Contract Act

Asst. Professor
Eti Khatri
 Contract
• An agreement which is legally enforceable
alone is a contract.
• Agreements which are not legally enforceable
are not contracts but remain as void
agreements which are not enforceable at all or
as voidable agreements which are enforceable
by only one of the parties to the agreement.
“All contracts are agreements, But all
agreements are not contracts.”
• Offer/Proposal sec 2(a) - 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
person either to such act or abstinence, he is said to make a
proposal.

• Acceptance sec 2(b) - When the person to whom the proposal

is made, signifies his assent there to , the proposal is said to be
accepted.

• Promise sec 2(b) - A Proposal when accepted becomes a

promise. In simple words, when an offer is accepted it
becomes promise.
 Offer

Agreement

Acceptance
Example
• Ram offers to sell his car for Rs 1,00,000 to
Shyam. Shyam accepts this offer. This offer
after acceptance becomes promise and this
promise is treated as an agreement between
Ram and Shyam.
• Therefore, an agreement consists of an offer
by one party and its acceptance by the other.
• Agreement = Offer + Acceptance of offer
 ESSENTIALS OF A VALID
CONTRACT
As per Section 10 “All agreements are contracts, if they are made – by
free consent of the parties, competent to contract, for a lawful
consideration and with a lawful object, and not hereby expressly declared
to be void .”
– Offer and acceptance
– Legal relationship
– Consensus - ad-idem (same time same sense)
– Free consent.
– Capacity or competency of parties
– Lawful object
– Lawful consideration
– Certainty and possibility of performance
– Agreements not declared to be void
– Legal formalities
 TYPES OF CONTRACT

• Express contract
ON THE BASIS OF • Implied contract
CREATION/FORMATION • Quasi contract

• Valid contract
ON THE BASIS OF • Void contract
• Voidable contract
VALIDITY • Unenforceable contract
• Illegal contract

ON THE BASIS OF • Executed contract

EXECUTION/PERFORMANCE • Executory contract

ON THE BASIS OF • Bilateral contract

LIABILITY • Unilateral contract