THE INDIAN CONTRACT ACT 1872

An act meant to ensure that rights agreed between parties in a contract are legally enforced

Outline of the Presentation:

Introduction Definition of contract Relationship between Contract, Agreement, Promise and offer Essential Elements of Establishing a Valid Contract Types of Contract Summary
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Introduction
What is business?
(Business is as old as civilization. Over the period of time it has gained enormous power over customers/employees/shareholders)

Environment of Business Factors Constituting the Business Environment

Meaning & Nature of Law

What is Law? ( Legally Accepted Ways)
Law to ;
a) b) c) d) A Citizen A Lawyer A Legislator A Judge
A set of rules derived by the State to regulate the conduct of its people, recognized by the State and enforced by it on its people termed as Law Business Law represents all those legal rules which are connected with Trade, Industry & Commerce

Nature of Law -- Changing (Non Static) Objective Establishing Order

Characteristics of Law
A body of rules For the guidance and conduct of persons Imposed Enforced by the executive Presupposes a State Contents are non-static Develop Social Order & Compel Social Member to remain in order Serves Social/Political/Economic purpose Law & Morality ignorantia juris non excusat

Classifications of Law
Public Law / Private Law Criminal Law / Civil Law Substantive Law / Procedural Law International Law / Municipal Law Public International Law / Pvt. Int. Law

Sources of Business Law

English Mercantile Law Business Customs & Usages Statute Law Judicial Decisions of Higher Courts / System of Precedents

Law of

Contract

The law of contract is that branch of law which determines the circumstances in which promises made by the parties to a contract shall be legally binding on them. Its rules define the remedies that are available in court of law against a person who fails to perform his/her contract and conditions under which the remedies are available
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Nature of Indian Contract Act, 1872

Provides for remedies against failure The conditions under which remedies are available Ensures realization of reasonable expectation of the parties Not as exhaustive act (deals with the general principles of law of contract and some special contracts only) Doesnt lay down limits & duties rather create limiting principles The act is neither the whole law agreements nor whole law of obligations jus in rem v/s jus in personem (privity of contract)

Agreement & Contract

A contract is an agreement made between two or parties which the law will enforce - Section 2 (h) Agreement = Offer + Acceptance >> Promise (Promisee & Promisor) Consensus ad idem Legal Obligation should be created
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What is a Contract ?
An Agreement Enforceable by law Made between atleast two parties By which rights are acquired by one, & Obligations are created on the part of another And on failure, the other party has a remedy.
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AGREEMENT & ENFORCEABILITY

Every promise and very set of promises forming consideration for each other. Enforce by law

All agreements are not contracts, but all contracts are agreements
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Section 2 (h) defines a contract as an agreement enforceable by law thus to make a contract there must be : 1. An agreement 2. The agreement shall be enforceable by law. 3. All agreements are not enforceable by law 4. and therefore, all agreements are not contracts.

e.g. C makes an agreement with D to sell him some goods for Rs. 25000.
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Agreement
According to Section 2(e) an agreement is defined as every promise and every set of promises forming the consideration for each other. A promise is defined as an accepted proposal as Section 2(b) says a proposal when accepted becomes a promise Therefore it can be said that an agreement is an accepted proposal. In an agreement there is a promise from both the sides. For example, A promises to deliver his radio to B and in return B promises to pay a sum of Rs. 500 to A , there is said to be an agreement between A and B
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Essential of Valid Contract

1.An Agreement or offer and acceptance: -Agreement = Proposal + their acceptance -Agree. Must made by two person, one is making offer and another is accepting this offer. 2.Intention to create legal relation -Court would like to measure the degree of seriousness. -Not every loose conversation, not any exchange of pleasantries, not a casual social commitment, consider as a contact.
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Essential of Valid Contract

3.Competentnce of Parties Everybody is able to make contract except Minor, Person of Unsounded mind, Person who are disqualified by any other law. 4.Consideration Something in Return e.g. B promise to S that He will buy his bike for Rs.35000. 5.Free Consent If the parties make the agree. without any kind of pressure or misguidance, then the agree. would be the result of Free Consent. Consensus ad item between parties, which means that there must be complete understanding of each others mind between them.

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Essential of Valid Contract

6.Lawful object and consideration e.g. I will kill you Mr. if you will give mw 100 bottle wine. 7.Not expressly declared void (Cancelled) agreement Always void i.e. without legal effect because of their nature. e.g. Agree. made without consideration Agree. to do impossible act. Agree. on the meaning of which uncertain etc. 8.Certain Formalities -Necessary fulfillment of certain formalities for making certain specific types of contract -Made in written or in presence of witness.

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Case Law
A invite B to out for dinner together. B accepts the offer. A hires a taxi but B does not turn up. A has to give the dinner some compensation. Can A recover it from B? V offer to donate Rs. 11000 to hospital. The hospital accept the offer. Can it recover the amount ?

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An agreement is regarded as a contract when it is enforceable by law.

In other words, an agreement that the law will enforce is a contract. The conditions of enforceability are stated in Section 10. According to this section 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.
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Essentials of a valid contract

1. The agreement should be between two parties. An agreement is the result of a proposal or offer by one party followed by its acceptance by the other. 2. The agreement should be between the parties who are competent to contract. 3. There should be a lawful consideration and lawful object in respect of that agreement. 4. There should be free consent of the parties, when they enter into the agreement. 5. The agreement must not be one, which has been declared to be void.

