oblicon ppt

8/11/2019 oblicon ppt

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INTRODUCTION

LAW OF

CONTRACT


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What is a Contract ?

A legally binding agreement. In other words

A promise or set of promises which the law will

enforce.

The agreement will create rights and

obligations that may be enforced in the courts.

The normal method of enforcement is an

action for damages for breach of contract.


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Steps involved in Contract

Offer and its acceptance

Free consent of both parties

Mutual and lawful consideration foragreement

It should be enforceable by law. Hence,

intention should be to create legalrelationship. Agreements of social or

domestic nature are not contracts


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Steps involved in Contract

Parties should be competent to contract

Object should be lawful

Contract should not have been declaredas void under Contract Act or any other

law.

Jus in Personam and Jus in remConsensus ad idem

obligation


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Form of Contracts

1) Written

2) Oral

3) Partly oral and written


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2 classes of Contract

Contracts by Deed

A deed is a formal legal document signed, witnessed and

delivered to effect a conveyance or transfer of property or

to create a legal obligation.

Simple contracts

Simple contracts are informal contracts and may be made

in any wayin writing, orally or they may be implied

from conduct


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Bilateral & Unilateral

Bilateral contracts

A promise by one party in exchanged for a promise by anotherparty

A one to one contract

Example: Sale of goods contract

The Buyer promises to pay the price

The Seller promises to deliver the goods

Offeror or

PromisorThe person who

make the offer

Offeree or PromiseeThe person to whom

the contract was made


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Unilateral contracts

A promise by one party in exchanged for an action by

another party A one to all contract

Example:X promises a reward to anyone who will find his lost wallet.

X bound himself to the promise, but no one is bound to search for

the lost wallet. But if Y, having seen the offer, recovers the wallet

and returns it, he is entitled to the reward.

1 OfferorMany

Offerees


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Essential elements of a Contract

1) AgreementOne party make the offer, another party accepts the offerand both achieve consensus ad idem (meeting of theminds)

2) ConsiderationBoth parties must have provided consideration, ie, eachside must promise to give or do something for the other.

3) Intention to create legal relationsThe parties must have intended their agreement to havelegal consequences. The law will not concern itself with

purely domestic or social agreements.


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4) Capacity

The parties must be legally capable of entering into a

contract.

5) Absence of Vitiating factors

Absence of factors that are going to invalidate a contract,

ie : duress or undue influence, mistake, misrepresentation,illegality


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Enforceability

Void contracts

the whole transaction is regarded as a nullity, as though as

there has been no contract between the parties.

Any goods or money obtained under the agreement must

be returned.

Where items have been resold to a 3rdparty, they may berecovered by the original owner.


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Features of Void agreements

An agreement made by incompetent

parties (Minor/Lunatic Person) is void.

Agreements which have unlawful

consideration is void.

Agreement with a unlawful object is void.

Agreements made without consideration isvoid.


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An agreement the terms of which are

uncertain is void.

An agreement by way of wager

(betting/gambling) is void.


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An agreement contingent upon the

happening of an impossible event is void.

Agreement to do impossible acts is void.

Agreement in restraint of legal

proceedings is void.


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Voidable contracts

An agreement which is enforceable by law at the option ofone or more of the parties thereto, but not at the option of

the other or others, is a voidable contract

A voidable contract will operates as a valid contract

unless and until one of the parties takes steps to avoid it.

Anything obtained under the contract must be returned,

insofar as this is possible.

If goods have been resold before the contract was avoided,

the original owner will not be able to reclaim them.


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Classification of Contracts

Classification according to validity

Voidable contracts

Void contracts

Illegal contractsUnenforceable contracts

Classification according to formation

Express contracts

Implied contracts

Quasi contracts

E-commerce contracts


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Classification of Contracts..

Classification according to Performance

Executed contracts

Executory contracts

Unilateral or one-sided contracts

Bilateral Contracts

Classification according to formation

Formal Contracts (a) Contracts of Record: is either a

judgment of a court or recognisance (b) Contracts underseal: A contract under seal is one which derives its binding

force from its form alone.

Simple contracts:


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Unilateral Contracts or one-

sided contracts ..A contract in which only one party has to fulfill his obligationat the time of the formation of the contract, the other party

has fulfilled his obligation at the time of the contract or

before the contract comes into existence.

(Contracts with the executed consideration)

Bilateral contracts:

In which obligations on the part of both of the parties to the

contract are outstanding at the time of the formation of the

contract.

(Contracts with the executory consideration)


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End

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