THE INDIAN CONTRACT ACT (ICA), 1872
description
Transcript of THE INDIAN CONTRACT ACT (ICA), 1872
![Page 1: THE INDIAN CONTRACT ACT (ICA), 1872](https://reader033.fdocuments.net/reader033/viewer/2022061517/56815205550346895dc047a4/html5/thumbnails/1.jpg)
THE INDIAN CONTRACT ACT (ICA), 1872
![Page 2: THE INDIAN CONTRACT ACT (ICA), 1872](https://reader033.fdocuments.net/reader033/viewer/2022061517/56815205550346895dc047a4/html5/thumbnails/2.jpg)
What is a contract?
Contract-Section 2(h)
“An agreement enforceable by law is a contract”.
Agreement-Section 2(e)
“Every Promise and every set of promises forming consideration for each other”
![Page 3: THE INDIAN CONTRACT ACT (ICA), 1872](https://reader033.fdocuments.net/reader033/viewer/2022061517/56815205550346895dc047a4/html5/thumbnails/3.jpg)
Promise – Section 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”
![Page 4: THE INDIAN CONTRACT ACT (ICA), 1872](https://reader033.fdocuments.net/reader033/viewer/2022061517/56815205550346895dc047a4/html5/thumbnails/4.jpg)
Contract consists of two elements: A) An agreement B) Legal Obligation
All Contracts are agreements, but all agreements are not contracts
![Page 5: THE INDIAN CONTRACT ACT (ICA), 1872](https://reader033.fdocuments.net/reader033/viewer/2022061517/56815205550346895dc047a4/html5/thumbnails/5.jpg)
Valid Contract
Section 10
To be a valid contract, it must satisfy the following:
1. Agreement - Offer and Acceptance
2. Consensus-ad-idem (Meeting of minds) i.e., persons must agree to the same thing in the same sense and at the same time.
3. Intention to create legal relationship as against social relationship or illegal/unlawful relationship.(Balfour Vs.Balfour)
Parker Vs.Clark
![Page 6: THE INDIAN CONTRACT ACT (ICA), 1872](https://reader033.fdocuments.net/reader033/viewer/2022061517/56815205550346895dc047a4/html5/thumbnails/6.jpg)
4. Free and Genuine Consent, i.e., free from coercion undue influence fraud misrepresentation mistake
5. Parties competent to contract Sec.11- is of the age of majority, is of sound mind, is not disqualified from Contracting.
6. Lawful consideration and object, i.e., something in return and that must be lawful.
7. No Consideration – No Contract (Nudum Pactum)
![Page 7: THE INDIAN CONTRACT ACT (ICA), 1872](https://reader033.fdocuments.net/reader033/viewer/2022061517/56815205550346895dc047a4/html5/thumbnails/7.jpg)
Valid Contract
7. Agreement not declared void.
8. Certainty of Meaning: e.g. sale and purchase of 100 tonnes of oil. But which oil? Thus, agreement being uncertain – not valid.
But, if the seller deals only in one kind of oil and one variety, then it shall be valid since it is capable of being made certain.
![Page 8: THE INDIAN CONTRACT ACT (ICA), 1872](https://reader033.fdocuments.net/reader033/viewer/2022061517/56815205550346895dc047a4/html5/thumbnails/8.jpg)
Valid Contract
9. Possibility of performance: Impossibility whether known to the parties or not, renders a contract invalid.
10.Necessary legal formalities: e.g. sale-deed of immovable property.
![Page 9: THE INDIAN CONTRACT ACT (ICA), 1872](https://reader033.fdocuments.net/reader033/viewer/2022061517/56815205550346895dc047a4/html5/thumbnails/9.jpg)
Classification of Contracts
From the Point of view of Enforcement
a) Valid Contracts
b) Void Contracts
c) Voidable Contracts
d) Illegal Agreements
e) Unenforceable Agreements
![Page 10: THE INDIAN CONTRACT ACT (ICA), 1872](https://reader033.fdocuments.net/reader033/viewer/2022061517/56815205550346895dc047a4/html5/thumbnails/10.jpg)
Classification of Contracts
According to Mode of Formation:a) Express Contractsb) Implied Contractsc) Quasi ContractsAccording to Performance:a) Executed Contractb) Executory Contractc) Unilateral Contractd) Bilateral Contract
![Page 11: THE INDIAN CONTRACT ACT (ICA), 1872](https://reader033.fdocuments.net/reader033/viewer/2022061517/56815205550346895dc047a4/html5/thumbnails/11.jpg)
Offer
a) Offer by an Act-By Words (Express Offer)
b) Offer by Omission
c) Offer by Conduct (Implied Offer)
d) Specific Offer
e) General Offer (Carlill Vs.Carbolic Smoke Ball Co.,)
f) Counter Offer
![Page 12: THE INDIAN CONTRACT ACT (ICA), 1872](https://reader033.fdocuments.net/reader033/viewer/2022061517/56815205550346895dc047a4/html5/thumbnails/12.jpg)
Essentials of a Valid Acceptance
1.Acceptance must be absolute and unqualified
2.Acceptance must be communicated to the Offeror
3.Acceptance must be according to the mode prescribed.
4.Acceptance must be given within the time specified.
5.Acceptance must be in response to the offer
6.Acceptance must be made before the offer lapses.
