Indian Contract Act, 1872 – Section-Wise Notes

 

📜 Indian Contract Act, 1872 – Section-Wise Notes

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S.1 – Short Title, Extent, Commencement

• Short title: Indian Contract Act, 1872

• Extent: Applies to all of India (except Jammu & Kashmir pre-2019; now applies after constitutional changes).

• Commencement: Came into force on 1st September 1872.

• Originally included contracts, agency, sale of goods, and partnership — later separated into their own Acts.

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S.2 – Definitions

• Contains key terms:

  • Proposal (offer): Willingness to do/abstain.

  • Promise: Accepted proposal.

  • Consideration: Something in return.

  • Agreement: Set of promises forming consideration.

  • Contract: Agreement enforceable by law.

  • Void agreement: Not enforceable.

  • Voidable contract: Enforceable until rescinded.

  • Void contract: Initially valid but becomes unenforceable.

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S.3–9 – Communication, Acceptance, and Revocation

• Offer & acceptance: Communication rules; acceptance must match offer.

• Revocation: Offers can be revoked before acceptance.

• Communication complete when acceptance is put into course of transmission.

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S.10 – What Agreements are Contracts

• Valid contracts must have:
  ✅ Free consent
  ✅ Competent parties
  ✅ Lawful object
  ✅ Lawful consideration
  ✅ Not expressly declared void

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S.11 – Who are Competent to Contract

• Major (18+), sound mind, not disqualified by law.

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S.12 – Sound Mind

• Understands contract and can make rational decisions.

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S.13–22 – Consent and Free Consent

• Free consent: No coercion (S.15), undue influence (S.16), fraud (S.17), misrepresentation (S.18), or mistake (S.20–22).

• Consent induced by these factors makes the contract voidable.

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S.23–24 – Lawful Consideration and Object

• Consideration/object must be legal, not forbidden, immoral, or against public policy.

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S.25 – Agreement Without Consideration

• Generally void, except:

  • Natural love and affection (written & registered)

  • Compensation for past voluntary services

  • Promise to pay time-barred debt

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S.26–30 – Void Agreements

• Restraint of marriage, trade, legal proceedings, uncertain agreements, wagers — all void.

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S.31–36 – Contingent Contracts

• Dependent on happening/non-happening of uncertain events.

• Rules on enforceability when events happen or become impossible.

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S.37–67 – Performance of Contracts

• Who must perform, joint promises, time & place of performance, effect of refusal, assignment of contracts.

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S.68–72 – Quasi-Contracts

• No formal agreement, but obligations arise:

  • Necessaries supplied to incapable persons.

  • Payment by interested person.

  • Liability for non-gratuitous acts.

  • Finder of goods.

  • Money or goods delivered by mistake or coercion.

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S.73–75 – Remedies for Breach

• S.73: Compensation for loss/damage due to breach.

• S.74: Compensation for breach of contract where penalty is stipulated.

• S.75: Right to compensation when rightfully rescinding contract.

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⚖ Important Highlights

✅ Void contracts: Agreement becomes void due to supervening impossibility.
✅ Voidable contracts: Affected party can cancel due to defective consent.
✅ Damages: Must be reasonably foreseeable at the time of contract (Hadley v. Baxendale rule).
✅ Specific performance: Under separate Specific Relief Act.

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📊 Quick Summary Chart

Section Range	Topic
S.1–2	Introduction & definitions
S.3–9	Communication of offer/acceptance
S.10–30	Essentials, void/voidable agreements
S.31–36	Contingent contracts
S.37–67	Performance of contracts
S.68–72	Quasi-contractual obligations
S.73–75	Breach and remedies