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OFFER AND ACCEPTANCE

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Proposal of offer
The term proposal has been defined in section 2(a) as follows: When one person signifies to another his willingness to do or 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.

e.g. R tells S : I am ready to sell my machine for Rs.9000,are you ready to buy. This is clear offer from R to S.
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The willingness to do or abstain from doing something, i.e. the proposal or offer must be made with a view to obtain the assent of the other party thereto. For example, As willingness to sell his radio set to B for Rs. 500 if B accepts to purchase the same, amounts to proposal by A for the sale of the radio set. But if a statement is made without any intention to obtain the assent of the other party thereto that cannot be termed as proposal.
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Requirements for Valid Offer

1.Offer must be express or implied -Must be made in a manner which leave no doubt about it. -Proposal made in words, the promise is said to be express, and proposal mad otherwise than in words, it is said to be implied. e.g. B tells S : Can you repair my computer? Express offer A street seller of photo-albums quietly extends a piece before a passer by who takes it in his possession.Implied offer to sell. 2.Offer must intend to create legal relation 3.Offer must be certain and not vague in meaning Offer must be definite and certain in meaning

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Requirements for Valid Offer

4.Offer may be specific or General
There must be destination of offer. -If offer is targeted for one specific person, it is called a specific offer. -If it is targeted for the whole world at large, it is called general offer. e.g. Advertisement Carill Vs. Carbolic Smoke Ball Company

5. Offer must be communicated

Lalman Shulka vs Gauri Dutt

6.Offer must be distinguished from invitation to offer

e.g. Availability of Books in Book Store being available for letting out. Display of suit with price tag-All are example of invitation to offer. Advertiser may or may not sell this. e.g. Publishing of Time Table by railways are example of expression of an intention.
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Requirements for Valid Offer

What is difference between Invitation to Offer and General Offer? Invitation to Offer: Aims at taking the customer to the advertiser to start negotiation. General Offer: Aims at leading the offeree (to whom offer made) to the performance of specified condition which would amount to acceptance of offer. 7.An Offer should not contain a term forcing an action on Offeree e.g. B tells S that in case no reply is receiving from S within days , it will treated as acceptance of his offer. S are not bound by this offer.

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Offer and invitation to treat distinguished

A proposal or an offer has to be distinguished from an invitation to treat. Sometimes a person may not offer to sell his goods, but may make some statements or give some information with a view to invite others to make offers on that basis. For example, a bookseller sends a catalogue of books indicating prices of various books to many persons. This catalogue is not an offer to sell those books at prices indicated against those books. This is an Invitation to treat. If any person is interested in purchasing those books mentioned in the catalogue he may make an offer. Similarly, inviting persons to an auction where goods, which are to be auctioned, are displayed is not an offer for the sale of goods. The intending buyers, who make the bid make an offer. Such an offer, when accepted, by the fall of hammer or in some other customary way, will result

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Intention to create legal relationship

In order that an offer, after acceptance, can result in a valid contract it is necessary that the offer should be made with an intention to create legal relationship. Promise in the case of a social engagements is generally without an intention to create legal relationship, such an agreement cannot be considered to be a contract. Thus an agreement to go for a walk, to go to movie, to play some game, or entertain another person with a dinner, cannot be enforced in a court of law. Sometimes the party may expressly mention that it is not a formal or legal agreement, whereas in some other cases such an intention could be presumed from their agreement.

The test to know the intention of the parties is objective and not subjective. Merely because the promisor contends that there was no intention to create obligation would not exempt him from liability
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In Rose and Frank Co. Vs. Crompton & Brothers Ltd. the agreement between the parties provided ; This arrangement is not entered into . as a formal or legal jurisdiction in the Law Courts. that it (the agreement) will be carried through by parties with mutual loyalty and friendly co-operation. One of the parties made a breach of this agreement. In an action by the other party to enforce the agreement, it was held that since the agreement had provided that it was not a formal or legal agreement the same was not enforceable..
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In the case of Meritt Vs. Meritt, (1970) the husband and wife were the joint owners of a building which was subject to a mortgage to a building society. The husband left the matrimonial home to live with another woman. At that time, at the insistence of the wife, the husband signed a note saying that the wife will pay all outstanding amounts in respect of the house and in return I will agree to transfer the property into your sole ownership. It was held that in this case it was clear that the parties intended to create legal relationship and, therefore, the husband was bound by the contract
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Communication of offer
An offer when accepted results in a contract. An offer can be accepted only after the same has come to the knowledge of the offeree. It means that the offer has to be communicated to the offeree in order that the offeree can accept it. According to section 4, 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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If an offer has not yet been communicated, even if somebody acts according to the terms of the offer, he cannot be deemed to be the acceptor of the offer. Acting in ignorance of an offer does not amount to the acceptance of the same. This point may be explained by referring to the case of Lalman Shukla Vs. Gauri Dutt. (1913) In this case the defendants nephew absconded from home. The plaintiff, who was defendants servant, was sent to search the missing boy. After the plaintiff had left in search of the boy, the defendant issued handbills announcing a reward of Rs. 501 /- to anyone who might find the boy. The plaintiff who was ignorant of this reward, was successful in searching the boy. When he came to know of the reward, which had been announced in his absence, he brought an action against the defendant to claim this reward. It was held that since the plaintiff was ignorant of the offer of reward, his act of 32 bringing the lost boy did not amount to the acceptance of the offer, and therefore, he was not entitled to claim the

If the plaintiff has the knowledge of the offer, his acting in accordance with the terms thereof amounts to the acceptance of the same. In such a case it is immaterial that at the time of accepting the offer the acceptor does not intend to claim the reward mentioned in the offer. In Williams Vs. Carwardine (1833) the plaintiff who knew that the reward had been announced to be given to anyone who gave information leading to the conviction of an assailant for murder, gave the necessary information. While giving the information the plaintiff mentioned that she had given the information to ease her conscience. At that time she did not intend to claim the reward. It was held that since the offer had been accepted with its knowledge, there was a valid contract and, therefore, she was entitled to claim the reward.
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Cross Offers
When the offers made by two persons to each other containing similar terms of bargain cross each other in post they are known as cross offers. For example, on 1st January A offers to sell his radio set to B for Rs. 500/- through a letter sent by post. On the same date B also writes to A making an offer to purchase As radio set for Rs. 500 /- When A or B send their letters they do not know about the offer which is being made by the other side. In these cross offers, even though both the parties intend the same bargain, there arises no contract. A contract could arise only if either A or B , after having the knowledge of the offer, had accepted the same.
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In (Tinn Vs. Hoffmann 1873), A wrote to B indicating his willingness to sell 800 tons of iron at 69 s. per ton. On the same day B also wrote to A offering to buy 800 tons of iron at the same rate of 69 s. per ton. The two letters crossed each other in post. B brought an action against A for the supply of iron contending that a valid contract had been created between the two parties. It was held that in this case there were only two cross offers and the offer of neither of the parties having been accepted by the other, there was no contract which could be enforced
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Specific and General Offers

