Indian Contract Act, 1872 Essential, Proposal and Acceptance
Indian Contract Act, 1872 is the basis of mercantile law in India as Indian Contract Act, 1872 provides all the basics of the contracts in India. Though there are specific laws for most the contracts like Partnership, Sale of Goods, Negotiable Instrument etc however even these laws take their basis from Indian Contract Act 1872. So it becomes important for any student who wants to study any mercantile law to study Indian Contract Act .
Definition of CONTRACT
Section 2(e) of the Indian Contract Act, 1872 defines “AGREEMENT as every promise and every set of promises forming the consideration for each other”.
AGREEMENT = PROMISE + CONSIDERATION
As per Section 2(h) of Indian Contract Act, 1872 states that “An agreement enforceable by law is a CONTRACT.”
CONTRACT = AGREEMENT + ENFORCEBILITY BY LAW
ESSENTIALS OF A VALID CONTRACT
For a Valid contract there must be an Intention to create legal obligation among the parties
Proper offer and proper acceptance to create a Valid contract
There must be lawful consideration
Parties entering into contract should be Competent to Contract
Free Consent: Consent is said to be free when it is not caused by (i) coercion, (ii) undue influence, (iii) fraud, (iv) misrepresentation, or (v) mistake.
Lawful Object: Object for which the contract is formed must be lawful
Certainty: There must be certainty about terms and conditions about terms and conditions. There must not be any term or condition which is vague.
Possibility of performance: Agreement must be possible to perform both legally and physically.
Not expressly declared Void: Agreement by way of Wager, Restrain of Trade and Restrain of Marriage are expressly declared void.
TYPES OF CONTRACTS:
ON THE BASIS O ENFORCEABILITY
ON THE BASIS OF CREATION
E commerce Contract
ON THE BASIS OF EXECUTION
Bilateral Contract/Executory Contract
As per Section 2(a) of Indian Contract Act 1872 "When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a PROPOSAL.”
Following conditions must be fulfilled for a proposal to be Valid
Proposal must intend to create legal relations (Balfour Vs Balfour)
Terms of Proposal must be certain, definite and not vague
The Proposal must be distinguished from a mere declaration of intention
Proposal must be distinguished from invitation to offer
Proposal must be distinguished from mere statement of intention
Proposal must be distinguished from communication of information
The Proposal must be communicated
To be valid a Proposal should not contain a term the non-compliance of which would amount to acceptance
Types of Proposal
One the basis how it is made
On the basis to whom it is made
As per Section 2(b) of the Indian Contract Act, 1872 "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.
FOR A VALID ACCEPTANCE FOLLOWING CONDITIONS MUST BE FULFILLED.
Acceptance must be absolute
Acceptance must be communicated
Acceptance must be in the prescribed manner
Acceptance must be within prescribed or reasonable time
Acceptance must be given before the offer lapses or is withdrawn
Acceptance must be communicated by a person who has the authority to accept
Acceptance cannot be implied by silence
Acceptance must not precede Offer
Students who are preparing for CSEET (CS Executive Entrance Test) must study these online notes for essentials of a Valid Contract, Rules for valid proposal and Acceptance. Then students for CSEET (CS Executive Entrance Test) should practice online test series for essentials of a Valid Contract, Rules for valid proposal and Acceptance for the CSEET subject Legal Aptitude and Logical Reasoning.