Nature of contract
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The document discusses key concepts in corporate and business law, specifically the Indian Contract Act of 1872. It defines what a contract is under Indian law, noting that a contract is an agreement that is enforceable by law. It outlines the essential elements required for a valid contract, including offer and acceptance, lawful consideration, capacity and consent of parties, lawful object, and certainty of terms. It also classifies contracts according to their validity, formation, and time of performance.
Nature of contract
- 1. Corporate & Business Law THE INDIAN CONTRACT ACT, 1872
- 2. WHAT IS LAW? Law consists of rules that regulate the conduct of individuals, businesses, and other organizations within society. Law means any rule of conduct, standard or pattern , to which actions are required to conform.
- 3. OBJECT OF LAW Object of law is the creation and protection of legal rights to maintain order in the society. Keeping the peace . Shaping moral standards . Promoting social justice Maintaining the status quo Facilitating orderly change Maximizing individual freedom
- 4. IGNORTIA JURIS NOT EXCUSANT Ignorance of law is - NO EXCUSE Every member of the society is expected that his actions conform to a set pattern or standard as reflected in legal rules. For this purpose he is presumed to know the legal rules. He cannot take the plea that he did not know them.
- 5. Business Laws Business law is also termed as commercial Law and mercantile law. Business law is generally used to denote that portion of law which deals with rights and obligations arising out of transactions between mercantile persons.
- 6. Cont….. The term appears to be a convenient way of grouping together the laws that should be regarded important for men in business. It includes following laws: Law of contracts Sales of goods act Partnership act Company law Negotiable instrument act Insurance act
- 7. THE INDIAN CONTRACT ACT, 1872
- 8. The Law of Contract It is that branch of law which determines the circumstances in which promises made by the parties to a contract shall be legally binding on them. It defines: Remedies available Conditions under which remedies are available
- 9. Nature of the Law of Contract It does not lay down the duties and responsibilities which the law will enforce BUT, It consists a number of limiting principles, subject to which; the parties may create rights & duties for themselves which the law will upload.
- 10. Law of contract creates jus in personam, jus in rem
- 11. DEFINITION OF CONTRACT Sec.2(h) “An agreement enforceable by law.” Contract =Agreement + enforceability by law. Agreement must create a legal obligation or duty.
- 12. AGREEMENT Sec. 2(e), “Every promise and every set of promises, forming consideration for each other” An agreement takes place when an offer is made by one person is accepted by the other. All agreements are not contracts but all contracts are agreements. (Balfour v/s Balfour) Agreement = Offer + Acceptance
- 13. Agreement is a wide term All agreements are not contracts BUT All contracts are agreements (Social v/s Legal) Consensus ad idem Obligation
- 14. ESSENTIAL ELEMENTS OF VALID CONTRACT Offer and acceptance – Two parties, offer & acceptance Intention to create legal relationship – (Balfour vs. Balfour- domestic, social agreements ) Lawful consideration- cash,kind,act of abstinence Capacity of parties – Competency Free consent – without pressure (physical or mental)
- 15. Lawful object – The object of contract is unlawful, if : Immoral Illegal Opposed to public policy Agreement not expressly declared void – agreements must not be declared voidby law in force in the country Certainty and possibility of performance Legal formalities – In writing, properly stamped
- 16. Valid Contracts Voidable Contracts Void Agreement Void Contracts Unenforceable Contracts Illegal contract Express Contracts Implied Contracts Quasi contracts Executed Contracts Executory Contracts Bilateral Contracts Unilateral Contracts Classification of Contracts Validity or Enforceability Performance Formation
- 17. CLASSIFICATION OF CONTRACTS… According to validity Valid contract – Agreement satisfying all the essentials. Voidable contract – Consent of one party is not free. ( Aggrieved party, avoid in reasonable time). & Void at option of that party only Void contract – A valid contract when it was made but subsequently it becomes void.
- 18. Illegal contract – An agreement which is forbidden by law or against the policy of law is known as unlawful or illegal agreement. ( smuggling, murder ) Void agreements - Void ab - initio …. From the very beginning ( lack of one of the essentials) Unenforceable contract – one which cannot be enforced in a Court of law due to some technical defects
- 19. According to formation Express contract – orally or in writing Implied contract – by conduct or acts Quasi contract – no intention of the parties to create legal relationship. It is created by law.
- 20. According to time of performance: Executed contract – Both the parties have performed. Executory contract – Both the parties are yet to perform. It can be partly as well.