THE CONTRACT ACT, 1872

CONTENTS

SECTIONS

PRELIMINARY
1. Short title
Extent Commencement
Enactments repealed
2. Interpretation-clause
CHAPTER I
OF THE COMMUNICATION, ACCEPTANCE AND REVOCATION OF
PROPOSALS
3. Communication, acceptance and revocation of proposals
4. Communication when complete
5. Revocation of proposals and acceptances
6. Revocation how made
7. Acceptance must be absolute
8. Acceptance by performing, conditions, or receiving
consideration
9. Promises, express and implied
CHAPTER II
OF CONTRACTS, VOIDABLE CONTRACTS AND VOID AGREEMENTS
10. What agreements are contracts
11. Who are competent to contract
12. What is a sound mind for the purposes of contracting
13. "Consent” defined
14. "Free consent" defined
15. "Coercion" defined
16. "Undue influence" defined
17. "Fraud" defined
18. "Misrepresentation" defined
19. Viodability of agreements without free consent
19A. Power to set aside contract induced by undue influence
20. Agreement void where both parties are under mistake as to
matter of fact
21. Effect of mistakes as to law
22. Contract caused by mistake of one party as to matter of fact
23. What considerations and objects are lawful and what not
 Void Agreements
24. Agreements void, if considerations and objects unlawful in part

25. Agreement without consideration void, unless it is in writing and

registered, or is a promise to compensate for something done, or is a promise
to pay a debt barred by limitation law
26. Agreement in restraint of marriage void
27. Agreement in restraint of trade void Saving of agreement not to carry on
business of which good- will is sold
28. Agreements in restraint of legal proceedings void Saving of contract to
refer to arbitration dispute that may arise Suits barred by such contracts
Saving of contract to refer questions that have already arisen
29. Agreements void for uncertainty
30. Agreements by way of wager void Exceptions in favour of certain prizes
for horse-racing. Section 294A of the Penal Code not affected
30A Agreements collateral to wagering agreements void
30B No suit for recovery of money, commission etc., in respect of void
agreements
30C Payment by guardian, executor, etc., in respect of void
agreements not to be allowed credit
CHAPTER III
OF CONTINGENT CONTRACTS
31. "Contingent contract" defined
32. Enforcement of contracts contingent on an event happening
33. Enforcement of contracts contingent on an event not happening
34. When event on which contract is contingent to be deemed impossible, if it
is the future conduct of a living person
35. When contracts become void which are contingent on happening of
specified event within fixed time
When contracts may be enforced which are contingent on specified event not
happening within fixed time
36. Agreement contingent on impossible events void
CHAPTER IV
OF THE PERFORMANCE OF CONTRACTS
Contracts which must be performed
37. Obligation of parties to contracts
38. Effect of refusal to accept offer of performance
39. Effect of refusal of party to perform promise wholly
By whom Contracts must be performed
40. Person by whom promise is to be performed
41. Effect of accepting performance from third person
42. Devolution of joint liabilities
43. Any one of joint promisors may be compelled to perform Each promisor
may compel contribution Sharing of loss by default in contribution
t of release of one joint promisor
45. Devolution of joint rights Time and Place for Performance
46. Time for performance of promise where no application is to be
made and no time is specified
47. Time and place for performance of promise where time is specified
and no application to be made
48. Application for performance on certain day to be at proper time
and
49. place
Place for performance of promise were no application to be made
and no place fixed for performance
50. Performance in manner or at time prescribed or sanctioned by
promisee Performance of Reciprocal Promises
51. Promisor not bound to perform, unless reciprocal promisee ready
and willing to perform
52. Order of performance of reciprocal promises
53. Liability of party preventing event on which the contract is to
take effect
54. Effect of default as to that promise which should be first performed,
in contract consisting of reciprocal promises
55. Effect of failure to perform at fixed time, in contract in which time is
essential
Effect of such failure when time is not essential
Effect of acceptance of performance at time other than that agreed upon
56. Agreement to do impossible act
Contract to do act afterwards becoming impossible or unlawful
Compensation for loss through non-performance of act known to be
impossible or unlawful
57. Reciprocal promise to do things legal, and also other things
illegal
58. Alternative promise, one branch being illegal
Appropriation of Payments
59. Application of payment, where debt to be discharged is
indicated
60. Application of payment, where debt to be discharged is not
indicated
61. Application of payment where neither party appropriates Contracts
Which Need Not be Performed
62. Effect of novation, rescission and alteration of contract
63. Promisee may dispense with or remit performance of
promise
64. Consequences of rescission of voidable contract
65. Obligation of person who has received advantage under void
agreement or contract that becomes void
66. Mode of communicating or revoking rescission of voidable
contract
67. Effect of neglect of promisee to afford promisor reasonable facilities
for performance
 CHAPTER V
OF CERTAIN RELATIONS RESEMBLING THOSE CREATED BY
CONTRACT

