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    LAW OFLAW OF

    CONTRACTCONTRACT

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    LESSON OUTLINELESSON OUTLINE

    INTRODUCTIONINTRODUCTION

    ELEMENTS OF A CONTRACT:ELEMENTS OF A CONTRACT:1. Ofer1. Ofer

    2. Acceptance2. Acceptance

    3. Cons!eraton3. Cons!eraton

    ". Capact#". Capact#$. Intenton$. Intenton

    %. Free Consent%. Free Consent

    &. Certant#&. Certant#

    '. (a)! O*+ect'. (a)! O*+ect

    (OID AND ILLE,AL CONTRACT(OID AND ILLE,AL CONTRACT DISC-AR,E OF CONTRACTDISC-AR,E OF CONTRACT REMEDIESREMEDIES

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    INTRODUCTIONINTRODUCTION

    Contract !ene! *#Contract !ene! *# Sec. 2/0Sec. 2/0 an a4ree5ent an a4ree5enten6orcea*)e *# )a7 s a contract8en6orcea*)e *# )a7 s a contract8

    Specc Le4s)aton Specc Le4s)aton Contract Act 19$Contract Act 19$*;t*;t

    En4)s0 )a7 st)) app)ca*)e *#

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    ELEMENTS OF CONTRACTELEMENTS OF CONTRACT

    1. Ofer1. Ofer

    Sec.2 /aSec.2 /a ofer or proposa) 70en a person s4n6# 0s ofer or proposa) 70en a person s4n6# 0s7))n4ness to !o or a*stan 6ro5 !on4 an#t0n4.7))n4ness to !o or a*stan 6ro5 !on4 an#t0n4.

    @roposa) or ofer so5et0n4 70c0 s capa*)e o6 *en4@roposa) or ofer so5et0n4 70c0 s capa*)e o6 *en4con

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    To *e an ofer> t0e oferor 5;st not 5ere)#To *e an ofer> t0e oferor 5;st not 5ere)#

    6ee)n4 0s 7a# to7ar!s an a4ree5ent 6 t0at6ee)n4 0s 7a# to7ar!s an a4ree5ent 6 t0at

    s t0e case> t0en t s not ofer *;t s ans t0e case> t0en t s not ofer *;t s an

    n

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    2. Acceptance2. Acceptance

    Sec.2 /*Sec.2 /* 70en t0e person to 70o5 t0e proposa) s 5a!e 70en t0e person to 70o5 t0e proposa) s 5a!es4n6# 0s assent t0ereto.s4n6# 0s assent t0ereto.

    Acceptance can *e e=presse! or 5p)e! /n6erre! 6ro5Acceptance can *e e=presse! or 5p)e! /n6erre! 6ro5con!;ctcon!;ct Acceptance 5;st *e accepte! on e=act)# t0e sa5e ter5s asAcceptance 5;st *e accepte! on e=act)# t0e sa5e ter5s as

    t0e proposa) 7t0o;t an#

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    Ter5naton o6 oferTer5naton o6 ofer

    Re

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    3. Intenton To Create Le4a) Re)aton3. Intenton To Create Le4a) Re)aton

    Not pro 6or e.4 :

    acceptance to a !nneracceptance to a !nner

    acceptance to an ofer to p)a# a 4a5e o6 socceracceptance to an ofer to p)a# a 4a5e o6 soccer

    acceptance o6 an ofer to pa# 6or 0a)6 o6 t0e petro) costacceptance o6 an ofer to pa# 6or 0a)6 o6 t0e petro) cost

    T0;s partes to a transacton 5a# state t0at t0e# !o notT0;s partes to a transacton 5a# state t0at t0e# !o not

    nten! to enter nto an# *n!n4 o*)4aton.nten! to enter nto an# *n!n4 o*)4aton.

    Intenton s partc;)ar)# re)e

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    ". Cons!eraton". Cons!eraton

    Sec.2%Sec.2% as a 4enera) r;)e a4ree5ent 7t0o;t cons!eraton as a 4enera) r;)e a4ree5ent 7t0o;t cons!eratons

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    $.$.Certant#Certant# T0e ter5s o6 an a4ree5ent cannot *e

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    %.%. Capact#Capact# @artes to a contract s0o;)! *e co5petent to contract> .e@artes to a contract s0o;)! *e co5petent to contract> .e

    0a

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    @RI(ITK OF CONTRACT@RI(ITK OF CONTRACT A6ter a or *o;n! *# t.

