1. Define Contract ?
Ans - Contract is an agreement to do or not to do an act . It is a legally binding agreement , which is enforceable at law .
According to Section 2 (h) of the Contract act defines a contract as " An Agreement enforceable at law ".
Contract = Agreement + Enforceability at law
Agreement = Offer + Acceptance .
2. What are the essential elements of the valid contract ?
Ans - 1. Offer and Acceptance -
In order to create a valid contract , there must be a lawful offer by one party , and lawful acceptance by another party . This offer and acceptance are must fulfill some rules laid down in the Indian Contract Act .
2. Intension to create legal relationship-
In case there is no such legal intension on the part of the parties , there is no contract . Agreement of social or domestic nature do not complete legal relations .
3. Lawful Consideration- Consideration is an essential element of a contract. Promise made for nothing are unenforceable under the Indian Contract Act. The law enforces only those promises which are made for consideration .
4. Capacity of Parties - The parties of an agreement must be competant to contract if either of the parties does not have the capacity to contract is not a valid contract . The following persons are on incompitent to contract -
(a) Minor (b) Person of unsound mind (c) Person disqualified by law .
5. Free Consent - Consent means the parties must have agreed upon something in the same sense . According to Section 14 Consent is said to be free when it is not caused by coercion , undue influence , fraud , malpractices , mistake , etc .
6. Lawful Object - The object of an agreement must be lawful , object has nothing to do with consideration . Thus , when one party hiers a house for the use of gathering , the object of the contract is to run gambling business . These objectives is said to be unlawful .
7. Certainty of meaning - According to Section 29, the meaning of the agreement which is not certain are avoided . The term of the contract are avoided . The term of the contract may be certain and precise . A contract may be void on the ground of uncertainty.
8. Possibility of performance - If the act is impossible in itself physically or legally, it cannot be enforce by law . For eg- Ankita agrees with puja to discover treasure by magic . Such agreement is not enforceable by law.
9. Not declared to be void or illegal- The agreement through satisfying all the conditions for a valid contract must not be expressly declared void by any law enforce in the country .
10. Legal Formalities - An oral contract is perfectly a valid contract , except in those cases where writing registration is required by some law or statue . In India writing is required in case of sale , mortgages , gift of immovable property , Negotiable Instrument etc.
3. Explain the different types of Contract ?
Ans - A. Enforceability
(a) Valid Contract - An agreement enforceable at law is a valid contract . An agreement becomes a contract when all the essential elements of a valid contract as laid down in section 10 are fulfilled .
(b) Void Contract - An agreement which was legally enforceable when enter into a contract out which has become void due to supervising impossibility of performance .
(c) Voidable Contract - According to Section 2 (i) an agreement which is enforceable by law at the option of 1 or more parties but not at the option of the other party is a voidable contract .
(d) Unenforceable Contract -It is a contract which is otherwise valid but cannot be enforced because of some technique defects like absence of a written form , absence of proper stamp. Such contract cannot be proved in the country , so it will not enforce by law until and unless the defect is rectified.
(e) Illegal Agreement - A contract which is either prohibited by law or otherwise against the policy of law is an illegal agreement . It is void -ab-initio.
(f) Void Agreement - According to Section 2(g) , "An agreement which is not enforceable by either of the parties is void . It void - ab - initio i.e. from its very beginning .
B. Formation-
1. Express Contract - An express contract is one which are entered through words either spoken or written , where the proposal and acceptance is made in words it is an express contract .
2. Implied Contract - Where the proposal or acceptance is made otherwise then the words , it is an implied contract , where a person employed another to do some work , the law implies that the formal agreed to pay for the work .
3. Quasi Contract - It is a contract in which there is no intension or either sider to make a contract , but the law imposes a contract . In such a company , rights and obligations arises operations of law . For eg - Where certain books deliver to a wrong address that is Ankita Das instead of Ankita Roy , Ankita Das is an under obligation either to pay for them or return them .
4. E- Com Contract - This contract are entered between two arties which are using internet . This helps in doing business transaction by using electronic device .
D. Performance -
1. Executed Contract -
An executed contract is one where both the parties have performed their obligations or carried out in terms of the contract . It is also called completed contract .
2. Executory Contract -
Where the contract is yet to be performed either wholly or partially one or both the parties have yet to be performed their obligations such contract are called executory contract.
Executory Contract may be of 2 types -
(a) Unilateral Contract - A unilateral contract is one in which a promise on one side is exchange for an act on the other side .
(b) Bilateral Contract - These are the contracts where a promise on one side is exchange for promise on the part of the other party / side .
4. Define Offer or Proposal ?
Ans - According to Section 2(a) defines proposal as , "When one person signifies to another his willingness to do or to abstain from doing anything with a view to obtain the assent of that other to such act or abstainence .
According to Section 2(a) there are three essential elements are to be present in an offer -
(a) Expression of willingness to do or not to do something .
(b) Made for another person i.e. a person cannot make an offer to himself .
(c) With the object of gaining a concent of other person to such tha act or abstainence .
