contract bup.pptx it is about the indian contract act

an overview of the indian contract act

1. Introduction to Contract Law and Scope of the Contract Act, 1872 Prepared by Showkat Hossain, Additional District Judge.

2. The basis of the law of contract C ommissioners appointed to prepare a body of substantive law of contract for India 6th july 1856 The principles of contracts act 1872 were adopted from common laws. A promise does engender an expectation in the promisee and unless a good reason to the contrary appears, the court will call upon a defaulting promisorto fulfill the expectation so created. 1. This Act may be called the  Contract Act, 1872 It extends to the whole of Bangladesh; and it shall come into force on the first day of September, 1872.

3. What is a contract S ection 2(h) – An agreement enforceable by law is a contract. A greement is “ every promise and every set of promisesforming the consideration for each other” section 2( e) P romise is a proposal which has been accepted . S ection 2(b) T herefore, a contract is an agreement which is enforceable by law, an agreement is a promise in exchange of consideration, and a promise is an accepted proposal C ontractual liability and tort

4. The objective of the Contract Act is to ensure that the rights and obligations arising out of a contract are honoured and that legal remedies are made available to an aggrieved party against the party failing to honour his part of agreement. The Indian Contract Act makes it obligatory that this is done and compels the defaulters to honour their commitments. 

5. Structure of the Act Basic Principles of Contract (Sections 1 to 75) Indemnity and Guarantee (Sections 124 to 147) Bailment (Sections 148 to 181) Agency (Sections 182 to 238)

6. Proposal and promise When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of the other to such act or abstinence, he said to make a proposal. 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. The person making the proposal is called the “Promisor” and the person accepting the proposal is called the “ Promisee ”.

7. C onsideration, agreement, contract When at the desire of the promisor, the promise 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 something, such act or abstinence or promise is called a consideration for the promise. Every promise and every set of promises, forming the consideration for each other is an agreement. An agreement not enforceable by law is said to be void. An agreement enforceable by law is a contract.

8. Steps involved in the Contract Proposal and its communication Acceptance of proposal and its communication Agreement by mutual promises Contract Performance of Contract

9. Essential requirements of a valid contract Offer and its acceptance Free consent of both parties Mutual and lawful consideration for agreement It should be enforceable by law. Hence, intention should be to create legal relationship. Agreements of social or domestic nature are not contracts Parties should be competent to contract Object should be lawful Certainty and possibility of performance Contract should not have been declared as void under Contract Act or any other law

10. Offer May be express or implied May be positive or negative Must intend to create legal relationship Terms of offer must be certain May be made to a specific person or class of persons or to any one in the world at large Must be communicated to the offeree Must be made with a view to obtain the assent May be conditional

11. Essentials of a valid acceptance Acceptance must be absolute and unconditional Acceptance by usual mode as desired by the offeror Acceptance cannot precede the offer Acceptance may be express or implied Acceptance must be given within a reasonable time Acceptance must be by an ascertained person (offeree)

12. Essentials of a valid acceptance Offer cannot be accepted after it was rejected unless it is renewed Silence does not imply acceptance Acceptance must be made before the lapse or revocation of the offer Acceptance of offer means acceptance of all terms attached to the offer

13. Legal rules regarding Consideration Consideration is required both for formation and discharge of an agreement or contract Consideration may be past, present and future Consideration may be either positive or negative Consideration must be done at the desire of the promisor Consideration may be furnished by the promisee or any other person Consideration must be lawful Consideration must be real and not illusory Consideration need not be adequate Consideration must not be the performance of existing duties Consideration must be of some value in the eyes of law

14. Contractual Capacity Every person is competent to contract who is of the age of the majority according to the law to which he is subject and who is of a sound mind, and is not disqualified from contracting by any law to which he is subject Mental Deficiency Sound Mind (he is capable of understanding it and of forming a rational judgment as to its effects upon his interests) Mental Incompetents Idiots Lunatics and insane persons Minor (< 18 years) Drunkenness Legal Disability (Alien Enemy, Insolvent, Imprisonment

15. Object and Public Policy Not be forbidden by law Should not defeat provisions of any law Not be fraudulent Should not injure a person / property Should not be immoral Should not be opposed to public policy

16. T ypes of contract Valid, V oid and voidable U nenforceable E xpress, implied, quasi E xecuted, executory U nilateral, bilateral, written or oral

17. Performance made by whom? Personal Performance : In cases involving personal skill, taste, or credit, the promisor must himself perform the contract.  Performance by Representative : In all other cases the Promisor or his representatives may employ a competent person to perform it. Performance by a third person : When a promise accepts performance  of  the promisee from a third person, he cannot afterwards enforce it against the promisor Death of Promisor Contracts involving personal skill or volition, come to an end when the Promisor dies. His heirs or legal representatives are not bound to perform such contract In cases not involving personal skill or volition, the legal representatives  of  a deceased promisor are bound to perform the contract. Liability of the legal representatives is limited to the assets obtained from the deceased.

18. Persons entitled to demand performance Promisee Legal Representative Third Party ( Eg. Trust : A & B enter into a contract in favor of C; C can demand performance) Joint promisees

19. Contracts that need not be performed Discharge of Contract by a New Agreement Discharge by Operation of law Discharge of contract by impossibility Breach of contract , actual and anticipatory Remedies in case of Breach ( suit for damage and specific performance, injunction,

20. M ovies and Tv’s Movies - The Rainmaker, A civil action, Kramer vs Kramer, Erin Brochovich, the people vs Larry Flynt , I am Sam, Philadelphia, Dark waters, The paper chase, A few Good men , 12 angry men, My Cousin Vinny, Murder in the first , Judgment at Nuremberg, T o kill a mockingbird, T he accused, P rimal fear, The Verdict, A time to Kill, Witness for the Prosecution, In the Name of the Father, Paths of glory, Trial by fire, The trial of the Chicago seven, the client , compulsion (1956), Nothing but the truth , Marshal, legally blonde, Bollywood- Jolly LLB, Pink. TV shows- Mr. bates vs the post office, RBG, the staircase, Making a murderer, 13 th street , the thin blue line, The central park five. T he trials of gabriel fernandez , Dear Zachary: A Letter to a Son About His Father. Big little lies, The Suits, Boston legal, The good fight, The practice, Damages, The people vs OJ Simpson, Better call saul , big little lies, Golliath , Documentaries- H ot coffee, the devil we know, who lets the dog out, cleanflix, Making a Murderer.