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Kinds Of Contract Valid Contract Voidable Contract Void Contract Contingent Contract Unenforceable Contract Executed Contract Executory Contract Express Contract Implied Contract Quasi Contract
Legal formalities
Certainty and possibility of performance
Intention to create legal relations
Enforceability by law
Offer / Proposal
When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence he is said to have made a proposal.
Promisor / Promisee
The person making an offer or proposal is called offerer or proposer . sec 2(c) calls such a person making the proposal the promisor. The person who accepts the proposal is called the promisee.
Essential of valid offer
Express or ImpliedMust contemplate to give rise to legal
consequences and capable of creating legal relations
Certain not loose or vague Invitation to offer is not an offer
May be general or specificMust be communicated to the offereeCan be made subject to any terms and
conditionsShould not contain term the non
compliance of which amount to acceptance
two identical cross offers do not constitute a contract
Lapse of offer
not accepted in the mode specified after a stipulated or a reasonable timeby revocation- before the expiry of time,
offeree fails to perform certain conditions, death, insanity
illegality or destruction of the subject matter
by rejection
Acceptance
Sec2(b)when a person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted.
Essentials of a valid acceptance
must not be qualifiedexpress or impliedmust be communicated to the offeroracceptance cannot precede offermust be made within a reasonable timeacceptance cannot be implied from silence
Consideration
Consideration is the price for which the promise of the other party is brought.
Benefit to one party and detriment to another.
Agreement without consideration is void .
Essentials of Valid Consideration
An act to do something or abstinence of doing something
Past present or futureReal not illusoryMove at the desire of the promisorMove from any personNeed not be adequateValuable in the eyes of law.
Exceptions
Agreement on account of love and affection
Promise to compensate past voluntary services.
Promise to pay time barred debt- fresh agreement is made without consideration
AgencyGift
Free Consent
Consent is not freewhen it is obtained byCoercionUndue influenceFraud MisrepresentationMistake
Competent Parties
Following are NOT Competent PartiesMinorsPersons of unsound mind Idiots Lunatics Drunkards Persons expressly disqualified by law
Legality Of Object
It must not be forbidden by law It should not defeat the purposes of law It should not be fraudulent It should not be something which causes
injury to person or property It should not be immoral or opposed to
public policy.
Void Agreements
Expressly declared void agreementsAgreements in restraint of marriageAgreements in restraint of TradeAgreements in restraint of Legal
ProceedingsAgreements the meaning of which is
uncertain
Agreements by way of wagerAgreements contingent on impossible
eventsAgreements to do impossible acts
Wagering Agreement
One party promises to pay money or money’s worth on happening of some uncertain event and the other party has to pay if the event does not happen.
There are reciprocal promises always. Future event is the sole determining factor. Parties have no interest in the subject matter It is a game of chance Parties do not intend to perform the contract.
Contingent Contract It is a contract to do something if the event collateral to the contract does or does not
happen.
The future event is collateral.
Parties to the contingent contract have interest in the subject matter.
They intend to perform the contract.
Quasi Contract
Obligation created by law Implied contractsTypes Claim for supply of neccesitiesReimbursement of money paidObligation of person to pay for enjoying
benefit of non – gratuitous actFinder of goods
Discharge Of Contract By performance By death By refusing tender of performance By breach of contract By impossibility of performance By agreement novation accord / satisfaction remission recession By promisee failing to offer facilities By operation of law insolvency merger By unauthorised material alteration By lapse of time
Remedies For Breach Of Contract
Suit for specific performance
Suit for injunction
Suit for damages
Quantum Merit
Rules For Ascertaining Damages
1] When a contract is broken the aggrieved party is entitled to receive compensation for loss or damages
2]No compensation for any remote and indirect loss
3]Party suffering must have taken steps to minimize the loss
Contract Of Indemnity
A contract of indemnity is a contract by which one party promises to save the other from a loss caused to him by the conduct of the promisor himself or by the conduct of any other person
Rights of indemnity holder
Suit for damages.
Claim for cost.
Other sums
Suit for specific performance
Agency
An agent is a person employed to do an act for another or to represent another in dealing with third person.
The person so represented is called as the principal.
The person who represents is called as an agent.
Agent
Any person of sound can be an agent.
A minor can be an agent, but minors are not personally liable.
An agent is not a servant as a servant is told what to work and how to work. But an agent is not.
Test of Agency
Whether a person can bind another person by his acts
Whether a person can establish privity of contract
Creation of an Agency
By agreementExpress , ImpliedBy necessity By estoppel or holding outBy operation of lawBy ratification
Types of Agents
Specific AgentGeneral AgentMercantile Agent Broker Commission Agent Factor Auctioneer Del-Credere Agent
Duties Of Agent
Proper conduct of business. Render proper accounts. Pay the sums to the principal. Communicate and inform . Not to deal on own account. Proper use of information. No secret profits or adverse title. Not to delegate. Name sub agent & liable for his acts.
Rights of Agent.
Retainer .Remuneration.Lien. Indemnity.Compensation .Renounce agency.Emergency decision making.
Agent Personally Liable Principal is a : foreigner . undisclosed . cannot be sued. Agent makes himself expressly liable.Agency coupled with interest.Usage and custom.Agent acts beyond authorityPretending agent.Responsible for fraud or misrepresentation.
Duties of Principal
Indemnify the agent.Compensate the agent for any loss or
injury caused.Pay remunerationLiable for acts of agents to the third party.Give notice to the agent.