Essentialelementsofvalidcontract 121009025914 Phpapp02

ESSENTIAL ELEMENTS OF A VALID CONTRACT
Raza Lilani . razamr@hotmail.com 09/10/12 07:59

OUTLINE
1. Offer and Acceptance
2. Contractual capacity
3. Free Consent
4. Consideration
5. Void agreement
6. Agreement in written
09/10/12
Raza Lilani . razamr@hotmail.com
07:59
OFFER & ACCEPTANCE
• First essential of a valid contract is agreement
Proposal Acceptance
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Promise
Agreement
Consideration
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WHAT IS PROPOSAL OR OFFER?
• 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 to such act or abstinence,
• he is said to make a proposal;
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ESSENTIAL OF VALID OFFER
• Express or Implied
• Legal relations
• Definite and clear
• Different from invitation to offer
• Specific or General
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• Communicated to the Offeree
• Should not contain negative conditions
• Subject to any conditions
• Must not contain cross offers
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OFFER OR PROPOSAL CAN BE REVOKED
BY
• Sending a notice of REVOCATION
• Laps of time
• Failure to fulfill conditions
• Death or Insanity of Offeror
• Revocation of offer by Offeree
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• Counter offer by the Offeree
• Death or Insanity of Offeree
• Subsequent Illegality
• Destruction of Subject matter
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ACCEPTANCE
Section 2(b)
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;
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ESSENTIAL OF VALID ACCEPTANCE
• Given by the Offeree
• Absolute & Unconditional
• In a prescribed manner
• Communicated to the Offeror
• Express or Implied
• Follow the offer
• Given within reasonable time
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Communication of
Offer, Acceptance and Revocation

COMMUNICATION WHEN COMPLETE
Communication of a proposal:
•The communication of a proposal is complete

when it comes to the knowledge of the person to
whom it is made.
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ILLUSTRATION
A proposes, by letter, to sell a house

. to B at a certain price
The communication of the proposal

is complete when B receives the
.letter
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COMMUNICATION OF AN ACCEPTANCE
• The communication of an acceptance is

complete,–
• as against the proposer, when it is put in a

course of transmission to him, so as to be
out of the power of the acceptor;
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As against proposer As against acceptor
when it is put in a as against the

course of transmission acceptor, when it
to him, so as to be out comes to the
of the power of the knowledge of the
; acceptor proposer
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ILLUSTRATION
B accepts A's proposal by a letter sent by post
Communication complete
As against A As against B
When the letter is When the letter is

posted by B received by A
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THE COMMUNICATION OF A REVOCATION
• The communication of a revocation is complete
• as against the person who makes it, when it is put

into a course of transmission to the person to
whom it is made, so as to be out of the power of
the person who makes it;
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The communication of a revocation is
complete
as against the person as against the person
, who makes it to whom it is made
when it is put in a course when it comes to his
of transmission to the knowledge
person to whom it is made
, so as to be out of the
power of the who makes
; it
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ILLUSTRATION
A revokes his proposal by telegram
Revocation is complete
when the telegram is when B receives it

dispatched
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ILLUSTRATION
. B revokes his acceptance by telegram
Revocation is complete
when it reaches him when the telegram is

dispatched
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REVOCATION OF
PROPOSALS & ACCEPTANCES
SECTIONS 5 & 6
• Revocation means:
• 1) mutual cancellation of a contract by the parties to it.

• 2) withdrawing an offer before it is accepted.
• 3) cancelling a document before it has come into legal
effect or been acted upon, as revoking a will.
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Revocation of a Proposal Revocation of Acceptance
A proposal may be An acceptance may be
revoked at any time revoked at any time
before the before the
communication of its communication of the
acceptance is complete acceptance is complete
as against the proposer as against the acceptor
but not the afterwards but not the afterwards
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COMMUNICATION OF REVOCATION
OF A PROPOSAL
The Person who makes The Person to whom

Revocation Revocation made
Letter of Revocation of Proposal
Letter posted on Letter received

10th April on 12th April
Communication completes Communication completes

as against A on 10th April as against B on 12th April
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COMMUNICATION OF REVOCATION
OF ACCEPTANCE
The Person to whom The Person who makes

Revocation made Revocation
Letter of Revocation of Acceptance
Letter received Letter posted on

on 12th April 10th April
Communication completes Communication completes

as against B on 12th April as against A on 10th April
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Illustration
IN CLASS ACTIVITY

FACTS:
1.Mr. Ali proposed by letter dispatched on 1st

April, to sell his car to Mr. Kamran in Karachi.
2.Mr. Kamran received the proposal on 3rd April
and gave his acceptance by letter posted 4th
April.
3.Mr. Kamran received acceptance letter on 6th
April
4.On 10th April Mr. Ali wrote a letter revoking his
proposal.
5.The letter was received by Mr. Kamran on 12th
April.
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Questions:
1.Whether contract has been effected?

2.On what date communication of proposal
complete
3.On what date communication of

Acceptance complete
1.as against A and
2.As against B
4.Was revocation of effect?
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ANSWER
1. Contract has been effected when communication of

acceptance complete.
2. Communication of proposal complete
1. As against A on 1st April
3. Communication of Acceptance complete
1. as against A on 4th April and
2. As against B on 6th April
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Held
THE REVOCATION WAS OF NO EFFECT UNTIL IT
REACHED B
The contract made on the date when acceptor accepts the

proposal
on 4th April.
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REVOCATION HOW MADE
• A proposal is revoked:
• (1) by the communication of notice of revocation by the

proposer to the other party;
•
(2) by the lapse of the time prescribed in such proposal
for its acceptance, or, if no time is so prescribed, by the
lapse of a reasonable time, without communication of
the acceptance;
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• (3) by the failure of the acceptor to fulfill a condition
precedent to acceptance; or
• (4) by the death or insanity of the proposer, if the

fact of his death or insanity comes to the knowledge
of the acceptor before acceptance.
09/10/12
07:59

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ESSENTIAL ELEMENTS OF A VALID CONTRACT

Raza Lilani . razamr@hotmail.com 09/10/12 07:59

The person to whom the proposal is made

Raza Lilani . razamr@hotmail.com 09/10/12 07:59

•The communication of a proposal is complete

A proposes, by letter, to sell a house

The communication of the proposal

• The communication of an acceptance is

• as against the proposer, when it is put in a

when it is put in a as against the

When the letter is When the letter is

• as against the person who makes it, when it is put

when the telegram is when B receives it

when it reaches him when the telegram is

• 1) mutual cancellation of a contract by the parties to it.

The Person who makes The Person to whom

Letter of Revocation of Proposal

Letter posted on Letter received

Communication completes Communication completes

The Person to whom The Person who makes

Letter of Revocation of Acceptance

Letter received Letter posted on

Communication completes Communication completes

Raza Lilani . razamr@hotmail.com 09/10/12 07:59

1.Mr. Ali proposed by letter dispatched on 1st

1.Whether contract has been effected?

3.On what date communication of

1. Contract has been effected when communication of

The contract made on the date when acceptor accepts the

• (1) by the communication of notice of revocation by the

• (4) by the death or insanity of the proposer, if the

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