68. Claim for necessaries supplied to person incapable of contracting or

on his account
69. Reimbursement of person paying money due by another in
payment of which he is interested
70. Obligation of person enjoying benefit of non- gratuitous act
71. Responsibility of finder of goods
72. Liability of person to whom money is paid or thing delivered by
mistake or under coercion
CHAPTER VI
OF THE CONSEQUENCES OF BREACH OF CONTRACT
73. Compensation for loss or damage caused by breach of
contract
Compensation for failure to discharge obligation resembling those created by
contract
74. Compensation for breach of contract where penalty stipulated
for
75. Party rightfully rescinding contract entitled to compensation
CHAPTER VII
SALE OF GOODS
76-123. [Repealed]
CHAPTER VIII
OF INDEMNITY AND GUARANTEE
124. "Contract of indemnity" defined
125. Rights of indemnity- holder when sued
126. "Contract of guarantee", "surety", "principal debtor" and
"creditor"
127. Consideration for guarantee
128. Surety's liability
129. "Continuing guarantee"
130. Revocation of continuing guarantee
131. Revocation of continuing guarantee by surety's death
132. Liability of two persons primarily liable, not affected by arrangement
between them that one shall be surety on other’s default
133. Discharge of surety by variance in terms of contract
134. Discharge of surety by release or discharge of principal
debtor
135. Discharge of surety when creditor compounds with, gives time to,
or agrees not to sue, principal debtor
136. Surety not discharged when agreement made with third person to
give time to principal debtor
137. Creditor's forbearance to sue does not discharge surety
138. Release of one co-surety does not discharge others
139. Discharge of surety by creditor's act or omission impairing surety's
eventual remedy
140. Rights of surety on payment or performance
141. Surety's right to benefit of creditor's securities
142. Guarantee obtained by misrepresentation invalid
143. Guarantee obtained by concealment invalid
144. Guarantee on contract that creditor shall not act on it until co-
surety joins
145. Implied promise to indemnify surety
146. Co-sureties liable to contribute equally
147. Liability of co-sureties bound in different sums
CHAPTER IX
OF BAILMENT
148. "Bailment", "bailor", and "bailee" defined
149. Delivery to bailee how made
150. Bailor’s duty to disclose faults in goods bailed
151. Care to be taken by bailee
152. Bailee when not liable for loss, etc., of thing bailed
153. Termination of bailment by bailee's act inconsistent with
conditions
154. Liability of bailee making unauthorised use of goods bailed
155. Effect of mixture, with bailor's consent, of his goods with
bailee's
156. Effect of mixture, without bailor's consent, when the goods can be
separated
157. Effect of mixture, without bailor's consent, when the goods cannot be
separated
158. Repayment by bailor of necessary expenses
159. Restoration of goods lent gratuitously
160. Return of goods bailed on expiration of time or accomplishment of
purpose
161. Bailee's responsibility when goods are not duly returned
162. Termination of gratuitous bailment by death
163. Bailor entitled to increase or profit from goods bailed
164. Bailor's responsibility to bailee
165. Bailment by several joint owners
166. Bailee not responsible on re-delivery to bailor without title
167. Right of third person claiming goods bailed
168. Right of finder of goods; may sue for specific reward offered
169. When finder of thing commonly on sale may sell it
170. Bailee's particular lien
 171. General lien of bankers, factors, wharfingers, attorneys and policy-
brokers
Bailments Of Pledges
172. "Pledge", "Pawnor" and "Pawnee" defined
173. Pawnee's right of retainer
174. Pawnee not to retain for debt or promise other than that for which
goods pledged Presumption in case of subsequent advances
175. Pawnee's right as to extraordinary expenses incurred
176. Pawnee’s right where pawnor makes default
177. Defaulting pawnor's right to redeem
178. Pledge by mercantile agent
178A. Pledge by person in possession under voidable contract
179. Pledge where pawnor has only a limited interest
Suits by Bailees or Bailors against Wrong-doers
180. Suit by bailor or bailee against wrong-doer
181. Apportionment of relief or compensation obtained by such
suits
CHAPTER X
AGENCY
Appointment and Authority of Agents
182. "Agent" and "principal" defined
183. Who may employ agent
184. Who may be an agent
185. Consideration not necessary
186. Agent's authority may be expressed or implied
187. Definitions of express and implied authority
188. Extent of agent's authority
189. Agent's authority in an emergency
Sub-Agents
190. When agent cannot delegate
191. "Sub-agent" defined
192. Representation of principal by sub-agent properly appointed
Agent's responsibility for sub-agent
Sub-agent's responsibility
193. Agent's responsibility for sub-agent appointed without
authority
194. Relation between principal and person duly appointed by agent to
act in business of agency
195. Agent's duty in naming such person
Ratification
196. Right of person as to acts done for him without his authority. Effect
of ratification
197. Ratification may be expressed or implied
198. Knowledge requisite for valid ratification
199. Effect of ratifying unauthorized act forming part of a
transaction
200. Ratification of unauthorized act cannot injure third person
Revocation of Authority
201. Termination of agency
202. Termination of agency where agent has an interest in subject-
matter
203. When principal may revoke agent's authority
204. Revocation where authority has been partly exercised
205. Compensation for revocation by principal or renunciation by
agent
206. Notice of revocation or renunciation
207. Revocation and renunciation may be expressed or implied
208. When termination of agent's authority takes effect as to agent, and
as to third persons
209. Agent's duty on termination of agency by principal's death or
insanity
210. Termination of sub-agent's authority Agent's Duty to
Principal
211. Agent's duty in conducting principal's business
212. Skill and diligence required from agent
213. A g e n t ' s a c c o u n t s
214. Agent's duty to communicate with principal
215. Right of principal when agent deals, on his own account, in business
of agency without principal's consent
216. Principal's right to benefit gained by agent dealing on his own
account in business of agency
217. Agent's right of retainer out of sums received on principal's
account
218. Agent's duty to pay sums received for principal
219. When agent's remuneration becomes due
220. Agent not entitled to remuneration for business mis-
conducted
221. Agent's lien on principal's property
Principal’s Duty to Agent
222. Agent to be indemnified against consequences of lawful acts
223. Agent to be indemnified against consequences of acts done in
good
224. faith
Non-liability of employer of agent to do a criminal act
225. Compensation to agent for injury caused by principal's
neglect Effect of agency on contract with third persons
226. Enforcement and consequences of agent's contracts
227. Principal how far bound, when agent exceeds authority
228. Principal not bound when excess of agent's authority is not
separable
229. Consequences of notice given to agent
230. Agent cannot personally enforce, nor be bound by, contracts on behalf of
principal
Presumption of contract to contrary

