CHAPTER-I

INTRODUCTION

21
CHATPTER-I

INTRODUCTION

The present research on the topic; Changing Concept of Contract-Recent Problems

and Issues, covers the present contract act and the new concepts in contract law which came
in contract after1991.The main object of the contract is to enforce the contract between the
parties. This Act is based mainly on English Common law consisting of judicial precedents 1.
The Act is not exhaustive as it does not deal with all the branches of the law of contract.
There are separate Acts which deal with contracts relating to negotiable instruments, transfer
property, sale of goods, partnership, insurance, etc. Before 19302, the Act also contained
provisions relating to contracts of sale of goods3 and partnership. Now contract Act, 1872
does not affect any usage or custom of trade4 (not inconsistent with the provisions of the
Act). A minor amendment in section 28 of the Act was made by the Indian Contract
(Amendment Act, 1996. The general principles of the law of contract are laid down under
section 1-755. Of6 the Act. The Indian contract act is largely based on the principles of
English law. Even at present, where a case is not covered within the particular provisions of
Indian Contract Act nor any other law in force in India the court must follow the principles of
English Common Law which are not inconsistent with the Indian conditions.
The importance of law as an enabling tool for drafting a clear contract to facilitate a
smooth transactional relationship between corporate and farmers cannot be underestimated7.
Over the past few decades, and in particular in the past twenty years, there have been major
changes that necessitate a novel approach to study of the field of contract law. The law and
regulations governing business and contract law is very complex and now affect all kind
industries and every type of commercial agreement; from entering into a contract, to validity
of purchase condition8. As far as India is concerned, traditionally, the Indian Contract Act,
1872, is still the governing, foundational law in terms of regulation of all forms of contract,
whether the making and breaking of contracts and its legal consequences within the national

1
mba-notebook.blogspot.com assessed on 31.10.2013
2
www.shareyouressays.com assessed on 31.04.2012
3
www.shareyouressays.com assessed on 31.05.2013
4
www.lawyersnjurists.com assessed on 31.01.2012
5
210.212.95.124 assessed on 31.12.2013
6
210.212.95.124 assessed on 31.11.2013
7
www.ausib.org assessed on 31.01.2012
8
www.campts.com assessed on 31.06.2013

22
jurisdiction9. Every man in his day-to-day life from dawn to dusk makes a variety of
contracts10.
Generally, a contract is an agreement between two or more persons to do a particular
act or abstain from doing a particular act. By entering in to a contract, it creates legal
obligation between the parties. It also provides certain rights to the parties to do a particular
task. Different authors defined a contract in various ways. Let us see some of them Every
agreement and promise enforceable at law is a contract; Sir Fredrick Pollock, a contract is an
agreement, creating and defining the obligation between parties; Salmond11, a contract is an
agreement enforceable at law made between two or more persons by which rights are
acquired by one or more to acts or forbearances on the part of others; Sir William Anson. The
Indian Contract Act is closely related to the Pollock's definition and the Section 2(h) of
the Act clearly states that "an agreement enforceable by law is a contract." From the above
definitions we can understand that a contract essentially consists of two elements12. Offer (i.e.
Proposal)13 when a person signifies to another his willingness to do or to abstain from doing
anything, with a view to obtaining the assent of the other person to such act or abstinence, he
is said to make a proposal, Acceptance when the person to whom the proposal is made,
signifies his assent there to, the proposal is said to be accepted, promise a proposal when
accepted becomes a promise. In simple words, when an offer is accepted it becomes
promise, Promissory and Promise:- When the proposal is accepted, the person making the
proposal is called as promissory and the person accepting the proposal is called as
promise; Consideration:- when at the desire of the promissory, the promisee or any other
person has done or abstained from doing something or does or abstains from doing something
or promises to do or abstain from doing something, such act or abstinence or promise is
called a consideration for the promise; Price paid by one party for the promise of the other
technical word meaning quid pro quo i.e. something in return Agreement ; Every promise and
set of promises forming the consideration for each other,14 Void agreement; An agreement
not enforceable by law is void Voidable contract; an agreement is a voidable contract if it is
enforceable by Law at the option of one or more of the parties there to (i.e. the aggrieved
party), and it is not enforceable by Law at the option of the other or others. Void contract :- A

