Law of Contracts
Law of Contracts is the working core of civil practice. The Indian Contract Act 1872, the Specific Relief Act 1963 and the Sale of Goods Act 1930 supply most questions: formation, consideration, free consent, discharge, damages and specific performance.
Formation
- Offer and acceptance must be unconditional; acceptance must be communicated to the offeror.
- Consideration under s.2(d) must be real, not adequate; s.25 lists exceptions, including natural love and affection between near relatives reduced to writing and registered, and past voluntary services.
- Capacity: a minor's agreement is void ab initio, though the minor may be a beneficiary.
Free consent and validity
- Coercion, undue influence, fraud, misrepresentation and mistake vitiate consent; agreements without free consent are voidable.
- Void agreements include those in restraint of marriage, trade or legal proceedings, and wagering agreements.
Performance and breach
- Discharge by performance, agreement, impossibility, operation of law or breach.
- Anticipatory breach allows the promisee to sue immediately or wait.
- Damages under s.73 follow Hadley v. Baxendale: natural consequences and contemplation of the parties; s.74 deals with liquidated damages.
Specific relief
- Specific performance is discretionary; injunction, declaration and possession are the other remedies.
- Quasi-contracts (ss.68-72) prevent unjust enrichment.
Worked example
A promises to gift B Rs 10,000. The promise is unenforceable for want of consideration. It would be enforceable under s.25(1) only if made out of natural love and affection to a near relative and put in writing and registered.
Traps
Consideration need not be adequate but must be lawful; a minor's agreement cannot be ratified; fraud differs from misrepresentation in intent; s.74 caps compensation at the amount named.