    Contract cannot con6er r40ts on t0r! part#Contract cannot con6er r40ts on t0r! part# @rce@rce

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    CONTENTS OF A CONTRACTCONTENTS OF A CONTRACT1. E=press an! I5p)e! Ter5s1. E=press an! I5p)e! Ter5s

    Contents 5a!e ;p o6 ter5s Contents 5a!e ;p o6 ter5s

    e=presse! or 5p)e!e=presse! or 5p)e!

    1. E=press ter5s1. E=press ter5s 0as *een specca))# a4ree! ;pon *# t0e 0as *een specca))# a4ree! ;pon *# t0epartes ora))#> n 7rtn4 or *ot0.partes ora))#> n 7rtn4 or *ot0. E=press ter5s are stra40t6or7ar! an! can *e !ente! +;stE=press ter5s are stra40t6or7ar! an! can *e !ente! +;st

    *# )oon4 at t0e contract !oc;5ent.*# )oon4 at t0e contract !oc;5ent.

    2. I5p)e! ter5s2. I5p)e! ter5s ter5 t0at s rea! nto t0e contract *# t0e ter5 t0at s rea! nto t0e contract *# t0eco;rt.co;rt.

    For5 an nte4ra) part o6 t0e contract t0o;40 not e=press)#For5 an nte4ra) part o6 t0e contract t0o;40 not e=press)#pro

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    3. T0e co;rts > *ase! *# t0e ntenton o6 t0e partes3. T0e co;rts > *ase! *# t0e ntenton o6 t0e partes Cases:Cases:

    Kon4 Un4 HaKon4 Un4 Ha

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    3. E=e5pton C)a;se3. E=e5pton C)a;se Dene! as Dene! as a term of a contract that attempts either toa term of a contract that attempts either to

    modifymodifythe principal obligations! arising out of the contractthe principal obligations! arising out of the contractor toor to limit " e#cludelimit " e#cludethe liability of a party which wouldthe liability of a party which would

    otherwise arise as a result of a breach by that party$.otherwise arise as a result of a breach by that party$. Co55on n stan!ar! contract t0e operaton o6 70c0Co55on n stan!ar! contract t0e operaton o6 70c0

    !epen!s on t0e constr;cton o6 t0e contract.!epen!s on t0e constr;cton o6 t0e contract. In case o6 !sp;tes co;rt 7)) nterpret In case o6 !sp;tes co;rt 7)) nterpret contracontra

    pro6erent;5.pro6erent;5. I6 t0e c)a;se s a5*4;o;s 7)) *e nterprete! to t0eI6 t0e c)a;se s a5*4;o;s 7)) *e nterprete! to t0e

    !sa!

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    Free ConsentFree Consent

    Sec 1Sec 1o6 Contract Act a4ree5ents areo6 Contract Act a4ree5ents are

    contracts 6 t0e# are 5a!e *# t0e 6ree consent o6contracts 6 t0e# are 5a!e *# t0e 6ree consent o6t0e partes.t0e partes.

    Sec 1"Sec 1" consent s 6ree 70en not ca;se! *# one consent s 6ree 70en not ca;se! *# oneor 5ore o6 t0e 6o))o7n4:or 5ore o6 t0e 6o))o7n4:

    1. Coercon1. Coercon Sec 1$Sec 1$

    2. Un!;e n?;ence2. Un!;e n?;ence Sec 1%Sec 1%

    3. Fra;!3. Fra;! Sec 1&Sec 1&

    ". Msrepresentaton". Msrepresentaton Sec 1'Sec 1'

    $. Mstae$. Mstae Sec 21> 22 an! 23Sec 21> 22 an! 23

    (o!(o! a4ree5ent t0at )acs an# )e4a) efect 6ro5 a4ree5ent t0at )acs an# )e4a) efect 6ro5t0e *e4nnn4

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    1. Coercon.1. Coercon. Coercon !ene! as Coercon !ene! as committing or threatening tocommitting or threatening to

    commit any act forbidden by the %enal &ode, or thecommit any act forbidden by the %enal &ode, or the

    unlawful detaining of any person " property with theunlawful detaining of any person " property with theintention of causing any person to enter into anintention of causing any person to enter into an

    agreement.agreement.