9
Sai Ram Bhatt, Law of Business Contract in India (2010) id at x1 Sages publication publication.
10
www.zessay.org assessed on 31.12.2013
11
www.lawyersnjurists.com assessed on 31.12.2013
12
lrd.yahooapis.com assessed on 31.12.2013
13
Y.S. Sharma, law of Contract 1(2012), University Book House (P) Ltd.1 Id at p14, 15.
14
Dutt, Law of Contract (2006)10th edition, Eastern Law House Id at p.50

23
contract which ceases to be enforceable by Law becomes void when it ceases to be
enforceable.15In the ordinary way the customer has no time to read standard form contracts
and, if he did read them, he would probably not understand them. If he did understand them
and object to any of them, he would generally be told that he could take it or leave it 16. If he
went to another supplier, the result would be the same. Freedom to contract implies some
choice or room for bargaining. This is a complex situation. Standard form contracts rarely
leave any such room for bargaining. The present trend to conclude contracts in Standard
Forms is gaining momentum. The Railways, Airways, L.l.C. are resorting to these methods. It
would rather be cumbersome to draw up a separate contract with every customer. Such
standardised contracts contain a large number of terms and conditions in fine print which
restrict and often exclude liability under the contract17. In all such instances, individual
dealing with such large organisations have hardly time and patience to bargain with them.
With the result, they are left with no choice. They are there for them to take or leave. "No
customer in a thousand ever read the conditions". In other words, the big company exploits
this weakness of the individual customer by incorporating such terms which may exempt the
Company from all liability under the contract. The Courts are, in these circumstances, called
upon to save and rescue the weaker party who deserves to be protected against the
possibilities of exploitation in such contracts. Following modes are evolved by the courts in
this regard. Adequate notice to the offeree of the printed terms and conditions ought to be
given. If not, the acceptor will not be bound by the terms18. "For conditions see back" were
obliterated by the date stamp, was held to be not a proper notice of the terms. This view has
been endorsed in India; the attention of the width of the exemption clause has to be drawn,
failing which he would be disentitled to rely on the exemption clause19. Notice of the terms
should be given either before or at the time of the contract but not later 20. A later notice
amounts to modification. That would be binding only21 when the other parts assents to it on
the property being stolen, the proprietors were held responsible because the notice was
subsequent and not a part of the agreement. This is yet another method of controlling the
unreasonable consequences of wide and sweeping exemption clauses. Every contract contains
a 'core' or fundamental obligation which must be performed. If one party fails to perform this

15
en.wikipedia.org
16
www.legalservicesindia.com assessed on 31.12.2013
17
drgokuleshsharma.com
18
lex-warrier.in
19
R.K.Bangia, Indian Contract Act (2010) Allahabad Law Agency Id at p.45
20
www.drsmau.in
21
G.H. Trietae, Law of Contract (1983) (Stevens and Sons Ltd.) Id at p. 168, 169

