Meaning of contract and other definitions under Indian contract Act 1872

Meaning of contract and other definitions under Indian contract Act 1872

The Indian Contract Act, 1872 defines the term “Contract” under its section 2 (h) as “An agreement enforceable by law”. In other words, we will say that a contract is anything that’s an agreement and enforceable by the law of the land.
This definition has two major elements in it viz-“agreement” and “enforceable by law”. So so as to know a accept the sunshine of The Indian Contract Act, 1872 we’d like to define and explain these two pivots within the definition of a contract.

Agreement

In section 2 (e), the Act defines the term agreement as “every promise and each set of promises, forming the consideration for every other”.
Now that we all know how the Act defines the term “agreement”, there could also be some ambiguity within the definition of the term promise.

Promise

The Act in its section 2(b) defines the term “promise” here as: “when the person to whom the proposal is made signifies his assent thereto, the proposal becomes an accepted proposal. A proposal when accepted, becomes a promise”.
In other words, an agreement is an accepted promise, accepted by all the parties involved within the agreement or suffering from it.
This definition says that so as to determine or draft a contract, we’d like to initiate some steps:

The definition requires an individual to whom a particular proposal is formed .
The person (parties)

in the first step has got to be during a position to completely understand all the aspects of a proposal.
“signifies his assent thereto” – means the person in point one accepts or agrees with the proposal after having fully understood it.Once the “person” accepts the proposal, the status of the “proposal” changes to “accepted proposal”.
“accepted proposal” becomes a promise. Note that the proposal is not a promise. For the proposal to become a promise, it’s to be an accepted proposal.

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To sum up, we will represent the above information below:
Agreement = Offer + Acceptance.

Enforceable By Law

Now allow us to attempt to understand this aspect of the definition as is present within the Act. Suppose you comply with sell a motorcycle for 30,000 bucks with a lover . Can you have a contract for this?

Well if you follow the steps within the previous section, you’ll argue that when you and your friend agree on the promise, it becomes an agreement. But so as to be a contract as per the definition of the Act, the agreement has got to be legally enforceable.

Thus we will say that for an agreement to vary into a Contract as per the Act, it must produce to or cause legal obligations. In other words, must be within the scope of the law. Thus we’ll summarize it as Contract = Accepted Proposal (Agreement) + Enforceable by law (defined within the law)

Contract : an agreement between two private parties that makes mutual legal obligations. A contract can be either oral or written. However, oral contracts are tougher to enforce and will be avoided, if possible. Some contracts must be written so as to be valid, like contracts that involve a big amount of cash (over ₹500). Contracts are a part of everyday dealings altogether aspects of life. Therefore, it is crucial to understand the rules governing them to ensure you have a valid contract.

All valid contracts must include the following elements to be enforced:

An offer (I will pay you ₹1,000 for 1,000 cupcakes);
And acceptance of the offer presented with (Other person accepts ₹1,000 for 1,000 cupcakes);
A promise to perform (Other person says they’re going to perform);
A valuable consideration (₹1,000);
A time or an event of when the performance must be made (1,000 cupcakes exactly 2 weeks from now);
Terms and conditions for the performance (The cupcakes must be chocolate and have vanilla frosting); and Performance (The 1,000 cupcakes are delivered and the person is paid ₹1,000).
On top of that, the courts won’t enforce certain contracts unless they’re in writing. These contracts fall under the Statute of Frauds and must be in writing. They include marriage contracts, contracts to not be performed within one year, interest in land contracts, paying decedent’s debt guarantees, and sale of products contracts over a selected amount.

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Most contracts are governed by the state statues and thus it’s important to think about the local laws when handling a contract issue.

Important Terminologies –

Agreement – Section 2(e) defines agreement. An agreement results when two minds meet upon a standard purpose. They comply with an equivalent thing within the same sense. Section 2(e) defines the term agreement as “every promise and each set of promise, forming the consideration for every other.” An agreement only happens when there’s a suggestion by one party and acceptance by the opposite party. Therefore, offer + acceptance = agreement.

Offer – Section 2(a) defines the term offer or proposal as, “When one party signifies to a special his willingness to undertake to to or to abstain from doing anything, to get the assent of that other to such act or abstinence, he’s said to propose.” Offer is that the initiative for agreeing. An offer are often made to an individual or the general public at large, referred to as general offers.

Acceptance – When the person to whom the offer is formed signifies his assent for an equivalent , then the offer is claimed to be accepted. Section 2(b) defines the same.

Promise – Offer + Acceptance = Promise. So, when the offer is accepted, it becomes a promise. Section 2(b) defines the same.

Consideration – Consideration refers to getting “something reciprocally .” In India, consideration are often past, present or future. A contract without consideration is void. The consideration must be lawful and real, and it needn’t be adequate.

Free Consent – A contract can only be made when there’s free consent between the parties. A contract without free consent is voidable, and a contract without consent is void. A contract possesses to be freed from coercion, undue influence, fraud, misrepresentation or mistake.

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Contract of Indemnity – A contract of indemnity may be a contract wherein, one party promises to guard the opposite party from causing loss to him by the conduct of the promisor himself, or by the conduct of the opposite person.

Bailment – Bailment refers to transactions whereby one person delivers goods to the opposite for a few purpose based upon a contract that they’re when the aim is accomplished to be returned or otherwise disposed of consistent with the directions of the person delivering them.

Classification of Contracts –

Contracts are often classified into three broad branches –

Based on Enforceability –

  • Contract
  • Voidable agreement
  • Void Agreement
  • Agreement
  • Illegal agreement
  • Voidable contract

2. supported formation –

  • Express contract
  • Tacit contract
  • Implied/Quasi contract

3. supported performance –

  • Executed contract
  • Executory contract

a) agreement
b) contract.

Author: Pragya Sinha,
Symbiosis law college,nagpur . 1st year

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