Welcome to our presentation

We are Group 1
Serial No. 1 2 3 Name Mainul Hasan Alin Md. Abu Sanzid Sanowara Nasrin roll 15-026 15-066 15-098

Nafisa Khanum

15-162

Chapter 1
Nature and kinds of contracts

What is Contract Law?

The law of contract is a set of rules governing the relationship, content and validity of an agreement between two or more persons (individuals, companies or other institution) regarding the sale of goods, provision of services or exchange of interests or ownership. According to Sir William Anson, The law of contract in intended to ensure that what a man has been led to expect shall come to pass; that that what has been promised to him shall be performed.

The Indian contract act,1872

Indian Contract Act 1872 is the main source of law regulating contracts in Indian law, as subsequently amended. It determines the circumstances in which promise made by the parties to a contract shall be legally binding on them. All of us enter into a number of contracts everyday knowingly or unknowingly. Each contract creates some right and duties upon the contracting parties. Indian contract deals with the enforcement of these rights and duties upon the parties.

Definition of contract
A contract is a voluntary agreement, whether verbal or in writing, between two or more parties, that creates a legal relationship and is enforceable by law.

The purpose of contracts is: to protect the reasonable expectations of the parties involved in an agreement to provide an avenue for dispute settlement according to the rule of law.

Elements of Contract
Agreement Legal Obligations

Contract

ALL CONTRACTS ARE AGREEMENT

Example: An agreement to buy 100 bags of wheat at tk.430 per bag is a contract because it gives right to a duty enforceable by law and in case of default on the part of either party an action for breach for contract could be enforced.

ALL AGREEMENTS ARE NOT CONTRACT

Example: A promise to launch together at a friends house is not a contract because it is not likely to create a duty enforceable by law for the simple reason that the party never intended that they should be attended by legal consequences.

Essential elements of a valid contract

1.OFFER AND ACCEPTANCE
Must have a lawful offer and a lawful acceptance of the offer. Offer and acceptance must satisfy the requirements of the contract act in relation thereto.

EXAMPLE : Abir offers to sell a wrist watch to Vinod for Rs. 500 and Vinod accepts the offer. There is a valid contract

2.INTENTION TO CREATE LEGAL RELATIONS

There must be an intention among the parties that the agreement should be attached by legal consequences and create legal obligations. Agreements of a social or domestic nature do not contemplate legal relations .

 If the parties have expressly declared their resolve that the

agreement is not to create legal obligations, does not amount to a contract. EXAMPLE : Aftab promises his wife Nila to get her a saree if she will sing a song. Nila sang the song but Aftab did not bring the saree for her. Nila cannot bring an action in a court to enforce the agreement as it lacked the intention to crate legal relations.

3. LAWFUL CONSIDERATION
Consideration is the price paid by one party for the promise of the other. An agreement is legally enforceable only when each of the parties to it gives something and gets something. Gratuitous promises are not enforceable at law. May be an act or forbearance or a promise to do or not to do something.

 it may be past, present or future. the consideration is lawful unless -it is forbidden by law.
EXAMPLE : Mina promises to maintain Rinas child and Rina promises to pay mina Rs 2000 yearly for the purpose. Here the promise of each party is the consideration for the promise of the other party.

4. CAPACITY OF PARTIES
Parties to an agreement must be competent to contract. The parties must be of the age of majority and of sound mind and must not be disqualified from contracting by any law to which they are subject. If any of the parties suffers from minority, lunacy, idiocy, drunkenness etc the agreement is not enforceable at law.

In the case of necessaries supplied to a minor or lunatic, the supply of goods is entitled to be reimbursed from their estate be asked to repay the money. A minors agreement is void-ab-initio as against him.

