Business Law
Business Law
Business Law
CHAPTER
INDIAN CONTRACT
01
ACT , 1872
Example
Gabber offered Rs 10000 to Jai and Viru in consideration of murder of Thakur.
(4) Lawful object
The object of the agreement must not be illegal or unlawful. It may be noted that a lawful object
is that which is neither fraudulent, forbidden by law, immoral nor opposed to any public policy etc.
If the object is not lawful the contract will be void.
Example
Baccha Yadav and Chedi Singh entered in an agreement with an object to kill Chulbul Pandeyis not
considered is lawful object. In our original example buying and selling of house is lawful object also.
LET’S CONCLUDE
Agreements, which do not give rise to contractual obligations, are not contracts.
Example:
Mr. Ranbir invites Miss Katrina for dinner in a restaurant. Miss Katrina accepted the invitation but
did not turn up. Mr. Ranbir cannot claim for special arrangement made for her because this is not
a contract; there being no intention to create legal obligation between two parties. (I.e. it is an
agreement only.)
1.8 DIFFERENCES BETWEEN (A) AGREEMENT AND CONTRACT (B) DIFFERENCE BE-
TWEEN VOID CONTRACT AND VOIDABLE CONTRACT AND (C) DIFFERENCE BE-
TWEEN VOID CONTRACT AND VOID AGREEMENT:
(a) Agreement and Contract
Basis of Difference Agreement Contract
1. Meaning Every promise and every set Agreement enforceable
of promises, forming the by law Agreement + Legal
consideration for each other. enforceability
Offer + Acceptance
2. Scope It’s a wider term including both It is used in a narrow sense with
legal and social agreement. the specification that contract
is only legally enforceable
agreemane
3. Legal obligation It may not create legal An agreement does not always
obligation. grant rights to the
4. Nature All agreement are not All contracts are agreements
3. Performance A void contract can not be If the aggrieved party does not
performed. (In reasonable time) exercise
his right to avoid the contract,
any party can sue other for
claiming the performance the
contract.
4. Rights A void contract does not grant The party whose consent
any right to any party. was not free has the right to
rescind the contract.
SUMMARY
hh A contract is defined in section 2(h) of the Indian Contract Act, 1872 which consist of Mutual
Promises or agreement enforceable by law.
hh Only those agreements which, contains a promise. needs a free consent of the parties with
adequate consideration and if enforceable by law results in a contract and those which are not
legally enforceable are void agreement.
hh A contract is an agreement enforceable at the option of aggrieved party. For a binding contract
both the parties to the contract must agree upon the same thing in the same sense. Moreover
it should be noted that a Latin word “Nundum Pactum” means a Bare Promise. Further all
contracts are agreements.
hh An Agreement is defined in section 2(e) of the Indian Contract Ad, 1872 according to which
every promise or set of promise forming the consideration for each other is an agreement.
hh A proposal when accepted becomes a lawful promise and becomes an agreement when a lawful
consideration is involved in such Promise. Further All Agreements are Promise.
hh A Promise is defined in section 2(b) of the Indian Contract Act, 1872 according to which 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
hh Section 10 of the Indian Contract Act, 1872 specifies that all agreements are contract if
they are Iliad, by the free concert of the parties competent to contract, for a law full
consideration with a law full object and are not hereby expressly declared as void.
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