CONTRACT 1872 Applies to whole of India except J & K. General Provisions relating to Contracts. There are other laws relating to contracts which are not in syllabus. Allows contracting parties to make rules for themselves. Intervention of the Court of Law can be sought in case the contract is violated. Sale of Goods Act and Partnership Act, was earlier part of the Contract Act, but later on they have been separated.

THE STEPS Promise – Section 2(b) “When a person to whom a proposal is made, signifies his assent thereto, the proposal is said to be accepted. A proposal when accepted becomes a promise “ Agreement – Section 2(e) “ Every promise and every set of promise forming consideration for each other” Contract – Section 2(h) “An agreement enforceable by law” Basic Conditions Offer & Acceptance Mutual Agreement Consideration

ONLY SOME AGREEMENTS ARE CONTRACTS Basic Condition Intention to create legal relationship between the parties must be present to qualify as a Contract Ref : Balfour vs Balfour (1919) Contracts

CONDITIONS OF ENFORCEABILITY Section 10 “All agreements are contracts, if they are made by free consent of parties, competent to contract, for a lawful consideration, and with a lawful object, and are not hereby expressly declared to be void.” Free Consent Capacity to Contract Lawful Consideration Lawful Object Not Void

ESSENTIAL ELEMENTS OF A CONTRACT Offer and Acceptance Mutual Consent Intention to create legal relationship Free Consent Capacity to Contract Lawful Consideration Lawful Object Must not be void Must be certain Must not be impossible Must be in writing and registered when required by the relevant law

ENFORCABILITY-WISE CONTRACTS Valid = enforceable by law Void = not enforceable by law or has ceased to be be enforceable by law Voidable = Can be terminated by one party , but not by the other parties. Unenforceable = Cannot be enforced because of technical defects

FORMATION OF CONTRACTS Expressed = Contract in writing or by words of mouth Implied = Contract by act or conduct of parties Quasi= Contracts without intention ( but based on Equity)

PERFORMANCE OF CONTRACT Unilateral = When one party has already performed his part Bilateral = When both parties have to perform their part Executed = Completely performed by both the parties Executory = Something remains to be performed by one or the other party