    Hesar5a)Hesar5a)

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    2. Un!;e In?;ence2. Un!;e In?;ence E=st 70en E=st 70en the relations subsisting between the parties arethe relations subsisting between the parties are

    such that one of the parties is in the position tosuch that one of the parties is in the position to dominate thedominate thewillwillof the other and uses that position toof the other and uses that position to obtain an unfairobtain an unfair

    advantageadvantageover the other.over the other. T0ere6ore t0e e)e5ents o6 ;n!;e n?;ence:T0ere6ore t0e e)e5ents o6 ;n!;e n?;ence: @oston to !o5nate@oston to !o5nate Use t0at poston to o*tan ;n6ar a!

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    3. Fra;!3. Fra;! Sec 1&Sec 1& F

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    ". Msrepresentaton.". Msrepresentaton.

    Msrepresentaton re6er to certan 6a)se state5ent o6Msrepresentaton re6er to certan 6a)se state5ent o6e=stn4 or past 6act 5a!e *# a person *e6ore or at t0ee=stn4 or past 6act 5a!e *# a person *e6ore or at t0et5e o6 5an4 t0e contract 70c0 n!;ces a part# to entert5e o6 5an4 t0e contract 70c0 n!;ces a part# to enternto a contract.nto a contract.

    Basc !ference *et7een 5srepresentaton an! 6ra;! sBasc !ference *et7een 5srepresentaton an! 6ra;! st0at n 6ra;! t0e person 5an4 t0e representaton !oest0at n 6ra;! t0e person 5an4 t0e representaton !oesnot 05se)6 *e)e

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    $. Mstae$. Mstae

    Sec. 21Sec. 21o6 t0e Contract Act o6 t0e Contract Act wherewhere both the partiesboth the partiesunderunder

    the agreement are under a mista'e as to a matter ofthe agreement are under a mista'e as to a matter of factfactessentialessentialto the agreement, the agreement is void (to the agreement, the agreement is void ( 6or )ac6or )aco6 6ree consent.o6 6ree consent.

    Sec 22Sec 22 5stae as to t0e )a7 contract not *;t 6 t0e )a7not n 6orce n Ma)a#sa )e 5stae o6 6act.not n 6orce n Ma)a#sa )e 5stae o6 6act.

    Sec 23Sec 23 5stae as to one part# /;n)atera) contract 5stae as to one part# /;n)atera) contracts

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    (OID AND ILLE,AL(OID AND ILLE,ALCONTRACTCONTRACT

    Sec 2 /4Sec 2 /4 Contract 70c0 s not Contract 70c0 s not

    en6orcea*)e *# )a7.en6orcea*)e *# )a7.Sec 2"Sec 2"Contract 7t0 ;n)a76;)Contract 7t0 ;n)a76;)

    cons!eraton o*+ect s

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    T0ere are a)soT0ere are a)so Sec 2$ to Sec 31Sec 2$ to Sec 3170c0 pro

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    Conse;ence O6 (o! An! I))e4a) Contract.Conse;ence O6 (o! An! I))e4a) Contract. ,enera) r;)e ;n!er CA ,enera) r;)e ;n!er CA e# turpi causa none# turpi causa non

    oritur actiooritur actio no acton 7)) arse 6ro5 a 7ron4 no acton 7)) arse 6ro5 a 7ron4

    !one.!one. Contracts ;n!er sec 2&> 2' an! 29 not 2' an! 29 not

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    DISC-AR,E OF CONTRACTDISC-AR,E OF CONTRACT Contract s !sc0ar4e! 70en t s ter5nate! n one o6Contract s !sc0ar4e! 70en t s ter5nate! n one o6

    t0ese 7a#s:t0ese 7a#s:1. B# per6or5ance.1. B# per6or5ance.

    2. B# consent or a4ree5ent *et7een t0e partes2. B# consent or a4ree5ent *et7een t0e partes

    3. B# 5poss*)t# /6r;straton3. B# 5poss*)t# /6r;straton

    ". B# *reac0.". B# *reac0.

    1.B# @er6or5ance.1.B# @er6or5ance. @er6or5ance 5;st *e strct)# n accor!ance 7t0 ter5s o6@er6or5ance 5;st *e strct)# n accor!ance 7t0 ter5s o6

    t0e contract.t0e contract. Sec 3' /1Sec 3' /1 partes to a contract 5;st et0er per6or5 or partes to a contract 5;st et0er per6or5 or

    ofer to per6or5 t0er respect

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    2. B# Consent or A4ree5ent.2. B# Consent or A4ree5ent. Contract create! *# consent can *e e=tn4;s0e!Contract create! *# consent can *e e=tn4;s0e!

