Contract act 1 to 4

 

Preliminary

Section 1

1.this act may be called the Indian contract act 1872 .

2.it extends to the whole of India 

3.this act had been enacted on 25 April 1872 and this act had been commenced from 1 September 1872 

4.classification of this act

Sec .1 to 75 general contract

Sec.124 to 238 special contract

Section 76 to 123 sale of goods act 1930 

5.this is act no.9 of 1872 and this is not an exhaustive law .

6.this is a codified  and substantive law which create rights and liabilities.

7.contract word derived from Latin word contractum which means dran together

8. Contract is depend on consensus ad idem which means meeting of minds over same things 

9 contract creates right in personam and its depend on pacta sunt  servanda 

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Savings ----nothing herein contained shall affect the provision of any statue ,act or regulation not hereby expressly repealed nor any usege or custom of trade ,nor any incident of any contract ,not inconsistent with the provision of this act

2.intrepretation clause ----

In this act the following words and expressions are used in the following senses ,unless a contrary intention appears from the contract .

A.when one person signifies 

to another his willingness to do or to abstain from doing anything 

With a view to obtain the assent of that other to such act or abstinence 

He is said to make a proposal 

A.proposal must be communicated 

Lalman shukla versus Gouridutt 1913 

Facts 

The nephew of respondent had strayed .he had sent his munim to locate his nephew .he had distributed in Kanpur with reward of rs.501 / for anyone who will locate his nephew .munim had found his nephew and he had known about this proposal after this incidents .he had filed a case to get this reward.

Decision 

In this case proposal had not been communicated to the munim properly .he had not accepted this proposal . without knowledge of proposal no acceptance can be made .

2.R versus Clark 

Facts ----anyone who will swim 100 gaz  in dockyard on the first  day of year .but anyone who will fall down from ship and swim to save his life .that person cannot claim for reward .because he does not know about this proposal.

Decision ----same  decision had been pronounced in this case .that proposal must be communicated in proper way .

General proposal 

Case no.1

Carlil versus carbolic smoke ball company 1893

Respondent company had advertised that anyone who will use this medicine 💊 and if he suffers from a cold and a fever ,100 pond will be given to him .the company had deposited 1000 pond  in Reliance bank.plaintiff had used this medicine  and suffered from a fever .that plaintiff had filed a suit to get 100 pond as compensation.

Decision by court ----

Although this is a general offer but company had deposited 100 pond in a bank . So it cannot be said that this is a hollow commitment .

Principle -----a proposal can be made to public but public cannot enter into a contract .any person who accept this proposal and fulfil conditions of cone.that person can enter into  contract .

According Anson it is not essential that proposal can be made to a definite person but no contract can be made unless a definite person accept it .

Proposal and invitation to treat ....

Proposal and invitation to treat are both different things 

Proposal means when proposer shows his  final desire to enter into contract.

Such advertisement which are started to start businesses conversation.those are invitation to treat .

Landmark case 

Harvay versus  Fancy 

Facts 

Plaintiff had sent a telegram to respondent 

Will you sell your property which name is Bumper hall pen ,will you sell ?

Send telegram of cash price 

Respondent had sent reply by y telegram   that minimum  cash price of bumper pen is  900 pond .

Plaintiff had replied that we have accepted it .

Respondent had refused to sell pen at this price .

Decision ---it had been held that to disclose minimum price of pens is not offer but invitation to treat /offer 

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2.macferson versus Apanna 

Plaintiff had proposed to buy house of respondent at rs.6000/ .he had asked agent of respondent that proposal had been accepted or if he wanted to get more money .those excessive money will be accepted . respondent replied that he will take minimum 10,000/ . plaintiff had accepted this .but respondent had denied this .

Decision -----two mention rs .10000 /as price of this house is just a invitation to offer not a  proposal 

Example ---

Books for sale 

House for rent 

Catalogue 

Information of bid 

Time table of train 🚂 

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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 be comes promise.

Acceptance of proposal 

1.acceptance must be oral or in written or by act 

2.intention must be shown any evidence to enter into contract

Cases 

Brogdan versus Metropolitan Railway company 

B without legal contract  ,he continued to give coal to a Railway company .after some times a legal agreement had been written and sent to B .after some formalities B had sent to it to Railway company .the agent of company put this agreement in a drawer  without give permission .he continued to give coal and get money .after some time dispute had been raised between both parties .B protested that he was not bound by contract .the act of company show that they wanted to enter into a contract .

