THE INDIAN CONTRACT ACT, 1872

By: Vandana PGDM(T) 11TM13

CONTRACT
In Accordance With Section 2(h)
An agreement enforceable by law is a contract.

AGREEMENT
According to sec.2(e) every promise or set of promises forming consideration for each other.

PROMISE
According to sec.2(b)

when a person made a proposal to another to whom proposal is made, if proposal is assented there to.

OFFER
According to Sec.2(a)
when a person made a proposal, when he signifies to another his willingness to do or to abstain from doing something.

ESSENTIAL ELEMENTS OF A VALID CONTRACT (Sec.10) 1.Offer & acceptance. 2.Intention to create legal relationship. 3.Consensus - ad - idem. 4.Consideration. 5.Capacity to contract. 6.Free consent. 7.Legality of object. 8.Possibility of performance. 9.Writing & registration.

TYPES OF CONTRACTS

VOIDABLE CONTRACT A contract which is valid unless until avoided by either the party.
e.g.. A promises to sell his car to B for Rs. 20000. His consent is obtained by use of force. The contract is avoidable at the option of A. He may avoid the contract or elect to be bound by it.
(Ref. Elements of Mercantile law by N.D. Kapoor)

VOID AGREEMENT
An agreement not enforceable by law is said to be void (sec.2(g)).A void agreement does not create any legal rights or obligations. e.g. An agreement with a minor or an agreement without consideration.
(Ref. Elements of Mercantile law by N.D. Kapoor)

VOID CONTRACT
A contract which cease to be enforceable by law becomes void when it ceases to be enforceable (sec.2(g))
e.g. A contract to import goods from a foreign country. It may subsequently become void.
(Ref: Elements of Mercantile law by N.D. Kapoor)

ILLEGAL AGREEMENT
An agreement which involves the transgression of some rule of basic public policy and is criminal in nature or immoral. It is not only void as between the immediate parties but it also taints the collateral transactions with illegality.
e.g. B borrows Rs. 5000 from A and enters into a contract with an alien to import prohibited goods. A knows of the purpose of the loan. The transactions between b and A is collateral to the main agreement.It is Illegal since the main agreement is illegal.
(Ref. Elements of Mercantile law by N.D. Kapoor)

UNENFORCEABLE CONTRACT
It is valid but due to some technical defect the contract becomes void. In case defects are removed the contract is enforceable.(lack of registration, lack of signature etc.,)

EXPRESS CONTRACT
A contract in which the terms are stated in words (written or spoken) by the parties.
e.g. The landlord presents Joe with a preprinted lease on the apartment Joe wants and Joe agrees to the terms and signs it. This is an express written contract.
(Ref : definits.uslegal.com)

IMPLIED CONTRACT When contracts are neither in writing nor in oral.

e.g. A fire broke out in Ps farm. He called upon the Upton Fire Brigade to put out the fire which the latter did . Ps farm did not come under the free service zone although he believed to be so. Held, he was liable to pay for the service rendered as the service was rendered on an implied promise to pay.
(Ref: vakilno1.com)

QUASI CONTRACT
It is an obligation created by law , regardless of agreement.
e.g. If UPS delivers a new television to Zoe that she did not order and she keeps the television and does not attempt to return it to the company that mistakenly shipped it to her, a judge could impose a quasi contract to force her to pay for the television. Zo did not intend to purchase the TV. And the TV company did not intend to sell her a TV, but since she chose to benefit from the TV at the companys expense, the court requires her to reimburse the TV Company to make the situation fair.
(Ref: lawteacher.com)

EXECUTED CONTRACT
Executed contract - In a contract where both the parties have performed their obligation, there is remaining nothing to perform.
e.g. A agrees to paint a picture of B for Rs.100 . When A paints the picture and B pays the price i.e. when both the parties perform their obligations, the contract is said to be executed.
(Ref: Elements of Mercantile law by N.D. Kapoor)

EXECUTORY CONTRACT
In a contract where both the parties are yet to perform their obligation.
e.g. Abel orally has agreed to buy Bakers Land, and Bakers attorney has drafted a contract. At this stage it is executory because neither Abel nor Baker has signed it.
(Ref: definits.uslegal.com)

