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Unit I
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 the other to such act or abstinence, he said to make a proposal.
Promise
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. The person making the proposal is called the Promisor and the person accepting the proposal is called the Promisee.
Consideration
When at the desire of the promisor, the promise or 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 is called a consideration for the promise.
Agreement
Every promise and every set of promises, forming the consideration for each other is an agreement. An agreement not enforceable by law is said to be void.
Contract
An agreement enforceable by law is a contract.
Offer
May be express or implied May be positive or negative Must intend to create legal relationship Terms of offer must be certain May be made to a specific person or class of persons or to any one in the world at large Must be communicated to the offeree Must be made with a view to obtain the assent May be conditional
Termination of Offer
By notice of revocation By lapse of time By failure of the acceptor to fulfil a condition precedent to acceptance By failure to accept according to the mode prescribed By death or insanity of the offeror By rejection
Contractual Capacity
Every person is competent to contract who is of the age of the majority according to the law to which he is subject and who is of a sound mind, and is not disqualified from contracting by any law to which he is subject.
Contractual Capacity
Mental Deficiency
Sound Mind (he is capable of understanding it and of forming a rational judgment as to its effects upon his interests)
Mental Incompetents Idiots Lunatics and insane persons
Free Consent
Agree upon the same thing in the same sense.
Performance
Section 37, Para 1, of the Contract Act lays down that, The parties to a contract must either perform, or offer to perform, their respective promises, unless such performance is dispensed with or excused under the provisions of this act, or of any other law. The offer to perform the contract is called Tender. Offer to perform or Tender may be called attempted performance. A tender, to be legally valid, must fulfill the following conditions.
Alteration (change in terms of contract Rescission (by mutual consent/nonperformance/voidable) Waiver (abandonment of a right which a person is entitled to)
Merger (superior right and inferior right coincide and meet in one and the same person) eg. Person buys the land which he has taken for lease before.
Breach
If a party breaks his obligations which the contract imposes; contract is no longer binding on the other person Actual Breach of Contract
At the time when the performance is due
One party fails or refuses to perform his obligation
Breach
Anticipatory Breach of Contract (done before the time for performance arrives)
By Renunciation (Express Repudiation) By creating some Impossibility (Implied Repudiation)