INDIAN CONTRACT ACT
Presented by:-
Ankit Aggarwal
HISTORY OF LAW
Indian Contract Act came into force on
1st Sept, 1872.
The act is applicable to whole India
except the state of Jammu & Kashmir.
It contains 266 sections.
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CONTD….
These are as follows:-
1-75 General principles of Law
76- 123 Contract of Sales of Goods Act
124-238 Special Contracts (Indemnity
&Guarantee, Agency, ETC.
239-266 Law of Partnership
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CONTRACT
• Agreement enforceable by law is
Contract.
• Contract implies of two constituents:-
An Agreement
Enforceable by Law
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AGREEMENT
• Agreement is a promise or set of
promise.
In General Terms:
Contract = Agreement + Enforceability by law
Agreement = Offer + Acceptance + Consideration
OR
Agreement = Promise + Consideration
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DEFINITIONS
• Contract
According to section 2(h) of Indian Contract Act,1872 –
Contract is defined as-
“ An agreement enforceable by law”
According to Salmond –
“Contract is an agreement creating and defining
obligations between the two parties.”
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CONTD…..
• Agreement
According to section 2(e) of Indian Contract Act,1872 –
“ Every promise or set of promises forming the
consideration for each other.”
• Promise
According to Section 2(b) of Indian Contract Act,1872 –
“ A proposal when accepted becomes a promise.”
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ESSENTIALS ELEMENTS OF VALID
CONTRACT
• An agreement becomes enforceable by law when it satisfies the
essentials laid under SECTION 10 of Contract Act.
Lawful object
Lawful offer & acceptance
Not declared to be void
Intention to create legal
relationship Possibility of performance
Capacities of parties Certainty
Lawful consideration Legal formalities
free consent
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CLASSIFICATION OF CONTRACTS
Enforceability Formation Performance
• Valid Contract • Express • Executed
• Void Contract • Implied / Contract
• Void Agreement Tactic • Executory
• Voidable • Quasi/ Contract
Contract Constructive - Unilateral
• Illegal Contract • E.com - Bilateral
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CONTD….
• On the basis Enforceability
- Valid Contact:- valid contract is that contract which satisfies
all the essentials of section 10 of Indian Contact Act like:-
lawful offer & acceptance, free consent, etc.
For example:- A ask B if he wants to buy his bike for
Rs.10,000. B agrees to buy bike. It is agreement which is
enforceable by law. Hence, it is contract.
- Void Contract:- void contract is one which was a valid
contract when it was made but subsequently it becomes void
due to change of circumstances.
For example:- X agrees to sell his horse to Y for Rs. 5,000.
but the horse died in an accident. It become impossible to
perform the contract due to destruction of the subject. Thus, a
valid contract changes into void contract because of
impossibility of performance.
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CONTD……
- Void Agreement :- an agreement not enforceable by law is
said to be void.
For example:- X supplies luxury goods to Y a minor for a
consideration of Rs. 10,000. y refused to make payment. X
cannot enforce the agreement in the court of law since the
agreement is void because Y is minor.
- Voidable Contract:- an agreement which is enforceable by
law at the option of one or more of the parties thereto, but not
at the option of other, is voidable contract. Such a contract
come into existence where of consent of one or more parties is
not free.
For example:- X promise to his scooter to Y for Rs. 500.
however, the consent X has been procured by Y at a gun
point. X is an aggrieved party & the contract is voidable at his
option.
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CONTD……
- illegal Agreement:- an agreement which is prohibited by
law or against the policy of law is known as illegal
agreement.
For example:- X agrees to kill Y if Z pays him
Rs.10,000. it is an unlawful as well as void agreement.
• On the basis of Formation
- Express Contract:- the contract is said to express
contract when terms of contract have been agreed upon
between the parties expressly i.e. oral or written, at the
time of formation.
For example:-
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CONTD……
- Implied Contract:- an implied contract is one which
come into existence by the acts, the conduct of the
parties.
For example:- takes a cup of coffee in a restaurant.
- Quasi Contract:- in quasi contract, there is no intention
of the parties to form a contract but created by law.
For example:- X, a trader, leaves certain goods at
house of Y by mistake. This imposes an obligation on
“Y” either to return the goods to X or to make the
payment if he treats the goods as his own.
- E.com Contract:- contract created on the internet.
For example:- any business deal done on internet.
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CONTD…..
• On the basis of Performance
- Executed Contract:- a contract is said to be executed
contract where both the parties to a contract have
performed their respective obligations.
For example:- all the transactions of cash sales are
executed contract.
- Executory Contract:- an executory contract is one where
both the parties are yet to perform their respective
obligations. It is of 2 types:-
o Bilateral Contract:- a bilateral contract is one in which
both the parties are required to perform their obligations at
the time of formation of contract.
For example:- X promises Y to pay Rs.1200 for his cycle.
Neither of them has performed his obligation.
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CONTD…..
o Unilateral Contract:- a contract is said to be
unilateral where one party has performed his obligation
and the performance of obligation is outstanding on the
part of other party.
For example:- X buys a railway ticket for journey from
Amritsar to Delhi. X has performed his obligation under
the contract by paying the fare. But, the railways are
yet to perform their duty i.e. carrying ‘X’ from Amritsar
to Delhi.
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THANK YOU
