Basics of Law relating to Contracts an introduction to Indian Contract Law
Nandimath Omprakash V, Associate Professor of Law & Coordinator, Centre for Environmental Law Education, Research and Advocacy (CEERA), National Law School of India University, Nagarbhavi, Bangalore-560 072.
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Theoretical basis of contracts
Theory based on morality Fulfilling contractual obligation is ones moral duty Theory based on expectation Failing ones expectation creates pain and performance creates pleasure Theory based on Utility Acts which lead to greatest happiness of greatest number are moral generally and should only be encouraged Theory of certainty Without certainty no business or social activities in the society are possible
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Theoretical basis of contracts
I ought to keep my promises Why? because my conscience bids me to do it How do you know your conscience bids you to do it? because I have an interior feeling to that effect Why ought you to obey your conscience? because GOD is author of my nature, and to obey my conscience is to obey GOD Why ought you obey GOD? because it is my first duty How do you know that it is your first duty? because my conscience tells me that - Bentham, Principles of Morals & Legislations
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Breach of contract - why it should be remedied?
Contract abiding person suffers pain and disappointment
Not only him but his family and other relatives get disappointed
Encourage persons who have tendency to take such advantages
So enforce the promises
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What promises ought to be enforced?
Enforce all promises
All promises made with intention
Promises based on selection
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Selection of promises by law
Set pf promises
AGREEMENT
TEST OF LEGAL VALIDITY: CONTRACT
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Capacity of the parties Free-mind of the parties Legally not harmful No specific bar by law Valid consideration Approved format
Contract some relevant things
Contract may be writing or oral no specific mandate by ICA But some times writing becomes mandatory vide other laws
Some times not only writing other formalities are to be observed Standard Format Stamping & Registration Signing by Witnesses Other formalities
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Indian contract law
every promise and every set of promises, forming the consideration for each other, is an agreement Sec. 2(e)* an agreement enforceable by law is a contract Sec. 2(h)* all agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void Sec. 10*
*Indian Contract Act , 1872
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Importance to law of contract
This law has widest application (no other law can boast of such a wide applicability) It provides the very basis of formal co-operation in the society, without it the very fabric of society will become weak Contract is a means of social solidarity as a tool of cooperation, law of contract helps a lot in rendering society more happy
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Contract and society
society is nothing but network of relationships between the individuals. Every group of individuals is not a society. To form a society individuals must be woven into network of relationships. Cooperation turns a scattered number of individuals into society and contract is an important tool for such cooperation
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Thanks very much
Questions Clarifications Suggestions
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