Topic under discussion

What is Law of contract? Applicable law of contact in Pakistan Nature and formation of contact Definition Components of contract i. offer/proposal ii. Acceptance iii. Consideration parties to contact

What is Law of contract?

Applicable law of contact in Pakistan

The Contract Act, 1872. Available on: http://www.paksearch.com/Government/CORPORATE/ Contract/Contract_Act.html

Definition of Contact
Contract

An agreement enforceable by law is a contract. (sec:2(h))

Agreement

Every promise and every set of promises, forming the consideration for each other, is an agreement. (sec:2(e))
consideration:

When, at the desire of the promisor, the promisee or any other person has done or abstained from doing or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise. (sec:2(d))

Components of contract
Three Components of contract:
1. 2. 3.

offer/proposal acceptance consideration

Proposal/offer
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 act or abstinence, he is said to make a proposal. SEC: 2(a)
Shows his willingness to do or to abstain from doing

anything Intends to get acceptance

Promise
A proposal, when accepted, becomes a promises. SEC: 2(b) Proposal+ Acceptance=promise

Consideration
When, at the desire of the promisor, the promisee or any other person has done or abstained from doing or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise.
sec:2d

parties to contact
Promisor & promisee
The person making the proposal is called the

promisor and the person accepting the proposal is called the promisee

SEC: 2(C)

Offer / proposal
Difference between offer and invitation to treat
Difference between offer and supply of information General offers

Offer must be communicated.

Invitation to treat
Display of goods in shopkeepers window
Advertisment for sale in news-papers

(partridge v Crittenden)

supply of information
Harvey v Facey

will you sell Bumper Hall Pen? Telegraph lowest cash price

General offers
Reward for finding a lost diamond/dog
Performance of act without knowing about the reward

announcement???

Acceptance
An acceptance in order to be valid must : be absolute Correspond with the terms of the offer/proposal So following are not considered as acceptance of offers Counter-offer Equivocal ( ambiguous)or qualified acceptance Acceptance with changed terms This includes:

inclusion of new additional terms. terms of offers being replaced or modified or removed