in restraint of trade
Marriage brokerage contract
Wagering/Betting Agreements
Kinds of Contracts
From the point of view of
Enforceability
Void
Voidable
Valid
Void Agreement vs. Void Contract
Void Agreement
i.e., void-ab-initio i.e. unenforceable from the
very beginning
Becomes void (Void Contract)
Voidable
i.e., void + able
i.e., capable of being declared void
(unenforceable) at the option of one of the
parties to the contract but not at the option of
the other.
Valid Contract
Section 10
To be a valid contract, it must satisfy the
following:
1. Offer and Acceptance
2. Consensus-ad-idem (Meeting of minds)
i.e., persons must agree to the same thing in
the same sense and at the same time.
3. Intention to create legal relationship as
against social relationship or illegal/unlawful
relationship.
4. Free and Genuine Consent, i.e., free from
coercion
undue influence
fraud
misrepresentation
mistake
Damages
Damages
U/S Section 74
U/S Section 73
Special Damages
Only damages (No claim for
naturally flowing consequential loss
From breach unless in the Pre-fixed Damages
(Ordinary Contemplation
Damages) of the parties
(Hedley v. Baxendale
Liquidated Damages
(What can be recovered is
actual loss or
amount prefixed,
whichever is less)