When the offer is made to a specific or an ascertained person it is known as a specific offer, but when the same is not made to any particular person but to the public at large it is known as general offer. For instance, an offer to give reward to anybody who finds a lost dog is a general offer This general agreement will be deemed to be accepted by anyone who actually finds the lost dog. The person, who accepts this offer, generally by performing the condition of the proposal, can bind the person making the offer. According to Section 8, Performance of the conditions of a proposal .. is an acceptance of the proposal. Thus although a general offer is made to the public at large, the contract is concluded only with that person who acts upon the terms of the offer.
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The case of Carlil Vs. Carbonic Smoke Ball Co. ( 1893) is an illustration of a contract arising out of a general offer. The facts of the case are : The defendants advertised their product Carbonic Smoke Ball, a preventive remedy against influenza. In the advertisement they offered to pay a sum of 100 pounds as reward to any one who contracted influenza, colds or any disease caused by taking cold, after having used the Smoke Ball three times a day for two weeks, in accordance with the printed directions.
They also announced that a sum of 1000 pounds had been deposited with the Alliance Bank to show sincerity in the matter. The plaintiff ( Mrs. Carlil ) relying on the advertisement purchased a Smoke Ball from a chemist, used the same in accordance with the directions of the defendants, but still caught influenza. She sued the defendants to claim the reward of 100 pounds advertised by them. It was held that this being a general offer addressed to all the world had ripened into a contract with the plaintiff by her act of performance of the required conditions and thus accepting the offer. She was therefore, entitled to claim the reward.
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Revocation Of Offer
It is only after the acceptance of an offer that there arises a contract and then both the parties becomes bound by their respective promises. Before the offer has been accepted it can be revoked. After the offer has been accepted it ripens into a contract and then it cannot be revoked. According to Section 5 : A proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards. In case of sale by auction the bids made at the auction are offers, and the highest offer may be accepted by the auctioneer. In such a case the sale is complete when the auctioneer announces its completion by the fall of the hammer or in any other customary manner ; and , until such announcement is made, any bidder may retract his 38 bid.

 Submission of a tender to supply or purchase goods at a stated price is making an offer. Person submitting the tender may withdraw his tender before the same has been approved. Even after the tender has been approved that remains only a standing offer, which is capable of being revoked before a contract arises by placing of orders. In Rajendra Kumar Verma Vs. State of Madhya Pradesh AIR 1972
The respondents advertised for receiving tenders for sale of Tendu Patta (leaves). The petitioner submitted his tender. Before the date of the opening of the tenders the petitioner made an application withdrawing his tender and also requesting that his tender be not opened. One of the conditions in the tender notice was that a tenderer may withdraw his tender before the tender are open provided that there should be at least one other valid tender when the tenders are opened. Petitioners tender was the only tender submitted. In spite of his request to withdraw the tender the Government accepted his tender. Since the petitioner did not execute the purchasers agreement , Tendu leaves were sold to somebody else at a lower rate, and then an action was brought against the petitioner to claim compensation for the loss suffered by the Government.
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 The contentioner of the petitioner was that since he had withdrawn his tender before the same had been opened and accepted, there was no offer in existence which could be accepted. The respondents, however, contended that the offer could not be withdrawn in accordance with the tender notice and, therefore, the petitioners offer was still alive and had ripened into contract by acceptance. It was held that in spite of the clause in the tender notice against the withdrawal of the offer, the petitioner had a right to withdraw his offer before the same was accepted. In this case there was no offer which could be accepted, there had arisen no contract between the petitioner and the respondents and, as such, the respondents had no right to claim any compensation.
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Revocation in contracts by post

We have already seen earlier that as per Section 5, a proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards. In contracts by post it has to be seen, as to what time the communication of acceptance is complete against the offeror, because no revocation is possible after such communication has been completed.

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When is the communication of acceptance complete against the offeror (proposer) ?

According to section 4 : The communication of an acceptance is complete as against the proposer, when it is put in the course of transmission to him, so as to be out of the power of the acceptor. For instance in response to my offer sent by post to you, you post the letter of acceptance to me. As soon you have posted the letter my power to revoke comes to an end. This may be made further clear by referring to the following illustration ; A proposes, by a letter sent by post, to sell his house to B . B accepts the proposal by a letter sent by post. A may revoke his proposal at any time before or at the moment when B posts his letter of acceptance, but not afterwards.
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Revocation how made?

Section 6, mentions the various modes of revocation, which are as under : A proposal is revoked (1) by the communication of notice of revocation by the proposer to the other party ; (2) by the lapse of 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 : (3) by the failure of the acceptor to fulfil a condition precedent to acceptance : (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: 43

By notice of revocation
1. An offer ripens into a contract after it is accepted. Before it has been accepted it creates no legal obligation and, therefore, it may be revoked at any time before it is accepted. To be effective the notice of revocation has to be communicated by the proposer and not by any body else. 2. By lapse of time A proposal is revoked by the lapse of 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 to fulfil a condition precedent

When the offer is subject to some condition precedent, such a condition has got to be fulfilled before the acceptance is made. If there is failure of the acceptor to fulfil a condition precedent to acceptance, the offer stands revoked. For example, if the offer requires the deposit of some earnest money, or the execution of some document etc. these conditions must be fulfilled. Failure to fulfil these conditions may make an offer to lapse.
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4. By

the death or insanity of the offeror

An offer is revoked by the death or insanity of the proposer, if the fact of death or insanity comes to the knowledge of the acceptor before acceptance. In India the death or insanity of the offeror does not automatically make the offer to lapse. The offer stands revoked if the fact of death or insanity comes to the knowledge of the acceptor before acceptance. It means that if the fact of death or insanity has not come to the knowledge of the offeree while he accepts the offer, it is valid acceptance giving rise to a contractual obligation. In England the position is different. There, after the offeree knows about the offerors death, the offer lapses and cannot be accepted.
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Standing, Open or continuing offer

An offer which is allowed to remain open for acceptance over a period of time is known as a sanding, open or a continuing offer. For example, an offer to supply 1,000 bags of wheat from 1st January to 31st December, in accordance with the orders which may be placed from time to time to time, is a standing offer. As and when the orders are placed that amounts to acceptance of the offer to that extent. In the above stated illustration if an order for the supply of 100 bags of wheat is placed on 15th January, there is acceptance of the offer to that extent and the offeror becomes bound to supply those 100 bags of wheat. So far as the remaining quantity is concerned this offer can be revoked just like any other offer. Tender for supply of goods is a kind of standing offer. An advertisement inviting tenders is merely invitation for quotations. When the tender is approved it becomes a standing offer. 47

