Brief note on Indian Contract Act
Compiled by: Madhu Bhandari
Senior Faculty, RSC,Lucknow
The law relating to contracts in India is contained in INDIAN CONTRACT ACT, 1872.
The Act was passed by British India and is based on the principles of English Common
Law. It is applicable to all the states of India except the state of Jammu and Kashmir. It
determines the circumstances in which promises made by the parties to a contract shall
be legally binding on them. All of us enter into a number of contracts everyday
knowingly or unknowingly. Each contract creates some rights and duties on the
contracting parties. Hence this legislation, Indian Contract Act of 1872, being of skeletal
nature, deals with the enforcement of these rights and duties on the parties in India.
The Act as enacted originally had 266 Sections, it had wide scope and included.
v General Principles of Law of Contract- Sections 01 to 75
v Contract relating to Sale of Goods- Sections 76 to 123
v Special Contracts- Indemnity, Guarantee, Bailment & Pledge- Sections 124 to
238
v Contracts relating to Partnership- Sections 239 to 266
Indian Contract Act embodied the simple and elementary rules relating to Sale of goods
and Partnership. The developments of modern business world found the provisions
contained in the Indian Contract Act inadequate to deal with the new regulations or give
effect to the new principles. Subsequently the provisions relating to the Sale of Goods
and Partnership contained in the Indian Contract Act were repealed respectively in the
year 1930 and 1932 and new enactments namely Sale of Goods and Movables Act
1930 and Indian Partnership act 1932 were re-enacted.
At present the Indian Contract Act may be divided into two parts
Part 1: deals with the General Principles of Law of Contract Sections 1 to 75
, Part 2: deals with Special kinds of Contracts such as
v Acceptance 2(b):- When the person to whom the proposal is made, signifies his
assent there to, the proposal is said to be accepted.
v Promise 2(b) :- A Proposal when accepted becomes a promise. In simple words,
when an offer is accepted it becomes promise.
v Promisor and promisee 2(c) :- When the proposal is accepted, the person
making the proposal is called as promisor and the person accepting the proposal
is called as promisee.
v Consideration 2(d):- When at the desire of the promisor, the promisee or any
other person has done or abstained from doing something or does or abstains
from doing something, such act or abstinence or promise is called a
consideration for the promise. Price paid by one party for the promise of the other
Technical word meaning QUID-PRO-QUO i.e. something in return.
v Agreement 2(e) :- Every promise and set of promises forming the consideration
for each other. In short,
v Contract 2(h) :- An agreement enforceable by Law is a contract.
v Therefore, there must be an agreement and it should be enforceable by law.
v Void agreement 2(g):- An agreement not enforceable by law is void.
v Voidable contract 2(i):- An agreement is a voidable contract if it is enforceable
by Law at the option of one or more of the parties there to (i.e. the aggrieved
party), and it is not enforceable by Law at the option of the other or others.
v Void contract 2(j) :- A contract which ceases to be enforceable by Law becomes
void when it ceases to be enforceable
Definition
A contract is a legally enforceable agreement between two or more parties with mutual
obligations. The Indian contract Act 1872, Section 2(h) defines the term contract as an
agreement legally enforceable by law, for the formation of a contract there must be an
agreement, the agreement should be enforceable by law.
Compiled by: Madhu Bhandari
Senior Faculty, RSC,Lucknow
The law relating to contracts in India is contained in INDIAN CONTRACT ACT, 1872.
The Act was passed by British India and is based on the principles of English Common
Law. It is applicable to all the states of India except the state of Jammu and Kashmir. It
determines the circumstances in which promises made by the parties to a contract shall
be legally binding on them. All of us enter into a number of contracts everyday
knowingly or unknowingly. Each contract creates some rights and duties on the
contracting parties. Hence this legislation, Indian Contract Act of 1872, being of skeletal
nature, deals with the enforcement of these rights and duties on the parties in India.
The Act as enacted originally had 266 Sections, it had wide scope and included.
v General Principles of Law of Contract- Sections 01 to 75
v Contract relating to Sale of Goods- Sections 76 to 123
v Special Contracts- Indemnity, Guarantee, Bailment & Pledge- Sections 124 to
238
v Contracts relating to Partnership- Sections 239 to 266
Indian Contract Act embodied the simple and elementary rules relating to Sale of goods
and Partnership. The developments of modern business world found the provisions
contained in the Indian Contract Act inadequate to deal with the new regulations or give
effect to the new principles. Subsequently the provisions relating to the Sale of Goods
and Partnership contained in the Indian Contract Act were repealed respectively in the
year 1930 and 1932 and new enactments namely Sale of Goods and Movables Act
1930 and Indian Partnership act 1932 were re-enacted.
At present the Indian Contract Act may be divided into two parts
Part 1: deals with the General Principles of Law of Contract Sections 1 to 75
, Part 2: deals with Special kinds of Contracts such as
v Acceptance 2(b):- When the person to whom the proposal is made, signifies his
assent there to, the proposal is said to be accepted.
v Promise 2(b) :- A Proposal when accepted becomes a promise. In simple words,
when an offer is accepted it becomes promise.
v Promisor and promisee 2(c) :- When the proposal is accepted, the person
making the proposal is called as promisor and the person accepting the proposal
is called as promisee.
v Consideration 2(d):- When at the desire of the promisor, the promisee or any
other person has done or abstained from doing something or does or abstains
from doing something, such act or abstinence or promise is called a
consideration for the promise. Price paid by one party for the promise of the other
Technical word meaning QUID-PRO-QUO i.e. something in return.
v Agreement 2(e) :- Every promise and set of promises forming the consideration
for each other. In short,
v Contract 2(h) :- An agreement enforceable by Law is a contract.
v Therefore, there must be an agreement and it should be enforceable by law.
v Void agreement 2(g):- An agreement not enforceable by law is void.
v Voidable contract 2(i):- An agreement is a voidable contract if it is enforceable
by Law at the option of one or more of the parties there to (i.e. the aggrieved
party), and it is not enforceable by Law at the option of the other or others.
v Void contract 2(j) :- A contract which ceases to be enforceable by Law becomes
void when it ceases to be enforceable
Definition
A contract is a legally enforceable agreement between two or more parties with mutual
obligations. The Indian contract Act 1872, Section 2(h) defines the term contract as an
agreement legally enforceable by law, for the formation of a contract there must be an
agreement, the agreement should be enforceable by law.
