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✐ ✐ ✐ “Chapter-2*(5th*Proof)” — 2012/5/28 — 15:00 — page 7 — #1 ✐ CHAPTER INDIAN CONTRACT ACT, 1872 2 2.1 INTRODUCTION In commerca fe prome are mae ometme prome are honore t ometme reach ao commtte In cae of reach t oo to etermne the remee that are aaae n a cort of a agant a peron ho fa to honor h prome an the conton ner hch the remee are aaae he a of contract that ranch of ne a hch etermne the crcmtance n hch prome mae the parte to a contract ha e ega nng on them It affect a of n one a or the other It hoeer more appcae to peope engage n trae commerce an ntr ecae of ther tranacton are ae on contract 2.1.1 TheIndian Contract Act, 1872 Pror to the enactment of the Inan Contract ct 1872 ngh common a a appe ncrmnate to Inan nate hch e to man nconenence herefore eparate tatte ere enacte to peree ngh a an to regate the contract here parte ere n an ohammean If oth the parte ere n the ere regate the n a an here oth parte ere ohammean ohammean a appe here hoeer one part a a n an the other ohammean then a of efenant appe n here a an age of n or ohammean ere ent on an pont ngh a a appe raa mportance of the enactment of genera a regatng the contract an to efine an amen certan part of a reatng to contract common to a a fet an th gae rth to the Inan Contract ct 1872 he Inan Contract ct came nto force on 1t eptemer 1872 he ct appe to the hoe of Ina ecept the tate of amm an ahmr ✐ ✐ ✐ ✐ ✐ ✐ ✐ “Chapter-2*(5th*Proof)” — 2012/5/28 — 15:00 — page 10 — #4 ✐ 10 Business Law of those agreements whh reate ega ogatons n agreement whh reates ega ogaton n orer to e a an nng mst possess ertan essentas hese essentas are the essenta eements of a ontrat he foowng are the essentas or haratersts or featres of a a ontrat 1. Offer and Acceptance here mst e two partes to an agreement e one part ma ng the offer an the other part aeptng t he terms of the offer mst e efinte an the aeptane of the offer mst e asote an nontona n other wors offer an aeptane mst e oth awf e t mst onform to the res a own n the nan Contrat t 2. Consideration nagreement to e enforeae aw mst e spporte onseraton Conseraton means an aantage or enefit mong from one part to the other n short t means ‘somethng n retrn’ n agreement s ega enforeae on when oth the partes ge somethng an get somethng n retrn promse to o somethng gettng nothng n retrn s sa not enforeae aw 3. Capacity of Contract hepartes to the agreement mst e ompetent of enterng nto a a ontrat person s sa to e ompetent f he s (a) of age of maort () of son mn an () not safie from ontratng aw to whh he s set 4. Free Consent n agreement mst e ase on free onsent of the partes n orer to eome a a ontrat he onsent of the partes s sa to e free when the are of the same mn on a the matera terms of the ontrat he partes are sa to e of the same mn when the agree aot the set-matter of the ontrat n the same sense an at the same tme ree onsent oes not est when t s otane oeron ne nflene fra msta e or msrepresentaton 5. Lawful Object he oet of the agreement mst e awf t s nawf f the oet s foren aw ega mmora or oppose to p po n agreement wth an nawf oet annot e enfore aw 6. Leal elationsip he ntenton of the partes to the agreement mst reate ega reatonshp etween them e an agreement n the natre of a ommera argan n the asene of sh ntenton the agreement annot e enfore aw ✐ ✐ ✐ ✐ ✐ ✐ ✐ “Chapter-2*(5th*Proof)” — 2012/5/28 — 15:00 — page 12 — #6 ✐ 12 Business Law Express contracts When the terms of a ontrat are epress agree pon ( hether ors spoen or rtten) at the tme of the formaton of the ontrat the ontrat s sa to e an epress ontrat Example: rtes a etter to hs offer to se sooter for |20000 aepts t an repe n a etter Implied Contracts nmpeontrat s one hh s nferre from the ats or ont of the partes or orse of eangs et een them n other ors the proposa or aeptane of an promse s mae other se than n ors the promse s sa to e mpe Example: oars a C s t s mpe from hs ont that he has entere nto a ontrat th C to trae n the s prhasng a tet Quasi Contract as ontrat s a ega ogaton that has a nmer of smartes to a ontrat t s not eat the same as ontrat arses not from an agreement t from a mere reatonshp that omes aot et een nas t s a reatonshp ase on aton thot searhng of an agreement t smp means that the atons of one person hae onferre a enefit on other Example: eaes goos at C’s hose mstae C treats the goos as hs o n C s on to pa for the goos Contingent Contract ontngent ontrat s one n hh a promse s ontona an the ontrat sha e performe on on the happenng of some ftre nertan eent Example: ontrats to pa |10000 f ’s hose s rnt Valid Contract ontrat hh satsfies a the ega rerements a o n n seton 10 of the t s no n as a a ontrat Void Contract ontrat hh as a hen t as first entere nto t sseent eomes nen- foreae e to mposst of performane hange of a or other reason s ae a o ontrat ✐ ✐ ✐ ✐ ✐ ✐ ✐ “Chapter-2*(5th*Proof)” — 2012/5/28 — 15:00 — page 14 — #8 ✐ 14 Business Law Example: A agrees to engage B as hs serant fro the net onth the ontrat s ee tor Unilateral Contract A natera or one-se ontrat s one n hh on one part has to f fi hs ogaton at the te of foraton of the ontrat the other part hang f fie hs ogaton at the te of the ontrat or efore the ontrat oes nto estene h ontrats are aso non as ontrats th ee te onseraton Example: r perts a ooe to arr hs ggage an eep t n the ar A ontrat oesntoesteneassoonasthe ggageseptnthear B tthattetheooehas area perfore hs ogaton o on r has to f fi hs ogaton e paent of reasonae harges Bilateral Contract Aatera ontrat s one n hh the ogatons on the part of oth the partes to the ontrat are o tstanng at the te of the foraton of the ontrat n ths sense atera ontrats are sar to ee tor ontrats an are aso non as ontrats th ee tor onseraton 2.2 OFFER ffer s the first an foreost essenta eeent of a a ontrat t s the first step n the proess of ang a ontrat or the foraton of a ontrat there st e a efinte offer one person to another an ts n afie aeptane the person to ho t s ae he or ‘proposa’ se n seton 2(a) of the nan Contrat At s snono s n ngsh se th ‘offer’ 2.2.1 MeaningandDefinition Anoffer s a stateent one person of hat he ge n ret rn for soe at or prose of another n other ors an offer s a proposa one person here he epresses hs ngness to enter nto a ontrat a ogaton n ret rn for a prose or at or forearane n short an offer s a proposa one part to another to enter nto a ega nng agreeent th h eton 2(a) of the At efines offer as “A person s sa to hae ae a proposa hen he sgnfies hs ngness to o or to astan fro ong anthng th a e to otanng the assent of that other to s h at or astnene” Example: A sas to B “ o p rhase ar for |50000 n ths ase A s ang ✐ ✐ ✐ ✐
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