UNIVERSITY INSTITUTE OF LEGAL

STUDIES
DEPARTMENT OF LAW
Subject Name and Code: LAW OF CONTRACT
(LLT-122/LLT-106)
SUKHWINDER SINGH, ASST. PROF.

AGREEMENT DISCOVER . LEARN . EMPOWER

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INDIAN
CONTRACT
ACT, 1872
Course Outcome
CO Title Level
Number
CO1 To explain the legal terminology used in the area of Remember
contract law and provisions of contract
CO2 To apply the basic concepts of contract law to hypothet- Understand
ical situation

Will be covered in this

lecture

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OFFER,
ACCEPTANCE &
CONSIDERATION

• AGREEMENT = OFFER + ACCEPTANCE

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 OFFER

According to Section 2 (a); “when one person will signify to another person his willingness to do or not do something

(abstain) with a view to obtain the assent of such person to such an act or abstinence, he is said to make a proposal or an

offer.”

• The person making the offer/proposal is known as the “promisor” or the “offeror”. And the person who may accept such an

offer will be the “promisee” or the “acceptor”.

Contd ……

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 OFFER
• May be express or implied.

• May be positive or negative.

• Must intend to create legal relationship.

• Terms of offer must be certain.

• May be made to a specific person or class of persons or to any one in the world at large.

• Must be communicated to the offeree.

• Must be made with a view to obtain the assent.

• May be conditional.

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 Termination of Offer

• By notice of revocation.

• By lapse of time.

• By failure of the acceptor to fulfill a condition precedent to acceptance.

• By failure to accept according to the mode prescribed.

• By death or insanity of the offeror.

• By rejection.

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 ACCEPTANCE

• According to Section 2 (b); “When the person to whom the proposal has been made signifies his assent thereto, the offer is
said to be accepted. Thus the proposal when accepted becomes a promise.”

• When the offeree to whom the proposal is made, unconditionally accepts the offer it will amount to acceptance. After such
an offer is accepted the offer becomes a promise.

• For example A offers to buy B’s car for rupees two lacs and B accepts such an offer. Now, this has become a promise.

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 Essentials of Valid Acceptance
• Acceptance must be absolute and unconditional.

• Acceptance by usual mode as desired by the offeror.

• Acceptance cannot precede the offer.

• Acceptance may be express or implied.

• Acceptance must be given within a reasonable time.

• Acceptance must be by an ascertained person (offeree).

• Offer cannot be accepted after it was rejected unless it is renewed.

• Silence does not imply acceptance.

• Acceptance must be made before the lapse or revocation of the offer.

• Acceptance of offer means acceptance of all terms attached to the offer

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 Consideration

• According to Blackstone, “Consideration is the recompense given by the party contracting to the other”. In other words, it is

the price of the promise.

• According to Section 2 (d) of the Indian Contract Act, 1872, “when at the desire of the promisor, the promise 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 consideration for the promise.”

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 Legal Rules regarding Consideration
• Consideration is required both for formation and discharge of an agreement or contract.

• Consideration may be past, present and future.

• Consideration may be either positive or negative.

• Consideration must be done at the desire of the promisor.

• Consideration may be furnished by the promisee or any other person.

• Consideration must be lawful.

• Consideration must be real and not illusory.

• Consideration need not be adequate.

• Consideration must not be the performance of existing duties.

• Consideration must be of some value in the eyes of law. 10

 Assessment Pattern

• Discuss the essentials of a Valid Contract.

• Discuss the history, development and objective of Indian Contract Act,

1872.

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 Applications
• Students will be able to appreciate the transactions and agreements, they make in their day to day
living.

• Students will be able to avail and guide people to claim remedies in case of non-fulfillment of the
conditions by any party to the contract.

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 REFERENCES (size:44)
• Indian Contract Act, 1872, BARE ACT
• Law of Contract, by Dr. Avtar Singh
• Law of Contract, by Dr. R.K. Bangia
• Law of Contract by Mulla

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THANK YOU

For queries
Email: sukhwindersingh.uils@cumail.in