    *# consent et0er e=press or 5p)e!.*# consent et0er e=press or 5p)e!.

    E=press consent 5a# *e 4

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    3. B# I5poss*)t# Fr;straton.3. B# I5poss*)t# Fr;straton. T7o cate4ores o6 5poss*)t# o6 contractT7o cate4ores o6 5poss*)t# o6 contract W0en 5poss*)t# s at t0e t5e o6 5an4 t0e contract anW0en 5poss*)t# s at t0e t5e o6 5an4 t0e contract an

    a4ree5ent to !o an act 5poss*)e n tse)6 s nc);!n4 70et0er t s se)6 n!;ce!or not.or not.

    A contract 5a# *e !sc0ar4e! n an# o6 t0e 6o))o7n4A contract 5a# *e !sc0ar4e! n an# o6 t0e 6o))o7n4crc;5stances:crc;5stances:1. Destr;cton o6 t0e s;*+ect 5atter 1. Destr;cton o6 t0e s;*+ect 5atter Ta#)orTa#)or

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    ". B# Breac0". B# Breac0 Sec "Sec " )hen a party to a contract has refused to)hen a party to a contract has refused to

    perform, or disabled himself from performing, hisperform, or disabled himself from performing, hispromise in its entirety, the promisee to the contract,promise in its entirety, the promisee to the contract,

    unless he has signied, by words or conduct, hisunless he has signied, by words or conduct, hisacquiescence in its continuance.acquiescence in its continuance.

    @art# not n *reac0 0as t0e opton o6@art# not n *reac0 0as t0e opton o6contn;n4 7t0 t0e contract an! c)a5contn;n4 7t0 t0e contract an! c)a5!a5a4es or rep;!ate t0e contract.!a5a4es or rep;!ate t0e contract.

    Sec %$Sec %$ when a person at whose option a contract iswhen a person at whose option a contract isvoidable rescinds it, the other thereto need not performvoidable rescinds it, the other thereto need not performany promise therein contained in which he is promisor.any promise therein contained in which he is promisor.*he party rescinding a voidable contract shall, if he has*he party rescinding a voidable contract shall, if he hasreceived any benet thereunder from another party toreceived any benet thereunder from another party tosuch contract, restore the benet, so far as may be, tosuch contract, restore the benet, so far as may be, tothe person from whom it was received.the person from whom it was received.

    Cases :Cases : C0oo Kn LooC0oo Kn Loo

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    REMEDIESREMEDIES T0ere are se

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    I));stratons toI));stratons to sec&"sec&" a)so n!cate t0at t0e a44re 6or t0e !ference *t7 t0e prce o6 4oo!s as6or t0e !ference *t7 t0e prce o6 4oo!s ascontracte! 6or an! t0e act;a) prce t0e 4oo!s 7erecontracte! 6or an! t0e act;a) prce t0e 4oo!s 7ereso)! 6or as res;)t o6 t0e *reac0.so)! 6or as res;)t o6 t0e *reac0.

    Sec &$Sec &$ )hen a contract has been bro'en, if a sum is)hen a contract has been bro'en, if a sum is

    named in the contract as the amount to be paid in casenamed in the contract as the amount to be paid in caseof such breach$or any other stipulation by way ofof such breach$or any other stipulation by way ofpenalty$the party complaining of the breach is entitledpenalty$the party complaining of the breach is entitledto receive$reasonable compensation not e#ceeding theto receive$reasonable compensation not e#ceeding thesum named or the penalty stipulated for.sum named or the penalty stipulated for.

    T0e efect o6 =n4 t0e s;5 to !eter5ne t0e ;pperT0e efect o6 =n4 t0e s;5 to !eter5ne t0e ;pper

    )5t o6 co5pensaton.)5t o6 co5pensaton. Ne part# seen4 !a5a4es s a)so ;n!er t0eNe part# seen4 !a5a4es s a)so ;n!er t0e!;t# to 5t4ate t0e )oss !;t# to 5t4ate t0e )oss Ha*atasan T5*er E=tractonHa*atasan T5*er E=tractonCo.Co.

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    3. Specc Re)e6.3. Specc Re)e6. T0e Specc Re)e6 Act pro

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    ". In+;ncton.". In+;ncton. An e;ta*)e re5e!# t0at can *e

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    Thats All Folks!Thats All Folks!