SUMMARY – INDIAN CONTRACT ACT, 1872
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1. Contract [Section 2(h)]
Meaning
A contract is an agreement enforceable by law.
Essential Elements
1. Offer + Acceptance
2. Intention to create legal relations
3. Lawful consideration
4. Competent parties
5. Free consent
6. Lawful object
7. Not expressly declared void
Examples
A agrees to sell his car to B for 2,00,000 Valid contract
A promises to gift B 10,000 No consideration Not a contract
Agreement for illegal work Void
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2. Offer and Acceptance
(A) Offer (Proposal) [Section 2(a)]
Meaning
When one person signifies to another his willingness:
To do something OR
To abstain from doing something
With a view to obtaining assent It is an offer
Types of Offer
1. Express (spoken/written)
2. Implied (by conduct)
3. General (to public at large)
4. Specific (to a particular person)
Examples
A says: “I will sell my phone for 10,000” Express offer
Bus stopping at bus stop Implied offer
Reward advertisement General offer
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(B) Acceptance [Section 2(b)]
Meaning
When the person to whom offer is made gives assent Acceptance
Rules of Acceptance
1. Must be absolute and unqualified
2. Must be communicated
3. Must be in prescribed mode
4. Must be by the offeree only
Examples
A offers to sell bike for 50,000, B says “Yes” Valid acceptance
B says “I’ll pay 45,000” Counter offer, not acceptance
Silence = No acceptance
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3. Communication of Offer & Acceptance
(a) Communication of Offer
Complete when it comes to knowledge of offeree
Example:
A sends offer letter B reads it Communication complete
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1. Contract [Section 2(h)]
Meaning
A contract is an agreement enforceable by law.
Essential Elements
1. Offer + Acceptance
2. Intention to create legal relations
3. Lawful consideration
4. Competent parties
5. Free consent
6. Lawful object
7. Not expressly declared void
Examples
A agrees to sell his car to B for 2,00,000 Valid contract
A promises to gift B 10,000 No consideration Not a contract
Agreement for illegal work Void
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2. Offer and Acceptance
(A) Offer (Proposal) [Section 2(a)]
Meaning
When one person signifies to another his willingness:
To do something OR
To abstain from doing something
With a view to obtaining assent It is an offer
Types of Offer
1. Express (spoken/written)
2. Implied (by conduct)
3. General (to public at large)
4. Specific (to a particular person)
Examples
A says: “I will sell my phone for 10,000” Express offer
Bus stopping at bus stop Implied offer
Reward advertisement General offer
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(B) Acceptance [Section 2(b)]
Meaning
When the person to whom offer is made gives assent Acceptance
Rules of Acceptance
1. Must be absolute and unqualified
2. Must be communicated
3. Must be in prescribed mode
4. Must be by the offeree only
Examples
A offers to sell bike for 50,000, B says “Yes” Valid acceptance
B says “I’ll pay 45,000” Counter offer, not acceptance
Silence = No acceptance
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3. Communication of Offer & Acceptance
(a) Communication of Offer
Complete when it comes to knowledge of offeree
Example:
A sends offer letter B reads it Communication complete
