Contracts General

CONTRCTS
General
The Indian Contract, 1872 & The Specific Relief Act, 1963.
 The Indian Contract, 1872 - Sections 1 to 75 . (ICA – Common Law)
 The Specific Relief Act, 1963. Sections 1 to 42 .( Equity Law)
 Indian Contract Act 1872. - Frame work of the Act
Rules regarding Performance of Contract Discharge of contracts

Ch I: Offer and Acceptance (including Ch IV: Secs. 37 to 67: -
Principles of revocation) Performance of contracts
Ch II: Secs. 10 to 30: Ch V Secs. 68 to 72: -
Remaining essentials: (Statutory) Quasi Contracts
i. Capacity of Parties. Ch VI: Secs. 73 to 75 -
ii. Consensus –ad-idem Law relating to
iii. Consideration consequences of
iv. Lawful Object. breach of
Ch III: Secs.31 to 36: Contingent contracts. Obligations.
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The Indian Contract, 1872 & The Specific Relief Act, 1963
(Contd.)
• Meaning of Common Law: Common Law represents that body of
unwritten law which arose out of conventions and usages in England and
which had obtained the approval of Common Law Courts in England in
contra distinction with Equity Courts, which established principles of
Equity.
2 eyes to study a Statute
 First eye: Object of the Act.
 Second Eye: Application of the principle of semantics.
Object of the ICA: Based on a Latin Maxim:
“Certum Est Quod Certum Reddi Potest” That which is certain can be made
certain.\
Classification of Laws:
S: Substantive Laws: Principles on a given subject-matter.
W: Welfare Laws: Laws providing welfare to the people or society
A: Adjectival Laws: Procedural Laws – Rules for the enforcement.
P: Pecuniary Laws: Laws that bring forth revenue to the Government.
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The Indian Contract, 1872 & The Specific Relief Act, 1963 (Contd.)
Definitions of the term Contract:
1. Halsbury’s Laws of England: “A contract is an agreement made
between two or more persons is intended to be enforceable by law and is
constituted by the acceptance by one party of an offer made to him by the
other party to do or to abstain from doing an act”.
2. The American Restatement of Law of Contract: “ A contract is a set
of promise/s for the breach of which the law gives a remedy, or the
performance of which the law in some way recognizes as a duty”.
3. Pollock and Mulla: “The Law of contract may be described as the
endeavor of the public authority, a more or less imperfect one by the
nature of the case to establish a positive sanction for the expression of
good faith which has grown up in the mutual dealings of men of average
right-mindedness”.
4. Sir William Anson: “The Law of Contract may be defined as that
branch of the law which determines the circumstances in which a
promise shall be legally binding”
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Definitions of the term Contract: (Contd.)

5. Sir John Salmond: “The Law of Contract is one which creates and
defines obligations between the parties”.
6. ICA: Statutory Definition: Section 2 (h): “An agreement
enforceable by law is a contract”.
Analysis of the above definitions:
• Each definition brings out some essentials that may be found in a
contract.
• Hence there is no one definition which gives out all the essentials to be
found in a valid contract.
• However, the statutory definition appears to be built upon a succession
of the definitions of the elements that make a contract.
• But the various definitions give rise to axiomatic questions the answers
to which provide a picture regarding formation of a valid contract.
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Axiomatic questions: are those questions/statements which are
capable of acceptance without any proof. These have the following
characteristics: 1) commands universal acceptance; 2) requires no test
in a laboratory & 3) no demonstration is required.
AXIOMATIC QUESTIONS IN LAW OF CONTRACT:
 “ All contracts are agreements while all agreements are not”
 “ The law of contract, observes Salmond, is not the whole law of
obligations nor is it the whole law of agreements”
 “Consensus” i.e., mutual assent, however elusive in practice, is at
the root of the contract”.
Against the backdrop of these questions the Statutory definition in
Section 2 (h) of ICA.
Based on the statutory definition various types of contracts which are
to be analyzed since what arises from a contract is ‘contractual
obligations’. As it is there is no such term ’contract’ in its noun form.
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Types of Contracts:
1) VALID CONTRACT: possessing all the ingredients and having

the force of law
2) VOID AGREEMENT: nullity in the eyes of law.
3) VOIDABLE CONTRACT: Ostensibly valid contract and can be set

aside at the option of either of the
parties to the contract and not at the
instance of other/s.
4) ILLEGAL AGREEMENTS: contrary to the provisions of law and

hence incapable of enforcement.
5) UNENFORCEABLE though fulfilling the essentials of a valid

CONTRACT: contract, ceases to be enforceable for
want of technical requirements.
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SIGNIFICANCE OF VALID CONTRACT:

 Valid Contract (VC) = ?
= Ag. + OAC3L/LB.
= Vinculum Juris (VJ) – Legal tie or bond.
EXPANSION OF OA C3 L/LB: INGREDIENTS OF A VALID
CONTRACT.
 General ingredients: O : Offer
A : Acceptance
C-1: Capacity of parties
 Statutory ingredients: C-2: Consideration
C-3: Consensus-ad-idem
L : Legality of object
LB: Legal Bar
 Validity is to be infused into each one of the ingredients so that the
contract that may result in between the parties will be valid one.
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CONTRCTS

Rules regarding Performance of Contract Discharge of contracts

Definitions of the term Contract: (Contd.)

1) VALID CONTRACT: possessing all the ingredients and having

3) VOIDABLE CONTRACT: Ostensibly valid contract and can be set

4) ILLEGAL AGREEMENTS: contrary to the provisions of law and

5) UNENFORCEABLE though fulfilling the essentials of a valid

SIGNIFICANCE OF VALID CONTRACT:

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