24
fundamental obligation, he will still be guilty of a breach of the contract whether or not any
exempting clause has been inserted which purports to protect them22. Thus, when a car has
been sold on "as is" basis without any warranty whatever, still when the engine of the car
blew up, here was a contract which was fundamentally broken because what was sold was not
a "car". In England, the Court of Appeal23 recently has held that where the goods are lost
from the custody of a bailee, fundamental breach would be presumed unless he accounts for
the loss. If he is not able to account for the loss, he will not be permitted to rely upon a clause
which limits his liability to a negligible figure. Exemption clauses are normally construed
strictly particularly where a clause is so widely expressed as to be highly unreasonable. If
there is an ambiguity in24 construing an exemption clause, the Court will resolve it in favour
of the weaker party. The Court held that though the clause exempted J from their liability in
contract, it did not exempt them from liability in negligence. 25 Before the enactment of the
Indian Contract Act, 1872, there was no codified law governing contracts in India. Act of
Settlement required the Supreme Court of India that questions of inheritance and succession
and all matters of contract and dealing between party and party should be determined in case
of Hindu as per Hindu law and in case of Muslim as per Muslim law and when parties to a
suit belonged to different persuasions, then the law of the defendant was to apply. In outside
Presidency Towns matters with regard to contract was mainly dealt with through English
Contract Laws; the principle of justice, equity and good conscience was followed26.
However, even this liability for negligence can be excluded by specific words or necessary
implication. Thus, "trial of the car at the customer's risk" would mean that by these express
words, the risk has been shifted to the customers. After the (English) Unfair Contract Terms
Act, 1977 the result now is different, which expressly provides that any clause in a contract
which excludes or restricts liability for death or personal injury resulting from negligence
shall be void.27, Terms Unreasonable: A term is said to be unreasonable when it defeats the
very purpose of the contract or if it is repugnant to public policy. 28 This clause was found to
be unreasonable because this condition was held to be in flagrant infringement of the law
relating to negligence.29 The cleaners must know that the articles worth a lot of money arc

22
drgokuleshsharma.com
23
Id at p.49.
24
www.legalservicesindia.com
25
Supra note 8 id at p.51.
26
en.wikipedia.org assessed on 31.12.2013
27
www.legalservicesindia.com
28
www.eiilmuniversity.ac.in
29
Id at p. 49, 53, 458.

25
handed over to them for cleaning and it would be most unreasonable to limit their liability to
ridiculously low figure. The terms of the contract strictly binds the parties to it and no third
party can either enjoy any right or suffer any liability under it. This principle applies equally
in case of standard form contracts. Thus, where goods are sold under contract which exempts
the supplier from liability and if a third party is injured by the use of them, the supplier will
be liable to the third party irrespective of the exemption clause.
Man's contract making activities increase with the increasing trade, commerce and
industry. In a way of living in a modern society would be impossible if the law did not
recognize this contract making power of a person. This prompted Roscoe Pound to make his
celebrated observation: "Wealth, in a commercial age, is made up largely of promises." In
this sense India is also a "Promissory" Society. The conferment and protection by the law of
this contract making a power of persons gives them a considerable leeway to strike best
bargain for the contract making persons. In a way they are permitted to regulate and define
their relations in a best possible manner they choose. However, the contours of contractual
relations in a feudal, colonial and capitalist society of pre-independence India cannot
necessarily be the same in an independent and developing Indian society. Whatever may be
the nature of a given society, the contractual relations, as are obtained in that society, are
governed by certain principles which are more or less of a general and basic nature. In India
these general principles are enacted in the form of the Indian Contract Act 1872. Specific
enforcement of contract is an important aspect of the Law of Contracts 30.Analysis of the
kinds of contracts that can be specifically enforced and the3 methods of enforcement forms a
significant segment of this study31In common law legal systems, a contract (or informally
known as an agreement in some jurisdictions) is an agreement having a lawful object entered
into voluntarily by two or more parties, each of whom intends to create one or more
legal obligations between them. The elements of a contract are "offer" and "acceptance" by
"competent persons" having legal capacity who exchanges "consideration" to create
"mutuality of obligation32. Therefore, the knowledge of the basic principles of the law of
contract is an essential equipment to understand the legal liability that one may create
against himself. A contract is an agreement enforceable by law which offers personal rights,
and imposes ‗personal‘ obligations, which the protects and enforces against the parties to the

30
www.legalservicesindia.com assessed on 31.12.2013
31
Su. Digital.University.ac/files//Contract_Law_assessed on 31.12.2012.
32
Smkproperties. assessed on 31.12.2013