Important case 

Felthouse versus Bindlay 

Communication must be made to the proposer and his indicated person 

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Offer /proposal must be created to establish legal relations 

Landmark case 

1.Balfour versus Balfour1919 

Defendant was doing job in Ceylon /shrilanka  .he visited England with his wife and children .his wife had fallen ill there .before departure from England he promised that he will send 30 pond every months.he stopped to sent money after some months.divorce had been happened between them .wife had filed a suit against husband for remaining amount .

Decision --in this case parties have no intention to create legal relation.the parties must keep to create legal relations before enter into a contract.these case depend on compromise between husband and wife 

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2.JONES VERSUS PADVETON 

A  divorcee woman was living in Washington with her child .her mother had wanted that she should live with her in Trininad .she persuaded her daughter .she promised to give her expenditure with a house .her mother had wanted that she should pursue LLB degree there .

Her daughter could not get LLB DEGREE and she married with another person .both relation had spoiled .mother stopped to give money and filed a suit to evacuate her house

Decision -the girl could not get LLB degree in five years.promise of mother was in form of contract .she did not follow instructions of mother . So this contract had intention to create legal right.

3.merit versus merit 

Both spouse were joint owner of a house .house was mortgaged .husband left the house and began to live with another woman .on request of woman , husband signed a document if she had repaid the mortgaged money ,he would have transferred the house .

Decision -both parties had to create legal relationship here .so this is not social contract .

Proposal+acceptance ----promise  2 c

2a +2 b---2 c

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2C.the person making the proposal is called the promisor 

And the person accepting the proposal is called the promisee

2D.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 abstinence or promise 

Is called a consideration for the promise

 consideration had been defined by Polak and black stone .but accepted defination had been explained in 

Curie versus Misa by justice Lush .

Consideration 

At desire of promisor 

Durga Prasad versus Baldev 

Plaintiff had build some shops at the order of collector .these shops had been got by some traders .they promised to give commission.but the traders  did not give commission.plaintiff had filed the suit 

Decision---these shops had not been built at desire of respondent but on the orders of collector.

2.at the desire of promisor any work is consideration .even promisor did not get any personal profit .

Kedarnath versus Gori mohamad 

Commissoner of Hawara nagar palika had made to list to get donation to build bridge in Hawara. Gouri mohamad had promised to give 100/  with many people .but he did not give that donation .case had been filed to get money .

Decision ----respondent was liable to give 100/ because  work had been done at his desire .even he did not get benefit personally .

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Case 2 

Abdul Aziz versus Masoom ali

Respondent had promised to give 500 / to repair a mosque .repairing had not been started .a case had been filed to recover money

Decision ----case had been quashed because work had not been started 

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PRIVITY OF CONTRACT AND CONSIDERATION 

according english law any person who is not party of contract can also give consideration.this principle had been given in following case 

Daton versus pool 

Facts ----a person wanted to give some cash in her daughter marriage .so he had wanted to log a huge tree to get money .but his son prevented him and promised to give 1000 pond to her sister .but he did not give that money .case had been filed by his sister and her husband .

Decision ---here that girl was not party to contract .but in this case  the court had decided to give 1000 pond to her sister despite she was not party to a contract.

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Case no.2 vvv important.

Twindle versus Atkinson 1861

Plaintiff marriage had been fixed with daughter of G.father of plaintiff and G decided to give money to this couple per year .G had not perform his promise and he had died . plaintiff had filed a case for money 

Decision ----plaintiff was not party of contract .so he would not have filed a case for money .PRIVITY OF contract had been raised from this case . although plaintiff had benefit in this contract .

Case no.3

Dunlop newmatic tyre versus sellfrige and company 

Dunlop company had sold the tyres to Dew  and company  with this condition in that it will not breach price index.Dew company had sold these tyre to Sellfrige company  .this company had breached price index . Case had been filed against sellfridge company 

Decision ----this had been decided in this case that only the party to contact can file a suit .this law cannot accept principle of 

Jus quaesitum tertio 

According to which any other person cannot file a suit who is not party to contract.

3.Chinaya versus Ramaya 1882  

Facts ----a old woman had given her property to her daughter . With this condition that she will have to give 653/ to her sister per year . agreement had been signed by respondent.but he breached her promise .case had been filed by plaintiff .

Decision ----consideration had been given by sister of plaintiff and promise had been given to plaintiff so the Facts are similar according to Daton versus pool .

4.Jamuna Das versus Ram Awatar 1911.

