Indian Contract Act 1872

The Indian Contract Act, 1872 was an English statute that codified the general principles of contract law in India by declaring a hierarchical order of priorities among bilateral agreements to govern their interpretation and performance. In the Indian legal system, a contract is an agreement between two or more parties about what each party will do for the other.

What is a Contract?

In layman’s language, a contract is an agreement between two or more parties where the rights and duties of every party to the agreement are mentioned. A contract requires that all the parties to the contract, that is, all the contracting parties, must have consented, and they should have promised to do something or to refrain from doing something. To be valid, a contract requires the mutual consent of both parties to contract.

A person needs an expert lawyer because each type of business has its peculiarities, and one needs a lawyer who has hands-on knowledge of his profession. Moreover, a lawyer helps while making a deal with others. Hence an entrepreneur should hire a professional lawyer who can save time and money in business deals. A contract, in law, is defined as a legally binding agreement between two or more parties where the rights and duties of every party to the agreement are mentioned. A contract requires that all the parties to the contract, that is, all the contracting parties, must have consented, and they should have promised to do something or to refrain from doing something. To be valid, a contract requires both parties’ mutual consent to a contract.

What are the Essentials for a Valid Contract?

A contract is a legally binding agreement between two or more parties where the rights and duties of every party to the agreement are mentioned. A contract requires that all the parties to the contract, that is, all the contracting parties, must have consented, and they should have promised to do something or to refrain from doing something. To be valid, a contract requires both parties’ mutual consent to a contract. Under Section 10 of the Indian Contract Act, 1872 conditions are laid down that are mandatory for a valid contract, which are:

1) Offer: The offer must be clear and distinct. The words of the offer should enable the offeree to have no reasonable doubt as to what the offer is.

2) Acceptance: The acceptance must be using words or conduct, which the offeree cannot misunderstand as an invitation to agree.

3) Consideration: The consideration need not be equal in amount but must be reasonable. The offer and acceptance are equally beneficial to both parties. There would be no possibility of one of those parties suffering a loss without considering the other party.

4) Mutual consent: Offers can only be made by a competent party to agree with others.

5) Certainty as to rights: If a person agrees, he needs to be specific about his rights. This can be ensured by exchanging useful but definite information readily ascertainable by both parties.

6) Non-misrepresentation: Misrepresentation is a false statement in itself. Therefore the parties are obliged to inform each other of their true intentions and not conceal anything which would oblige the other party to enter into the contract since such concealment would lead one party to assume that there is something wrong with the other party’s knowledge and understanding of the contract or its terms.

Breach of a Contract:

1. If a contract is breached by one party, that party is in breach of contract.
2. If the breach is such that it prevents the other contracting party from carrying out his obligations under the contract, then in legal terminology, it is called a fundamental breach and entitles the innocent party to terminate performance, terminate the contract, and claim compensation for any losses suffered.
3. Breach of contract can be defined as a failure by one person to live up to their obligations under an agreement or promise, a violation of duty or trust. Simply put, it can be said that “a breach” occurs when parties fail to fulfill an obligation specified in a written or verbal agreement.

Conclusion

The Indian contract act 1872 pdf notes help students understand the contract idea simply and easily. The Indian Contract Act 1872 pdf is very potent as it is widely discussed and practiced. The Indian contract act 1872 explains an agreement between two or more parties in simple terms. Through this law, we can know parties’ legal obligations towards each other, principles of consent, execution, interpretation, and performance. I hope you have a good time reading this article on Indian contract act 1872 pdf.