Contract Act | Beginners Note

Contract Act is one of the first to understand materials for law students, though this comparatively easy topic nicely explained by various authors for law students, I would like to make it easier to understand for those who are from other discipline or thinking about the legal study.

When we buy something or make any business deal what do we do? We meet them, talk about the deal/product, offer a rate (Amount of money) for that deal / Product and then if the other party agreed and we get assured about the deal.  Simply this is a contract. Now the law discussed various aspects and consequences of this contract, such as, what if that person/party violate the deal? What is it is a lot of illegal arms? will you be able to sue him in court?

Before we start refereeing about the legal procedure please go to the following link and open it in another tab:  THE CONTRACT ACT, 1872 

As we have seen in the first para to be a contract there are certain procedure that we follow, these are elements of a contract, we will discuss these elements from the bottom up approach to easily understand what is a contract but before that let’s have the legal definition of contract according to the Contract Act 1872.

Definition of contract: An agreement enforceable by law is a contract. Now that seems quite ambiguous, right? Therefore we will understand it step by step with a visual presentation.

Contract —- > Agreement + Enforceable By law
Agreement —- > Promise + Consideration
Promise —- > Proposal  +. Acceptance

After the definition of contract, the question comes what is Agreement or what is meant by the term “Enforceable by law”?

Let’s break it down into small components.

Proposal and Acceptance

Generally, when we buy something we ask for the price or we offer a price for that good, let’s consider you want to buy a book. You proposed the seller to give you that book at 100 takas and the seller happily accepted your price. Here your offer is a proposal and the positive response by the seller is acceptance. The same is described under section 2(b) of The Contract Act 1872.

 2(b). When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal:

Now, what is a Promise? A proposal, when accepted, becomes a promise, as articulated under section 2(b) of the Act. That means when is offer is presented and before the other party and the other party accepts it becomes a promise. The person who presents the offer is named as promisor and the person accepts the promise is named as promisee.

Having “promise” in our side we have understood a part of a contract (Valid), as we can see in our directional diagram above we need another element called “Consideration” to be a contract.

Consideration

Under section 2(d) of the act  it provides:

When, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise:

Recalling our previous example we can remember that the promisor offered 100 taka for the book and that is a consideration for that contract. Let’s make it more simple, When Rahim And Karim make a deal that Rahim shall provide Karim 100 apple and Karim for the same deal give Rahim a Hilsha fish, here both of them considered something [100 apples and a Hilsha fish] for this contract. Here are some points that can drown form that definition of consideration.

  1. That “something” could be any product or money or any other task or actor work that has some value, even it could be abstaining from doing something, for example; Rahim may abstain from building a high wall due to a contract with Karim.
  2. It must be done at the desire of the promisor, that means that something must be a desire of the promisor and that desire would be understood via concent of promisor.
  3. It (Consideration) may be in three forms. a. has been done or b. is being done c. promised to be done. that means the consideration can be past, present or future.

Now when the elements of Proposal and Consideration is there both of this combined as an Agreement as said under section 2(e); Every promise and every set of promises forming the consideration for each other is an Agreement.

So, now we have all the elements of a contract except one and that is that the contract must be enforceable by law. let’s make it simple. Can we come to an agreement to sell drugs? would it be considered as a contract? The answer is yes that would be an agreement but would not be a contract as selling drugs is prohibited and illegal by Law. So that agreement would not get the status of contract nor the interest (benefits) of contract can be enjoyed by the promisor or promisee. They would not present it before the court or get damages etc.

Here are a few points that can make us bit more clear what is not enforceable by law

  1. It must be legal or not barred by Law; u/s 57
  2. An agreement must be made by a minor; both parties must be major, u/s 25
  3. An agreement made in restraint of a marriage or trade; u/s 26 & 27
  4. An Agreement made without consideration
  5. An Agreement of wager; u/s 30
  6. An Agreement  contingent on impossible events; u/s 36
  7. An Agreement to dan o impossible act; u/s 56

Therefore, after meeting all these elements and criteria an agreement can be called as a contract.

Editor’s Recommendation:  Classification of Contract

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Rayhanul Islam

Legal activist & Practitioner - Editor - Researcher - Learner; A person who uses Logic & Law as his tool where psychology & Philosophy plays a role, he is on a quest to bring positive change to the legal sector of Bangladesh. He works as a lawyer and promotes legal knowledge and human right concept to the root level. More @ rayhan.lawhelpbd.com E-Mail: [email protected] or Call: +88 01711-386146

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1 Response

  1. November 5, 2018

    […] New to Law of Contract? Follow the Contract Act Beginners Note […]

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