231. Rights of parties to a contract made by agent not disclosed

232. Performance of contract with agent supposed to be principal
233. Right of person dealing with agent personally liable
234. Consequence of inducing agent or principal to act on belief that
principal or agent will be held exclusively liable
235. Liability of pretended agent
236. Person falsely contracting as agent not entitled to
performance
237. Liability of principal inducing belief that agent's unauthorized acts
were authorized
238. Effect, on agreement, of misrepresentation or fraud by agent
CHAPTER XI
OF PARTNERSHIP
239-266. [Repealed]
 THE CONTRACT ACT, 1872

Preamble

Whereas it is expedient to define and amend certain parts of the law relating
to contracts; It is enacted as follows:-

PRELIMINARY

Short title

1. This Act may be called the Contract Act, 1872. Extent

Commencement

It extends to the whole of Bangladesh; and it shall come into force on the first
day of September, 1872.
Enactments repealed

Nothing herein contained shall affect the provisions of any Statute, Act or
Regulation not hereby expressly repealed, nor any usage or custom of trade,
nor any incident of any contract, not inconsistent with the provisions of this
Act.

Interpretation-clause

2. In this Act the following words and expressions are used in the
following senses, unless a contrary intention appears from the context:-

(a) When one person signifies to another his willingness to do or to

abstain from doing anything, with a view to obtaining the assent of that
other to such act or abstinence, he is said to make a proposal:

(b) When the person to whom the proposal is made signifies his assent
thereto, the proposal is said to be accepted. A proposal, when accepted
becomes a promise:

(c) The person making the proposal is called the "promisor" and the
person accepting the proposal is called the "promisee":

(d) When, at the desire of the promisor, the promisee or any other
person has done or abstained from doing, or does or abstains from
doing, or promises to do or to abstain from doing, something, such act
or abstinence or promise is called a consideration for the promise:

(e) Every promise and every set of promises, forming the

consideration for each other, is an agreement:
 (f) Promises which form the consideration or part of the
consideration for each other are called reciprocal promises:

(g) An agreement not enforceable by law is said to be void:

(h) An agreement enforceable by law is a contract:

(i) An agreement which is enforceable by law at the option of one

or more of the parties thereto, but not at the option of the other or
others, is a voidable contract:

(j) A contract which ceases to be enforceable by law becomes void

when it ceases to be enforceable.

CHAPTER I

OF THE COMMUNICATION, ACCEPTANCE AND REVOCATION OF

PROPOSALS

Communication, acceptance and revocation of proposals

3. The communication of proposals, the acceptance of proposals,

and the revocation of proposals and acceptances, respectively, are
deemed to be made by any act or omission of the party proposing,
accepting or revoking by which he intends to communicate such
proposal, acceptance or revocation, or which has the effect of
communicating it.

Communication when complete

4. The communication of a proposal is complete when it comes

to the knowledge of the person to whom it is made.

The communication of an acceptance is complete,–

as against the proposer, when it is put in a course of transmission to him, so

as to be out of the power of the acceptor;

as against the acceptor, when it comes to the knowledge of the proposer.

The communication of a revocation is complete,-

as against the person who makes it, when it is put into a course of
transmission to the person to whom it is made, so as to be out of the power of
the person who makes it;
as against the person to whom it is made, when it comes to his knowledge.