Contract and its kinds Final Project GROUP MEMBERS: SALMAN AHMAD RAHEEL AKBAR AHSAN AKRAM JAWAD

NAWAZ L1F10BBAM2004 L1F10BBAM2030 L1F10BBAM0003 L1F10BBAM0038

Submitted to: Prof.javaria qais Submission date: June18, 2013

Law Of contract
The law relating to contracts in Pakistan is contained in the Contract Act, 1872. It extends to the whole of Pakistan and came into force on the 1st day of September, 1872. It deals with: General principles governing all types of contracts. Contracts of Indemnity, Guarantee, Bailment, Pledge, and Agency.

Definition of contract:
Every Agreement and promise enforceable at law is a contract.

Agreement:
Every promise and every set of promises, forming the consideration for each other, is an agreement.

Essentials Of Valid Contract:

A valid contract is binding and enforceable . In a valid contract, all the parties are legally bound to perform the contract.

1. Offer and Acceptance:

There must be a lawful offer by one party and lawful acceptance of that offer by the other party. When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such 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.

2. Legal Obligation:
One party does not fulfill his promise, he shall be liable for breach of contract.

3. Lawful Consideration:
Valid contract, consideration should be lawful. Pollock says: The consideration is the price for which the promise of the other is bought and the promise thus given for value is enforceable.

4. Capacity of Parties:
An agreement is enforceable if it is made by parties who are competent to contract.

Minor is a person who has not attained 18 years of age. According to Majority Act, 1875;
where a guardian of minors person or property is appointed or court of wards take charge of minors property, a minor will attain the age of majority after 21 years.

5. Free Consent:
Obtained by coercion, under influence, fraud, misrepresentation or mistake. Section 14 defines that, consent is said to be free when it is not caused by coercion, undue influence, fraud, misrepresentation, or mistake.

6. Lawful Object:
Fraudulent, illegal, immoral, opposed to public policy.

7. Writing and Registration:

A contract may be oral or writing. A written contract is valid and formalized and it can be challenged in court and by law if there is breach of contract the written contract can be challenged in the court.

8. Certainly of Terms:
If the terms are uncertain, the agreement is void.

9. Possibility of Performance:
A valid contract must be capable of being performed.

Kinds of Contract:
Valid Contract:
A valid contract is enforceable by law. An agreement becomes enforceable by law all the essentials of a valid contract are present.

Void Contract:
A contract which ceases to be enforceable by law becomes void, when it ceases to be enforceable.

Void Agreement:
An agreement not enforceable by law is said to be void.

Voidable Contract:
An agreement which is enforceable by law at the option of one or more of the parties thereto but not at the option of the other or others, is a voidable contract.

Contigent contract:
A contigent contract is a contract to do or not to do something, if some event collateral to such contract does or does not happen.

Quasi contract: A Quasi contract arises under some special circumstances. It is an obligation imposed by law upon a person for the benefit of another even in the absence of contract. It is based on the principle of equity and justice.

Case law of contract:

The two sample cases of contract are as fallow:

The mihalis angelos 1971:

The facts: the parties entered into a Contract for the charter of a ship to be ready to load at Haiphong(in Vietnam) on 1 July 1965.The charterers had the option to cancel if the ship was not ready to load by 20 July .On 17 July the charterers repudiated the contract believing (wrongly) that they were entitled to do so .The

ship owners accepted the repudiation and claimed damages. On 17 July the ship was still in Hong Kong and could not have reached Haiphong by 20 July

Decision: The ship owners were entitled only to nominal damages since they would have been unable to perform the contract and the charterers could have cancelled it without liability on 20 July .

Here the essential of Legal Obligation is missing.

Bannerman v White 1861:

The Facts: In negotiations for the sale of Hops the buyer emphasized that it was essential to him that the hops should not have been treated with sulphur adding that , If they had, he would not even bother to ask the price. so the seller replied explicitly that no sulphur had been used and made contract on the agreed term of no sulphur .It was later discovered that a small proportion of the hops (3acres out of 300 which were hardly noticeable) had been treated with sulphur. The buyer refused to pay the price.

Decision: The representation as the absence of sulphur was intended to be a term of contract. Here the essential of Lawful Object is missing

Summary:
Contract is an agreement which is enforceable at law and it must fulfill its essentials Contract must be fulfilling its essential and if one of the essential is missing it cannot be a valid contract. The contract must be written and formalized, written contract can be challenged in court or by law.