Business Law

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INDIAN CONTRACT ACT:

QUE.1.Discuss the meaning and essential elements of contract.

Meaning Of Contract

According to Section 2(h) of the Indian Contract Act,1872, “An agreement enforceable by law is a contract.” In other words, an agreement which can be enforced in court of law is known as a contract. On analyzing this definition of contract, it appears that a contract must have the following two elements.

(a) An agreement, and

(b) Enforceability of an agreement.

In the form of an equation, it can be shown as under:

Contract= An Agreement + Enforceability of an agreement

Essential elements:

* Proper Offer and Proper Acceptance:

* Intention to Create Legal Relationship:

* Free Consent :

* Capacity of Parties:

* Lawful Consideration

* Lawful Object :

* Agreement not Expressly Declared Void :

* Certainty of Meaning:

* Possibility of Performance :

* Legal Formalities :

QUE.2. Discuss the meaning and legal rules of valid offer.

Meaning of Offer [Section 2(a)]

An offer is the starting point in the making of an agreement. An offer is also called ‘proposal’. According to Section 2(a) of the Indian Contract Act, 1872,

* “A person is said to have made the proposal

* when he signifies to another his willingness to do or

* to abstain from doing anything

* with a view to obtaining the assent of that offer to such act.”

Legal Rules for A Valid Offer

* Intention to Create Legal Relationship:

* Certain and clear-cut Terms:

* Different from a Mere Declaration of Intention:

Example: X, a broker of Bombay wrote to Y a merchant of Ghaziabad stating the terms on which he is willing to do business. It was held that the letter was mere statement of intention and not an offer. (Devidatt v. Shriram)

* Different from an Invitation to Offer:

Example: Goods were displayed in the shop for sale with price tags attached on each article and...