contract law new
TRANSCRIPT
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Contract Law
Prof. Manoj Nair
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Definition
A contract is an agreement that isenforceable at law
………Indian Contract Act
A contract is a promise or a set of
promises for the breach of which the law
gives a remedy, or the performance of whichthe law in some way recognizes as a duty
…………US Restatement
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Offer + Acceptance + Consideration
Contract
Offer
Acceptance
Consideration
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Offer
the indication by one person to another of his or her willingness to enter into a contract with that person oncertain terms
Essential Features of an offer Offer must be clear and definite
Must be communicated to the offeree
Minimum requirement offer should include:
Delivery date
Price Terms of payment and
description of the item of offer/ type of service
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Invitation to treat
Also known as invitation to offer Invitation to treat is not an offer, but an indication of
persons willingness to negotiate a contract.
Examples Display of goods for sale
Auction
Advertisements
Invitation to bid (ITB)
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An Offer Comes To An End
Revocation
Rejection( explicitly or by counter-offer)
Termination (lapse of Time)
Death
Condition bringing an offer to an end
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Acceptance
All an offer needs is a “yes” to make a contract
Essentials of acceptance
Must respond to the offer Must be communicated
Should be made before the offer lapses
Must be absolute and unconditional
Silence ......................???????????
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CONSIDERATION
Consideration is the price for which the promise of the other is bought .Consideration could be anything
of value (such as an item or service)
Example A signs a contract to buy a car from B for Rs.50,000
A’s consideration is the Rs. 50,000 and
B’s consideration is the car
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CONSDIERATION
The British courts have come to defineconsideration as
“rights, interest, profit or benefit accruing to one party, or
some forbearance, detriment, loss or responsibility given
suffered or undertaken by the other”
Exceptions to the Rule
Love and Affection
………….
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Essentials Of A Valid Contract
Consensus ad idem- meeting of the minds
Free consent
Capacity to Contract
Lawful consideration
Legal and not against public policy
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FREE CONSENT
Consent is said to be free and voluntary if it is notcaused by;-
Coercion
Undue influence Fraud
Misrepresentation
Mistake
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Lawful consideration and not against public
policy
The consideration or object of contract is lawful unlessand unless and until it is;
Forbidden by law
Fraudulent
Implied or involved injury to person or property
Defeat any provisions of law Immoral
Opposed to public policy – examples
Agreement for restraint of Marriage
Agreement in restraint of parental rights Agreements which interfere with Administration of
justice
Agreements for restraint of trade/ personal freedom
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Types of Contracts
Executory and executed A executory promise is a promise for future performance
If the contract has been executed, both parties have performed
Express and Implied
An express contract can be written or oral
In an express contract the duties of the parties are clearly
elucidated
An implied contract is implied by conduct
After receiving treatment from a doctor, you will be asked tomake arrangements for payment
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Quasi Contracts The plaintiff is suing for quantum merit (the fair market
value of her services) The plaintiff performed valuable services
The defendant knowingly received these services
The plaintiff expected to get paid if the services were used bythe def.
The def. was unjustly enriched
Example
A plumber accidentally installs a sprinkler system in the lawn of the wrong house. The owner of the house had learned the
previous day that his neighbour was getting new sprinklers.That morning, he sees the plumber begin installing them in hisown lawn. Pleased at the mistake, he says nothing, and thenrefuses to pay when the plumber hands him the bill, claimingthat he never agreed to pay for the sprinklers
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Writing requirements
Oral contracts in general are enforceable
For certain contracts, the contract must be in writing
…………………………………….
…………………………………..
…………………………………….
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Performance of Contract
Performance in law means the act of doing thatwhich is required by a contract.
Each party to the contract is bound to perform
promises according to the stipulated terms
Most contractual obligations are discharged by
performance
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Breach of Contract
If performance fails in its essential purpose, it ismaterial breach
A material breach relieves the non-breaching party from
the obligation to pay the breaching party By inserting a time is of the essence clause, late
performance becomes a breach
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Remedies for breach of contract
Rescission
Damages
Quantum merit- as much as earned in proportion to
the work done
Specific performance
Injunction
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Discharge of Contract
Discharge of contract means termination of thecontractual relationship between the parties thereto
By Performance
By agreement or consent By impossibility
By lapse of time
By operation of law
By breach of contract
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Discharge by Agreement or consent
Novation- substitution
Recession- cancellation
Alteration- by mutual consent
Remission- acceptance of a lesser sum then what
was contracted for
Waiver
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Discharge Due to Impossibility
Impossibility If performance is objectively impossible due to war or
embargoes, the promisor is discharged without liability
If there is a subjective impossibility due to events that are
foreseeable, the obligation to perform is not discharged
If the promisor made a bad bid, he cannot claim he cannot
perform because he is not making any money
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Discharge by impossibility of performance
Destruction of subject matter of the contract
Death or disablement of parties
Subsequent illegality
Declaration of War
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Doctrine of Privity of Contract
a contract is a contract between the parties onlyand no stranger to the contract can sue even if
the contract is avowedly made for his benefit ….
English law
when, at the desire of the promisor, the promiseeor 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 iscalled a consideration for the promise… Section 2(d) of
the Indian Contract Act
Contracts (Rights of Third Parties) Act 1999