The Contract Act-1872

Introduction
and
The Contract Act-1872

Definition of Law

 

Law, as it is, is the command of the sovereign. It means-

  (a) law has its source in sovereign authority

  (b) law is accompanied by sanctions, and

  (c) the command to be a law should compel a course of conduct

Thus the term law is used to denote rules of conduct enforces by the state.

People living in a society have to follow certain common rules, otherwise peaceful leaving is impossible. It is the function of the state to enforce these laws for the betterment of human being. 

 

Rule of law

The concept of “equality of all persons” before law is the basis of rule of  law.

1.rule of law states that no man is punishable or can be lawfully made to suffer in body or goods except for a distinct breach of law.

2.Rule of law means no man is above law irrespective of his position in the society.

3.Rule of law is the result of statutes and judicial decisions determining the rights of private persons. 

 

Meaning of business law

 

The term ‘commercial law/Mercantile law’ describes a wide body of laws that govern business transactions

Business Law:

 Business law is the general field of law relating to business, trade, industry and commerce. The scope of commercial law is large. It includes the laws relating to contract, partnership, companies, sale of goods etc.

 

Different business laws

 

1. Contract Act-1872

2. Sale of Goods Act-1930

3. Partnership Act-1932

4. Negotiable Instrument Act-1881

5. The Common Carriers Act-1865

6. The Railway Act-1890

7. Carriage of Goods by Sea Act-1925

8. Carriage by Air Act-1972

9. Marine Insurance Act-1963

10. The Insolvency Act-1997

11. The Provincial Insolvency Act-1920

12. Consumer Protection Act-1986

13. Company Law-1994

14. The Factories Act-1948

15. The Minimum Wages Act-1948…etc. 

 

Definition of contract

Section 2(h) of the Act provides that, “An agreement enforceable by law is a contract”.

Therefore in a contract there must be –

   (a) an agreement and

   (b) the agreement must be enforceable

        by law.

(a)(a) an agreement comes into existence whenever one or more persons promise to one or others, to do or not to do something.

(b) An agreement if it is not enforceable by law is not a contract. For example, agreement to plat cards, or agreement to go to cinema hall. 

 

Essential Elements of a Valid Contract

An agreement become enforceable by law when it fulfills certain conditions. These conditions are:

1.(1) Offer and acceptance

2.(2) Intention to create legal relationship

3.(3) Lawful consideration

4.(4) Capacities of parties

5.(5) Free consent 

(6) Legality of the object

(7) Certainty

(8) Possibility of performance

(9) Void agreement

(10) Written, registration and legal formalities. 

The element mentioned above must all present. If any one of them is absent, the agreement does not become a contract. 

 

Any agreement which fulfills all the essential elements and is enforceable by law, is called a contract.