INDIAN CONTRACT ACT 1872

Group No. 4

Presented By:
Akansha

Poddar (65),
Farheen Khan (113),
Karishma Chouhan (107),
Saurabh Makharia (114),
Raghav Seksaria (74),
Nisarg Joshi (112),
Parvez Shaikh (78),
Pratik Mundhra (120),
Shreya Gunecha
Rituraj palan

Introduction

Law of contract Foundation upon which

the super structure of modern business is
built
Business promise made between parties
performance follows later
Breaking of a promise without incurring liability
endless complications
Law of contract lays down legal rules relating to
promises, their formation, performance and
enforcement
Applicable not only to business community but
others

CONTRACT

Sec 2(h) An agreement enforceable by

law is a Contract.

Two elements

An Agreement
Legal obligation i.e, a duty enforceable by
law.

Agreement
Section 2(e) Every promise and every
set of promises forming the consideration
for each other, is an agreement.
Promise What is a promise?

Sec 2(b) - When the person to whom the

proposal is made signifies his assent
thereto, the proposal is said to be
accepted. A proposal, when accepted,
becomes a promise

Enforceability of Agreement
An agreement is said to be enforceable by law if
it creates a legal obligation.
If an agreement is incapable of creating a duty
enforceable by law, it is not a contract.
Thus, an agreement is a wider term than contract.

Essential elements of a valid

contract

Proposal & acceptance

Intention to create legal relationship
Free Consent
Capacity to contract
Lawful consideration
Lawful object
Agreement not expressly declared void
Certainty of meaning
Possibility of performance
Legal formalities

Proposal and Acceptance

Proposal.
An offer is the starting point in the making
of an agreement.
An offer is also called proposal
Sec 2(a) A person is said to have made
the proposal when he signifies to another
his willingness to do or to abstain from
doing anything with a view to obtaining the
assent of that offer to such act or
abstinence.

PROPOSAL

An offer involves the following essential

elements;

It must be made by one person to another person

It must be an expression of readiness or willingness
to do (i.e., a positive act) or to abstain from doing
something (i.e., a negative act)
It must be made with a view to obtain the consent
of that other person to proposed Act or abstinence

Offeror The person making the proposal is

called the offeror or proposer.
Offeree The person to whom the proposal
is made is called the offeree or the proposee.

Acceptance
Acceptance means giving consent to the
offer.
It is an expression by the offeree of his
willingness to be bound by the terms of the
offer.
Sec 2(b) A proposal is said to be
accepted when the person to whom the
proposal is made signifies his assent there
to. A proposal when accepted becomes a
promise.
Acceptance is the consent given to offer.

Contd

How to make acceptance

Express acceptance
An express acceptance is one in which is made
by words spoken or written
Implied acceptance
An implied acceptance is one which is made
otherwise than in words.
It is inferred from the conduct of the parties or
the circumstances of a particular case

Communication of offer and

acceptance

Must be complete so as to bind the concerned

parties because as soon as the
communication is complete the parties loose
the right of withdrawal or revocation.

(a) Communication of offer It is complete when it

comes of the knowledge of the person to whom it
is made.

Revocation of offer and acceptance

Taking back, withdrawal (sec 5)

Time for revocation of proposal A proposal
may be revoked at any time before the
communication of its acceptance is complete
as against the proposer, but not afterwards.
Time for revocation of acceptance An
acceptance may be revoked at any time
before the communication of the acceptance
is complete as against the acceptor, but not
afterwards.

Consideration:
Consideration is what a promisor demands as the
price for his promise.
Essentials of Consideration:
It can move from promisee or any other person.
It need not be in terms of money only.
It need not be adequate.
It must be real and not vague.
It must be lawful.

Lawful Object:
Object or consideration of an agreement is unlawful
if it is:
forbidden by law; or
it is of such nature that if permitted it would
defeat the provisions of law; or
is fraudulent; or
involves or implies injury to the person or property
of another; or
the Court regards it as immoral or opposed to
public policy.
Agreements with unlawful consideration or
object are void.

Capacity to Contract:
Every person is competent to contract if he/ she
i)
is of the age of majority
ii)
is of sound mind
iii)
is not disqualified from contracting by any law
to which he is subjected.
iv)
A minor cannot be a competent to contract,
if stituation so demand minor can be :
Promisee or transferre

Agency

Partnership

Quasi Contract

Free Consent:
The parties should mean the same thing in the
same sense and agree voluntarily.
Consent is said to be free when it is not1 caused
by:
i.Coercion
ii.Undue influence
iii.Misrepresentation
iv.Fraud
v.Mistake

Void Agreement
Agreements declared void:
Agreements against public policy- Some of the
agreements which are against public policy have
been declared to be void by law. These are:
Trading with enemy
Champerty and Maintenance Contract
Marriage broken agreements
Agreements for sale of public offices and titles
Agreements in restraint of marriage
Agreements in restraint of parental rights
Agreements in restraint of legal proceedings
Agreements in restraint of trade

THANK
YOU