CONTRACT ACT,
1872
WHAT IS CONTRACT ?
Contract is anything that is an agreement enforceable by the law of land.
It has two major elements in it viz – “agreement” and “enforceable by law”.
Agreement: According to Section 2 (e),the term agreement as “every promise and every set of
promises, forming the consideration for each other”.
Agreement= Offer + Acceptance
Enforceable by law: Enforceable means capable of being enforced. Enforceable is an action
which can be made effective. For example, an agreement or contract between persons in which
either of the parties can legally compel the performance of the other is called an enforceable
contract.
1. Coercion (Section 15)
Coercion means using force to compel a person to enter into a contract. So force or threats are used to obtain the consent of the
party under coercion, i.e it is not free consent.
2. Undue influence (section 16)
Section 16 of the act contains the definition of undue influence.it states that when the relations between the two parties are such
that one party is in a position to dominate the other party, and uses such influence to obtain an unfair advantage of the other party
it will be undue influence.
3.Fraud (section 17)
Fraud means deceit by one of the parties i.e. when one of the parties deliberately makes false statements. So the misrepresentation
is done with full knowledge that it is not true,or recklessly without checking for the trueness,that is said to be fraudent,it is
absolutely impairs free consent.
4.Misrepresentation (section 18)
Misrepresentation is when a party makes a representation which is false,inaccurate,incorrect etc. the difference here is the
misrepresentation is innocent i.e. not intentional. The party making statement believes it to be true.
3 v’s of contract
1.Valid: A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable”. This makes all those
contracts that are not enforceable by a court of law as void.
2.Voidable: 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.
3.Void:Void contract is defined by section 2(j) viz., a contract which is legally enforceable when entered but become void due to
supervening impossibility of performance.
Boulton Vs. Jones 1597
Jones used to have business dealings with Brockle Hurst. He sent an order (offer) to Brockle Hurst for the purchase of certain
goods. By the time the order reached Brockle Hurst, he had sold his business to Boulton. Boulton receiving the order sent all the
goods to Jones as per the order without informing Jones of the changing of the hands of the business. When Jones learnt that the
goods were not supplied by Brockle Hurst, he refused to pay for the goods. His contention was that he had never placed an order
to Boulton, the offer being made to Brockle Hurst, and therefore had no intention to make a contract with Boulton.
Judgement
It was held that Jones was not liable to pay.
Conclusion
When the offer is made to a specific or an ascertained person, it is known as a
specific offer. Specific offer can be accepted only by that specified person to whom the offer has been made.
Also acceptance can be given only by the person whom the offer is ma
Har Bhajan Lal vs Har Charan Lal And Anr. on 8 May, 1925
This application in revision must be allowed, the decision of the learned Judge of the Court of Small Causes, Bareilly, set aside,
and judgment entered for the plaintiff for Rs. 500. It is a curious case. A young boy of 13 or 14 years, Ram Kishen, ran away from
his father's home at Baheri on the 9th of June, 1924. The father eventually issued a pamphlet, offering a reward in these terms :
"Anybody who finds trace of the boy and brings him home, will get Rs. 500." That is the translation that has been put to me as the
correct translation, and there seems to be no substantial difference about the matter. It happened that one of these hand-bills came
into the possession of the plaintiff, and the plaintiff undoubtedly had the boy's name in his memory. On the 19th of July the
plaintiff was at the dharamshala of the Bareilly Junction railway station. There he saw a boy, overheard part of a conversation,
realised that the boy was the missing Ram Kishen and promptly took him to the Railway Police Station where he made a report
and sent a telegram to the boy's father saying that he had found his son. The question is whether he had not substantially fulfilled
the terms offered. The hand-bill was an offer open to the whale world and capable of acceptance by any person who fulfilled the
condition. The real condition of the promise in the hand-bill was. "I will pay Rs. 500 to any one who finds my son and brings him
home". I am of opinion that the plaintiff substantially performed the condition and that the judgment of the Small Cause Court is
extremely artificial. In these circumstances that decision must be reversed and there must be a decree in favour of the plaintiff for
Rs. 500 with costs.