EXAMPLE : Rahim, an infant, obtains a loan from Jahan. Rahim cannot

5. FREE CONSENT
Consent' refers that the parties must have agreed upon the same thing
in the same sense. If the agreement is induced by coercion, undue influence, fraud, misrepresentation, or mistake then there is absence of free consent. if the agreement is vitiated by coercion, undue influence, fraud and mistake then the contract would be voidable.

if the contract is induced by mutual mistake which is material to the agreement, it would be void. EXAMPLE : Rizvi threatens to shoot Moin , if he does not let out his house to him. Moin agrees to let out his house to Rizvi. The consent of Moin has been induced by coercion and it is voidable.

6. LAWFUL OBJECT The object of the agreement must not be fraudulent or illegal or
immoral or opposed to public policy or must not imply injury to the person or property of another If the object is unlawful then the agreement is void. EXAMPLE : An agreement between husband and wife to live separately is invalid as being opposed to law.

7.WRITING AND REGISTRATION A contract may be oral or in writing.

in certain cases it lays down that the agreement, to be valid, must be in writing or registered. An arbitration agreement must be in writing as per arbitration and conciliation act. An agreement for a sale of immovable property must be in writing and registered under the transfer of property act before they can be legally enforced. EXAMPLE : It requires that an agreement to pay a time barred debt must be writing and an agreement to pay a gift for natural love and affection must be in writing and registered.

8. CERTAINTY
The terms of the agreements must not be vague or uncertain. It must be possible to ascertain the meaning of the agreement . Agreements , the meaning of which is not certain are void. EXAMPLE : : Amar agrees to sell Amit a hundred tons of oil. There is nothing whatever to show what kind of oil was intended. The agreement is void for uncertainty.

9. POSSIBILITY OF PERFORMANCE
An agreement to do an act impossible in itself is void. If the agreement is physically or legally impossible in itself, then it cannot be enforced at law. EXAMPLE : Mishu agrees with Nilam, to discover treasure by magic. The agreement is not enforceable.

10. NOT EXPRESSLY DECLARED VOID

The agreement must not have been expressly declared to be void. In certain types of agreements which have been expressly declared to be void.
EXAMPLE : An agreement in restraint of marriage, an agreement in restraint of trade, and an agreement by way of wager have been expressly declared void.

Kinds of Contract

From the point of view of enforceability

Valid contract

Voidable contract

Unenforceable contract

Contracts

Illegal or unlawful

Void contract

Valid contract
an agreement enforceable by law, an agreement becomes enforceable by law when all the essential elements of a valid contract is present

Voidable contract
an agreement enforceable by law at the option of one or more of the parties thereto, but not the option of the other or others
Contract usually becomes voidable when Coercion, Undue influence, Misrepresentation, Fraud is used to get the consent of one of the parties

EXAMPLE : Mithun sells a car to Shakil saying that it is 6 months old, later it is proved that the car is six years old, the contract is voidable by the option of Shakil.

In case of reciprocal promises, if one party prevents the other from performing his promise, contract becomes voidable at the option of the party so prevented EXAMPLE : Mushfiq promises to shaptak to sell a motorbike for 150000 tk. Later shaptak rejects to buy it, the contract becomes voidable at the option of Mushfiq In case of a party promising to do something in a specified time but fails to do it, the contract becomes voidable at the option of the promisee.
EXAMPLE : Apu promises to deliver awad 10 bags of europian strawberry for 2000 within 1 month but couldnt within time, the contract becomes voidable at the option of awad.

Consequences of rescission of voidable contract

If one party rescinds it, the other need not perform any of the promise where he is a promisor Rescinding party must restore any benefit he took from the other party under the contract If an amount has been received as a security for the due performance of the contract, the money deposited is not needed to be returned

Void contract
A contract which ceases to be enforceable by law becomes void a void contract is not void from its inception Reason for becoming void 1. Supervening impossibility: void because impossibility of performance EXAMPLE : A makes a contract with B to sell goods worth 10000 tk, but B becomes declared insolvent by the court, thus he cannot complete the contract. 2. Subsequent illegality: EXAMPLE : Apu who lives in London promises to sayeef to export 100 pieces of jeans pants to sayeef in Bangladesh. Later the government put ban on jeans importing. The contract becomes void.

