CASE<\/strong> There was an agreement between R & Co. And C & Co. By means of which the former was appointed as the agent of the latter. One clause in the agreement was \u201cthis agreement is not entered into a formal or legal agreement, and shall not be subject to legal jurisdiction in the law courts.\u201d Held, there was no binding contract as there was no intention to create legal relationship. <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n Thus, the legal relationship is created in commercial contracts not in case of social agreements.<\/p>\n\n\n\n - LAWFUL CONSIDERATION:<\/strong> The agreement must be supported by consideration. Consideration refers to something in return i.e. \u2018quid pro quo\u2019<\/em><\/strong><\/li><\/ul>\n\n\n\n
ACCORDING\nTO BLACKSTONE<\/strong><\/p>\n\n\n\n\u201cConsideration is\nrecompense given by the party contracting to another\u201d<\/p>\n\n\n\n ACCORDING\nTO POLLOCK<\/strong><\/p>\n\n\n\n\u201cConsideration is the\nprice for which the promise of another is brought.\u201d<\/p>\n\n\n\n Consideration<\/p>\n\n\n\n - Must move at the desire of the promisor<\/li>
- Need not to be adequate\/ sufficient<\/li>
- Must not be illegal, immoral and opposed to the public policy<\/li>
- Must be real not illusory.<\/li><\/ol>\n\n\n\n
A promise to do or to give something without anything in return is invalid as it would not be enforceable at law.<\/p>\n\n\n\n - CAPACITY OF PARTIES:<\/strong> The parties to agreement must be competent to contract. It means, they must be capable of entering into the contract.<\/li><\/ul>\n\n\n\n
Section 11 of the Indian Contract Act 1872 states that<\/p>\n\n\n\n \u201cEvery person is\ncompetent to contract who is of age of majority according to the law to which\nhe is subject to and who is of sound mind and is not disqualified from\ncontracting b and law to which he is subject.\u201d<\/p>\n\n\n\n EXAMPLE<\/strong> Parthiv, a minor borrowed a sum of \u20b91,00,000 from Sachin, a major. Held, Sachin could not recover the sum lent since it was not a valid contract as Parthiv was not competent to contract. <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n- FREE CONSENT: <\/strong>“Consent” means the parties must have agreed upon the same thing in the same sense. This is called consensus ad idem<\/em><\/strong> in English law.<\/li><\/ul>\n\n\n\n
According to Section 14 of Indian Contract Act 1872<\/strong><\/p>\n\n\n\nConsent is said to be\nfree if it is not created by:<\/p>\n\n\n\n - Coercion<\/li>
- Undue influence<\/li>
- Mistake<\/li>
- Misrepresentation<\/li>
- Fraud <\/li><\/ol>\n\n\n\n
According to section 13 of the Indian Contract Act 1872: <\/strong><\/p>\n\n\n\n EXAMPLE<\/strong> A who own 2 cars, one Maruti and other Santro, offers to sell B one car. A intending it to be the Maruti car. B accepts the offer thinking that it is the Santro. Held, there is no consensus, hence no contract. <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n \n\n\u201cTwo\nor more persons are said to consent when they agree upon the same thing in the\nsame sense.\u201d\n\n<\/p>\n\n\n\n An agreement should\nbe made by the free consent of the parties.<\/p>\n\n\n\n - LAWFUL\nOBJECT:<\/strong> The object of an agreement must be\nlawful. If an agreement suffers any legal flaw, it shall not be enforceable by\nlaw.<\/li><\/ul>\n\n\n\n
According to Section 23<\/strong> of Indian Contract Act 1872<\/strong>, an object is unlawful if it is:<\/p>\n\n\n\n- Forbidden by law<\/li>
- Against the provisions of any of the law<\/li>
- Fraudulent<\/li>
- Damages any person or property<\/li>
- Against or immoral to the public policy in the opinion of the court.<\/li><\/ol>\n\n\n\n
EXAMPLE<\/strong> Amar offers to pay \u20b911,000 to Akbar if Akbar kidnap Anthony. The agreement is void as the object is unlawful. <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n- CERTAINTY\nOF MEANING:<\/strong> The meaning of an agreement must be\ncertain and should be capable of being made certain.<\/li><\/ul>\n\n\n\n
According to Section 29<\/strong> of Indian Contract Act 1872<\/strong><\/p>\n\n\n\n\u201cAgreements the meaning of which is not certain or capable of being made certain are void.\u201d<\/p>\n\n\n\n If the terms of agreement are vague, confusing or uncertain, it shall lead to no binding obligation for the parties.<\/p>\n\n\n\n EXAMPLE:<\/strong> Amar agrees to sell 5 tons of coconut oil to Akbar at whatever price Akbar may pay. The agreement is void due to uncertainty of price.<\/p>\n\n\n\n- POSSIBILITY OF PERFORMANCE:<\/strong> The agreement must be capable of being performed. If the parties have agreed on a contract that contains any promise, the agreement will not be considered as valid. The impossibility makes an agreement void if the parties are aware of the same or not.<\/li><\/ul>\n\n\n\n
EXAMPLE<\/strong> A promises to put life in B\u2019s dead wife if B pays him a sum of \u20b910,000. Such agreements are not enforceable at law as the performance of such act is impossible in nature. <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n- NOT\nDECLARED TO BE VOID OR ILLEGAL:<\/strong> An agreement to\nbecome a contract should not be an agreement which has been expressly declared\nor void by any law in the country, as it would not be enforceable at law.<\/li><\/ul>\n\n\n\n