7.Acceptance must be given by the person to whom the offer is made
![Page 13: THE INDIAN CONTRACT ACT (ICA), 1872](https://reader033.fdocuments.net/reader033/viewer/2022061517/56815205550346895dc047a4/html5/thumbnails/13.jpg)
Communication of Special Terms:Parker Vs.South Eastern Rly.Co.,
Mental Acceptance is no AcceptanceBrogden Vs.Metropolitan Rly.Co.,
Communication of Acceptance It has two aspects, viz.,
As against the proposer As against the acceptor
![Page 14: THE INDIAN CONTRACT ACT (ICA), 1872](https://reader033.fdocuments.net/reader033/viewer/2022061517/56815205550346895dc047a4/html5/thumbnails/14.jpg)
Agreements Declared Void
1.With or by a person incompetent of Contracting (S.11) – Void ab initio
2.Affected by mutual mistake of fact between the parties (S.20)
3.The object of consideration is unlawful.4.Agreement without Consideration (S.25)5.Agreements in restraint of Trade (S.27)6.Agreements in restraint of Marriage (S.26)7.Agreements in restraint of Legal Proceedings
(S.28)
![Page 15: THE INDIAN CONTRACT ACT (ICA), 1872](https://reader033.fdocuments.net/reader033/viewer/2022061517/56815205550346895dc047a4/html5/thumbnails/15.jpg)
8. Uncertain Agreements (S.29)
9. Wagering Agreements (S.30)
10.Impossible Agreements (S.56)
11.Agreement to enter into an Agreement in Future.
![Page 16: THE INDIAN CONTRACT ACT (ICA), 1872](https://reader033.fdocuments.net/reader033/viewer/2022061517/56815205550346895dc047a4/html5/thumbnails/16.jpg)
Consent (S.130)
Two or more persons said to consent when they agree upon the same thing in the same sense.
Free Consent.(S.14) When it is not caused by
a. Coercion
b. Undue Influence
c. Fraud
d. Misrepresentation
e. Mistake.
![Page 17: THE INDIAN CONTRACT ACT (ICA), 1872](https://reader033.fdocuments.net/reader033/viewer/2022061517/56815205550346895dc047a4/html5/thumbnails/17.jpg)
Free Consent
Coercion (S.15):Committing or threatening to commit any act forbidden by law.
Ranganayakkamma Vs.Alwar Setti
Effects of Coercion:Contract voidable at the option of the aggrieved party. (S.19)
Undue Influence (S.16) One party is in a position to dominate
the will of the other. Effect – Voidable.
![Page 18: THE INDIAN CONTRACT ACT (ICA), 1872](https://reader033.fdocuments.net/reader033/viewer/2022061517/56815205550346895dc047a4/html5/thumbnails/18.jpg)
Fraud (S.17)
No truth, active conealment of fact. An act to deceive
Effects of Fraud: a) Rescind the Contract; b) Sue for Damages C) Can insist on Performance
However, relief available only if party actually defrauded.
A fraud that does not defraud is no fraud.
![Page 19: THE INDIAN CONTRACT ACT (ICA), 1872](https://reader033.fdocuments.net/reader033/viewer/2022061517/56815205550346895dc047a4/html5/thumbnails/19.jpg)
Misrepresentation (S.18)
Innocence, no desire to deceive, may be false or inaccurate.
Effects: a) Rescind the Contract b) Insist on Performance
Mistake (S.22): Mistake of Law and Mistake of Fact.
Consequence of Mistake : Void
![Page 20: THE INDIAN CONTRACT ACT (ICA), 1872](https://reader033.fdocuments.net/reader033/viewer/2022061517/56815205550346895dc047a4/html5/thumbnails/20.jpg)
Consideration (S.2d)
Quid Pro Quo: Something in Return The price which the Promisor demands for his
Promise.
Legal Rules as to Valid Consideration:
1.Consideration must move at the desire of the Promisor (Durga Prasad Vs.Baldeo)
2. Consideration may move from the promisee or any other person (Chinnayya Vs.Ramayya)
![Page 21: THE INDIAN CONTRACT ACT (ICA), 1872](https://reader033.fdocuments.net/reader033/viewer/2022061517/56815205550346895dc047a4/html5/thumbnails/21.jpg)
3. Consideration may be past, present or future
4. Consideration must be of some value
5. Consideration must be legal.
![Page 22: THE INDIAN CONTRACT ACT (ICA), 1872](https://reader033.fdocuments.net/reader033/viewer/2022061517/56815205550346895dc047a4/html5/thumbnails/22.jpg)
Quasi Contracts:
1. Claim for necessities supplied to a person incapable of contracting on his account.
2. Reimbursement of a person paying money due by another in payment of which he is interested.
3. Obligation of a person enjoying benefits of a non-gratuitous act.
4. Responsibility of Finder of lost goods 5. Liability of a person to whom money is paid or
thing delivered by mistake.
Insurance = Contingent Contract.
![Page 23: THE INDIAN CONTRACT ACT (ICA), 1872](https://reader033.fdocuments.net/reader033/viewer/2022061517/56815205550346895dc047a4/html5/thumbnails/23.jpg)
Discharge of Contracts:
1. By Performance
2. By tender of Performance
3. By mutual consent: Novation/Rescission
4. By subsequent impossibility
5. By Breach: Actual or Anticipatory
![Page 24: THE INDIAN CONTRACT ACT (ICA), 1872](https://reader033.fdocuments.net/reader033/viewer/2022061517/56815205550346895dc047a4/html5/thumbnails/24.jpg)
Remedies for Breach of Contract
Remedies Right of Rescission of the Contract Suit for damages: Ordinary/Special Suit for specific Performance Suit for Injunction Suit for “Quantum Meruit” (as much as
earned)