In Bengal Coal Co. Vs. Homie Wadia & Co., the defendants (Bengal Coal Co.) agreed to supply coal to the plaintiff (Homie Wadia & Co. ) up to a certain quantity at an agreed price for a period of 12 months, as may be required by the plaintiffs from time to time. The plaintiffs placed orders for the supply of coal and the same were complied with. Before the expiry of 12 months, the defendants withdrew their offer to supply further coal, and refused to comply with the orders to supply further coal, and refused to comply with the orders placed thereafter. They were sued for breach of contract. There was simply a continuing offer to supply coal. They were bound to supply coal only as regards orders which had already been placed, but were free to revoke their offer for supply of coal thereafter.
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ACCEPTANCE
A proposal when accepted, results in an agreement. It is only after the acceptance of the proposal that a contract between the two parties can arise. According to Section 2 (b) : 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 does not become bound thereby until acceptance. As soon as his proposal is accepted that is known as promise whereby both the parties become bound.
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Requirements for Valid Acceptance

1.By a proper person -The proper person to accept the offer is the one to whom it is targeted. -Offeror cannot be forced to be bound in a contract with a person with whom he did not want to be involved. 2..Within proper time Time specified by Offeror. e.g. Advertisement of IPO
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Requirements for Valid Acceptance

3.Must be absolute and unqualified( total and without condition)
Offeree should neither add to nor reduce from the offer anything from his side. -B offer to sell his Car to S at Rs.20,000. S accept the offer with the condition that payment shall take after a month. This is counter offer from S to B. The offer from B stand rejected.

4.Must be Communicated

Mental acceptance is no acceptance.

5.Must be given in a proper Mode.

-If Offeror prescribed ay mode of acceptance , it must be adopted by offeree for acceptance. E.g. by fax, by mail, by registered post etc

e.g. A makes an offer to B and says : If you accept the offer, replay by e-mail only. B send the reply by post.
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Requirements for Valid Acceptance

6.Accepatnce must succeed the offer Two identical cross offers can not form an agreement. e.g. A sends a letter to B containing an offer. Almost at the same time, B also sends a latter to A containing an offer on exactly same lines The two offer cross each other during postal journey. So they called identical cross offer. Can both of them together form an agreement between A and B on the logic that they represent a common desire and common understanding ? Only two offer are made and there is no acceptance.
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Requirements for Valid Acceptance

7. Offer once rejected can not be accepted. B makes an offer to give job to H at Rs. 7000 pm salary. S says, No, I want Rs. 8000 pm month. B refuses. S says, Alright , I will work for Rs.7000. B says , I am not interested in you. There is no contract between B and S because Bs initial offer came in to end with its rejection by S through a counter offer. Now, it is Ss offer to work for Rs. 7000 which B is rejecting. (Hyde vs Wrench)
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Effect of Acceptance
A contract is created only after an offer is accepted. Before the acceptance is made neither party is bound thereby. At that stage the offeror is free to revoke or withdraw his offer, and the offeree is free not to accept the offer or reject the same. After the offer has been accepted it becomes a promise which, if other conditions of a valid contract is satisfied, binds both the parties to the promise. After acceptance each party becomes legally bound by the promise made by him through the medium of offer or acceptance of it.

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Essentials of a valid acceptance

In order that acceptance of an offer can result in a contract the acceptance must satisfy the following requirements. 1. Acceptance should be communicated by the offeree to the offeror. 2. Acceptance must be made in the prescribed manner, and if no manner is prescribed, in some usual and reasonable manner. 3. Acceptance should be absolute and unqualified. 4. Acceptance should be made while the offer is still subsisting.
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1.

Acceptance should be communicated

We have seen above that when the person to whom proposal is made signifies his assent thereto, proposal is said to be accepted. It means that offeree must signify his assent, or communicate acceptance. the the the the

When the parties are face to face, communication could be oral. When they are at a distant place communication could be made by post, by telegram, by a message on phone, through a messenger, or in any other reasonable manner. Sometimes the conduct of a person might indicate his assent. For example, when a passenger boards a bus and travels thereby, he impliedly assents to pay the necessary fare.
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Communication must be made by the offeree or his authorised agent

In order that the acceptance can be treated as valid it is necessary that the same must be communicated to the offeror either by the offeree, or by some duly authorised person on his behalf. If the communication is made by an unauthorised person it does not result in a contract. In Powell Vs. Lee, (1908) Powell was one of the candidates for the post of head master of a school. The Board of managers passed a resolution selecting him for the post. No communication about this decision was made to Powell by the Board. one of the members of the Board who had not been authorised to communicate this decision, acting in his individual capacity, informed Powell about his selection for the post. Subsequently, the Board of managers met again and decided to cancel the appointment of Powell and appoint another candidate, Parker, in Powells place. Powell sued Lee, the chairman of the Board of managers for the breach of contract. It was held that since the resolution passed by the Board was not communicated to Powell by the Board, or any authorised person on its behalf, it could not give rise to a contract. Powells action therefore failed.
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When is communication of acceptance complete ?

As soon as the communication of acceptance is complete that results in a contract whereby both the parties become bound. In case the parties to the contract are present at the same place, one making the offer and the other communicating the acceptance, both parties become bound immediately. The problem arises when the parties are at a distant place and the contract is concluded through post
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Acceptance by post
Section 4 of the Act mentions the following rules when the communication of acceptance is made by post : 1. The communication of acceptance is complete as against the proposer, when it is put in the course of transmission to him, so as to be out of the power of the acceptor. 2. The communication of acceptance is complete as against the acceptor, when it comes to the knowledge of the proposer.

Illustration B accepts As proposal by a letter sent by post. The communication of the acceptance is complete, -As against A , when the letter is posted ; As against B, when the letter is received by A.

