Law of Contract
LAW OF CONTRACT
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Introduction
·
Every agreement and promise enforceable at
law is called a Contract
·
Enforceability of an
agreement means that it is recognized by the court and create legal obligations
between the parties
·
Contract = Agreement
+ Enforceability
·
Agreement = Offer +
Acceptance
Essentials
of a Valid Contract
·
Offer & Acceptance
o
Abdulla refers to sell his helicopter to
Simran for Rs 50000000, This is an offer
o
If Simran accepts this offer there is an acceptance
·
Legal Obligation
o
If one party does not fulfil his promise, he
shall be liable for of contract
·
Lawful Consideration
o
Something given and taken is called
consideration
o
Abdulla promise to sell his car to Simran for
Rs 500000
o
For Abdulla Rs 500000is consideration and for
Simran car is the consideration
·
Capacity of Parties
o
An agreement is enforceable if it is made by
the parties who are competent for the contract
·
Free Consent
o
Consent of parties must be free and not
obtained by
§ Force
§ Fraud
§ Undue Influence
·
Lawful Objects
o
The object of the contract must not be
§ Illegal
§ Immoral
§ Opposed to public policy
·
Written
o
The contract must be in written format for
the clarity of obligations of both the parties
·
Certainty of Terms
o
Terms and conditions of the contract must be
§ Clear
§ Complete
§ Certain
·
Possibility of Performance
o
Contract must be capable of being performed
o
Abdulla agrees with Simran to discover the
treasure of ALI BABA by magic, this agreement is not enforceable
Types
of Contract
1. According to
Enforceability
a. Valid Contract (Enforceable by law)
b. Void Contract (Not enforceable by law)
c. Void Agreement (Agreement not enforceable by law)
d. Unenforceable Contract (Contract which cannot be enforced
in a court because of some technical defect & faults such as absence of
writing, stamp, registration etc.)
e. Illegal Agreement (When its performance is forbidden by
any law)
2. According to Formation
a. Express Contract (Expressed in words)
b. Implied Contract (Arise from conduct of parties (Abdulla
went to a restaurant and had a cup of tea. It is implied that Abdulla will pay
for the Tea)
c. Quasi Contract (Law imposes under some special
circumstances)
3. According to Performance
a. Executed (When both parties have completely performed
their obligations)
b. Executory (Something remains to be done)
4. According to
Parties
a. Unilateral (Only one party has commitment)
b. Bilateral (Both parties are bounded to perform their duties)
Discharge
Modes of a Contract
·
By Performance
·
By Mutual Agreement
·
By Impossibility of Performance
·
By Operation of Law
·
By Breach
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