26
 agreement33. The legal personal rights and personal obligations, arising out of a contract,
depend upon the general law, but are created by the acts of the contracting parties
themselves34. The general law of contract is based upon the conception, that the parties have
by an agreement, created legal rights and obligations, which are purely personal in their
nature and are only enforceable by action against the party in default 35. The law of contract
is differs from other branches of law in an important respect. It does not lay down a number
of rights and duties which the law will protect or enforce; it consists rather of a number of
limiting principles, subject to which the parties may create rights and duties for themselves
which the law will uphold. In a sense the parties to a contract for themselves. Its rules define
the remedies that are available in a court of law against a person who fails to perform his
contract, and the conditions under which the remedies are available36. There are several
agreements which do not give rise to legal obligations. There are, therefore, not contracts.
The law of contract is a subject at once touching upon the lives of ordinary persons and large
businesses. Its principles are often derived as solutions to conflicting interests. A contract
arises from an agreement, which arises mostly through the process of negotiation between
the parties, one making the offer and the accepting it. A contract may be oral or in writing.
But in certain special circumstances the Act lays down that the agreement, to be in writing
or/and registered, viz an agreement to make a gift be in writing (section 25).37
The law of contract lays down the legal rules relating to promises: their formation,
their performance, and their enforceability. Explaining the object of the law of contract, Sir
William observes: the law of contract is intended to ensure that what a man has led to expect
shall come to pass; that what has been promised to him shall be performed38.
Moreover modern contract law has developed itself into specialized branch of law in
itself. Traditionally, contract law is taught and learnt vis-à-vis the Indian Contract Act, 1872.
Though this law is still the governing, foundational law in terms of regulation of all forms of
contract, one must appreciate that business contracts have grown beyond the proposition of
the century-old Contract Act39 Contracts over the telephone are regarded the same in
principle as those negotiated by the parties in the actual presence of each other. In both cases
an oral offer is made and an oral acceptance is expected. It is important that the acceptance

33
www.manupatrafast.com
34
iilm.edu
35
www.legalserviceindia.com
36
www.freewebs.com
37
Mulla, Indian Contract and Specific Relief Act (2007).s Lexis Nexis Butterworths Id at p.9, 56.
38
mba-notebook.blogspot.com
39
www.ausib.org assessed on 31.12.2013

27
 must be audible, heard and understood by the offeror. If during the conversation the
telephone lines go, "dead" so that the offeror does not hear the offeree's word of acceptance,
there is no contract at the moment. If the whole conversation is repeated and the offeror
hears and understands the words of acceptance, the contract is complete40A proposal or an
offer is made with a view to obtain the assent to the other party and when that other party
expresses his willingness to the act or abstinence proposed, he accepts the offer and a
contract is made between the two. But both offer and acceptance must be made with the
intention of creating legal relations between the parties. The test of intention is objective.
The Courts seek to give effect to the presumed intention of the parties. Where necessary, the
court would look into the conduct of the parties, for much can be inferred from the conduct.
The court is not concerned with the mental intention of the parties, but rather with what a
reasonable man would say, was the intention of the parties, having regard to all the
circumstances of the case. In commercial and business agreements, the presumption is
usually that the parties intended to create legal relations. But this presumption is rebuttable
which means that it must be shown that the parties did not intend to be legally bound41.
When contracts transcend national boundaries, the` national legal regime of any single
country becomes inadequate to grapple with the situation. When the parties to the contract
are located in different countries, at least two systems of law impinge upon the transaction
and the rules of Private International Law come into play. The best way to ensure the
application of a particular legal system to international contracts is to choose a particular law
to govern this contract. This law is called the ―Proper Law of the Contract.‖ The courts have
held that ―Proper Law is the law which the parties have expressly or impliedly chosen, or
which is imputed to them by reason of its closest and most real connection.‖
Modern contract is largely involved in multinational, or transnational, jurisdiction,
with International Conventions such as Convention on International Sale of Goods (CISG)
or the clauses of International Arbitration governing formation of contracts in India. Issues
of international taxation and multinational contractual jurisdiction are also areas which
govern modern forms of contract. Largely, these complex issues are seen in e-contract which
is a multinational personality in the chain of production, distribution, and consumerism.
Further, one must seek the modern developments of contracts which have changed the
meaning and facets of traditional contractual terms. More and more minors do enter into

