Indian Contract Act, 1872 — Summary

 

🏛 Indian Contract Act, 1872 — Summary

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📜 Overview

• Enacted: 25 April 1872

• Came into force: 1 September 1872

• Objective: To define the law relating to contracts in India.

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🔑 Main Parts

The Act originally had three parts:

1. General Principles of the Law of Contracts (Sections 1–75)

2. Contracts relating to Special Kinds: Contracts of Indemnity, Guarantee, Bailment, Pledge, and Agency

3. Contracts relating to Partnership (this was later separated into the Indian Partnership Act, 1932)

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📘 Key Definitions (Section 2)

• Agreement — Every promise or set of promises forming consideration for each other.

• Contract — An agreement enforceable by law.

• Void Agreement — Not enforceable.

• Voidable Contract — Valid until rescinded by one party.

• Offer/Proposal — When one person signifies willingness to do or abstain from doing something.

• Acceptance — When the person to whom the proposal is made signifies his assent.

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🏗 Essential Elements of a Valid Contract

✅ Offer and acceptance
✅ Lawful consideration
✅ Competent parties (major, sound mind, not disqualified)
✅ Free consent (no coercion, undue influence, misrepresentation, fraud, or mistake)
✅ Lawful object (not illegal, immoral, or opposed to public policy)
✅ Not expressly declared void

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📌 Important Sections

Section	Content
S.1	Short title, extent, commencement
S.2	Definitions
S.10	What agreements are contracts
S.11	Who are competent to contract
S.13–19	Consent, free consent, and factors vitiating it
S.23	Lawful consideration and object
S.73–75	Compensation for breach, penalty provisions

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⚙ Types of Contracts

• Void Contract — Ceases to be enforceable by law.

• Voidable Contract — One party has the option to void it.

• Unenforceable Contract — Cannot be enforced due to technical defect.

• Illegal Agreement — Forbidden by law.

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💥 Remedies for Breach

• Suit for damages (Section 73)

• Suit for specific performance (under Specific Relief Act)

• Injunctions (in certain cases)

• Quantum meruit (reasonable payment for work done)

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⚠ Key Case Laws

• Carlill v. Carbolic Smoke Ball Co. (offer and acceptance)

• Balfour v. Balfour (intention to create legal relations)

• Mohori Bibee v. Dharmodas Ghose (minor’s contract void)

• Lalman Shukla v. Gauri Dutt (acceptance of offer)

• Hadley v. Baxendale (remoteness of damages)

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📊 Quick Reference Chart

Topic	Key Rule
Offer	Clear, communicated, can be revoked before acceptance
Acceptance	Absolute, communicated, matches the offer
Consideration	Something of value, need not be adequate
Free Consent	No coercion, undue influence, fraud, misrep., mistake
Competency	Major, sound mind, not legally disqualified
Legality	Object and consideration must be lawful