What is contract?

An agreement enforceable at law, made between two or more persons, by which rights are acquired by one or more to acts or forbearances on the part of the other or others, is a contract.

Section 2(h) of the Contract Act, 1872, provides the authoritative definition of a contract, ―”an agreement enforceable by law is a contract”

Example:

When A offers to sell his horse to B for Tk.5000.00,there is an obligation on A to sell and on B to buy thehorse at the stipulated price. Such an agreement istherefore, enforceable by law.

But

An agreement between A and B to go together to apicnic does not create any obligation on either sideand is not, therefore, enforceable in law. The formeragreement is, therefore, a contract, while the latter isnot.

Elements of Contract Proposal or offer

Acceptance

Promise

Consideration

Agreement

Enforceable by law

Contract

Proposal or Offer where one person signifies to another his willingness

to do or abstain from doing something with a view to obtaining the assent of that other to such act or abstinence he is said to said a proposal.

Elements of Offer

Signification of one‘s willingness;

Willingness is expressed to another person;

The willingness may be affirmative or negative;

It has a definite object with the intention to create a legal relation.

Acceptancewhen the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted.

Types of acceptance

Express: ‘ ―I accept your offer.

Implied: when both parties to a contract begin to perform the terms of the contract.

Conditional: Acceptance is conditional on the happening of something.

Agreement ―Every promise and every set of promises, forming

the consideration for each other, is an agreement.

it is found that to be an agreement three elements are necessary-

it will be promise.

it will form a consideration.

the consideration will be formed for the parties each other.

Consideration A valuable consideration in the sense of the law may

benefit interest.

Section 2 of the contract act 1872 define consideration as “When at the desire of the promissor, the promise or any other person, has done or abstained from doing, does or abstains from doing, promises to do or to abstain from doing something, such act, abstinence or promise is called a consideration for the promise"

Example

Parag agrees to sell a house to Kamal for Tk. 800,000 For Porag‘s promise , the consideration is tk. 800,000. For kamal‘s promise the consideration is the house

Enforceable by Law A contract will be enforceable by law if the following

conditions are comply with.

Competency of parties

Free consent

Lawful object

Lawful consideration

Not unlawful by law

Types of Contract Contracts depending on the mode of Creation

Express contract Implied contract

Contracts as regards the mood of time of performance Executed contract Executory contract

Contracts as regards the number of parties Bilateral contract Unilateral contract

Contracts as regards the mood of enforceability and validity Valid contract

Voidable contract Void contract

Types of Contract (Cont.) Express contract

The offer and acceptance of a contract if made in words, either expressed orally or in written words, the contract will be considered to be an expressed one.

For instance Mr. A proposes Mr.B, ‗I would like to sell my house for Tk. 3lack‘ and Mr.B replies ‗I agree‘- this deemed to be an express contract

Implied contract

An implied contract is formed when the offer and acceptance of a contract is made without the use of any words, rather by some other means.

For example, if a repairer starts to repair the watch of one person and the later permits it remaining silent knowingly that the first person is doing so to get a payment in exchange of this service, it will be treated as a implied by law

Types of Contract (Cont.) Executed contract

If the conditions of a contract are performed as soon as possible, the contract is said to be a executed contract

Executory contract

In this contract the obligations of the contract is supposed to be performed at the later period of the formation of the contract

Types of Contract (Cont.) Bilateral contract

Where there are two or more parties of a contract and both of the parties have their obligations on each other, the contract is said to be a bilateral contract.

Unilateral contract

where one party has to fulfill his obligations whereas the other party has already performed his obligations, it is called unilateral contract.

Types of Contract (Cont.) Valid Contract

Valid contract is a contract in law.

Void Contract

A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable.

Example:

Contract entered into by minors, lunatics and insolvents are void owing to the incapacity of such persons to contract.

Voidable contract

An agreement which is enforced by law at the opinion of one or more of the parties thereto, but not at the opinion of the others, is a voidable contract

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