INTRODUCTION

TO
INDIAN CONTRACT ACT,1872

By
Prof. Zahid Parwez
Visiting Faculty, MBA,KSOM
Latin word “Contractum” means drawn
together.
Law of Contract is the foundation upon which
super structures of modern business is built.
It is based on the Principle of Equity.
Law of Contract furnishes the basis for other
branches of Mercantile Law.
Law of Contract lays down the legal rules
relating to promises ; viz. it’s formation, it’s
performance and it’s enforceability.
 OBJECT

Definiteness

To avoid endless complications.

 BENEFITS OF CONTRACT
 Contract eases understanding of law
Ensures your Rights
Protects you and your property.
Minimises Risks.
Protects you and your organisation.
Enforceable (Legal Remedies)
 MEANING AND DEFINITION

It is a branch of Law of Obligation in

jurisdiction of civil law.

 A Contract is voluntary arrangement between

two or more parties that is enforceable at law
as a binding legal agreement. It is branch of
law of obligation in jurisdiction of civil law
tradition.
 Sir William Anson
 It is intended to ensure that what a man has
led to expect shall come to pass ; that what has
been promised to him shall be performed.
Contract is legally binding agreement between
two or more persons by which rights are
acquired by one or more to act or forbearances
on the part of others/others.
 Salmond
 It is an agreement creating and defining
obligations between the parties.

Pollock
Every agreement and promises enforceable at
law
 Scheme of the Act
General Principles of the law of Contract
(Sec 1-75)
Specific kinds of Contracts :

1. Contracts of Indemnity and Guarantee

(Sec124-147)
2. Contracts of Bailment and pledge (Sec 148-181)
3. Contracts of Agency (Sec 182-238)
 What is Contract ?
Acc. to Sec 2(h) – An Agreement enforceable
by law is a contract.

Contract = Agreement + Enforceability

Agreement = Promise + Consideration
Promise = Offer + Acceptance (Accepted
proposal)
 Essentials of Agreement

1. Plurality of Persons
2. Consensus-ad-idem (Meeting of minds)
3. Promises and reciprocal promises
Characteristics of Contract

Unlike Tort it is bilateral.

It creates right- in- personam.

Agreement is wider term than

Contract.
 Essentials Elements of a Valid Contract

1. Offer and Acceptance ( Carlill vs. Carbolic smoke ball Co.)

2. Intention to create legal Relations.(Balfour vs. Balfour)
3. Lawful Consideration
4. Capacity of parties (Sec 11)
5. Free Consent
6. Lawful object
7. Legal formalities
8. Certainity (Sec 29)
9. Possibilty of Performance (Sec 56)
10. Agreement not expressly declared void (Sec 24-30)
 Kinds of Contract
From the point of view of Enforceability :

1. Valid Contract
2. Voidable Contract
3. Void Contract
4. Unenforceable Contract
5. Illegal/ unlawful Contract
From the point of view of mode of
Creation :

1. Express Contract
2. Implied Contract
3. Quasi Contract
From the point of view of extent of
Execution

1. Executed Contract
2. Executory