![Section 2(h) of the Indian Contract Act, 1872[2] defines a
contract as “An agreement enforceable by law”. The
word ‘agreement’ has been defined in Section 2(e) of
the Act as ‘every promise and every set of promises,
forming consideration for each other’
Indian contract act based on English law, it extends to
entire India.
Anyone who conducts business uses contract law. Both
companies and consumers use contracts when they
buy and sell goods, when they license products or
activities, for employment agreements, for insurance
agreements and more. Contracts make these
transactions happen smoothly and without any
misunderstandings.](https://image.slidesharecdn.com/bl-200914061653/85/introduction-of-Indian-Contract-act-1872-3-320.jpg)
introduction of Indian Contract act 1872
- 1. Indian contract act-1872 It was implemented 1st Sep. 1872 and divided in different sections- Section 1 to 75 for General Provision Section76 to123 for Sales and Goods Section 124 to 147 for Indemnity and Guarantee Section 148 to 181 for Bailment and Pledge Section 182 to 238 for Agency Section 239 to 266 for Partnership
- 2. Nature of contract- We are well aware about the contract , in a day we are doing so many contact example- a man go the mechanic for repair his scooter, when Ram buy a packet of cigarettes he is making a contract of the sale of goods act 1930. when Ram goes to the cinema to watch movie he is making another contract.
- 3. Section 2(h) of the Indian Contract Act, 1872[2] defines a contract as “An agreement enforceable by law”. The word ‘agreement’ has been defined in Section 2(e) of the Act as ‘every promise and every set of promises, forming consideration for each other’ Indian contract act based on English law, it extends to entire India. Anyone who conducts business uses contract law. Both companies and consumers use contracts when they buy and sell goods, when they license products or activities, for employment agreements, for insurance agreements and more. Contracts make these transactions happen smoothly and without any misunderstandings.
- 4. Essential elements of a valid contract u/s 10 1. Agreement- an agreement is the essence of any contract. it is the result of offer and acceptance between two or more parties. the acceptance must be unconditional and absolute. Agreement is called offer & acceptance. Example- A propose to sell his house to B for Rs. 5 lakh and B gives his consent to purchase the house for Rs. 5 lakh. This is an agreement between A and B.
- 5. Feature of agreement- a) Persons- Must be two or more person for an agreement. b) Understanding-Parties to an agreement must agree about the subject matter of the agreement in the same sense and at the same time.
- 6. c) Legal obligation An agreement must give rise to a legal obligation. If an agreement is incapable of creating law. it is not a contract. “all contract are agreement but all agreement are not contract” agreement= offer+ acceptance. Example- A agree to sell his car to B for Rs. 50,000. the agreement gives rise to an obligation on the part of A to deliver the car to B and on the part of the B to pay Rs. 50,000 to A. this is a agreement of a conract.
- 7. 2. Offer and Acceptance- In offer and acceptance there must be two parties one party making the offer and another parties accepting. acceptance must be communicated to the offerer. 3. Law full consideration- An agreement to be enforceable by law must be supported by consideration, moving from one party to the other party. According to sec.25 agreement without consideration is void subject to certain exception given in this section. The agreement is legally enforceable by law when parties give some thing and get something.
- 8. Example-Mr. X promise to sell his car to Mr. Y for Rs. 50,000 in this agreement there is consideration for both parties, for Mr. X it is Rs. 50,000 and for Mr. it is car. 4. Capacity of parties- sec.11 and 12. The parties to the agreement must be capable for valid contract. If he has attained the age of majority, is of sound mind and is not disqualified from contracting by any other law.
- 9. 5- Free and Genuine Consent sec. (13 & 14)- It is essential to the creation of every contract there must be free consent of the parties to the agreement consent means that the parties must have agreed upon the same things in the same sense. There is a absence of free consent- 1) Coercion u/s 15 2) Undue influence u/s 16 3) Fraud u/s 17 4) Misrepresentation u/s 18 5) Mistake u/s 19
- 10. Example- “X” at the gun point ask to “Y” to sell his watch worth Rs. 9000 for Rs. 900 only. “Y” accept the offer to sell his watch. Here “Y’s” consent is not free. The agreement would be voidable at option by “Y”. 6. Writing and registration- According to Indian contract act , a contract may be oral and writing. But in certain special cases it must be in writing and registration.
- 11. Example- an agreement of sale of immovable property must be in writing and registration under the transfer of property act 1882.
- 12. 7- Lawful Object sec.(23) The object of the agreement must be lawful. The object must not be- a) Illegal b) Immoral c) Oppose to public policy Example- when a land lord knowingly lets a house to a prostitute to carry on prostitution, he can not recover the rent through a court of law.
- 13. Example- Mr. X promises to give his car to “B” for Rs. 50,000, if he beats Mr. Sudhir. Here the object of contract is unlawful. 8. Certainty and Possibility of performance- An agreement must be certain , it must be possible to ascertain . An agreement must be precise and certain. Example- A agree to sell to B a hundred tons of oil , there is nothing whatever to show what kind of oil was intended. The agreement is void for incertainty.