Contracts CONTRACT???? • American Law Institute – Restatement
– A Contract is a promise or set of promises for
the breach of which the law gives a remedy; or the performance of which the law in some way recognises as a duty. • Halsbury’s Law of England Vol.VIII – A contract is an agreement made between two or more persons which is intended to be enforceable at law, and is constituted by the acceptance by one party of an offer made to him by the other party to do or abstain from doing some act. • Latin word Contractum – Drawn together. • India Indian Contract Act, 1872 deals with contracts in general. • Can be broadly divided into two parts:- – General Principles Ss. 1 – 75 – Specific Contracts Ss. 124 – 238 • Indemnity and Guarantee • Bailment • Agency S. 2 (h) Contract • An agreement enforceable by law is a contract. – Agreement – Enforceable by Law Agreement • Built upon a series of definitions. – Agreement – Promise – Proposal – Promisor, Promisee – Consideration Agreement S. 2 (e) • Every promise and every set of promises, forming the consideration for each other, is an agreement. – Promise – Every set of promises forming the consideration for each other Promise S. 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 – Proposal – accepted - promise Proposal S. 2 ( a) • When one person signifies to another his willingness to do or abstain from doing anything, with a view to obtaining the assent of the other to such act or abstinence, he is said to make a proposal. S. 2 (c) • The person making the proposal is called the “Promsor”, and the person accepting the proposal is called the “promisee” Enforceable by Law S.10 • 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. • Nothing herein contained shall affect any law in force in India and not hereby expressly repealed, by which any contract is required to be made in writing or in the presence of witnesses, or any law relating to the registration of documents. • Two Paragraphs – Requirements of Substantial or essential validity – Formalities Conditions of Essential Validity • Competent Parties Ss. 11 & 12 • Existence of Consent of Parties S. 13 • Consent being free Ss. 14 – 22 • Existence of Consideration S.2(d) & S.25. • Consideration and object being lawful S.23 • The agreement not being expressly declared to be void. Ss. 23 – 30. Formation of Contract • Promisor 2(c ) – Proposal 2 (a) – Promisee 2 ( c ) – accepts 2(b) – Promise 2(b) – Agreement 2(e) – Enforceable by Law 10 – Contract 2(h) Proposal / Offer • One person to another One distinct person to another • Signifies communicates with clarity and certainty • His willingness to do or abstain from doing anything • With a view to obtain the assent of that other to such act/abstinence One Person to Another