Contract Law
Contract Law
This domain tests the Contract Act 2056: proposal, acceptance, consideration, free consent, capacity, lawful object, performance, breach, damages and discharge. Questions often test whether a contract exists before asking about remedies.
Core rules
- A contract requires a lawful proposal, communicated acceptance and lawful consideration.
- Consent must be free from coercion, undue influence, fraud, misrepresentation and mistake.
- The object must be lawful, possible and not opposed to public policy.
- Breach may lead to damages, specific performance, rescission or restitution as the law allows.
- An invitation to treat is not an offer; acceptance must generally be communicated to the offeror.
Worked example
A offers by email to sell a motorcycle for Rs 2,00,000. B replies accepting the offer and pays. A refuses to deliver. A contract was formed when acceptance was communicated. B may claim specific performance if the motorcycle is unique, or damages for the loss suffered. The measure is compensation for loss naturally arising from the breach, not an arbitrary penalty.
Traps
Do not say consideration must be adequate; the law generally requires consideration, not equal value. Do not assume every contract must be written. Do not confuse offer with price quotation. Check capacity and free consent before enforcing. Do not award damages for remote or unproved loss.