Law of Contract & its

Essentials

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= ›ccording to the Contract ›ct 1872 Sec (2):

´›n ›greement enforceable by law is a Contractµ

Thus a Contract consist of two elements:

a) ›n ›greement
b) The ›greement must be enforceable by law.
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Œ £ffer and ›cceptance
Œ Legal £bligation
ΠLawful Consideration
ΠCapacity of Parties
ΠFree Consent
Œ Lawful £bject
ΠNot Expressly Declared Void
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The Contract can be classified into 04 Categories.

1) ›ccording to Enforceability:
a) Valid Contract
b) Void Contract
c) Void ›greement
d) Voidable Contract
e) Unenforceable Contract
f) Illegal ›greement
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2) ›ccording to Formation

a) Express Contract
b) Implied Contract
c) Quasi Contract
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§) ›ccording to Performance

a) Executed Contract
b) Executory Contract
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4) ›ccording to parties:

a) Unilateral Contract
b) Bilateral Contract.
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£ffer:
 

 
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It may be Express or implied
1) It must create legal relations
2) It must be definite & clear
§) It is different from invitation to offer
4) It may be specific or general
5) It must be communicated to the offeree
6) It should not contain negative stipulation
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Essential Rules for revocation of £ffer:

1) By Notice of revocation
2) Lapse of time
§) Failure to Fulfill Condition
4) By Death or insanity of the offeror
5) By counter offer by offeree
6) Death or insanity of the offeree
7) Failure to accept according to manner
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›cceptance:
 

 
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Essential of a Valid ›cceptance:

It must be given by the offeree
1) It must be absolute & unconditional
2) It must be in prescribed manner
§) It must be communicated to the offeror
4) It may Express or implied
5) It must be given within reasonable time
6) It must Follow the offer
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´The Parties to an agreement must create

legal obligations.
If one of them does not full fill his part of
promise, he shall be liable for breach of
contract.µ
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Essentials of a Valid Consideration:

1) It must move at the desire of the partner.

2) It may move from the promisee or any other person.
§) It may be act, abstinence or promise.
4) It may be past, present or future.
5) It need not be adequate.
6) It must be real.
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›ccording to Sec 2§ of the Contract ›ct 1872

The consideration or object of an agreement is unlawful in

The following cases:

1) If it is forbidden by Law
2) If it defeats the provisions of any law
§) If it is fraudulent
4) If it involves injury to person or property of another.
5) If the court regards it as immoral
6) If the court regards it as opposed to public policy.
 
     
 


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Persons who are incompetent to join a

Contract:

1) Minor
2) Persons of Unsound Mind
§) Persons who are disqualified by
the Law
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Nature of Contract with Minor:

1) ›n agreement with Minor is void.

2) ›n agreement made by Minor cannot be confirmed by
him on attaining the age of majority.
§) The rule of estoppels does not apply to a Minor.
4) › Minor cannot be compelled to repay.
5) Payment of necessaries supplied to Minor.
6) › Minor cannot be declared Insolvent.
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Persons of Unsound Mind:

› person may become of unsound mind due to:

1) Idiocy
2) Insanity
§) Drunkenness
4) Hypnotism
5) £ld age
 
      


Persons disqualified by the Law:

Following persons are disqualified by the Law from
Contracting:

1) Joint Stock Company

2) Diplomatic ›gent
§) ›lien Enemy
4) Insolvent
5) Convict
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›ccording to Contract ›ct 1872 Sec (14):

› consent is said to be free when it is not caused by:
1) Coercion
2) Undue influence
§) Misrepresentation
4) Fraud
5) Mistake











 







 

 
 



 



 








 
 

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1) ›greement in Restraints of Marriage
2) ›greement in Restraints of Trade
§) ›greement in Restraints of Legal Proceedings
4) Uncertain ›greements
5) Wagering ›greements
6) ›greements Contingent on Impossible Events
7) ›greement to do Impossible ›cts