Prof. P. K. - PowerPoint Presentation

Slide1

Prof. P. K. Kshirsagar

BUSINESS LAWS.Y.B.Com.

1Slide2

The Indian Contract Act,1872

2Slide3

What is a Law ? “Law is body of Principle recognized and applied by the state in the administration of Justice”“Law is rule of external human action enforced by the sovereign political authority”A law is the rule of conduct, imposed and enforced by the sovereign.3Slide4

What is a contract A written or spoken agreement intended to be enforceable by law. An agreement enforceable by law is a contract. [

Section 2(h) ]A contract is an agreement made between two or more parties, which the law will enforce.Contract is a method through which individuals make law for themselves by creating rights and obligation

ex contracts.

4Slide5

Fundamental Definitions5Agreement :-A meeting of minds with the understanding and acceptance of reciprocal legal rights and duties as to particular actions or obligations, 

which the parties intend to exchange; a mutual assent to do or refrain from doing something; a contract.Contract :-An agreement with specific terms between two or more persons or entities in which there is a promise to do something in return for evaluable benefit

 known as considerationSlide6

Proposal, Acceptance, Promise & AgreementWhen a 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. [Sec 2(a)]

A proposal is said to be accepted when the person to whom the proposal is made signifies his assent thereto. A proposal when accepted becomes promise. [Sec 2(b)] Every promise and every set of promises forming consideration for each other is a an agreement. [(Sec 2(e)] 6Slide7

Essential Elements of ContractOffer / ProposalAcceptanceCompetent Parties

Lawful considerationMinimum Two partiesFree consentLawful object

Agreement not declared void

Certainty and possibility of performanceLegal formalitiesLegal Relationship7Slide8

Types of ContractVoidable ContractsUnenforceable Contract Executed ContractExecutory

ContractUnilateral ContractBilatral Contract

Contigent

ContractImplied ContractContract of RecordsQuasi ContractE-Contract8Slide9

Types of Offer Express Offer – by words written or spoken. Implied Offer – By conduct or circumstances. Specific Offer- Made to a specified or definite person.

General Offer- Made to public at large 9Slide10

Acceptance of ProposalRules of a valid Acceptance Acceptance must be unconditional

Acceptance must be AbsoluteAcceptance must be made within a Reasonable Time Mode of Acceptance

Mental Acceptance is No Acceptance

Acceptance must be communicate to the offerAcceptance must be by a Certain PersonA quotation of prices is not an offerAn offer can be Express or implied , Simple or Specialty.10Slide11

Revocation or lapse of Offer (Sec. 6)By communication of notice of revocation.By lapse of time.By non-fulfillment by the offeree of a condition precedent to acceptance.

By death or insanity of the offeror.If a counter offer is made.

If an offer is not accepted according to the prescribed or usual mode.

If the law is changed.11Slide12

ConsiderationConsideration is some kind of an exchange between the parties to an agreement.Consideration is the price for which the promise of the other is bought and the promise thus given for value is enforceable. PollockA valuable consideration in the sense of the law may consist either – in some right, interest, profit or benefit accruing to one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other.

12Slide13

Legal Rules as to ConsiderationConsideration must move at the Desire of the promisorA consideration may be given by the promisor or by any other personA consideration may be past, Present or futureA consideration may be real and not

IllusaryConsideration may be an act of doing or obstainingPerformance of existing obligation is not consideration

Consideration need not be Adequate

A consideration must not be Illegal13Slide14

Capacity to contract Every person is competent to contract who is of the age of majority according to the law to which he is subject is of sound mind is not disqualified from contracting by any law to which he is subject. (Sec 11)14Slide15

Free ConsentConsent means an act of approval or assenting to an offer. Two or more persons are said to consent when they agree upon the same thing in the same sense.Consent involves ad idem i.e. identity of mind about the subject matter of contract. A mere consent is not enough, it should be free and voluntary. Not to be caused by any vitiating factors given u/s 14.