Following agreements are expressly void: :<\/p>\n\n\n\n Under Section 20 of Indian Contract Act 1872<\/strong>:<\/strong> Agreements made under mutual mistake of law.<\/p>\n\n\n\nUnder Section 23 of Indian Contract Act 1872<\/strong>:<\/strong> Agreements with unlawful consideration.<\/p>\n\n\n\nUnder Section 25 of Indian Contract Act 1872<\/strong>:<\/strong> Agreements having no consideration.<\/p>\n\n\n\nUnder Section 26 of Indian Contract Act 1872<\/strong>:<\/strong> Agreements in restraint of marriage.<\/p>\n\n\n\nUnder Section 27 of Indian Contract Act 1872<\/strong>:<\/strong> Agreements in restraint of trade.<\/p>\n\n\n\nUnder Section 56 of Indian Contract Act 1872<\/strong>:<\/strong> Agreements to do impossible acts.<\/p>\n\n\n\n EXAMPLE<\/strong> Amar promises to pay \u20b950,000 to Akbar if Akbar does not marry at all. This agreement is void as marriage as right of every individual. Restraint of marriage is expressly declared void by the law. <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n- LEGAL FORMALITIES:<\/strong> A contract may be made by word, spoken or written. If there is a statutory requirement that contract should be in writing, registered or altered, then agreement must be so, otherwise is shall not be enforceable.<\/li><\/ul>\n\n\n\n
EXAMPLE<\/strong>: An oral agreement for sale of immovable property is unenforceable because the law requires such agreements to be in writing or registered. <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<\/span>KINDS OF CONTRACT<\/strong><\/span><\/h2>\n\n\n\nON\nTHE BASIS OF CREATION<\/strong><\/p>\n\n\n\n- EXPRESS CONTRACT: <\/strong>If the terms of the agreement are expressly agreed upon by the parties in words either spoken or written, at the time of formation, the contract is said to be an express contract.<\/li><\/ul>\n\n\n\n
EXAMPLE: <\/strong>Amar said to Akbar, Will you buy my watch for \u20b9500. Akbar replies, I am ready to buy. This is an express contract made orally.<\/p>\n\n\n\n- IMPLIED\/TACIT CONTRACT:<\/strong> The contract is an implied contract in which a proposal or acceptance is made other than words spoken or written.<\/li><\/ul>\n\n\n\n
These contracts are not created by words, either spoken or written but by an act or conduct of parties.<\/p>\n\n\n\n EXAMPLE:<\/strong>A, a coolie in uniform take up the luggage of B at Railway Station as B allows him to do so. The law implies that B will have to pay for the services of A. This is an Implied contract.<\/p>\n\n\n\n- QUASI CONTRACT:<\/strong> These are the contracts which are created by the law and not by the words or conduct of the parties. This contract is based on the principle that a person shall not be allowed to enrich himself at the expense of another party.<\/li><\/ul>\n\n\n\n
Section 68 to 72 of Indian Contract Act <\/font>1872 read about the situations where court can create quasi contract.<\/p>\n\n\n\nUnder Section 68 of Indian Contract Act 1872<\/strong>:<\/strong> When necessaries are supplied.<\/p>\n\n\n\nUnder Section 69 of Indian Contract Act 1872<\/strong>:<\/strong> When expenses of one person are paid by another person.<\/p>\n\n\n\nUnder Section 70 of Indian Contract Act 1872<\/strong>:<\/strong>\u00a0 When one party is benefitted by the activity of another party.<\/p>\n\n\n\nUnder Section 71 of Indian Contract Act 1872<\/strong>:<\/strong> In case of finder of lost goods.<\/p>\n\n\n\nUnder Section 72 of Indian Contract Act 1872<\/strong>:<\/strong> When payment is made by mistake and goods are delivered by mistake.<\/p>\n\n\n\nCASE: SHOWAL VS. COOPER<\/strong><\/p>\n\n\n\nIn this case, A\u2019s husband becomes no\nmore. She is very poor and therefore not capable of meeting the cost of\ncremation. B, one of her relatives, understands her position and spends his own\nmoney for cremation. It is done so without A\u2019s request. Afterwards B claims his\namount from A where A refuses to pay. Here court applies Section 68 and creates\na Quasi Contract between them.<\/p>\n\n\n\n - E-CONTRACT:<\/strong> An e- contract\nis the one, which is entered between the parties\nvia Internet. It is\none of the most important common ways of\ncontracting in current scenario. The offer\nand acceptance of the parties do not happen in person but over the internet.<\/li><\/ul>\n\n\n\n
EXAMPLE:<\/strong>Rohit ordered a law book from an online book store. The book store makes the delivery in 4 working days and Rohit pays for the same.<\/p>\n\n\n\nON THE BASIS OF\nVALIDITY<\/strong><\/p>\n\n\n\n- VALID CONTRACT:<\/strong> The contracts which are enforceable in a court of law are called valid contract. The valid contract has essentials like: <\/li><\/ul>\n\n\n\n
- Offer and acceptance <\/li>
- Lawful consideration <\/li>
- Intention to create legal relationship <\/li>
- Lawful object <\/li>
- Possibility of performance <\/li>
- Certainty <\/li>
- Capacity of parties to contract <\/li>
- Legal formalities <\/li>
- Not expressly declared void or illegal <\/li>
- Free consent <\/li><\/ol>\n\n\n\n
EXAMPLE: <\/strong>Amar offers to sell his horse for \u20b9 1000 to Akbar. He accepts the offer it is a valid contract. Here either of the party can enforce the contract.<\/p>\n\n\n\n
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