UNILATERAL CONTRACT
In a contract one party has performed his obligation and other person is yet to perform his obligation.
e.g. A permits a railway coolie to carry his luggage and place it in a carriage. A contract comes into existence as soon as the luggage is placed in the carriage. But by that time the coolie has already performed his obligation. Now only A has to fulfill his obligation i.e. pay the reasonable charges to the coolie.
( Ref: Elements of Mercantile law by N.D. kapoor)

In a contract where both the parties have performed their obligation. Bilateral & Executory are same and inter - changeable.
e.g. If someone offered to drive you to work on Monday and Tuesday in exchange for your promise to return the favor on Wednesday and Thursday, a bilateral contract would be formed binding both of you once you provided consideration by accepting these terms.
(Ref: Elements of Mercantile law by N.D. Kapoor)

BILATERAL CONTRACT

AGENT PRINCIPAL SUB-AGENT

AGENT
Sec 182 defines an agent as a person employed to do any act for another , or to represent another in dealings with third persons the person for whom such act is done is s called the principal

PRINCIPAL
The person for whom such act is done, or who is so represented is called a principal

SUB-AGENT
A Sub- agent is a person employed by and acting under the control of, the original agent in the business of the agency. This means he is the agent of the original agent. The relation of the sub-agent , to the original agent is , as between themselves, that of the agent and principal.

PROCESS ON WHICH WE SELECT AGENT FOR NEW BUSINESS:

Any person who is the age of majority according to the law to which is subject and who is of sound mind may employ an agent (Sec.183). As such a lunatic or a minor or a drunken person cannot employ an agent. Any person who is authorised to act as such may be an agent. As the agent does not make contracts on his own behalf. If it is not necessary that he should have contractual capacity. Even a minor may be an agent. If a person who is not competent to contract is appointed an agent, the principal is liable to the third party for the acts of the agent. But no person who is not of the age of majority and of sound mind is responsible to his principal (sec. 184). It is therefore in the interest of the principal that the agent should have contractual capacity.

AGREEMENTS DEED
SCHEDULE REGISTRATION NO. DATE OF REGISTRATION FORM A Application for Registration of Firms (See rule 3) We, the undersigned, being partners, hereby apply for registration as a firm and for that purpose supply the following particulars pursuant to section 58 of the Indian Partnership Act, 1932 : (a) Firm Name. (b) Nature of business of the firm. (c) Principal place of business of the Firm. Place Taluka District (d) Names of any other places where the firm carries on business in the above name. (e) Names in full and permanent address (residential) of all the partners. (f) Date on which each partner joined the firm. Fee Rs. 50

(g) Duration of the firm. In case there is any provision made by contract for the duration of the partnership or for the determination of the partnership, please state the provisions briefly. If no such provision is made, words AT WILL may be stated. Note 1.For the registration of each Firm a separate application is necessary. Accordingly the applicants should supply in this application only particulars of the Firm in respect of which the application is made, this applies to the case of the same persons carrying on business in partnership under different firm names. Note 2.Against items (c) and (d), the exact location of the place should be given. Note 3.This application must be signed by all partners or their agents specially authorised in this behalf on solemn affirmation before a Magistrate or other officer duly empowered to administer Oaths.

Note 4.Making a false, untrue or incomplete statement is punishable under section 70 of the Indian Partnership Act, 1932. (h) In case there are any minors admitted to the benefits of partnerships : Name of Address of Name and Address of Date of admission Date when he/she will minor guardian to benefits attain majority (1) (2) (3) (4)

We are sending the prescribed registration fee by cash/money order, we .......... the ..........above named, solemnly affirm that what is stated in paragraphs .......... is true to our own knowledge and that what is stated in the remaining paragraphs is stated on information and belief, and I/We believe the same to be true. We also declared on solemn affirmation that up to the date of submission of this application there has not been any change whatever in any of the particulars aforesaid. Solemnly affirmed at. Dated this ................................. day of ................ (1) (2) (3) (4) (5) Names and Signatures: Certified that the persons who have signed the application have signed in my presence and have solemnly affirmed that the particulars furnished therein are true. Name of Attesting Witness Designation Address And Seal, if available Before me (Price Re. 1)

THANKYOU!!!