15Slide16

16Consent is said to be free when it is not caused by – a) Coercion.b) Undue influence.c) Fraud.

d) Misrepresentation.e) Mistake.The contract is said to be voidable at the option of the party whose consent was not free. [Sec. 19]Slide17

Agreement Expressly Declared as VoidAgreements restricting personal liberty.Agreements in restraint of marriage.Agreement to commit a crime. Agreements in restraint of trade.

Agreements in restraint of legal proceedingsa) Agreement restricting enforcement of rightsb) Agreement Limiting the Period of Limitation.

17Slide18

Performance of ContractPerformance of a contract is a mode of discharge of the contract. Performance of contract takes place when the parties to the contract fulfill their respective obligations under the contract. The parties to a contract must either perform or offer to perform their respective promises,

unless such performance is dispensed with or excused under the provisions of this Act, or of any other law.[Sec 37]18Slide19

Performance and Demand of PerformanceBy promisor himself. (S. 40)Promisor’s Agent. (S. 40)Legal representatives. Third person. (S 41)

Joint promisors.Promisee Legal Representative

Third Party

Joint promisee 19Slide20

Discharge of ContractBy PerformanceBy an agreementBy laps of timeBy operation of Law

By breach of contractBy ImpossibilityBy alteration in the terms of contract

By Renovation

By accord & satisfactionBy waiverBy default of the promise of perform his promise20Slide21

By Operation of LawBy death.By merger.By insolvency.By unauthorized alteration of terms of a written contract.

By rights and liabilities becoming vested in the same person.21Slide22

By Breach of ContractActual Breacha) On the due date of performance.b) During the course of performance of contract. i

) Express Repudiation.ii)Implied Repudiation.Anticipatory Breacha) By express renunciation.

b) Making the performance of promise become impossible by doing some act.

22Slide23

Quasi ContractsSometime a person may receive a benefit which the law regards another person as better entitled, or for which the law considers he should pay to the other person, even though there is no contract between the parties. Such relationships are called quasi contracts. Because although there is no contract or agreement between the parties, they are put on the same pedestal as though there was a contract between them. This is based on the principles of equity.23Slide24

Kinds of quasi contracts Right to recover the price of necessities supplied. [Sec 68]Payment by an interested person. [Sec 69]Right to recover for non-gratuitous Act. [Sec 70]

Responsibility of the finder of Goods. [Sec 71]When money is paid or things are delivered by mistake or under coercion. [Sec 72]

24Slide25

Contract of GuaranteeA contract of guarantee is essentially a contract to perform the promise or discharge the liability of a third person in case of his default. The basic function of a contract of guarantee is to enable a person to get a loan, or goods, or an employment. [Sec 126]

25Slide26

Essential features of guaranteeSurety.Principal Debtor.Creditor.Not be vitiated by incapacity, flaw in consent, and unlawful character of the agreement.May be oral and it may either be expressed or implied.

Concurrence of parties.Existence of Principal debt. Essential of a valid contract like Consideration and Free consent.

26Slide27

Kinds of GuaranteesSpecific guarantee – extends to a specific transaction or a single debt. The liability of surety comes to an end when the guaranteed debt is duly discharged.Continuing guarantee –extends to a series of transaction.

This kind of guarantee is intended to cover a number of transactions over a period of time. Whether the guarantee is continuing guarantee or not is a question of intention, subject matter & circumstance.27Slide28

Revocation of Continuing GuaranteeBy Notice By Death of Surety By Novation. (Sec 62)By variance in the terms of contract. (Sec 133)

By release or discharge of principal debtor.By compounding with the principal debtor. (Sec 135)By creditor's act or omission imparting surety's eventual remedy. (Sec 139)

By loss of security. (Sec 142)

28Slide29

Discharge of SuretyBy Revocation of Guarantee Discharge by conduct of creditorVariance in the terms of the contractRelease or discharge of principal debtor

Compounding by creditor with principal debtorCreditor compounding with principal debtorCreditor promising to give time to the principal debtor

Creditor agreeing not to sue the debtor.

29Slide30

30Thank You