The Indian Contract Act, 1872 came into force on
September 1, 1872. The act prescribes the law relating to contracts in India
and is the key act regulating Indian
contract law. The act is applicable to the whole of India and regulates
contracts, defining the rights and duties of parties involved in a contractual
agreement. The act is based on the principles of English Common Law. Under Section 2(h), the Indian Contract Act defines a contract as an agreement
enforceable by Law. Here are some key aspects of the Indian Contract Act:
1. Definition of Contract: The Act defines a contract as an
agreement enforceable by law. It consists of an offer and acceptance, with
lawful consideration and lawful object.
2. Essential Elements of a Valid Contract
(Section 10): For a
contract to be valid, it must have the following essential elements: offer,
acceptance, lawful consideration, lawful object, capacity of parties, and free
consent.
3. Void and Voidable Contracts (Sections
2(g), 2(i), 10, 19-30):
The Act distinguishes between void contracts and voidable contracts. A void
contract is one that lacks the essential elements from the beginning, making it
invalid from the outset. On the other hand, a voidable contract is initially
valid but can be declared void at the option of one of the parties, usually due
to factors like coercion, undue influence, fraud, misrepresentation, or the
incapacity of a party.
4. Contingent Contracts (Sections 31-36): The Act deals with contingent
contracts, which are contracts based on the happening or non-happening of an
uncertain future event. The rights and obligations of parties in such contracts
are determined by the occurrence or non-occurrence of the specified event.
5. Performance of Contracts (Sections
37-67): The Act
outlines the rules regarding the performance of contracts, discharge of
contracts, and remedies available in case of breach of contract. It also covers
the rights and obligations of parties when a contract is broken.
6. Quasi-Contracts (Sections 68-72): The Act discusses quasi-contracts,
which are not contracts in the true sense but are created by law to prevent
unjust enrichment. These include contracts based on the principle of
restitution.
7. Contracts of Indemnity and Guarantee
(Sections 124-147): The
Act defines and regulates contracts of indemnity and contracts of guarantee.
8. Bailment and Pledge (Sections 148-181): The Act provides provisions related to
bailment (delivery of goods for a purpose) and pledge (pawn or security).
9. Agency (Sections 182-238): The Act outlines the rules governing
the relationship between principal and agent.
