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Lectures On Law of Contracts
INTRODUCTION
The law of contracts deals with agreements, which can be ¬enforced through law courts. Law of contracts is the most important branch of mercantile law. It affects every person in the society. It affects us in every walk of our life every day.
The law of contract determines the circumstances in which promises made by the parties to a contract shall be legally binding on them.
However, the law of contract is of immense importance to people engaged in trade, commerce and industry as all their transactions are based on contracts.
The object of the law of contracts is to introduce definiteness in commercial and other transactions, and to ensure the realisation of reasonable expectation of the parties who enter into a contract.
Sir William Anson observed “As the law relating to property had its origin in the attempt to ensure that what a man has lawfully acquired he shall retain, so the law of contract is intended to ensure that what a man has been led to expect shall come to pass; and that what has been promised to him shall be performed.”
The Indian Contracts Act, 1872, governs the general law of contracts in India.
LAW ANTERIOR TO INDIAN CONTRACT ACT
Before 1872 there was no uniform law on contracts.
The Charters of eighteenth century, which established Court of Justice for the three presidency towns of Calcutta, Madras and Bombay introduced into their jurisdictions the English common and statute law in force at that time so far as it was applicable to Indian circumstances. The indiscriminate application of English law to Hindus and Mohammadans within the jurisdiction of the Supreme Courts led to many inconveniences. To obviate this, the statute of 1781 empowered the Courts of Madras and Bombay to determine all actions and suits against the inhabitants of the said towns, provided that their succession and inheritance to lands, rents and goods and all matters of contract and dealing between the parties should be determined in the case of Mohammadans by the law and usages of Mohammadans and in case of Hindus by the law and usages of Hindus and where one of the parties was Hindu and the other Mohammedan, by the laws and usages of the defendant.
Besides, the Courts were bound, in absence of any specific rule, to decide according to justice, equity and good conscience. In the matters of contract, when they were not in conflict with these principles, the rules of English Law were also freely applied.
This practice continued invariably till the Indian Contract Act was enacted in 1872.
THE INDIAN CONTRACT ACT, 1872
In 1865 Indian Law Commission in England drew the first draft of law of contract.
The Indian Contract Act endeavours to codify the chief rules relating to the formation, rectification and discharge of all agreements enforceable by law made between two or more persons by which rights are required by one or other. It was enacted mainly with a view to ensure reasonable fulfillment of expectations created by the promises of the parties and also enforcement of obligations prescribed by an agreement between the parties. The Act states the circumstances under which a valid contract shall come into force and the rights and liabilities of parties under it.
The Act also aims at making the principles and practices relating to business transactions uniform throughout the country.
The Act came into force from 1st day of September, 1872 and applies to the whole of India except the state of Jammu and Kashmir.
SCHEME OF THE INDIAN CONTRACT ACT
The Indian Contract Act deals
a.The general principles applicable to all contracts;
b.The conditions, which are essential for making a valid contract;
c.The principles applicable to quasi-contracts;
d.The principles, which are applicable to a few special contracts, namely,
i.the contracts of indemnity,
ii.the contracts of guarantee, and
iii.the contracts of bailment and agency.
The law of contracts deals with agreements, which can be ¬enforced through law courts. Law of contracts is the most important branch of mercantile law. It affects every person in the society. It affects us in every walk of our life every day.
The law of contract determines the circumstances in which promises made by the parties to a contract shall be legally binding on them.
However, the law of contract is of immense importance to people engaged in trade, commerce and industry as all their transactions are based on contracts.
The object of the law of contracts is to introduce definiteness in commercial and other transactions, and to ensure the realisation of reasonable expectation of the parties who enter into a contract.
Sir William Anson observed “As the law relating to property had its origin in the attempt to ensure that what a man has lawfully acquired he shall retain, so the law of contract is intended to ensure that what a man has been led to expect shall come to pass; and that what has been promised to him shall be performed.”
The Indian Contracts Act, 1872, governs the general law of contracts in India.
LAW ANTERIOR TO INDIAN CONTRACT ACT
Before 1872 there was no uniform law on contracts.
The Charters of eighteenth century, which established Court of Justice for the three presidency towns of Calcutta, Madras and Bombay introduced into their jurisdictions the English common and statute law in force at that time so far as it was applicable to Indian circumstances. The indiscriminate application of English law to Hindus and Mohammadans within the jurisdiction of the Supreme Courts led to many inconveniences. To obviate this, the statute of 1781 empowered the Courts of Madras and Bombay to determine all actions and suits against the inhabitants of the said towns, provided that their succession and inheritance to lands, rents and goods and all matters of contract and dealing between the parties should be determined in the case of Mohammadans by the law and usages of Mohammadans and in case of Hindus by the law and usages of Hindus and where one of the parties was Hindu and the other Mohammedan, by the laws and usages of the defendant.
Besides, the Courts were bound, in absence of any specific rule, to decide according to justice, equity and good conscience. In the matters of contract, when they were not in conflict with these principles, the rules of English Law were also freely applied.
This practice continued invariably till the Indian Contract Act was enacted in 1872.
THE INDIAN CONTRACT ACT, 1872
In 1865 Indian Law Commission in England drew the first draft of law of contract.
The Indian Contract Act endeavours to codify the chief rules relating to the formation, rectification and discharge of all agreements enforceable by law made between two or more persons by which rights are required by one or other. It was enacted mainly with a view to ensure reasonable fulfillment of expectations created by the promises of the parties and also enforcement of obligations prescribed by an agreement between the parties. The Act states the circumstances under which a valid contract shall come into force and the rights and liabilities of parties under it.
The Act also aims at making the principles and practices relating to business transactions uniform throughout the country.
The Act came into force from 1st day of September, 1872 and applies to the whole of India except the state of Jammu and Kashmir.
SCHEME OF THE INDIAN CONTRACT ACT
The Indian Contract Act deals
a.The general principles applicable to all contracts;
b.The conditions, which are essential for making a valid contract;
c.The principles applicable to quasi-contracts;
d.The principles, which are applicable to a few special contracts, namely,
i.the contracts of indemnity,
ii.the contracts of guarantee, and
iii.the contracts of bailment and agency.
313 pages, Kindle Edition
Published September 3, 2017
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