Contract Law:

Human society works on promises and future cource of action is guided by some models which intended to fulfill some obligation on behalf of two consulting individual.

The contract law is an effective tool to deal with such act and deeds in a society.

 Contract:

A contract is a legally enforceable agreement between two or more parties with mutual obligations. The Indian Contact Act, 1872, section 2(h) defines the term 'Contract' as an agreement enforceable by law.

Agreement:

Section 2(e) of Indian Contract Act, 1872 defines agreement as, " every promise and every set of promises forming the consideration for each other". 

A promise is defined as an accepted proposal. Now, we can conclude that a contract is an agreement, an agreement is a promise and a promise is an accepted proposal.

 An agreement becomes a contract when the following conditions are satisfied

There is some consideration for it.

The parties are competent to contract.

Their object is lawful.

Offer and acceptance ( offer from one party and its acceptance by the other).

Intention to create legal obligations.

The terms of the agreement must not be vague or uncertain.

The agreement must be capable of performance.

Essential Conditions of a valid offer(Proposal):

1. Expression of willingness to do/Abstain from doing and to obtain other's assent: 

An offer must be made to obtain the assent of the other. When a person says he may buy a particular thing for a certain amount, it is not an offer.

2. Intention to  Contract:

 There is no provision in the Indian Contract Act requiring that an offer or its acceptance should be made with the intention of creating legal relations, while under english law it is so. However, the courts generally presume intention to enter into legal relation.

3. Express or Implied Offer:

 A valid proposal may be made by words i.e. express offer or by conduct i.e. implied offer.

 4. Certainty of offer: 

Terms of the offer must be certain and not vague.

e.g. 'A' agrees to sell to 'B' his whote horse for Rs.500 or Rs.1000. There is nothing to show which of the two prices was to be given, thus, it is not valid offer.

Essential elements of a valid contact: 

There are two kinds of offers, which are as follows

General offer:

 It is made to the public or world at large. The contract is made only with that person who  comes forward and performs the conditions of the of the proposal as such performance amounts to acceptance of performance. The communication of acceptance is not necessary.

Specific offer: 

It is made to specific or an ascertained person.

Offer and Invitation to treat( Offer):

An 'offer' is the final expression of willingness by the offer or to be bound by his offer. Sometimes a person may not offer to sell his goods, but make some statement or give some information with a view to inviting others to make offers onbon that 

A party without expressing his final willingness, proposes certain terms on which he is willing to negotiate, he does not make any offer but merely 'invites' the other party to make an offer on those terms.

e.g. A book seller sends catalogue of books indicating price of various books to many persons. This is an,' invitation to treat'. The interested party may make an offer and the book seller may accept or reject the offer.

Acceptance: 

Section 2(b) of Indian Contract Act,1872 defines 'acceptance' as, "when the person to whom the proposal is made signifies his assent therefore, the proposal is said to be accepted. A proposal, when accepted, becomes a promise."  Thus, acceptance is the ascent given to a proposal.

Consideration:

It constitutes the  very foundation of the contract. An agreement not supported by consideration is  void.

It is the cause of the promise and its absence would make the promise a  gravitous or bare promise( nudum pactum).

Consideration is the price for which the promise of the offer is bought. If 'A' makes an agreement to sell his laptop to 'B' for rupees 10000 then 10000 is the consideration for A's promise to sell his laptop.

Capacity to contract:

• It means the legal  competence of a person to enter into a valid contract. Usually, the capacity to become contractor refers to the capacity to enter into legal agreement and the competence to perform some act.
•  The basic elements to entere into a valid contract is that he/she must have a sound mind.

Following three persons are parties incompetent to contract

1. Minor person:

A minor cannot make a promise enforceable in law. An agreement made by minor person is absolutely void.

No Estoppel against minor:

• When a minor misrepresent at the time of the contract that he is a major, the question arises that whether the law of estoppel apply against him or not.
•  It is the define law that the law of estoppel cannot be applied against the minor even if he acted fraudulently.

No liability in contract or in tort arising out of contract:

A minor may be liable in tort generally. However, he will not to be liable for a tort arising out of contract, for the reason that such liability is an indirect way of enforcing his agreement.

Doctrine of restitution:

Doctrine of restitution applies against a minor i.e.when a minor obtain property or goods by false representation, he can be compelled to restore it, but only so long as the same is traceable in his possession.

2. Person of unsound mind:

A person is said to be of sound mind for the purpose of making a contract if at the time when he makes it he is capable of understanding it and of forming a rational judgement as to its effect upon his interest.

A person who is usually of unsound mind, but occasionally of sound mind, may make a contract when he is of sound mind. A person who is usually mind, may not make a contract when he is of unsound mind.

3. Disqualified person:

The incompetent person are those who are disqualified from contracting by any law to which they are subject. e.g. alien enemies, foreign sovereign and ambassadors, convicts etc.

Free consent:

• 'Consent' is defined under section 13 of Indian Contract Act, 1872.
• " Two or more person are said to consent when they agree upon the same thing in the same sense". This is known as 'Consensus -ad- idem'.

Consent is said to be free when it is not caused by

• Coercion
• Under influence
• Fraud
• Misrepresentation
• Mistake

Coercion:

An agreement to which the consent is caused by coercion  is voidable at the option of the party whose consent was so caused.

 A consent is caused by coercion, when it is obtained by

• Committing or  threatening to commit any act forbidden by the Indian Penal Code.
• Unlawfully detaining or threatening to detain any property.
• e.g. 'A' threatens to shoot 'B', if 'B' does not agree to sell his property to 'A' at a stated price. 'B' consent has been obtained by the coercion.

Under influence:

Where the relations subsisting between the parties are such that one of the parties is in a position to dominate the will of the other, and uses that position to obtain an unfair advantage over the other, there is said to be under influence.

e.g. 'A' having advanced money to his son, 'B' during his minority, upon 'B's coming of age obtained, by misuse of parental influence, a bond from 'B' for a greater amount that the sum due to respect of the advance. 'A' employs under influence.

Fraud:

• An agreement to which the consent is caused by fraud is voidable at the option of the party whose consent was so caused.
• 'Fraud' means and includes any of the following acts, committed by a party to a contract or with his convenience or by his agent, done with 'intent to deceive' or to induce a person to enter into a contract.

-The suggestion that a fact is true when it is not true and the person making the suggestion does not believe it to be true.

-Active concealment of a fact by a person

-Promise made without any intention of performing.

-Any other act fitted to deceive.

-Any such act or  omission as the lawyer specially declared to be fraudulent.

• The essentials of fraud are that there should be a 'false statement of fact' by a person who himself does not believe the statement to be true. There must be a wrongful intention also.

Question to answer

The contract act came into force

a) from 1st September,1972

b) before 1st September, 1882

c) from 1st September, 1872

d) after 1st September, 1872

Let me know the answer in comment