Lecture on Indian Contract Act

Introduction

Discussion of law’s role in society - provides rules, regulates conduct, provides justice
Law aims to ensure peace and justice in society

Contract: An agreement enforceable by law
Agreement: Offer + Acceptance
Legal Intention: Agreement with a purpose to create legal obligations
Essentials of a Valid Contract:
- Offer and Acceptance
- Intention to create legal relationships
- Lawful Consideration
- Capacity to contract
- Free Consent
- Lawful Object
- Certainty
- Possibility of Performance
- Not expressly declared void
Types of Contracts
- Valid, Void, Voidable
- Executed, Executory
- Unilateral, Bilateral
- Express, Implied

Who cannot contract:
- Minors
- Persons of unsound mind
- Persons disqualified by law
Key Points about Minors
- Contracts with minors are void ab initio
- Beneficial contracts for minors are valid
- Minors can be beneficiaries, partners for profit, shareholders with fully paid-up shares, etc.
- Minors cannot be declared insolvent

Definition: Consent without coercion, undue influence, fraud, misrepresentation, or mistake
Elements affecting free consent:
- Coercion (Section 15): Physical force to obtain consent
- Undue Influence (Section 16): Mental pressure to exploit
- Fraud (Section 17): Intentional deceit
- Misrepresentation (Section 18): Unintentional incorrect statement
- Mistake (Sections 20-22): Ignorance or error about basic facts

‘Something in return’ necessary for a contract
Rules:
- Must be lawful
- Need not be adequate
- Can be past, present, or future
- Can move from a third party
- Must be real
Important Doctrines:
- Privity of Contract: Only parties to contract can sue
- Nudum Pactum: No consideration, no contract (exceptions exist)

Modes of Performance:
- Offer to perform
- Actual performance
- Attempted performance
Performance by Parties:
- Offer and acceptance
- Time and place important
- Joint Promise (Section 42): Liability of joint promisers

Methods:
- By performance
- By mutual consent
- By subsequent impossibility (Section 56) - Doctrine of Frustration
- By lapse of time
- By operation of law
- By breach: anticipatory and actual

Types of Damages:
- Ordinary (Section 73): Compensation for loss from breach
- Special (Section 73): Not naturally occurring but reasonably foreseeable damages
- Liquidated and unliquidated damages
Specific Performance (Section 10-14): Order to perform actual contract terms
Injunction (Section 36-42): Order to prevent a party from doing something

Dependent on future uncertain events
Features:
- Based on happening or non-happening of an event
- Enforceable when event occurs
- Valid if lawful

Contract linked to primary contract
If the main contract is illegal, collateral contracts usually are too, except if they are independently valid