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Offeror bound when letter of acceptance posted to him

It has been noted that the communication of acceptance is complete as against the proposer when the letter of acceptance is posted to him. Once the letter of acceptance is posted the offeror becomes bound. He becomes bound immediately on the posting of the letter to him and it makes no difference that the receipt of the letter is delayed in transit, or even if the letter is lost in the post and the offeror never receives it.
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 In Dunlop Vs. Higgins (1848), Dunlop & Co. offered to sell 200 tons of pig iron at 65 sh. Per ton to Higgins & Co. through their letters dated 22nd and 28th January, Higgins & Co. received the letters on 28th and 30th January and replied on the same indicating their acceptance to purchase the pig iron in accordance with the offer. Due to frosty weather there was disruption in the train services and the letter of acceptance instead of reaching on 31st January reached Dunlop & Co. on 1st February. Dunlop & Co. refused to supply pig iron on the ground that the receipt of the letter of acceptance by them had been delayed. It was held that Dunlop & Co. had become bound by the contract as soon as the letter of acceptance was posted to them.
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Communication of acceptance to a wrong person

It has already been seen that the offeror becomes bound as soon as the letter of acceptance is posted to him. If the letter of acceptance is posted at the wrong address or to a wrong person, that will not bind the offeror. In this connection reference may be made to the decision of the court in the case of Karan Singh Vs. The Collector, Chhatarpur to explain the point. In that case in an auction of the quarry lease the petitioners bid of Rs. 1,800 was the highest bid. In accordance with the auction conditions the petitioner deposited the security deposit and earnest money of Rs. 540. The bid was not accepted at the auction. The bid was subsequently accepted by the collector, but instead of sending the communication of acceptance to the petitioner the same was wrongly sent to somebody else. The officer concerned realised the mistake after the expiry of the period of lease. Then a demand notice was sent to the petitioner asking him to pay the lease money. The petitioner, on the other hand, demanded the refund of the security deposit of Rs. 540. It was held that the petitioners bid, which was an offer, although accepted on file, did not result in a contract as no intimation was sent to the petitioner which was received by him. The demand notice for recovering the lease money was quashed and the respondents were directed to refund the security deposit.
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Acceptor Bound when his letter reaches the offeror

It has been noted above that though the offeror becomes bound when the letter of acceptance is posted to him, the acceptor himself does not become bound thereby. Acceptor becomes bound by his acceptance when his letter of acceptance comes to the knowledge of the offeror.

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Revocation of acceptance (India)

In India, since the acceptor does not become bound immediately on posting his letter of acceptance, he is free to revoke the acceptance by adopting speedier mode of communication, whereby his communication of revocation of acceptance may reach earlier than his letter of acceptance. Section 5 expressly permits the revocation of acceptance through the following provision : An acceptance may be revoked at any time before the communication of the acceptance is complete as against the acceptor, but not afterwards. Illustration A proposes, by a letter sent by post, to sell his house to B. B accepts the proposal by a letter sent by post. B may revoke his acceptance at any time before or at the moment when the letter communicating it reaches A, but not afterwards.
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Revocation of acceptance (England)

Under the English law, once the letter of acceptance is posted it binds both the parties and there appears to be no scope of revocation of acceptance by sending a telegram or through a phone call. Although there are no English cases on the subject are of the view that the posting of the letter of acceptance once posted cannot be revoked.
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Acceptance by Telephone or Telex

Section 4 and 5, which makes provisions about the communication of offer and acceptance and revocation thereof, do not make a mention whether these provisions relate to communications through letters and telegrams only or they also include communication made with the help of telephone and telex also. In Bhagwandas Vs. Girdhari Lal & Co. (1966) the Supreme Court has held that in case of telephonic conversation the position is the same as in the case where the parties are in the presence of each other, and the rule of contract through post does not apply to such contracts. In case of acceptance sent by post the contract is concluded when the letter of acceptance is posted, whereas in the case of acceptance by phone, the contract is deemed to be complete when the offeror hears the acceptance at his end rather than when the acceptor speaks the words of acceptance. 66

Communication of acceptance not needed in acceptance by conduct

It has been noted above that as a general rule no contract can arise unless and until the acceptance has been communicated to the offeror. In exceptional cases the terms of the offer may be such which waive the necessity of communication of acceptance, or a certain kind of conduct on the part of the offeree may be treated sufficient to create a contract. If that is so, the contract could be created even without communication of acceptance. According to Section 8, Performance of the conditions of the proposal. Is an acceptance of the proposal. ( case of Mrs. Carlil Vs. Carbonic Smoke Ball Co.)
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2.

Acceptance should be in the prescribed manner

If the proposal prescribes any manner of acceptance, the acceptance must be made in that manner. When the manner of acceptance has not been prescribed, it must be made in some usual and reasonable manner. Acceptance by post, telegram, telephone or through personal messenger may be considered to be a usual manner of acceptance. If no manner of acceptance is prescribed, acceptance in some usual and reasonable manner will suffice. If, however, the proposal prescribes any particular manner of acceptance, the acceptance must be made in that manner. If the proposal prescribes a manner in which it is to be accepted, and the acceptance is not made in such manner, then, according to Section 7 (2), of the Indian Contract Act, the proposer may, within a reasonable time after acceptance is communicated to him, insist that his proposal shall be accepted in prescribed manner, and not otherwise ; but 68 if he fails to do so, he accepts the acceptance.

3.

Acceptance should be absolute and unqualified: It lapses by rejection or counter-offer

Another essential of valid acceptance, which can convert a proposal into a contract, is that the acceptance must be absolute and unqualified. Conditional or qualified acceptance is no acceptance which could result in a contract. By such an acceptance the offer is deemed to be rejected. By such an acceptance the offer is deemed to be rejected. The effect of such a counter-offer in the eyes of law is to destroy the original offer. And an offer once refused is dead and cannot be accepted unless renewed.
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4.

Acceptance should be made while the offer is still subsisting

We have seen earlier that the offeror is free to withdraw the offer, or the offer is revoked under various circumstances mentioned in section 6. After the offer has been withdrawn or has lapsed there is nothing which can be accepted. It is, therefore, necessary that the acceptance should be made while the offer is still alive and subsisting. Acceptance after the lapse of the offer cannot give rise to a contract. Similarly, the offer is deemed to have ended by rejection of the original offer or a counter offer.
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Consideration
-Something in Return Sec. 2 (d) defines consideration as follow : When at the desire of the promisor, the promisee 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 abstinences or promise is called a consideration for promise.
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Legal Rules as to Consideration

1.Consideration at the desire of the promisor e.g. A saves Bs goods from fire without being asked to do so. A can not demand payment for his service. 2. Consi. from promisee or any other person. It is immaterial who provides the consideration for a persons promise so long as consideration is there. 3. Con. may be past, present or future. Past Con. : A finds Bs Son and B promises to pay A 10000. Present Con. : At the time of making promise Future Con. : A promises to deliver goods to B when the ship arrives and b promises to pay A Rs 1000 against the receipts of goods. Its future, as both the parties will perform after the arrival of ship.