40
www.zessay.org assessed on 31.12.2013
41
www.icsi.in assessed on 31.12.2013

28
 contracts in the field of entertainment and sports42. No longer are the courts sticking to the
notion that a contract with a minor is void ab initio. Rather, freedom of contract rules
dominates the decision of the courts in such cases. The idea to make research comes from a
realization that contract law needs to be taught with incorporation of newer facets of
practices and issues which confront modern-day contract43. An attempt has been made to
state the positions taken by judges on the various forms of contracts in a comparative
analysis of decisions in India, the US, and the America to adapt itself to modern demands.
Attempts to graft archaic legal systems onto ever- changing circumstances result in a
struggle to conform novel issues into an out-dated legal framework. Currently, courts and
legislatures are facing issues raised by business conducted over the Internet. Failing to
blanket current developments, old law leaves new problems exposed for litigation and
requires attorneys and judges to explore uncharted seas of legal complexity. The present
research takes cases from the United States and the United Kingdom, where higher
education is contractual, to suggest that unless a change occurs in the Indian legal regime,
and legal problem may be far more complicated than one may presume. Expressly set out44
my research also highlights the usage of securities, software, and real estate escrows via
examples. Given the rapid growth and increasing importance of the outsourcing industry in
India, it is pertinent to study the contractual aspects of how outsourcing transactions,
especially offshore ones, are agreed upon and implemented. Contractual terms associated
with outsourcing transactions will undoubtedly receive greater judicial scrutiny in the near
future, thus an analysis of issues involved in outsourcing contracts a significant contribution
to the new forms of business contracts. Standard form of contracts is the current norm of
practice. The growing relationship between contract law and consumer law has seen a
growing jurisprudence of the reasonability, fairness, and equitableness principles in the
interpretation of contra proferentem rule. Standard forms of contract are here to stay and
grow. Very often, these contracts do not give an equal bargaining position to the parties on
the terms and conditions. From caveatemptor to caveat venditor one sees the growing
significance of protecting consumer rights when there is lack of negotiating ability on the
other party to the contract. Standard forms of contracts have become a common fixture in
everyday life today. It becomes important to look into the principles which govern these
contracts due to the difference between these contracts another contracts in terms of consent,

42
Supra note 1 id at x1
43
www.ausib.org
44
www.ausib.org assessed on 31.12.2013

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 exclusion of liability, bargaining power, inability to negotiate, etc. The courts have, thus,
branded these contracts differently from others and formulated special principles regulating
the same include principles involving the nature of document, adequacy of notice provided,
and previous dealings. Law has always tended to lag behind technology, and given the
pervasive nature of such transactions in our everyday live; the chapter on electronic and
software contracts assumes particular relevance in cases of sale or licenses. However, owing
to the lack of scholarship and jurisprudence on the subject, this takes the form of conjectures
and recommendations rather than conclusive answers. Thus, what is required is a forward-
thinking attitude of the judiciary, with possible modifications and innovations in the law on
the part of the legislature. Lastly, the study also suggests that the standard player contracts
which exist in India today are highly inequitable, and India would dwell to take a leaf out of
the books of the leagues in the United States and make more conscious efforts toward the
drafting of such contracts on the basis of fairly negotiated collective bargaining agreements.
Employment contract being a standard form contract is a dynamic issue which changes with
time as the nature of employment and scope of employment progresses. Historically, the
Indian law on restraint, whether general or partial, despite being in service contract or
business contracts were generally held void by the courts. The terms and conditions of an
employment contract signify the working style and culture of an organization45.
While employing a person in your organization or commercial set-up, you need to
define the relationship in a fair and unambiguous manner. An employment contract helps a
company protect the interests of the organization while being fair to the employee.46
Restrictions such as non-competition, non disclosure, and non-solicitation agreements have
long been present in many employment contracts. Courts, however, have historically been
skeptical of such provisions and often refused to issue injunctions to enforce them resulting
uncertainty has proven to be a major problem for employers in many industries, who are left
with no reliable means of keeping their key employees from joining a competitor or
competing themselves.47 With more employment opportunities available in recent years,
employees are more mobile than they have been earlier. However, as employee mobility
increases, so do employer‘s concerns about the possible disclosure of trade secrets where
employees leave to join other companies.48 Restraint of trade clauses usually contain
restrictions on the employee‘s ability to work in a geographical area, or for a defined length

