Unit 1: Indian Contract Act & related laws

Section 2(h): a contract is an agreement enforceable by law. Contract = agreement + enforceability.

• Offer: a proposal expressing willingness to do or abstain from something to obtain assent. An invitation to offer (price tags, catalogues) is not an offer.
• Acceptance: must be absolute, unconditional and communicated in the prescribed manner.
• Capacity (Section 11): a person must be a major (18+), of sound mind and not disqualified by law. A minor's agreement is void ab initio (Mohori Bibee v. Dharmodas Ghose, 1903).
• Free consent (Section 14): consent is not free if caused by coercion, undue influence, fraud, misrepresentation or mistake.
• Consideration (Section 2(d)): something in return — it may be past, present or future, need not be adequate, but must be real and lawful. "No consideration, no contract", with exceptions (natural love and affection in writing, past voluntary service, time-barred debt promise in writing).

Contracts are discharged by performance, mutual agreement (novation, rescission, alteration, remission), impossibility (frustration), lapse of time, operation of law, or breach.

• Bailment (Section 148): delivery of goods for a purpose, to be returned after the purpose is achieved (giving a watch for repair). Bailee must take reasonable care.
• Pledge (Section 172): bailment of goods as security for a debt (pawning gold for a loan). The pawnee may sell after notice if the debt is unpaid.
• Agency (Section 182): an agent acts for a principal in dealings with third parties. Created by express or implied agreement, necessity, estoppel or ratification; terminated by revocation, renunciation, completion, death or insolvency.