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ICA Introduction

The Indian Contract Act, 1872 governs contracts in India and is based on English Common Law, applicable across the country since its enactment on September 1, 1872. Key definitions include proposal, acceptance, agreement, void agreement, contract, and voidable contract, highlighting that not every agreement qualifies as a contract unless it creates a legal obligation. The document also outlines the differences between agreements and contracts, emphasizing that while all contracts are agreements, not all agreements are contracts.

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35 views3 pages

ICA Introduction

The Indian Contract Act, 1872 governs contracts in India and is based on English Common Law, applicable across the country since its enactment on September 1, 1872. Key definitions include proposal, acceptance, agreement, void agreement, contract, and voidable contract, highlighting that not every agreement qualifies as a contract unless it creates a legal obligation. The document also outlines the differences between agreements and contracts, emphasizing that while all contracts are agreements, not all agreements are contracts.

Uploaded by

chandralekha surzhkumar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Introduction –

1) INDIAN CONTRACT ACT, 1872 governs law relating to contracts in India.


2) The Act was passed by British India and is based on the principles of English
Common Law.
3) This Act is applicable to whole of India including Jammu and Kashmir.
4) The Act came into effect from 1st September, 1872 and applies to all contracts in
India.

Important Definitions under the Act –

1) Proposal – Sec 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) Acceptance – Sec 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.
Person making the proposal is called the “promisor”, and the person accepting the
proposal is called the “promisee”.
3) Agreement – Sec 2(e)
Every promise and every set of promises, forming the consideration for each
other, is an agreement.
In simple words, Agreement = Offer + Acceptance
4) Void Agreement – Sec 2(g)
An agreement not enforceable by law is said to be void.
5) Contract – Sec 2(h)
An agreement enforceable by law is called as contract.
In simple words, Contract = Agreement + Enforceability
6) Voidable Contract –
An agreement which is enforceable by law at the option of one or more of the
parties thereto, but not at the option of the other or others.
Is every agreement contract?

 No, every agreement is not a contract.


 An agreement to become a contract must give rise to a legal obligation (duty)
 An agreement can be –

Social obligation
Legal obligation

a) An agreement giving rise to social a) Agreement giving rise to legal


obligation is not a contract. obligation is a contract
b) Not covered under ICA, 1872 (Indian b) Covered under ICA, 1872
Contract Act, 1872)

Example –

a) An agreement between two persons to go together to the cinema, or for


a walk, or for a dinner is an agreement of social nature and not covered
under Indian Contract Act, 1872.
b) Domestic agreement between husband and wife is also not a contract.

 Every contract is an agreement, but every agreement is not a contract

Difference Between Agreement and Contract –

BASIS FOR
AGREEMENT CONTRACT
COMPARIS
ON
Meaning When a proposal is accepted by the When an agreement is enforceable by
person to whom it is made, with law, it becomes a contract.
requisite consideration, it is an
agreement.
Elements Offer and Acceptance Agreement and Enforceability

Defined in Section 2 (e) Section 2 (h)


In writing Not necessarily Normally written and registered

Legal Does not creates legal obligation Creates legal obligation


obligation
One in other Every agreement need not be a contract. All contracts are agreement

Scope Wide Narrow

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