17 Aug Contract law
Contract act came into force in the year 1872. Contract act is followed all throughout India except Jammu and Kashmir. Contract act comes under the business law and is followed when two parties, a buyer and a seller enters into a contract with each other. Every company engages in selling or buying commodities. When a buyer and a seller agrees to buy or sell an asset, they sign a contract that is enforceable under the law. The person who makes the offer is called the promisor. The person who accepts the proposal is called the promise.
The elements of the contract act.
The essential elements of any contract act include offer and acceptance. The contract involves two parties: one, who proposes and the other who receives the offer. A deal comes into being only after certain legal formalities are followed. Every act should have a lawful object and should not be expressively declared void. The terms and conditions of the act should have the capacity and the consent to contract.
- Offer: The person who makes the offer is called the promiser. He promises to deliver an asset at a particular time for a fixed amount.
- Acceptance: The second party who accepts the offer is called the promise. Terms and conditions of both offer and acceptance must be clearly stated in the contract.
Capacity to Contract:
According to the law, any person who is a major and is of a sound mind can enter into a contract. However, a person who does not have a rational mind can also enter into a contract when he is in his senses. A person suffering from an unsound mind cannot enter into a contract. An incorporated company may not be allowed to enter into a contract.
Discharge of a contract.
A contract is discharged if both the parties violate the terms mentioned in the contract. Change of law, the death of the promiser or promise, lapse of time, breach of contract, failure of the ultimate objective, if the subject matter is destroyed, the contract is declared discharged and wouldn’t be valid. Any sorts of alteration done to the contract, if a new contract gets replaced for an old contract, promise paying lesser amounts than what was agreed for would also discharge the contract.
India law has quasi-contracts to avoid any sorts of benefits that another person has paid for. Let us consider an example to learn about quasi-contracts. Example: Person A orders a pizza and pays for it already. The delivery man now, by mistake delivers it to the wrong address to person B. Person B does not correct the delivery man, pays for the pizza and consumes it. The court, under quasi-contracts, demands the person B pay the same amount (with fine in some cases) to the individual A.