CONTRACT ACT

DEFINITION AND MEANING

Salmond: A contract is an agreement, creating and defining the obligation between parties Sir Fredrick Pollock: Every agreement enforceable at law is a contract Sec 2(h) of Indian Contract Act, 1872: An agreement enforceable by law is a contract

CONTRACT = AGREEMENT + ENFORCEABILITY where,

AGREEMENT according to Sec 2 (e) is defined as every promise and every set of promises, forming consideration for each other and According to Sec 2(6) when the person to whom a proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal when accepted becomes promise

AGREEMENT

ENFORCEABLE AT LAW

UNENFORCEABLE AT LAW

CONTRACTS

NOT CONTRACTS

*All agreements are not contracts but all contracts are agreements

SEC 10 OF INDIAN CONTRACT ACT:

i.
ii. iii. iv. v.

All agreements are contractsif they are made: By free consent of parties Competent to contract For a lawful consideration With a lawful object Are not expressly declared void

ESSENTIALS OF A VALID CONTRACT

1. 2. 3. 4. 5.

6.
7. 8.

9.
10. 11.

Lawful offer and acceptance Intention to create legal relations Consensus ad idem Lawful consideration Competency of parties Free consent Lawful object Certainty of meaning Agreement not declared as void Possibility of performance Completion of legal formalities

TYPES OF CONTRACTS

VALIDITY

ENFORCEABILITY

PERFORMANCE

ON THE BASIS OF VALIDITY

Valid contracts Void contracts Void agreements

Voidable contracts
Unenforceable contracts Illegal or unlawful agreement

ON THE BASIS OF ENFOCEABILITY

Expressed contracts Implied contracts Quasi contra

ON THE BASIS OF PERFORMANCE

Executed contracts Executory contracts Bilateral contracts Unilateral contracts