What is the concept of Indian Contract Act, 1872?
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The Indian Contract Act came into effect on 1st September 1872 and is one of the oldest mercantile laws of the country. This law provides guidelines that help in the formation and compliance of Contracts in a regulated and organized manner. These rules and regulations provide the framework for the course of Action to be followed in case of any disputes arising from the Contracts. The Act has 266 sections and is applicable to the entire country except for Jammu and Kashmir. Let’s understand the key elements of this Act and the definitions of its important features. The Indian Contract Act, 1872 provides the guidelines for forming a valid Contract. It plays an important role wherever there is an agreement or a Contract. The Contract Act defines the term ‘Contract’ under its section 2 (h) as ‘An agreement enforceable by law’. This definition has two key elements: agreement and enforceable by law.
What is an Agreement?An agreement is a promise or commitment given by one party to another party. It includes an offer that is made by one person and accepted by the other person. In simple words, an agreement happens when an offer is made by one person and accepted by another person. It consists of two or more parties. It becomes an agreement only if the essential ingredients are fulfilled. There must be a consideration. Essentials of Forming an Agreement:
Types of AgreementWritten agreement - Agreements are done by writing in a special layout called written agreement. It contains certain terms and conditions which are accepted by the parties with consideration. Oral Agreement - An agreement that has a set of gestures and terms agreed via spoken or by spoken communication. To Sum it Up:
What is a Contract? An agreement enforceable by law is called a Contract. An agreement cannot be said as a Contract unless and until it is enforced by law. A Contract is an agreement that is accepted by both parties and is enforceable by law. It gives certain rights to all the parties involved and also bestows on them certain obligations that they must fulfill. A Contract is an agreement but not all agreements are Contracts. Essentials of a Valid ContractFor a Contract to be valid, it must be enforceable by law and must include the following essentials given under Section 10 of the Indian Contract Act.
Example- A agrees to buy B’s house for a reasonable amount. A valid Contract must define the exAct amount that A intends to pay B for buying his house.
Example- A enters into a Contract with B to bring back to life B’s father for ten thousand rupees. Since the Contract involves the performance of an impossible Act, it is not a valid Contract
Types of Contract
Breach of ContractBreach of Contract occurs when one of the parties fails to abide by the terms and conditions accepted in the Contract. It can happen by the non-performance of certain terms and conditions as mentioned in the Contract. The breach of Contract can be resolved among the parties and if it is still not resolved then they can approach the court. There Are Three Conditions To Breach Of Contract -
Breach of Contract is a civil wrong. One who breaches the Contract may face legal Actions. Solved Questions on the Indian Contract Act, 18721. A Agrees to Buy B’s House for a Sum of Fifty Lakh Rupees. Is this a Valid Contract? Ans: It will be a valid Contract only if:
2. James Puts an Advertisement Outside His House for Selling it for One Lakh Rupees. Jack Sees the Advertisement and Agrees to Buy the House but James Refuses to Sell the House to Him. Can Jack Sue James for Breach of Contract? Ans: The advertisement was only an invitation to offer and not an offer by itself. Since James had not accepted Jack’s offer or bid of purchase there was no Contract between them. Acceptance is an integral part of a valid Contract. Hence Jack cannot sue James for a breach of Contract. Recently Updated Pages Banking and E-Banking – Definition, Types, Functions and FAQs Business Environment - Definition, Components, Dimensions & Examples Planning Premises - Introduction to Planning Premises, Importance, and Types Revenue Deficit - Differences, Calculations, Formula and Disadvantages Organizing - Meaning, Process, and In Every Aspect of Life Importance of Consumer Protection - Explanation and FAQs What is the main concept of contract?contract, in the simplest definition, a promise enforceable by law. The promise may be to do something or to refrain from doing something. The making of a contract requires the mutual assent of two or more persons, one of them ordinarily making an offer and another accepting.
What are the importance of Indian Contract Act, 1872?Importance of Indian Contract Act, 1872
It determines the circumstances under which promises made by the contracting parties shall be legally binding on them. It specifies the remedies that are available against a person who fails to perform the contract entered into by him, in a Court of law.
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