Contract Act | Beginners Note
The Contract Act is one of the first to understand materials for law students; though this comparatively easy topic is nicely explained by various authors for law students, I would like to make it easier to understand for those who are from other disciplines or thinking about legal study. This article will give a clear idea about the legal study and shall clarify the basic concept of Contract law.
Let’s think when we buy something or make any business deal what do we do? We meet the other party/s, talk about the deal/product, offer a rate (Amount of money) for that deal / Product and then if the other party agrees and confirms the deal. The deal is done; simply this is a contract. Now the law discusses various aspects and consequences of this contract, such as what if that person/party violate the deal? What is it if the deal is for selling illegal arms? Will it be presentable in the court and what would be the consequence?
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 part, to be a contract, there are certain procedures that we follow; these are elements of a contract; we will discuss these elements from the bottom-up approach to easily understand what a contract is but before that let’s have the legal definition of contract according to the Contract Act 1872.
Table of Contents
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 to the seller to give you that book at 100 takes, 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 sections 2(a) and 2(b) of The Contract Act 1872.
2(a). 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:
2(b). When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted becomes a promise:
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 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 who accepts the promise is named as promisee. as said in 2(c) of the act
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.
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 takas 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 apples, and Karim for the same deal give Rahim a Hilsha fish, here both of them consider something [100 apples and a Hilsha fish] for this contract. Here are some points that can draw from that definition of consideration.
- 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.
- It must be done at the desire of the promisor, which means that something must be a desire of the promisor and that desire would be understood via consent of the promisor.
- 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 are there both of these 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 the contract, nor the interest (benefits) of the contract can be enjoyed by the promisor or promisee. They would not present it before the court or get damages etc.
Enforceable by law
Here are a few points that can make us bit more clear what is not enforceable by law
- It must be legal or not barred by Law; u/s 57
- An agreement must be made by a minor; both parties must be major, u/s 25
- An agreement made in restraint of a marriage or trade; u/s 26 & 27
- An Agreement made without consideration
- An Agreement of wager; u/s 30
- An Agreement contingent on impossible events; u/s 36
- An Agreement to an impossible act; u/s 56
Therefore, after meeting all these elements and criteria, an agreement can be called a contract.