Indian Contract Act, 1872.
… It determines the circumstances in which promises created by the parties to a contract shall be legally binding. Under Section 2(H)
, the Indian Contract Act defines a contract as an agreement that is enforceable by law.
The Indian Contract Act occupies the foremost important place within the Commercial Law. Without contract Act, it would have been difficult to hold on trade or any other business activity and in employment law. It is not only the business community which is concerned with the Contract Act, however it affects everyone. The objective of the Contract Act is to confirm that the rights and obligations arising out of a contract are honored and that legal remedies are made available to those who are affected. According to Indian Contract Act, 1872 Section 1, this Act is also referrd to as the Indian Contract Act, 1872.
Interpretation of The Indian Contract Act, 1872
When one person signifies to another his willingness
to do or to abstain from doing something, with a view to getting the assent of that other to such act or abstinence, he is said to make a proposal;
When the person to whom the proposal is formed signifies his assent to it, the proposal is said to be accepted. A proposal, when accepted, becomes a promise;
The person making the proposal is named the “promisor”, the communicator or the person accepting the proposal is called the “promisee”;
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, or promises to do or to abstain from doing anything, such act or abstinence or promise is known as consideration for the promise;Every promise and every set of promises, forming the consideration for each other, is an agreement;
Promises, which form the consideration or part, of the consideration for each other are called reciprocal promises;
An agreement not enforceable by law is said to be void;
An agreement enforceable by law is a contract;
An agreement which is enforceable by law at the option of one or more of the parties – to it, however not at the option of the other or others, is a voidable contract; A contract that ceases to be enforceable by law becomes void when it ceases to be enforceable.
As per the Indian Contract Act
is an agreement enforceable by law
. The agreements don’t seem to be enforceable by law are not contracts. An “agreement” means ‘a promise or a set of promises’ forming consideration for each other. And a promise arises when a proposal is accepted. By implication, an agreement is an accepted proposal. In other words, an agreement consists of an ‘offer
‘ and its ‘acceptance’.
Under special circumstances, obligations resembling those created by a contract are imposed by law although there is no contract between the parties. Such contracts are referred ta as Quasi-Contracts.
Sections 68 to 72 deal with Quasi-Contractual Obligations.
Claim for Necessaries provide to a person incapable of contracting or on his account Reimbursement of person paying money due by another, in payment of that he’s interested. Obligation of person enjoying benefit of non-gratuitous act Responsibility of finder of good Liability of person to whom money is paid, or factor delivered by mistake or under coercion.
Essential Elements of a valid Contract:
Essential Elements of a Contract as defined in Section 10 of the Indian Contract Act 1872
1. Agreement – Offer and Acceptance
2. Legal purpose
3. Lawful Consideration
4. Capacity to contract
5. Consent to contract
6. Lawful object
8. Possibility of Performance
9. Not expressly declared void
10. Legal formalities like Writing, Registration etc.