45
www.ausib.org
46
Ibid
47
Ibid
48
www.ausib.orgassessed on23.07.2014

30
 of time. It is not uncommon or illegal for employer to restrict a former employee from
working within a fixed geographical area, or from working with a rival business to the
former employer for a period of time after the cessation of the contract of employment.
However, the restrictions must not be excessive. What is excessive depends on the
nature of the work in question and the structure of the business. Now it must be appreciated
that business contracts have grown beyond the proposition of the century-old Contract
Act49.But in practice the living relationships are fast changing into the commercial mould
under the impact of economic liberalization50 sponsored by World Trade Organization
(WTO) regime affecting the contractual relationship and shaping the economic development.
Further, if one‘s involved in commercial contracting or dealing with external parties at any
level, one‘s need to grasp the practical legal implications of these relationships because our
conventional laws are not responsive to the immediate confronted problem51.
When contracts transcend national boundaries, the national legal regime of any single
country becomes inadequate to grapple with the situation. When the parties to the contract
are located in different countries, at least two systems of law impinge upon the transaction
and the rules of private international law come into pay. The best way to ensure the
application of a particular legal system to international contracts is to choose a particular law
to govern this contract. This law is called the ―Proper Law of the Contract 52.‖ Modern
contract is largely involved in multinational or transnational jurisdiction, with International
Conventions such as Convention on International Sale of Goods or the clauses of
International Arbitration governing formation of contracts in India. The issues of
international taxation and multinational contractual jurisdiction are also areas which govern
modern forms of contract. Largely, these complex issues are seen in e-contract which is a
multinational personality in the chain of production, distribution, and consumerism. Further,
one must seek the modern developments of contracts which 53have changed the meaning and
facets of traditional contractual terms. More and more minors do enter into contracts in the
field of entertainment and sports. No longer is the court sticking to the old notion that
contract with a minor void ab initio. Undoubtedly, with the adoption of the Information
Technology Act, the concept of electronic contracts has been legally recognized compelling
modification of traditional rules of procedure and evidence. Various dimensions of

49
www.ausib.org assessed on 31.12.2013
50
www.ausib.org assessed on 31.12.2013
51
Ibid
52
batteredmale.blogspot.com
53
batteredmale.blogspot.com assessed on 31.08.2013

31
 electronic and software contracts have been emerging, from the ―contracts‖, which, farming
contracts; contract. The study need to study contract law from new perspectives. A variety of
specialized contracts are now in vogue which may not fit in squarely with the existing forms
and model. With the economy growing in unprecedented ways, entrepreneurs have evolved
new practices based on expediency and convenience. Standard form contracts have thus
become a dominant form of commercial transactions. Moreover standard form contracts
have thus become a dominant form of commercial transactions. Moreover modern contract
law has developed itself into specialized branch of law in itself. These modern contracts
have numerical pages of negotiations, they are often complex and hence require detail and
precision. Further, commercial contracts are being negotiated by parties for different
purposes, involving new terms and models to suit their ends.
In such an atmosphere the theoretical understanding of contract law and its practical
orientation need relevance and challenges must be understood in its changing nature of
contract to fulfill the objectives of the existing legislations and make necessary changes if it
requires and examine the new facets of contractual jurisprudence which is still unexplored.
However, in India there is no particular law governing joint venture agreements to deal with
the various legal issues which parties face in a joint venture. The present study highlights the
important legal issues which the parties need to be aware of while drafting such an
agreement. A well-drafted joint venture agreement can go a long way in making it successful.
The present wave of outsourcing transactions has transformed the way many corporations
look at business. Companies that have multiple operations are often found struggling against
smaller, more agile companies that have cut their costs and are pricing products and/or
services lower. In a sense, the concept of growth itself has been redefined, since the new
mantra for companies situated in developed economies is to focus on their ―core
competencies‖ and allow other processes to be outsourced to India and China, essentially
reducing the size of their operations!54 In spite of a substantial decrease in the contribution of
agriculture to the gross domestic product (GDP) of India, agriculture still remains the most
important sector in India‘s economy in terms of creation of employment. Against the
backdrop of this fact, it can be said that the content of arrangements involving the farmer and
another party (i.e., corporate) assumes importance for India as a country. 55 Over a relatively
short period of time, e-contracts have risen to ambiguity and the average computer user enters

