INDIAN CONTRACT ACT
This is a law that helps establish a legal relationship and regulate the same between two individuals in the public domain. This law is a very important tool of commerce in globalised era. This content will help and prepare the students for understanding the world of contract..
Section 2: Interpretation clause and Definitions
1) Proposal Section 2 (a)
2) Promise Section 2 (b)
3) Consideration Section 2(d)
4) Agreement Section 2 (e)
5) Contract Section 2 (h)
CHAPTER-1: COMMUNICATION, ACCEPTANCE AND REVOCATION OF PROPOSALS
Section 3-9: Communication, acceptance and revocation of proposals
section 4: Communication when complete
section 5: revocation of proposals and acceptance
section 6: revocation how made
section 7: acceptance must be absolute
section 8: acceptance by performing conditions or receiving consideration
section 9: promises, express and implied
Section 10: WHAT AGREEMENTS ARE CONTRACT
General principles in the formation of a Contract–
1. Intention to create Legal Relations.
2. Offer and Acceptance.
3. Lawful Consideration.
4. Capacity of the involved parties
5. Free Consent.
6. Object of the contract must be legal.
7. The agreement must also have the elements of certainty and possibility of performance for it to be enforceable by law and it must not be void.
Section 11 and 12: COMPETENCY TO CONTRACT (READ WITH SECTION 68)
1. Attaining the age of majority
2. Being of sound mind
3. Not disqualified from entering into a contract by any law that he is subject to.
4. Important landmark judgment (Mohiribibi v. Dharmodas)
Section 68: Claim for necessaries supplied to person incapable of contracting, or on his account
Section 2(i) of the Indian Contract Act, 1872 defines voidable agreements
section 13: Consent defined
section 14: Free consent defined
Section 19 and 19 A: Lack of free consent
section 15: coercion
section 16: undue influence
section 17: fraud
section 18: misrepresentation
section 53: prevention of performance by other party
section 55: failure to perform in fixed timefraud
section 64: consequences of recession
Section 2(g) of the Indian Contract Act, 1872 defines voidable agreements
Section 20: Mistake of fact
Sections 23 and 24: Mistake of law
Section 25: Agreements without consideration
Section 26: Agreements in restraint of marriage
Section 27: Agreements in restraint of trade
Section 28: Agreement in restraint of legal proceedings
Section 29: Agreement void for uncertainty
Section 30: Wagering agreements
CONTINGENT CONTRACTS: Sections 31 to 36
Section 31: contingent contract defined
Enforcement of contingent contract
Provisions related to the enforcement of the contingent contract are given under section 32 to 36 as follows:
Section 32: Enforcement of contract contingent on the happening of an event
Section 33: Enforcement of contract contingent on an event not happening
Section 34: When an event on which contract is contingent to be deemed impossible if it is the future conduct of a living person
Section 35 para 1: Contracts contingent on an event happening within the fixed time
Section 35 para 2: Contracts contingent on an event not happening within the fixed time
Section 36: Contract contingent of impossible event void
IMPOSSIBILITY OF PERFORMANCE AND FRUSTRATION OF CONTRACTS
1) Initial Impossibility
2) Subsequent impossibility
Specific grounds for frustration
1) Death or incapacity of party
2) Government, legislative and administrative interventions
3) Non-occurrence of contemplated event
4) Change of circumstance
5) Destruction of subject-matter
Effects of frustration
1. Frustration should not be self-induced
2. Section 65: Restitution under frustration
a. Discovered to be void
b. Becomes void
Sections 68 to 72: QUASI CONTRACTS
Quasi contract Sections 68 to 72 of the Indian Contract Act 1872 provide for 5 kinds of quasi-contractual obligations, they are:
1. section 68: Supply of necessities
2. section 69: Payment by interested persons
3. section 70: Liability to pay for non-gratuitous acts
4. section 71: Finder of goods
5. section 72: A mistake of coercion
Essentials of Quasi-Contract:
1. It is enforced by law. It is not formed by contract.
2. It is a right in personam.
3. The individual who incurs expenses is entitled to receive money (unjust enrichment).
4. It is raised through a legal fiction.
CONSEQUENCES OF BREACH OF CONTRACT: sections 73 to 75
Section 39 of the Indian Contract Act, 1872 defines the breach of contract
|Compensation for loss and damage caused by breach of contract||Compensation in regard to failure to discharge obligation||Compensation for loss or damage which naturally arose in the usual course of thing from such breach||Remote and indirect loss or damage
Breach of resembling contract
Mitigating of losses
Section 74: Penalties in regard to breach of contract
Section 75: compensation to the party rightfully rescinding the contract
Sections 124 to 147: INDEMNITY AND GUARANTEE
Sections 148 to 171: BAILMENT
Sections 172 to 181: PLEDGE
Sections 182 to 238 : AGENCY