NOTES ON LAW

1. Law is the body of principles recognized and applied by the State in the administration of justice. Who said?

   Ans: Salmond

2. A Proposal means an offer. True/False

    Ans: True

3. Every promise and every set of promises, forming  consideration for each other, is an

    Ans: agreement.

4. All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void, provided under which section of the Indian Contract Act?

    Ans: Section 10

SOME IMPORTANT PROVISIONS (INDIAN CONTRACT ACT)

Lawful Proposal {Sec.2 (a)}

When one person signifies to another his willingness to do or not to do something; he is said to make a proposaL Such proposal should, however, be lawful. In English Law, proposal is termed as an 'offer'. Following are important features of Lawful proposaL

• Proposal must be specific and certain. It should not be vague or ambiguous.
• It must be intended to create legal relationship;
• It must be made to another person with a view to obtaining his assent;
• It must be communicated;
• It must be capable of being accepted.

Lawful Acceptance (Sec.7)

As the proposal must be lawful; similarly the acceptance of the proposal must also be lawful.The important features of a lawful acceptance have been described below. These may be noted.

• It must be absolute and unqualified, that means without any condition or conditions;
• It must be communicated to the proposer;
• It must be given in the manner specified in the proposal or according to the usual or reasonable manner;
• It must be given within a reasonable time and before the proposal is withdrawn. A person making the proposal is called the "promisor" and the person" accepting the proposal called the "promisee"[Section 2(c)] and Sec.7. The promise may be expressed or implied (Sec.9)

Capacity of Parties or Competency of Parties to make a Contract (Sec.11)

A person becomes competent or capable to enter into a contract, when he fulfills the following three conditions:

• That he must be a major according to the Indian Majority Act. The Indian Majority Act provides that in normal circumstances, one becomes major when he completes 18 years of age and that, in certain specific circumstances, one becomes a major when he completes 21 years of age. Therefore, a contract by a minor is not a valid contract.
• That a person should be of sound mind at the time of giving a proposal or a consent. A contract by a lunatic or an insane, therefore, is not a valid contract.
• That a person should not have been disqualified/barred to enter into a contract under any other law.

A contract by an insolvent person is not a valid contract, as under the Insolvency Act, an insolvent is not competent to contract.

Minor's Agreement (Competency to Contract Sec.11)

A contract by a minor is void ab initio (Case law: Mohori Bibee v. Dharmodas Ghose).A contract by a minor, who fraudulently claims to be major, is also a void contract.A ratification via contract by a minor, on his attaining the age of majority is also void. An agreement in which a minor is beneficiary is a lawful agreement.In other words, a minor is not liable for obligations/responsibility of any nature under a contract but if a minor is going to get some benefit from a contract, it is binding upon other party.However, for supply of necessaries to a minor, the minor's property is liable.

Lawful Consideration [Sec. 2(d)]

"Consideration'" means something in return, such as gain, right, benefit, interest or profit to one party and loss, forbearance, responsibility to other party.

Generally, 'consideration' consists in the form of cash, property (movable and immovable), services and exchanges. In our day to day life, 'consideration' is known as value or price from one angle. 

Free Consent-{Sec.13)

'Consent' means when two persons agree upon same thing in same sense. (Sec.13). But, for formation of a valid agreement i.e. a contract, mere consent is not sufficient. A consent of each and every party to the agreement must be free. The consent is said to be free when it is not caused

• By coercion;
• By undue influence;
• By Fraud;
• By misrepresentation; or
• By mistake, (Section 14).

Each of the above terms, that is, 1) coercion 2) undue influence 3) fraud 4) misrepresentation or/and 5) mistake is defined and well described with illustrations in the Indian Contract Act. (Sections 15,16,17&18,20,21,22).