A mortgaged his land to B for 40,000/.he had sold this land to D for 44,000/.he had left 40,000/ to pay B and take his land .B had filed a case on B for 40,000/ .here B could not have filed a case because he is a mortgagee .only mortgagor can pay money and redeem his land 

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Contract 2 h 

Proposal +Acceptance+consideration+enforceable by law =contract 

PACE=CONTRACT 

an agreement is enforceable by law is a contract.

1.first essential condition is that both parties have intention to make legal relations .if any promise make  just for fun such type of promises cannot become contract.

Essential conditions for a Valid contract 

1.parties should be competent sec .11 DAS

2.consent should be free section 13 to 20

C U F MIS MI 

3.consideration and object should be lawful sec 23

4.not declared void expressly 

Section 26 to 30 and sec.56 .

M T L W I

Difference between void and voidable contract .

1.void contract are not enforceable by law on Othet hand voidable contract is enforceable only from the one party 

2.void contract was  valid in beginning and at last become void .voidable contract may be Valid or void .

3.under any void contract parties do not have any legal right . voidable contract aggrieved party gets a right to rescind the contract and the aggrevied party can get damages 

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(E) every promise and every set promises 

Forming consideration for each other 

Is an agreement.

2 b +2 d --------2 e 

Promise+consideration ------agreement 

(F) promises which from the consideration 

Or part of the consideration 

Are called reciprocal promises .

(G)  An agreement not enforceable by law is a said to be void  contract 

(I) an agreement which is enforceable by law at the option of one or more of the parties thereto 

But not at the option of the other or others is a voidable contract .

(J) a contract which ceasese to be enforceable by law becomes void when it ceases to be enforceable.

Important point 

1. Void contract  is void ab initio while voidable contract is valid till it will be declared void 

Surendra prasad singh versus jai prakash university 

2.the condition of proposal must be clear and readable otherwise such conditions are not bounded 

Secretary Rajasthan government versus venketraman 

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1.counter offer ---when the original offer is sent to the proposer with modification and variations .this is called counter offer . original offer automatically rejected 

If a person offers to sell his watch in 500/ and buyer say to purchase in 400/ .

The second offer is counter offer 

2.cross offer -----when two parties exchange identical offers in ignorance of the time of each other 's offer .the offer  are called cross offer .there is lack of legal acceptance .so there is no creation of contract .

Chapter 1

Of the communication 

Acceptance and revocation 

of proposal 

3. Communication ,acceptance and revocation of proposals

-----the communication of proposal ,

The acceptance of proposal 

And the revocation of proposal and acceptance respectively 

Are deemed to be made by any act ot omission of the party 

Proposing ,accepting or revoking 

By which he intends to communicate such 

Proposal ,acceptance or revocation 

Or which has the effect of communicating it 

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Section 4-----

The communication of a proposal is complete 

When it comes to the knowledge of the person to whom it is made

A ---promisor

B----promisee 

When B has known about the proposal .proposal is complete.

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 power of the acceptor /promisee.

A-----promisor 

B----promisee (post the letter of acceptance)

A is bound by his proposal

As against the acceptor when it comes to the knowledge  of the proposer 

A ----promisor /proposer (got the letter of  acceptance)

B-----promisee /acceptor (post the letter of acceptance)

When A  got the letter of acceptance then B has been bounded by his acceptance .

The communication of 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 

As against the person to whom it is made ,when it comes to his knowledge.

Illustrations 

A .A proposes by letter to sell a house to B at certain price 

The communication of the proposal is complete when B receive the letter .

A -----offer/proposal 

(to sell his house) ----B

When B has known about this offer 

Offer has been completed.

B.B accept A proposal by letter sent by post 

As against A ,when letter is posted 

As against B ,when the letter received by A

A------a  gives a proposal

B-----b accepts the proposal 

B sent his letter of acceptance 

A is bounded when it is dispatched 

B is bounded when A has known about this acceptance 

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(C) A revokes his proposal by telegram the revocation is complete 

As against A when telegram is despatched 

It is complete as against B 

When B recevies it 

A ----revoke his proposal 

A is bound by this revocation at the time of dispatched 

A ---revokes his proposal 

B ---got telegram of revocation 

Now B is bounded by that revocation of proposal 

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B revokes his acceptance by telegram  B revocation is complete as against B when the telegram is despatched and as against A when it reaches him

B -----revokes his acceptance 

B is  bound by this revocation at the time of dispatched 

A is bound by revocation when it comes in the knowledge of A .