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Indian Contract Act 1872 -- Banking related general awareness

Indian Contract Act 1872 - Presentation Transcript
2.    What is a contract?
o    Section 2(h)
o    “ An agreement enforceable by law is a contract”.
o    Thus,
o    Contract = Agreement + Enforceability at Law
3.    Agreement?
o    Section 2(e)
Promise/(s ) Promise/(s) = Agreement (in exchange for)
4.    Promise?
o    Section 2(b)
o    Promise = Proposal/Offer + Acceptance
o    Proposal?
o    Section 2(a)
o    Expression of willingness
o    With a view to seek the assent of the other
o    Thus, mere expression of willingness doesn’t constitute offer/proposal.
5.    Acceptance
o    Section 2(b)
o    Giving of assent to the proposal.
o    Enforceability by Law
o    Agreements which are not enforceable
o    Illegal/unlawful agreements, e.g., to smuggle/to kill
o    Social Agreements ( Balfour vs. Balfour )
6.    Agreements Declared Void under ICA
o    e.g.
§  Agreement with or by a minor
§  Agreement in restraint of trade
§  Marriage brokerage contract
§  Wagering/Betting Agreements
7.    Kinds of Contracts
§  From the point of view of Enforceability
§  Void
§  Voidable
§  Valid
8.    Void Agreement vs. Void Contract
o    Void Agreement
o    i.e., void-ab-initio i.e. unenforceable from the very beginning
o    Becomes void (Void Contract)
o    Voidable
o    i.e., void + able
o    i.e., capable of being declared void
o    (unenforceable) at the option of one of the parties to the contract but not at the option of the other.
9.    Valid Contract
o    Section 10
o    To be a valid contract, it must satisfy the following:
o    Offer and Acceptance
o    Consensus-ad-idem (Meeting of minds) i.e., persons must agree to the same thing in the same sense and at the same time.
o    Intention to create legal relationship as against social relationship or illegal/unlawful relationship.
o    Free and Genuine Consent , i.e., free from
§  coercion
§  undue influence
§  fraud
§  misrepresentation
§  mistake
o    Parties competent to contract
o    Lawful consideration and object, i.e., something in return and that must be lawful.
11.                       Valid Contract
o    (‘Object’ and ‘Consideration’ usually overlap. However, there may be difference at times e.g., object may be to kill competition and for that purpose in view, a senior manager of the competitor may be paid a certain amount to give unrealistically high quotation .)
o    Here: Object is to kill competition.
o    Consideration is :
o    (i) payment of money
o    (ii) giving high quotations
12.                       Valid Contract
o    Agreement not declared void .
o    Certainty of Meaning : e.g. sale and purchase of 100 tonnes of oil. But which oil? Thus, agreement being uncertain – not valid.
o    But, if the seller deals only in one kind of oil and one variety, then it shall be valid since it is capable of being made certain.
13.                       Valid Contract
o    Possibility of performance: Impossibility whether known to the parties or not, renders a contract invalid.
o    Necessary legal formalities : e.g. sale-deed of immovable property.
14.                       Void vs. Illegal Agreements Void Agreement Illegal Agreement
o    Unenforceable
o    Not Punishable
o    Collateral transactions unaffected.
o    Unenforceable
o    Punishable (fine or imprisonment or both)
o    Collateral transactions are also void.
15.                       Specific and General Offer
o    Specific Offer:
§  made to a specified person or a group of persons.
§  can be accepted only by the person to whom made.
o    Thus, if offer is addressed to ‘A’, ‘B’ cannot accept it.
o    Case Law: Boulton vs. Jones
16.                       Specific and General Offer
o    General Offer:
§  which is not a specific offer.
§  made to the world at large.
§  can be accepted by anyone by complying with the terms of the offer.
o    Case Law: Carlill vs. Carbolic Smoke Ball Co.
17.                       Offer vs. Invitation to offer
o    Illustrations of Invitation to Offer:
§  Prospectus issued by a college.
§  Prospectus issued by a company.
§  Invitation of bids in an auction.
§  Price-catalogues, price lists, quotations
§  Display of goods with a price-tag in a shop window.
18.                       Special Terms in a Contract
o    Examples: Dry cleaner’s receipt, courier’s receipt, shipment receipt, insurance policy, etc.
o    Binding if communicated or attention drawn to the fact that there are certain special terms and conditions.
o    Not binding if attention is not drawn and the other party not aware of.
19.                       Cross Offers & Counter Offers
o    Cross Offers
o    Identical offers cross each other and none of the parties is aware of the same. Doesn’t result in a contract unless one of them is accepted.
o    Counter Offer
o    Instead of accepting an offer, the offeree makes a counter offer, i.e., accepts the same subject to certain conditions or qualification.
20.                       Contracts through Post
o    Communication of Offer
o    is complete when the offeree has the knowledge of the same.
o    Communication of Acceptance
§  It has two aspects, viz.,
§  As against the proposer
§  As against the acceptor
21.                       As against the proposer
o    Communication is complete as soon as a duly addressed letter of acceptance is put into the course of transmission.
o    Whether the same reaches the proposer or not.
o    As against the acceptor
o    Communication is complete only when the proposer has received the letter and learnt the contents thereof.
22.                       Communication of Revocation
o    Communication of revocation (of offer or acceptance) is complete:
§  As against the person who makes it when it is put into the course of transmission.
§  As against the person to whom it is made, when it comes to his knowledge.
o    Comparing ‘offer’ to a ‘train of gunpowder’ and ‘acceptance’ to a ‘lighted match stick’ – How far correct?
o    William Anson’s observation though valid in the English context doesn’t hold good in India since in India acceptance is revocable.
24.                       Claim for Damages Damages U/S Section 73
Damages U/S Section 74 Only damages naturally flowing From breach (Ordinary Damages)
Special Damages (No claim for consequential loss unless in the Contemplation of the parties ( Hedley v. Baxendale Exemplary Damages Nominal Damages Pre-fixed Damages Penalty Liquidated Damages (What can be recovered is actual loss or amount prefixed, whichever is less)

Indian Contract Act 1872 -- Banking related general awareness Reviewed by sambasivan srinivasan on 8:38:00 AM Rating: 5

1 comment:

Archana Singh said...

nice read articulate differences between d words..!

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