1.

Offer (Proposal)
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
When the person to whom the proposal is made, signifies his assent there
to , the proposal is said to be accepted.
3. Promise
A Proposal when accepted becomes a promise. In simple words, when an
offer is accepted it becomes promise.
4. Agreement
Every promise and every set of promises, forming the consideration for
each other, is an agreement.
5. Contract
An agreement enforceable by law is a contract.
6. Void
An agreement not enforceable by law is said to be void.
7. Essentials of a Valid Contract
a. Agreement - Offer and Acceptance
b. Legal purpose
c. Lawful Consideration
d. Capacity to contract
e. Consent to contract
f. Lawful object
g. Certainity
h. Possibility of Performance
i. Not expressly declared void
j. Legal formalities like Writing, Registration etc.
All the above ingredients must be satisfied in every valid contract. It can
be noted that all contracts are agreements, but not all agreements are
contracts.
8. Competent to Contract
According to section 11of the Indian Contract Act the following three
classes of persons are incompetent to contract .
a. minors,
b. persons of unsound mind , and
c. persons disqualified by law to which they are subject.
9. Sound mind
A person is said to be of sound mind for the purposes of making a
contract, if , at the time when he makes it, he is capable of understanding
it and of forming a rational judgment as to its effect upon his interests.
10.Kinds of Offer
a. Express offer
b. Implied offer

c.
d.
e.
f.
g.

Specific offer
General offer
Cross offer
Counter offer
Standing open and continuous offer

11.Express offer
When the offeror expressly communication the offer the offer is said to be
an express offer the express communication of the offer may be made by
spoken word or written word.
12.Implied offer
When the offer is not communicate expressly. An offer may be implied
from The conduct of the parties or the circumstances of the case.
13.Specific offer
It means an offer made in a particular person or a group of person. It can
be accepted only by that person to whom it is made communication of
acceptance is necessary in case of specific offer.
14.General offer
It means on offer which is made to the public in general. General offer can
be accepted by anyone. If offeree fulfils the term and condition which is
given in offer then offer is accepted.
Communication of acceptance is not necessary is case of general offer.
15.Cross offer
When two parties exchange identical offers in ignorance at the time of
each others offer the offers are called cross offer.
16.Counter offer
When the offeree give qualified acceptance of the offer subject to modified
and variations in the terms of original offer. Counter offer amounts to
rejection of the original offer.
17.Standing, open and continuous offer
An offer is allowed to remain open for acceptance over a period of time is
known as standing, open and continuous offer. Tender for supply of goods
is a kind of standing offer.
18.Consent
Two or more persons are said to consent when they agree upon the same
thing in the same sense.
19.Free consent
Consent is said to be free when it is not caused by1. coercion
2. undue influence
3. fraud
4. misrepresentation
5. mistake

20.Coercion
Coercion" is the committing, or threatening to commit, any act forbidden
by the Indian Penal or the unlawful detaining, or threatening to detain, any
property, to the prejudice of any person whatever, with the intention of
causing any person to enter into an agreement.
21.Undue Influence
A contract is said to be induced by "undue influence" where the relations
subsisting between the parties are such that one of the parties is in a
position to dominate the will of the other and uses that position to obtain
an unfair advantage over the other.
In particular and without prejudice to the generality of the foregoing
principle, a person is deemed to be in a position to dominate the will of
another(a) where he holds a real or apparent authority over the other, or
where he stands in a fiduciary relation to the other; or
(b) where he makes a contract with a person whose mental capacity
is temporarily or permanently affected by reason of age, illness, or mental
or bodily distress.
(c) where a person who is in a position to dominate the will of
another, enters into a contract with him, and the transaction appears, on
the face of it or on the evidence adduced, to be unconscionable, the
burden of proving that such contract was not induced by undue influence
shall lie upon the person in a position to dominate the will of the other.
22.Fraud
Any of the following acts committed by a party to a contract, or with his
connivance, or by his agents, with intent to deceive another party thereto
or his agent, or to induce him to enter into the contract:
a. the suggestion as a fact, of that which is not true, by one who does
not believe it to be true;
b. the active concealment of a fact by one having knowledge or belief
of the fact;
c. a promise made without any intention of performing it;
d. any other act fitted to deceive;
e. any such act or omission as the law specially declares to be
fraudulent.
23.Misrepresentation
a. the positive assertion, in a manner not warranted by the information
of the person making it, of that which is not true, though he
believes it to be true;
b. any breach of duty which, without an intent to deceive, gains and
advantage to the person committing it, or any one claiming under
him; by misleading another to his prejudice, or to the prejudice of
any one claiming under him;
c. causing, however innocently, a party to an agreement, to make a
mistake as to the substance of the thing which is the subject of the
agreement.

24.Doctrine of Restitution
The equitable doctrine of restitution says that a minor can be compelled to
restore any property or goods which he obtains by misrepresenting his age
only if it is traceable in his possession.
25.Illegal Contract
It is a contract which the law forbids to be made. All illegal agreements are
void but all void agreements or contracts are not necessary illegal.
Contract that is immoral or opposed to public policy are illegal in nature.
26.Illegal Agreements
Illegal agreements are void from the very beginning agreements are void
from the very beginning but sometimes valid contracts may subsequently
becomes void.
27.Consideration
Consideration is a quid pro quo i,e something in return it may be
(i) Some benefit right, interest, loss or profit that may accrue to one party
or,
(ii) Some forbearance, detriment, loss or responsibility suffered on
undertaken by the other party.
28.Quasi Contracts
Under special circumstances, obligations resembling those created by a
contract are imposed by law although there is no contract between the
parties. Such contracts are called Quasi-Contracts.
a. Claim for Necessaries supplied to a person incapable of contracting or
on his account
b. Reimbursement of person paying money due by another, in payment of
which he is interested
c. Obligation of person enjoying benefit of non-gratuitous act
d. Responsibility of finder of goods
e. Liability of person to whom money is paid, or thing delivered by
mistake or under coercion.
29.Discharge of Contracts
A Contract may be discharged in any of the following ways
a. Discharge by Performance.
b. Discharge by Mutual Consent or Agreement
i. Novation - When a new contract is substituted for an existing
contract
ii. Alteration
iii. Rescission
iv. Remission - Accepting the lesser sum of amount than what
was contracted for
c. Discharge by subsequent illegality or impossibility
i. Destruction of Subject-matter
ii. Failure of ultimate purpose
iii. Death or personal incapacity of Promisor

iv. Change of Law

d. Discharge by lapse of time
e. Discharge by operation of law
f. Discharge by breach of contract
i. Anticipatory breach
ii. Actual breach
30.Tort
Tort is violation of right in rem i.e. in a person or as a member of
community. The right is available against the world at large.
31.Breach of Contract
Breach of Contract is an infringement of a right in personam. The right is
available against the other contracting party.
32.Wagering Agreement
An agreement between two persons under which money or moneys worth
is payable by one person to another on the happen or non happening of a
future uncertain event is called a wagering agreement.
33.Contingent Contract
It is a contract, to do or not to do something. If some event, collateral to
such contract does or does not happen.