3. Repudiation of voidable contract: becomes void when the party whose consent is not free repudiates the contract. EXAMPLE : Mithun sells a car to Shakil saying that it is 6 months old, later it is proved that the car is six years old, the contract is voidable by the option of Shakil. In case shakil rescinds the contract, it becomes void.

4. Incase of contract contingent on the happening of an uncertain future event, if that event becomes impossible:
EXAMPLE : A makes contract with B that he will buy goods worth 1 million from B if B provides part of the profit to C. C dies before the event . The contract becomes void

Unenforceable Contract
valid in itself, but not capable of being enforced in a court of law because of some technical defect suck as absence of writing, registration, requisite stamp, etc. or time barred by the law of limitation

EXAMPLE : Alcohol business is legal in limited way in Bangladesh, but in case of buying and selling alcohol, if either refuses to complete the bargain (either the seller after being paid, or the buyer after receiving the service) then the court will not assist the disappointed party.

Illegal Contract or Illegal agreement

An illegal agreement, under the common law of contract, is one that the courts will not enforce because the purpose of the agreement is to achieve an illegal end An agreement is illegal If its object or consideration 1.Is forbidden by law 2.Is of such nature that, if permitted, it would defect the provisions of any law 3. Is fraudulent 4. Involves or implies injury to the person or property of another 5. The court regards it as immoral

Kinds of contracts from the point of view of mode of creation

Express contract
where both the offer and acceptance constituting an agreement enforceable at law are made in words spoken or written

EXAMPLE : Mr. Sajjad tells Mr. Allin on phone that he offers to sell his house for 10000 tk and MR. Allin in reply informs MR. Sajjad that he accepts the offer. This is an express contract.

Why this is an express contract

M. Sajjad made the offer to Mr. Allin in word spoken. MR. Allin accepted the offer also in word spoken.

Implied contract
Where both the offer and acceptance constituting an agreement enforceable at law are made otherwise than in words by acts and conduct of the parties it is an implied contract. EXAMPLE : Mr. Sujats car stopped on a signal and a boy started to wash the car and he let that boy to wash the car.the boy expected to be paid from Mr.sujat and there comes an implied contract and Mr.sujat is under obligation to pay the boy.

Constructive or quasi contract

Such a contract does not arise by virtue of any agreement . A quasi contract is based upon the equitable principle that a person shall not be allowed to retain unjust benefit at the expense of another.

EXAMPLE : Mr. Shakil finds Mr.Mithuns wallet on the street . now this is the obligation of Mr.Shakil to return the wallet to his true owner. although there wasnt any offer and acceptance term between them.

Kinds of contracts from the point of view of the extent of execution

Kinds of contracts from the point of view of the extent of execution

Executed contract: a contract is said to be executed when both the parties to a construct have completely performed their share of obligation and nothing remains to be done by either party under the contract

EXAMPLE : Mr. Saif sells a computer on cash payment to Mr.Mushfiq.it is an executed contract because: Both the parties executed their obligation under the contract.

Where only one of the parties to a contract has performed his share of obligation and the other one still to perform his share of obligation then it is also an executed contract. It is also called Unilateral Contracts.
EXAMPLE : suppose, Mr. Awad orders a pizza from Pizza Hut. The delivery boy comes and placed the order and the obligation of pizza hut has been done by placing the pizza. Now,it remains for Mr. Awad to pay the delivery boy.

Executory contract
When both the parties of the contract have still to perform their share of obligation or there remains something to be done under the contract on the both sides EXAMPLE : Bangladesh Government arrange a tender on building roads and eastern company draft their proposal and it is accepted .but both the parties have to do their obligation . so this is a executory contract because:

 Eastern limited must built roads as they are asked by government. Government have to pay for those roads. Neither party done with their obligation.

Thank you all for being with us