Short Notes on Law of Contract

Short Notes on Law of Contract :

A Contract is an agreement enforceable by law.

Every promise and every'set of promises fonning the consideration of each other is an

ac:rccmcnt .

Promise is a proposal when accepted.

Proposal when one person signifies to~ciherhis willingness to do or abstain from doing

anything with a view to obtaining the assent of tlrat other to such acts or abstinence he is

said to ~ake a proposal.

Acceptance is when the person to whom the proposal is made signifies his assent thereto the proposal is accepted.

Promiser.. Making the proposal

Promisee.. Accepting the proposal.

Consideration .. when at the desire of the promisor, the promisee or any other person

has done or abstained from doing or does or abstains from doing something o~ such act or

abstinence or promise is called consideration ...


ESSENTIALS ELEMENTS OF A CONTRACT.

Agreement.		Offer ,acceptance, consensus -ad idem
Intention to create a legal relationship.		Not social or domestic.
Free and genuine consent.		Not misrepresentation,fraud,coercion mistake,undue influence.
Parties competent to contract.		Major,sound mind, not disqualified by law.
Lawful Consideration.		Nudum pactum( a bare promise)
Lawful object		. Not unlawful
Agreement not declared void orillegal.
Certainity of meaning.		Precision.
Possibility of performance		Impossible acts excluded
Necessary legal formalities.		Writing, registration and attestation

Essentials REOUIREMENTS OF A VALiD OFFER.

1	Must be made with a view to obtain acceptance.
2	Must be made with the intention of creating legal relations.
3	Terms of otTer must be unambigous,detinite and certain and capable of being certain.
4	It must be distinguished from mere declaration of intention or an invitation to offer.
5	It must be communicated to the offeree.
6	The offer must not contain a termthe non compliance of which may be assumed to amount to acceptance.
7	A tender is an offer as it is in response to an invitation to offer.
8	The special terms, fonning part of the otTer, must be duly brought to the notice of the offeree at the time the offer is made.
9	The special terms, fonning part of the otTer, must be duly brought to the notice of the offeree at the time the offer is made.

ESSENTIALS OF A VALID ACCEPTANCE

1 .Acceptance must be absoloute and unaualified.

2.It must be communicated.

3 .It must be according to the mode prescribed.

4.It must be given within the reasonable time specified or within

reasonable time.

5.It must be in response to an offer.

6.It must be made before the offer lapses.

7.It must be given by the person to whom the offer is made.

TERMINATION OF AN OFFER

1.An offer lapses after stipulated or reasonable time.

2.An offer lapses by the death or insanity of the offeror or the offerree

before acceptance.

3.An offer lapses on rejection

4.An offer terminates when rejected

5.It terminates by counter offer

6.It terminates by not being accepted in the mode prescribed or in

usual and reasonable manner.

7.A conditional offer tenninates when condition is not accepted.

Party can sue for damages.

Misrepresentation Innocent mistake of fact. Consequences are same as

fraud except cannot sue for damages.

Mistake Of fact ( bilateral/unilateral) and oflaw.

RULES REGARDING CONSIDERATION

1.Consideration must move at the desire of the promisor i.e. not at the

desire of a third party. -.

2 .Consideration may move from the promisor or any other person

3 .Consideration need not be adequate.

4 .Consideration must be real and competent.

5 .A stranger to a contract cannot maintain suit.

6 .Consideration must be legal.

DISCHARGE OF CONTR~CTS

+By performance or tender

+By mutual consent( Novation / Rescission / Alteration / Remission)

+By subsequent impossibility ( Destruction of subject matter / death or

disablement of parties / subsequent illegality / declaration of war /

+non existence or non occurrence of a particular thing)

+Exceptions: Difficulty of performance / Commercial impossibility /

Strikes; lockouts; civil disturbances (unless contract specifically

mentions ).

+ By operation of law ( death; insolvency ~ merger: unauthorised

alteration of the terms of contract)

y By breach ( anticipatory / actual)

POSITION OF MINOR's CONTRACTS

1. A contract with a minor is void ab initio

2 .A minor's agreement cannot be ratified by the minor on attaining

majority

3 .A minor cannot be asked to refund any benefit received under a void

agreement

4 .A minor is not estopped to plead minority even where he falsely

represents himself to be of full age.

5 .A minor cannot be a partner in a partneship firm . He may, however

be admitted to the benefits of an already existing partnershio.

6 .A minor can, however be a promisee or beneficiary

7 .A minor's estate is liable to a person who supplies neccessaries of

life to a minor.

8. Minor's parent or guardian are not liable to a minor's creditor for the

breach of contract of a minor.

9. A minor can act as allent

WHAT IS FREE AND GENUINE CONSENT

Both parties agree to the same thing in the same sense.

Coercion

Undue Influence

Fraud

Threat to commit suicide / DURESS / sums paid due to

coercion is repayable. Consequences are contract is

'voidable.

Where he holds a real or apparent authority over the

other / or where he stands in a fiduciary relationship /

where he makes a contract with a person whose mental

capacity is affected by age or illness for example:

parent/child, guardian/ward; doctor/patient

;guru/disciple . consequences are that contract. is

voidable. Burden of proof could lie on the person with

power. Stating of a fact not true deliberately; the active

concealment of a fact; a promise made without

i intention of perfonning it ; any act litted to deceive; any.

ilegal fraud. It must actually deceive; it must result in a

loss.