One of the earliest laws governing commerce in the nation is the Indian Contract Act of 1872. On September 1st of the same year, the Indian Contract Act 1872 was passed. Except for Jammu & Kashmir, the statute covered practically all of India's states.
The primary legislation governing all contracts made in India is Indian contract law, and the statute has 266 sections.
Let's discover some crucial information about the IPCC Contract Act Notes.
A contract is an agreement made by free consent of parties who are competent to enter into a contract, made for lawful consideration and a lawful object and not declared to be void.
In other words, a contract is a legal instrument that grants the parties involved individual rights (specified by the contract itself) and obligations that are presented, defined, and agreed upon by all parties.
The voidable contracts and void agreements are discussed in Chapter 2 of the Indian Contract Act 1872. Also, there are different sorts of contracts based on their validity, as listed below:
A valid contract is enforceable by law, as described in the "Essentials of a Contract." Also, it must meet all the requirements for a contract.
A void contract is one that no longer has legal validity. Section 2(j) of the Act states, “A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable.” This renders void any contracts that a court of law cannot enforce.
A voidable contract requires that at least one of the parties be subject to its provisions, and the other party is not obligated and is free to reject or accept the contract's conditions. The agreement is revocable if they decide to do so, at which point it is null and void. In all other cases, a voidable contract is a legitimate one.
The court deems a contract unlawful if it results in one or more parties breaching the law or failing to uphold social norms. A contract that is against the law is also prohibited. Additionally, illicit agreements are illegal and are therefore punishable by law.
Legal rules make unenforceable contracts unenforceable for a variety of reasons. Any of the two parties cannot be subject to the contract's enforcement.
There are several differences between an agreement and a contract. However, primarily an agreement is equivalent to an offer and acceptance. Besides the differences are provided in a tabular format below:
|
Criteria |
Agreement |
Contract |
|
Meaning |
An agreement is an acceptance of an offer provided by a party to the other. |
A contract is a legal bond or a written document between two or more individuals or parties that form a mutual obligation. There can be legal repercussions if a contract has not been followed or completed. |
|
Elements |
Agreement equals offer and acceptance |
A contract must include considerations, legality, offer and acceptance along with mutual assent. |
|
Definition |
As per Section 2(e) of the Indian Contract Act, 1872, 'Every promise and every set of promises, forming the consideration for each other, is an agreement. |
As per Section 2(h) of the Indian Contract Act of 1872, a contract is ‘an agreement enforceable through the law.' |
|
Scope |
The scope of the agreement is more comprehensive than a contract. |
The scope of a contract, on the other hand, is a portion of the formal document which encompasses all the criteria and parameters involved between two individuals or parties. |
|
Form |
An agreement can have various forms other than writing. |
A contract is usually written and registered. |
|
Obligations |
It does not create any legal obligation. The agreement is dependent on the free will and consent of the parties involved. |
A Contract, on the contrary, is legally binding. |
|
Risk |
Possess higher risk as the law doesn't enforce it. |
It has low risk as it abides by the law. |
For a contract to be successful, it must contain a valid offer which must be accepted. As per the Indian Contract Act 1872, acceptance is, ‘When the person to whom the proposal has been made signifies his assent thereto’, the offer is said to be accepted. Thus the proposal, when accepted, becomes a promise.
Hence, if an offeree accepts the offer unconditionally, it becomes an acceptance.
However, in this regard, there are a few rules for a valid acceptance:
Hence, the Indian contract act of 1872 defines multiple laws related to a contract. Also, you must remember that you cannot consider all agreements as a contract; on the other hand, all contracts are agreements.
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