54
Id at p.167
55
Id at p.304

32
into several binding E-contracts during transactions, sometimes unwittingly.56 During the
past two decades, the business world has witnessed a technological revolution known as
electronic commerce or e-commerce. This revolution has allowed businesses all over the
world to carry business in ways that could not be dreamt two decades ago. The backbone of
this revolution is development of Internet57.
Today goods and services of varied nature are transacted internationally via internet.
With the fast development of internet, the whole world has become a market where
everything is available on a click of a mouse on your laptop or on your mobile. This online
trading is known as e-commerce and to give validity to e-commerce, a contract is required to
enter into which is named as e-contract.
The United States (the federal of 50 States), where evolved the most developed e-
commerce community, has led the way to the enactment of several laws designed to give
effect to the Model Law. The US legislation which gives primary effect to the Model Law is
the Uniform Electronic Transactions Act (UETA). The US regulates through a mixture of
Federal and State Laws. The regulation of commerce is done by the States laws and the
Federal Government has no right to interfere. However, the interstate commerce, require a
uniform response from the state legislatures which is the foundation of the Uniform
Commercial Code (UCC) providing a common code for sales and leases, commercial paper,
bank deposits, letters of credit and more. UETA is neither a Federal nor State Law but is in
fact simply another model law. It achieved authority through further enactment by State
legislatures. By the year 2003, UETA has been enacted by forty-seven States except for
Alaska, New York and Washington; however, these States have statutes pertaining to
electronic transactions58. In addition UETA has achieved a degree of Federal recognition in §
102(a) of the Electronic Signatures in Global and National Commerce Act, 2000 (E-sign)
which provides State Law to modify, limit or supersede the electronic contracting provisions
of E-Sign under limited conditions. Therefore despite its status as a Model law, it is
reasonable to refer to UETA to deal with electronic contracting in the United States. UCITA
is also a studied in this research, however, the relevancy of this Act for the current research is
limited as this Act deals only with contracts or transactions in ―computer information‖.

56
www.ausib.org assessed on 31.12.2013
57
Ali. Sanayei. "E-Commerce and Security
Governance in Developing Countries",
Communications in Computer and Information Science, 2008
58
www.100megsfree4.com assessed on 21.06.2013

33
Contracts dealing with goods and services which are not related to computer information are
not dealt under this Act59.
United Nations Model Law on E-commerce is the first and foremost law to guide
nations regarding enactment of national laws. The European Union has given recognition to
the Model Law by adopting two key Directives60. The first of these is the Directive on
Electronic Signatures and the second Directive is the E-Commerce Directive. As European
Union is the union of European countries, these Directives also provide the framework within
which European countries are expected to do enactments at national levels, so is for the
England. Within the guidance of Model Law and European Directives, Electronic
Communication Act 2000, Electronic Signature Regulations61, 2002 and Electronic
Commerce (EC Directive) Regulations, 2002 were passed in England. In most legal systems,
a contract is formed through the exchange of offer and acceptance. However, the EU
Commerce Directive under whose guidance Electronic Commerce (EC Directive)
Regulations, 2002 is enacted introduces a third step in contract formation - confirmation in
the form of acknowledgement. This third step is not needed as per the US laws. In India,
Section 12 of Information Technology Act, 2000 also deals with the term
―acknowledgement‖. As e-contract is not restricted to a particular nation, it has crossed the
boundaries decided by the nations, it is also necessary to come at a consensus with regard to
uniformity of laws at international level. Hence, this study also suggests necessary changes in
Indian law to keep pace at the laws made at international level especially in context of US
and England.

