The Contract Act,1872

The law governing the contracts in Pakistan is contained in the Contract Act,1872. The first 75 sections of this Act contain a discussion of general principles governing all types of contracts. However, the remaining sections deal with the following three special types of contracts: 1. Indemnity and Guarantee 2. Bailment 3. Agency

The Origin of the Contract

A contract may be defined as an agreement which is enforceable at law. It originates when a person named as proposer makes a proposal or offer and the party to whom the proposal is made is called proposee or offeree, accept it. Offer and acceptance make an agreement and if it is enforceable at law, it is called a contract.

Proposal Illustration Invitation of Offer Standing offer Acceptance Promise Reciprocal Promise Promiser Promisee Agreement

Consent
The consent has been defined in law as: two or more persons are said to consent when they agree upon the same thing in the same sense. If free consent of any party is absent then contract is invalid.

Contract
An agreement which is enforceable at law is called a contract. Contract = An Agreement + Enforceability of an agreement An agreement must meet the following criteria to qualify as a contract: 1. There must be an agreement. 2. The parties must be competent to contract. 3. The parties must give their free consent. 4. The consideration and the object must be lawful. 5. The agreement must not come within the clauses of agreement which have been declared as void by the Contract Act,1872. 6. The agreement must be in writing, attested and registered in cases in which it is so required to be done by any law in Pakistan.

Valid Contract Voidable Contract Void Contract Unenforceable Contract Illegal Contract Contingent Contract Quasi Contract Quantum Merit

Proposal Acceptance Promise Consideration

Agreement
Enforceable by law

Contract

I. Offers and Acceptance II. Contractual Capacity (a) Age of Majority (b) Sound Mind (c) No other disqualification III. Free Consent of Parties (a) Coercion (b) Undue Influence (c) Fraud (d) Misrepresentation (e) Mistake IV. Lawful Consideration and Object

V. Agreement Expressly Declared as Void (a) Agreement in Restraint of Marriage (b) Agreement in Restraint of Trade (c) Agreement in Restraint of Legal Proceedings (d) Agreements Involving Uncertainty (e) Agreement by Way of Wager (f) Agreement to do an act, which is impossible (g) Agreement which of immoral acts VI. Agreements in Writing and Registered

Void contract are those which are not enforceable by law. Agreement in restrain of marriage Agreement restrain of Business/Trade Mistake of both the parties Agreement by way of wager Uncertainty in agreement Unlawful object Immoral Fraudulent case Injury to others or against public policy Agreement without object Agreement to do impossible acts

Agreement in restrain of legal proceedings Contract by minor Contract by unsound minded persons Contracts by Frauds Contracts Coercion Contracts by misrepresentation Agreement without consideration

I. General Proposal II. Specific Proposal III. Express Proposal IV.Impelled Proposal

I. II. III. IV. V. VI.

Legal Relationship Clear Terms & Conditions General and Specific Offer Must be communicated Assent must be an Object Distinction between Proposal and Invitation

The term revocation means taking back or withdrawal.

Lapse Of an Offer

By Revocation

By Lapse of Time

By Death or insanity of the offeror offeree

By Failure to accept condition precedent

By Counter Offer

By not accepting in the prescribed mode or usual mode

By Rejection of Offer by Offeree

By Subsequent illegality or destruction of subject matter of the offer

Contracts for sale of pubic offices. Contracts for trading with enemies. Contracts for waiving liquidity. Contracts for stifling prosecution. Contracts with the courts of justice. Contracts tending to create interest against duty. Contracts contrary to molarity. Marriage brokerage contracts. Contracts in the nature of maintenance and champerty.

I. By Performance II. By Mutual Agreement

a. b. c. Novation Waiver Condition Subsequent

III. IV. V. VI.

By Impossibility of Performance By Operation of Law By Breach By Lapse of time

 By Renunciation before Performance. By Impossibility Created by one Party before Performance is Due. By Renunciation in the course of Performance. Impossibility Created by one Party in the Course of Performance. By Failure of Performance.

Types Of Damages :
I. Nominal Damages II. Exemplary Damages III. General Damages IV. Special Damages V. Contemptuous Damages VI. Liquidated Damages