RULES REGARDING VALID ACCEPTANCE

(i) Acceptance must be absolute and unqualified.
(ii) Mere silence is not an acceptance.
(iii) Acceptance must be communicated.

TYPES OF OFFER

(i) General Offer – An offer made to the public at large. Anyone having know
offer can accept this offer by complying with the terms of offer.
(ii) Specific Offer – An offer made to a specified person. This offer can be accepted only by
the person to whom it is made
(iii) Cross Offers – When two persons exchange identical offer in ignorance of each other’s
offer. Two cross offers cannot made a contact.
(iv) Counter Offer – Qualified acceptance to the offer & counter offer amounts to rejection
of the original offer.
(v) Standing /open/continuing offer
period of time.
Tender for supply of goods is an example of General offer & standing offer.

Acceptance [sec 2 (b)]

Where the person to whom proposal is made signifies his assent
thereto, the proposal is said to be accepted.
Legal rules regarding offer
(i) Offer must be capable of creating the legal relationship. (ii) Offer must be
certain, definite and not vague.
(ii) Offer may be express or implied. (iv) Offer must be distinguish from an invitation
to offer.
(iii) Offer may be conditional.
(iv) Offer may be specific or general.
(v) Offer must be made with a view to obtaining the assent of the offeree.

(vi) An offer should not contain a term of non compliance which may amount to
acceptance.
(vii) Offer must be communicated to the
(viii) Special terms to an offer must be communicated.

Proposal/Offer

Proposal [sec 2(a)]/Offer – Where one person signifies to another his willingness to do or to
abstain from doing anything with a view to obtaining the consent of that either to such act
or abstinence, he is said to make a proposal.

TIME BARRED DEBT

1. Indian limitation Act, 1923 – A debt is said to be time barred on expiry of 3 years
from the due date, if the amount has not been recovered and also no action has
been taken for recovery of the amount.
2. A time barred debt is not recoverable.
3. A written promise to pay time barred debt & signed by the promisor or his duly
authorized agent is valid.
4. A person who pay time barred debt, in ignorance of Indian Limitation Act, 1963
(Indian Law), cannot recover it back.
5. In case of appropriation of payment, here there is an appropriation by time,
payment may appropriated to the debt first in time, whether time barred or not.
6. An agreement which is not legally enforceable but binding in honour only is invalid.
7. In commercial & Business Agreements, the intention of parties to create legal
relationship is presumed to exist.

TYPES OF CONTRACTS

TYPES OF CONTRACTS
(i) Valid Contract – A contract which contains all essential elements.
(ii) Void Contract [sec 2 (j)] – A contract which creases to be enforceable by law
becomes void when it ceases to be so enforceable. It is a contact which is valid in
the beginning but later on due to some reasons it becomes void.
(iii) Void Agreement [Sec 2(g)]- An agreement not enforceable by law. It is void from
the very beginning when it is made. It is void ab initio.
(iv) Voidable Contract [Sec 2 (i)] – A contract which is enforceable by law at the
option of one party but not at the option of other(s). Here, only one party can go
to the court of law, other party cannot go to the court of law.
(v) Illegal Agreement – An agreement the consideration of object of which is
unlawful [sec. 23].
(vi) Unenforceable contract – It is one which is good in substance but due to some
technical defect such as absence in writing, signing one or more parties cannot
sue upon it.
(vii) Unilateral Contract – Obligation is pending on the part of one of the parties to
the contract.
(viii) Bilateral Contact – Obligation is pending on the part of both of the parties to the
contract.
(ix) Executed Contract – A contract which is completed. Where parties to the
contract have performed their respective obligations.
(x) Executory contract – A contract which is to be performed in future.

ESSENTIAL ELEMENTS OF A VALID CONTRACT [SECTION 10]

ESSENTIAL ELEMENTS OF A VALID CONTRACT [SECTION 10]
All agreements are contracts if they are made by the:-
(i) Free consent of the parties
(ii) Competent to the contract.
(iii) For a lawful consideration &
(iv) With a lawful object &
(v) Are not hereby expressly declared to be void.
(vi) Intention to create legal relationship
(vii) Certainty of meaning
(viii) Possibility of performance
(ix) Legal formalities.

Basic Points

INDIAN CONTRACT ACT, 1872

1. Indian Contract Act, 1872 came into force on 1st September, 1872.
2. It applies to whole of India except the state of J & K.
3. The provisions related to contract are contained in Indian Contract Act, 1972.
4. The provisions related to sale of goods were originally contained in Indian Contract Act,
1872.
5. The provisions related to sale of goods are contained in the Sale of Goods Act, 1930.
6. The Sale of Goods Act came into force on 1st July, 1930.
7. Indian Partnership Act came into force on 1st oct, 1932.
8. The provisions related to partnership are contained in Indian partnership Act, 1932.
9. Contract [Sec. 2(h)] An agreement enforceable by law.
10. Agreement [sec 2(e)] Every promise & e very set of promises forming consideration for
each other.
11. Promise [sec 2 (b)] A proposal when accepted becomes a promise.
12. An agreement is an accepted proposal.
13. Consideration Quid pro quo i.e., something in return.
14. Enforceability by law Agreement which creates legal obligation on the part of parties.
(Balfour Vs. Balfour)