5. Explain the rules regarding a valid offer ?
Ans - 1. Offer must be capable of creating legal relation -
The offer must intent the creation of legal relations . He must intend that if his offer is accepted as legally binding agreement and enforceable at law.
2. Offer must be certain , definite and not vogue-
No contract comes into existence if the terms of the offer are vague and indefinite . Both the parties should be clear about the legal consequences arising out of a contract . A vague offer does not convey what is exactly meant .
3. Offer must be communicated to offeree -
There can be no offer by a person to himself . It must always be communicated to the offeree. For
4. Offer must be made with a view to obtain the accent of the other party -
An offer must be distinguished form mere expression of intension .
5. An offer may be conditional -
An offer can be made subject to a condition . In that case it can be accepted only subject to that condition . A conditional offer lapses when the condition is not accepted . Thus , a conditional offer by the manager of a company to the trade union to pay a certain amount when the condition is not accepted or lapses . A contract formed on a conditional offer , which is valid .
6. Offer should not contain a term the non complains of which would amount to acceptance -
One cannot say while making an offer that is the offer is not accepted before a certain date , it will presume to have accepted the offer .
7. Lapse of an offer -
An offer lapses -
(a) If either offerer or offeree dies before acceptance .
(b) If it not accepted within the specified time , reasonable time .
(c) An offer can also lapse by revocation .
8. An invitation to offer is not an offer -
An offer must be distinguished from an invitation to offer. In that case of an "invitation to offer "
the aim is merely to circulate information of readiness to negotiable business with anybody who on such information comes to the persons sending it . Such invitations are not offers in the eyes of law and do not become promise on acceptance .
6. What are the essential element of valid acceptance ?
Ans - 1. Acceptance must be absolute and unconditional
An acceptance must be conditional and absolute on accepting an offer with conditions, variations and reservations etc. to counter offer and rejection of the original offer . The acceptor must complied with the terms of the offer . A variation of the offer make the acceptance invalid.
2. Acceptance must be communicated to the offerer -
If the offered remains silent and doesn't not show that he had accepted the offer , no contract is formed . Acceptance must be communicated to the offered himself .
3. Acceptance must be made within a reasonable time -
Acceptance must be made within the time after by the offer and if no time is specified it must be made within a reasonable time .
4. It must be made according to the prescribed mode or reasonable mode -
Acceptance has to be made in the prescribed manner or indicated by the offerer
According to Section 7 (2) states that if the acceptance is not made in the manner prescribed , the proposer may within a reasonable time of the acceptance is communicated to him or insist that acceptance must be made in the manner prescribed.
5. Acceptance must be aware of the proposal at the time of the offer -
Acceptance follows offer , it the acceptor is not aware of the existence of the offer and convey his acceptance , no contracts come into existence .
6. Acceptance must be given before the offer lapse or before the offerer revoke -
It means that acceptance must be made while the offer is in force i.e. before the offer jas been revoked or lapse .
7. Acceptance cannot be implied from silence -
No contract is formed if the offeree remain silent and does nothing to show that he had accepted the offer .
7. Different modes of revocation of offer ?
Ans- 1 By notice of revocation -
Offer may be revoked by communication of notice of revocation by the offerer to the other party before acceptance is complete against the offerer himself .
2. By lapse of time -
A proposal will come to an end by the lapse of time preserve is such proposal for its acceptance or if no time is prescribed then the reasonable time should be consider . Reasonable time means depending upon the circumstances of each cases .
3. Death or insanity -
A proposal is revoked by the death or insanity of the offerer , if the fact of his death or insanity comes to the knowledge of acceptor before acceptor .
4. By non- fulfillment of condition precedent-
A proposal is revoked when the acceptor fails to fulfill a condition precedent to the acceptance of the proposal which was conditioned offer .
5. By counter offer -
An offer comes to an end when the offeree makes a counter offer or reject the offer . An offer once rejected cannot be received .
6. By subsequent illegality -
An offer lapses if it becomes illegal after it is made and before it is accepted.
8. What is Consideration ?
Ans - A consideration is one of the important element of every contract . The law enforces only those promises which are made for consideration , where one party promises to do something , it must get something in return , this return is called Consideration.
9. No , contract , no consideration- Exceptions ?
Or
Under what circumstances no consideration is required for a valid contract ?
Ans - 1. Natural love and affection
An agreement through made without consideration will be valid if it is in writing and registered , it is made on account of natural love and affection between parties standing in a near relation to each other .
2. Compensation for service rendered -
An agreement made without consideration may be valid agreement if it is a promise to compensate whollu or in a part . A person who has voluntarily done something for the promise or something which the promise was legally compensable to do .
3. Time Barred Debt -
A promise to pay a Time Barred Debt is also enforceable but the promise must be in writing and designed by the promise or his agent authorized is debt that behalf . The promise may be to pay the whole or part of the debt and oral promise to pay a time Barred debt is unenforceable.
4. Complete Gift -
It provides that the rule 'no consideration , no contract ' shall not effect the validity of any gift actually made between the donor or donee.
