INTRODUCTION TO THE LAW OF CONTRACT

Introduction

●Prior to this law, English law of contract was followed in India.

●This law was Enacted on 1st day of September ,1872.

●The Indian Contract Act ,1872 is applicable to whole India.

●It has XI chapters and 238 sections.

●Law of contract creates jus in personem and not jus in rem.

●The Indian Contract Act consists of the following two parts:
(a) General principals of the Law of Contract.
(b) Special kinds of contracts.

●The general principals of the Law of Contract are contained in Sections 1 to 75 of the Indian Contract Act. These principles apply to all kinds of contracts irrespective of their nature.

●Special contracts are contained in Sections 124 to 238 of the Indian Contract Act. These special contracts are Indemnity, Guarantee, Bailment, pledge and Agency.

Contract as Defined by Eminent Jurists :

POLLOCK - “Every agreement and promise enforceable by law is a contract.”

HALSBURY - “A Contract is an agreement between two or more persons which is intended to be enforceable at law and is contracted by the acceptance by one party of an offer made to him by the other party to do or abstain from doing some act.”

SALMOND - “A contract is an agreement creating and defining obligation between the parties.”

Some of the terms and expressions used in this Act are :

1. Offer(i.e. Proposal) [section 2(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 person either to such act or abstinence, he is said to make a proposal.

2. Acceptance 2(b):-

When the person to whom the proposal is made, signifies his assent there to , the proposal is said to be accepted.

3. Promise 2(b) :- A Proposal when accepted becomes a promise.

4. Promisor and promise 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.

5. 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 or promises to do or abstain from doing something, such act or
abstinence or promise is called a consideration for the promise. In simple words, Price paid by the one party for the promise of the other.

Technical word meaning QUID-PRO-QUO i.e. something in return.

6. Reciprocal promises 2(f) :-

Promises which form the consideration or part of the consideration for each other, are called reciprocal promises.

7. Agreement 2(e) :-

Every promise and set of promises forming the consideration for each other.

8. Contract 2(h) :- 

An agreement enforceable by Law is a contract.

9. Void agreement 2(g):-

An agreement not enforceable by law is void.

10. 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.

11. Void contract :-

A contract which ceases to be enforceable by Law becomes void when it ceases to be enforceable.