Contract Act, 1872-Essentials

Contract Act

1872- Essentials

Equations:

Offer + Acceptance = Promise
Promise + Consideration = Agreement
Agreement + Legal Binding = Contract

Agreement

Agreement
Every promise and every set of promises forming the consideration for each other is an agreement

Promise

Promise
When the person to whom the proposal is made signifies his assent to it, the proposal is said to be accepted.
A proposal, when accepted becomes a promise

Contract

Contract
An agreement enforceable by law is a contract.

Offer/Proposal

When one person signifies to another his willingness to do or to 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.

Lapse of an Offer (Revocation)

1- Revocation before acceptance by the offeree
2- Lapse of time
3- Death or insanity of the offeror
4- Non-fulfillment of condition precedent to the offer
5- Counter offer is made
6- Non-acceptance according to requirement of offeror
7- Non-acceptance/express rejection by the offeree
8- Subsequent illegality or destruction

Types of Offers

1- Specific Offer
2- General Offer
3- Cross Offer
4- Standing/Open/Continuing Offer

Essentials of an Offer

1- Two persons
2- Certain and definite
3- Contractual intention
4- Communication
5- Objective of consent
6- Conditional
7- Negative confirmation
8- Invitation of an offer
9- Communication of special conditions

Acceptance

Acceptance:
When the person to whom the proposal is made signifies his assent to it,
the proposal is said to be accepted.

Essentials of Acceptance

1- Absolute and unconditional
2- Communication
-By post
-Contracts over telephone/telex/fax

3- Reasonable time
4- Reasonable mode
5- Acceptor must be aware of the proposal at the time of acceptance
6- Acceptance must be given before the lapse of an offer
7- Negative Confirmation

Timing of Revocation

1- Offer
A proposal may be revoked at any time before acceptance OR
the communication of its acceptance is complete as against the proposer, but not afterwards

2- Acceptance
An acceptance can be revoked at any time before the communication of the acceptance is complete as against the acceptor, but not afterwards

Communication of Revocation

1- As against the person who makes it:
When it is put in a course of transmission

2- As against the person to whom it is made:
When it comes to the knowledge of the revokee.