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Legal Rules as to Consideration

4. Con. need not be adequate e.g. X sell his house worth Rs 1 lac for Rs. 100 to Y. 5. Con. must be real and not illusory. i. Physically Impossibility e.g. X promises to put life into Ys dead wife should Y pay him Rs. 500. ii. Legal Impossibility iii. Uncertain Consideration 6.Con. must be something which promisor not already bound to due. e.g. There was a promise to pay to the Vakil an additional sum if the case was successful. 7.It must not be illegal, immoral or opposed to public policy.

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Exceptions (Sec. 25)

1.Love and Affection e.g. A father promises to pay his son 1000 out of affection and love and registers it. Its a contract 2.Compensation for voluntary services e.g. X finds Ys purse and give it to him. Y promises to give X Rs. 50. This is contract. 3. Promise to pay a time-barred debt.
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Capacity to Contract
Capacity means Competency of the parties to enter into a valid contract. Sec.11 declares the following persons to be incompetent to contact: i. Minor ii. Persons of Unsounded Mind iii. Persons disqualified from any other law.
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Minor
According to Indian Minority Act, 1875., a person who has completed his 18th year of age is considered too be minor.

Law Relating to minors Agreements: NO LEGAL ACTION TAKEN AGAINST MINOR

1.Absolutly Void
Agree. of minor is absolutely void and nullify. e.g. A minor take loan of Rs. 20000 from moneylender and put mortgage of his house in favor of moneylender. Later, minor started an action to get the mortgage cancelled.

2. Agree. may be enforced for minors benefits. e.g. A minor may give loan to a person and the borrower may refuse to return money on the ground that agreement is void. -Fundamental rule, aim to protect the minor.
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Law Relating Agreements

to

minors

3. Rule of Estoppel does not apply against minor -If minor mislead the other party to believe that he is of the majority age, and then some benefits get under an agreement , he will be permitted to deny latter the fact that he was of minority age. Thereby , he will have no liability towards the other party. 4. Normally , no restitution would be permitted -No recovery from Minor Law regarding restitution is according to Sec.33 of Specific Relief Act 1963 5.Apprenticeship agreements are enforceable Such Agreement are made for minors benefit to enable him to acquire skill under trained person for future. -Agreement must be made under Apprentice Act 1961.

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Law Relating to minors Agreements

6. Service argee. for minor is not enforceable
e.g. Film Producer agreed with the guardian of minor girl to give to the girl the role in his film. Later, he gave role to other girl. Can girl make case on Film producer? 7. Normally , specific performance of promises shall not be ordered. Agree. By minor may be ordered for specific performance if some condition are satisfied. i. It is made by guardian on behalf ii. The Guardian is competent to make that agreement iii. The agreement for minors benefit 8. No ratification on attaining majority age. e.g. K (minor) take loan from B of Rs.10000 and give promissory note in favor of B .K will not be liable under this P/Note even after attaining majority age by K. 78

Law Relating to Minor Agreements

9. Minors liability for necessaries If person provide any support or necessities to minor who are not enable to make contract, this person who had provide necessity have right to reimburse from the property of the minor, because it is benefit of the minor. 10.Minor as a member of partnership firm -Minor can not be partner. 11.Minor as shareholder A minor can become a shareholder in a company through his guardian who will act as his trustee. Minor directly can not entered into contract with the company. 12.Minor as an agent A minor can be appointed as a agent because agent do not incur personal Liability
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Law Relating to Minor Contracts

13.Position of Minors Parents -Parents are not liable for Minors act 14. Position of a joint contract of major and minor -Minor will not be liable major (adult) are liable. 15. Insolvency of Minor - Court can not be declared insolvency by court.
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Free Consent
According to Sec. 13 Two or more person are said to consent when they agree upon the same things in the same sense. This mean that there should be perfect identity of mind (consensus ad idem) regarding the subjectmatter of contract. According to Sec. 14 consent is said to be free when it is not caused by any of the following : 1. Coercion 2. Undue Influence 3. Fraud 4. Misrepresentation 5. Mistake
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Illustrations:
i. A has two cars, one blue and other red. He wants to sell his blue car. B who knows of only As red car, offer to purchase As car for Rs. 20000. A accept the offer thinking that it is for his blue car. This is no consent because both the parties are not understanding the same things in the same sense. ii. If B goes to A and on the point of pistol asks A to sell his red car for sum of Rs. 20000 to him, there is consent because both are understanding that red car is the subject matter of the consent, but the consent is not free because it has been obtained by Coercion.

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Undue Influence
Undue influence is the improper use of any power possessed over the mind of the contracting party. According to Sec. 16 a contract is said to be affected by undue influence when: -(a) the relation subsisting between the parties are such that one of the parties is in a position to dominate the will of the other, and (b) Use that position to obtain an unfair advantages over other.
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Undue influence:
The person deemed to be in position to dominate the will of the other. - Where he holds a real or apparent authority over the other like master and Servant , child and parents.

-Where he stand in a fiduciary relationship (Mutual trust and confidence) like religious guru and follower, doctor and patients, lawyer and clients. - Where he makes a contract with a person whose mental capacity is temporarily or permanently affected by reason of age, illness or mental or body distress.
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Difference Between Coercion and Undue Influence

1.Mode of Obtaining Consent - In Coercion ,Consent obtained by threatening to act. - In U.I. , Consent obtained by using dominating power. 2. Type of Force -In Coercion, physical force is exercised. - In U.I. , Moral forced is used. 3. Existence of Relationship -relationship between the promisor and the promisee is not necessary. -Some sort of relationship MUST exist between the two parties to the contract.

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FRAUD
Fraud means method of misleading a person deliberately to cause in him a wrong understanding of so as to obtaining thats persons consent for a contact. E.g. M falsely tells R that the car that he was offering to sell was once owned by Sachin Tendulkar. This is a fraud against R committed to obtain his consent to purchase the car.
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MISREPRESENTATION
Misrepresentation is a false representation made innocently without any intention of deceiving the other party. It may include two things: (a)Wrong statement of a material facts not known to be false (b)Non-disclosure of the facts where there is a large duty to disclose without any intention to deceive.
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Diff. between Fraud and Misrepresentation

1. Intention: - In fraud, there is intention to deceive (mislead to somebody). -In Mis. , there is no intention to deceive. 2. Consequence: -In Fraud, damage can be available to the affected party for the loss suffered . -In Mis. , no such damage are available. 3. Defense: -In Fraud, the guilty party does not have any defense in its favor. In Mis. , the guilty party have defense in its favor.