1.1 Objectives of the Research

1. The idea to choose such topic for research comes from a realization of the facts that
the existing Indian contract law needs to incorporate newer facets of practices and
issues which confront modern-day contracts.
2. To study the various forms of business Contract Law and analyzes the law applicable
and related to these forms of contract.
3. To examine the impact of economic liberalization on modern forms of business
contracts and growing contractual jurisprudence in Indian context.

59
Supra note 2. Id at p. ix
60
Ibid
61
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 4. Comparison of Indian Contract Law, the US Contract Law, and the UK Contract Law
during the course of research.
5. To study the various definitions of Contract in order to identify the best approach of
understanding the Contract. Law.
6. To evaluate the legal system from 1872 - till date and comparative perspective.
Thus these are some main aims and objectives of this research which are very important for
any research.

1.2 Research Methodology

The methodology is doctrinal. The framework of doctrinal research is to study the
changing dimensions of law of contract in Indian context. Doctrinal research means research
that has been carried out on a legal proposition or propositions by way of analyzing the
existing statutory provisions and cases by applying the reasoning power for the purpose
solving a problem is one of the purposes of the traditional legal research. This has been
achieved by the original sources of law, the Acts of parliament and the acts passed by the
legislatures. It will also include the analysis of various statutes relating to contractual
relationship to find out the existing position. In the doctrinal research the researcher gives due
importance in the whole research process, to the law library and internet, where the legal
scholar tries to locate relevant court decisions, and all encyclopedia and legal periodicals. He
may also take support of the necessary data on the subject.

1.3 Scheme of Chapterization

The first chapter of the present study is introduction which articulates the problem of
study, Changing Concept of Contract-Recent Problems and Issues. It covers the research
methodology, and gives an overview of literature which includes books, articles and various
landmark judgment of Indian courts as well as English courts My study has sought to
highlight the legal complexities encountered in negotiating a concept of contract under Indian
contract 1872, and under post Indian contract Act . My study also highlights the comparative
study of America U.K. and Indian Contract Act. The main problems which have arisen in
contract are of jurisdiction of performance of e contract I have highlighted the cases on each
and every relevant point. The issues addressed here are just a few reminders that are
mandatory to be kept in mind by the various parties while entering into such a contract. The
challenge lies not only in the successful negotiation of the contract but also in avoiding the
legal complications that can arise.
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 The second chapter of the present research is Concept of Contract under Indian
Contract Act, 1872. It covers introduction of Contract Act, 1872, nature of contract, essential
elements of a valid contract- offer, acceptance, consideration, capacity to contract, coercion
fraud misrepresentation, mistake, kinds of contract-valid, voidable, illegal, unenforceable
quasi, bilateral, express, implied etc.
The third chapter of my thesis is Concept of Contract Changes in Present Scenario. It
covers contract, changing in contract law e contract, escrow agreement, joint venture
agreement contract farming, I.T. Act, outsourcing contract public private partnership etc., in
detail.
The fourth chapter of the research work is A Comparative study of contract Law of
India, UK. and America, It covers history of America, India and U.K. Contract law,
formation of contract in America, India and U.K., kinds, of Contract in U.K., America and
India in detail, It also highlights the various kinds of essential elements of a valid contract in
America, India, and U.K in detail.
The fifth chapter of this study deals with Judicial Articulation. It covers the stages of
development of contract through judicial pronouncements of English cases as well as Indian
cases. In this chapter the judicial decisions are categorized in four categories-(1)1872-1900,
(2) (1900-1950), (3)1950-1990, (4)1990-till date. My study on this topic covers all types of
contractual problems e.g. offer, acceptance, consideration, capacity to contract, coercion
undue influence fraud, misrepresentation, mistake, performance of contract etc.
The sixth chapter of this study is Conclusion and Suggestions which gives the brief
description of contractual problems and their solutions.

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