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Mistake
A mistake means an error in understanding the fact relevant for formation of a contract.

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Case law
- X , a poor widow, borrowed Rs. 3000 from a moneylender at 100% per annum rate of interest for the purpose of enabling her to establish her right of maintenance. Is she liable to replay the loan on these terms? - No, this is an unconscionable transaction and thus amount to a contract caused by undue influence. A woman went to a jeweller, falsely represented herself to be a wife of Sachin Tendulkar and took with her a ring on the pretext of getting the approval of her husband . She deposit the ring with Mr. Kambli. Can the jeweller recover the ring from Mr. Kambli? - Yes, because , there was a mistake of identity on the part of the jeweller, Thus the agreement was void.

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Void Agreement
1. Agreement made by incompetent parties (Sec. 11) Everybody is able to make contract except Minor, Person of Unsounded mind, Person who are disqualified by any other law. 2. Agree. the consideration or object of which is unlawful in part. (Sec. 24) I will kill you Mr. if you will give mw 100 bottle wine. 3. Agree. Made without consideration. (Sec. 25)
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Void Agreement
5. Agree. in restraint of trade. (Sec. 27)
X and Y were competitor shopkeeper in a locality in Surat. Y agreed to pay X , a sum of money if he would close his business in that locality.. X did so but Y refuse to pay money.

6. Agree. in restraints of legal proceeding. (Sec. 28) 7. Agree. the meaning of which is uncertain. (Sec. 29) 8. Agree by way of wager. (Sec. 30) A agrees with B that if there is a rain on a certain day, A will pay B Rs. 50. If there is no rain B will pay Rs. 50. A bet on horse race. A bet on winning or loosing of cricket match. 9. Agree to do impossible act. (Sec. 56) 10. Agreement made under a mutual mistake of the fact. (Sec. 20)
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Void Agreement

Agreement void where both parties are under mistake as to matter of fact. Where both the parties to an agreement are under a mistake as to a matter of fact essential to the agreement, the agreement is void. Explanation.-An erroneous opinion as to the value of the thing which forms the subject-matter of the agreement is not to be deemed a mistake as to a matter of fact.
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Illustrations
(a) A agrees to sell to B a specific cargo of goods supposed to be on its way from England to Bombay. It turns out that, before the day of the bargain, the ship conveying the cargo had been cast away and the goods lost. Neither party was aware of the facts. The agreement is void. (b) A agrees to buy from B a certain horse. It turns out that the horse was dead at the time of the bargain, though neither party was aware of the fact. The agreement is void.
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Effect of mistakes as to law

.-A contract is not voidable because it was caused by a mistake as to any law in force in [India]; Contract caused by mistake of one party as to matter of fact.- A contract is not voidable merely because it was caused by one of the parties to it being under a mistake as to a matter of fact.
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Consideration valid or not ?

What considerations and objects are lawful and what are not.-The consideration or object of an agreement is lawful, unless- it is forbidden by law ; or is of such a nature that, if permitted, it would defeat the provisions of any law; or is fraudulent ; or involves or implies injury to the person or property of another or ; the Court regards it as immoral, or opposed to public policy.
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Illustrations
(a) A agrees to sell his house to B for 10,000 rupees. Here B's promise to pay the sum of 10,000 rupees is the consideration for A's promise to sell the house, and A's promise to sell the house is the consideration for B's promise to pay the 10,000 rupees. (b) A promises to pay B 1,000 rupees at the end of six months, if C, who owes that sum to B, fails to pay it. B promises to grant time to C accordingly. Here the promise-of each party is the consideration for the promise of the other party and they are lawful considerations.
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(c) A promises, for a certain sum paid to him by B, to make good to B the value of his ship if it is wrecked on a certain voyage. Here A's promise is the consideration for B's payment and B's payment is the consideration for A's promise and these are ________ considerations. (d ) A promises to obtain for B an employment in the public service, and B promises to pay 1,000 rupees to A. The agreement is void, as the consideration for it is unlawful
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Agreement in restraint of trade void

Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void. Saving of agreement not to carry on business of which good-will is sold. Exception 1.-One who sells the good-will of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, so long as the buyer, or any person deriving title to the good-will from him, carries on a like business therein, provided that such limits appear to the Court reasonable, regard being had to the nature of the business.

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Agreements in restraint of legal proceedings void

Every agreement,- (a) by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights; or (b) which extinguishes the rights of any party thereto, or discharges any party thereto from any liability, under or in respect of any contract on the expiry of a specified period so as to restrict any party from enforcing his rights, is void to that extent. Saving of contract of refer to arbitration dispute that may arise
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Agreements void for uncertainty

Agreements, the meaning of which is not certain, or capable of being made certain, are void. Illustrations (a) A agrees to sell to B " a hundred tons of oil ". There is nothing whatever to show what kind of oil was intended. The agreement is void for uncertainty. (b) A agrees to sell to B one hundred tons of oil of a specified' description, known as an article of commerce. There is no uncertainty here to make the agreement void.
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(c) A, who is a dealer in coconut-oil only, agrees to sell to B "one hundred. tons of oil". The nature of A's trade affords an indication of the meaning of the words, and A has entered into a contract for the sale of one hundred tons of coconut-oil. (d) A agrees to sell to B " my white horse for rupees five hundred or rupees one thousand". 'There I is nothing to show which of the two prices was to be given. The agreement is void,
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Agreements by way of wager void

A wager agreement between two parties to the effect that if a given uncertain event happens, one party shall pay a certain sum to the other and on the contrary event happening. For eg. If the event turns out one way, one party shall lose and the other shall gain. Agreements by way of wager are void ; and no suit shall be brought for recovering anything alleged to be won on any wager, or entrusted to any person to abide the result of any game or other uncertain event on which any wager is made.
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CONTINGENT CONTRACTS
"Contingent contract" defined.-A " contingent contract " is a contract to do or not to do something, if some event, collateral to such contract, does or does not happen. Illustration A contracts to pay B Rs. 10,000 if B's house is burnt. This is a contingent contract.

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Enforcement of contracts contingent on an event happening

Contingent contracts to do or not to do anything if an uncertain future event happens cannot be enforced by law unless and until that event has happened. If the event becomes impossible, such contracts become void. Illustrations (a) A contracts to pay B a sum of money when B marries C. C dies without being married to B. The contract becomes void. (b) A makes a contract with B to sell a horse to B at a specified price, if C, to whom the horse has been offered, refuses to buy him. The contract cannot be enforced by law unless and until C refuses to buy the horse.
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Enforcement of contracts contingent on an event not happening

Contingent contracts to do or not to do anything if an uncertain future event does not happen can be enforced when the happening of that event becomes impossible, and not before. Illustration A agrees to pay B a sum of money if a certain ship does not return. The ship is sunk. The contract can be enforced when the ship sinks.
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Expiry of time
Illustrations (a) A promises to pay B a sum of money if a certain ship returns within a year. The contract may be enforced if the ship returns within the year, 'and becomes void if the ship is burnt within the year. (b) A promises to pay B a sum of money if a certain ship does not return within a year. The contract may be enforced if the ship does not return within the year, or is burnt within the year.
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Agreement contingent events void

on

impossible

Contingent agreements to do or not to do anything, if an impossible event happens, are void, whether the impossibility of the event is known or not to the parties to the agreement at the time when it is made. Illustrations (a) A agrees to pay B 1,000 rupees if two parallel lines should meet. The agreement is void. (b) A agrees to pay B 1,000 rupees if B will marry A's daughter C. C was dead at the time of the agreement
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Cases
In carew Co. Ltd v North Bengal, where two sugar manufactures had entered into an agreement allocating zones to procure sugar for meeting the needs of their respective factories and each undertook not to draw any cane from the zones alloted to the other factory, it was held that the agreement was in restraint of trade and therefore void. Similarly where four ginning factories entered into an agreement fixing uniform rate for ginning cotton and pooling their earnings to be divided between them in certain proportions, it was held that such an agreement was valid and enforceable. A combination which tends to create monopoly and which is against the public interest is void.
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 IN Attwood v. Lamount where the contract of service is provided that on termination of employment the tailor would not carry on similar business within 10 miles of his employer, the agreement was void. But if same restriction is made while the term is on, it is not restraint from trade. A, in Bombay, enters into a contract with B in madras with a condition that all disputes will be subject to Bombay jurisdiction. This limits the right of B to sue only in Bombay court in case of dispute. Such an agreement is valid. A agrees to sell B hundred tons of oil. The agreement is void for uncertainty as there is nothing whatever to show what kind of oil was intended.
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 An agreement to pay certain sum when able to pay is void or not ? A agrees to sell B all the grains in my grainary at Ramnagar. Is there any uncertainty ? A contracts to pay B a sum of money when B marries to C. C dies without being married to B. The contract becomes void. A agrees to pay Re 1000 if two parallel lines meet. The agreement is void. A agrees with B to put life into a dead man. The agreement is void. Money lent for the purpose of gambling can be recovered even though lent with the knowledge of the parties.

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Quasi Contract
There is no offer, no acceptance, no consensus ad idem and in fact neither agreement nor promise. These contact constituted by the Law, and therefore termed as Quasi Contact.

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Kinds of Quasi Contracts

1. 2. 3.

(Sec. 68 to 72)

Supply of necessaries Payment by an interested person Obligation to pay for non-gratuitous acts e.g. Mr. X , a trader, leaves goods at Ys house by mistake. Y treats the goods as his own. He is bound to pay for them to X. 4. Responsibility of Finder of Goods Mr. X picks up a diamond on the floor of Ys shop. He hands it over to Y to keep it till true owner is found out. No one appears to claim it for quite some weeks inspite of the wide advertisement in the newspapers. X claims the diamond from Y who refuse to return. Y is bound to return the diamond to X who is entitled to retain the diamond against the whole world except true owner.
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The finder can sell the goods in the following cases:

1.When the things found is in danger of perishing 2.When the owner cannot be found out 3. When the owner is found out, but he refuse to pay the lawful charges of the finder 5. Mistake or coercion e.g. A and B jointly owe Rs. 100 to C. A alone pays the amount to C. and B not knowing this fact, and pays Rs. 100 to C again. C is bound to pay the amount to B.

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Quantum Meruit
Quantum Meruit means as much as earned. When a person has done some work under a contact, and some event happens which makes the further performance of the contact impossible, then the party who has performed the work can claim remuneration for the work he has already done.

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The claim for quantum meruit arises in the following cases

When an agreement is discovered to be void. e.g. GE was employed as a managing director in a company. After he rendered service for three months. It was found that the director were not qualified to appoint him. 2. When something is done without any intention to do so gratuitously. 3. When there is an express or implied contract to render service, but there is no agreement as to remuneration. In such cases, reasonable remuneration is payable. e.g. There was an implied agreement between P and a fire brigade for the services of the brigade. 4. When an indivisible contract is completely performed but badly.
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Kinds of Contracts

(Sec. 68 to 72)

Classification of Contract Mode of Creation Express Contr. Implied Cont. Extent of Execution

Enforceability

Valid

Illegal

Void

Unenforceable

Executed

Executory

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Classification of Contract on the basis of Enforceability:

a. Valid Contract: Contract which satisfy all the essential elements of a valid contract as laid down be Section 10. b. Void Contract: An agreement may be enforceable at the time when it was made but later on, due to certain reason, it become void and unenforceable. c. Illegal Contract: All illegal agreement are void but all void agreement are not necessarily illegal. e.g. An agreement with minor is void but not illegal. d. Unenforceable Contract: Certain contract become void because the law court will not enforce them due to not fulfillment of certain formalities
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Classification of Contracts
2. Classification of Contract on the basis of Mode of Creation a. Expressed Contract: Contract is made by words spoken or written. b. Implied Contract: Contract which come into being on account of the act of the parties and not by their express words, written or spoken. 3. Classification of Contract on the basis of Extent of Execution a. Executed Contract Where both the parties to the contract have fulfilled their respective obligation, the contact said to executed. b. Executory Contract Where one or both the parties to the contact still to perform certain things in future or under the terms of the contract something remains to be done, the contract is termed as an executory contract.
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Thank You

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