Flashcard: Indian Contract Law — 92 carte

What two elements make up a promise in contract law?

An offer and acceptance.

What two elements form an agreement in contract law?

A promise and consideration.

What defines a contract in legal terms?

An agreement enforceable by law.

What is an offer in contract law?

A person's willingness to act or abstain to get another's consent.

What are reciprocal promises?

Promises that serve as consideration for each other.

Which agreements are enforceable: commercial or personal?

Commercial agreements are enforceable.

Are moral, social, and religious agreements legally enforceable?

No, they are not enforceable.

Name one essential element of a valid contract.

Proper offer and acceptance.

How are contracts classified by creation?

Contracts by creation are express, implied, tacit, quasi, or electronic.

What are the categories of contracts by validity?

Contracts by validity are valid, void, voidable, illegal, or unenforceable.

What types of contracts exist by execution?

Contracts by execution are executed, executory, or partly executed and partly executory.

How are contracts classified by liability?

Contracts by liability are bilateral or unilateral.

What defines a voidable contract?

A voidable contract is enforceable at the aggrieved party's option.

How does a quasi contract arise?

A quasi contract arises by operation of law, not by agreement.

What distinguishes an executed contract?

An executed contract has obligations fulfilled by both parties.

What is a present void contract?

A present void contract was once valid but became invalid due to later changes.

What are the essential qualities of a valid offer?

It must be communicated, certain, definite, capable of creating a legal relationship, and aimed at acceptance.

How does a general offer differ from a special offer?

A general offer is made to the public and accepted by anyone, a special offer targets specific persons.

What effect does a counter offer have on the original offer?

It modifies and rejects the original offer.

Name three ways an offer can be terminated.

By revocation notice, death or insanity of the offeror, or lapse of time.

When is communication of an offer considered complete?

When it comes to the offeree's knowledge or reaches the offeree by post.

What are the requirements for a valid acceptance?

It must be unconditional, by the offeree or authorized person, communicated timely and properly.

What must consideration be according to contract law rules?

Consideration must be desired by the promisor, lawful, real, not illusory, differ from existing obligation, and may be past, present, or future.

Is adequacy of consideration required for a valid contract?

Adequacy of consideration is not required for a valid contract.

Is consideration generally necessary for every contract?

Consideration is generally necessary for every contract under the rule that there is no contract without consideration.

When is no consideration required for an agreement?

No consideration is required for agreements involving natural love and affection when written, registered, and between persons in immediate relation.

Can a third party sue on a contract under privity of contract?

No, only parties to the contract can sue under privity of contract.

Can a third party provide consideration under privity of contract?

Yes, a third party may provide consideration under privity of contract.

Name an exception to the privity of contract rule.

A trust beneficiary is an exception to the privity of contract rule.

Who else is an exception to privity besides a trust beneficiary?

An assignee is an exception to the privity of contract rule.

Who are persons incompetent to contract?

Minors, persons of unsound mind, and persons disqualified by law.

What is the legal effect of an agreement with a minor?

It is void ab initio and cannot be ratified after majority.

Can an agreement with a minor be enforced by estoppel against the minor?

No, it is not subject to estoppel against the minor.

What must a minor do if they falsely represent their age in a contract?

Restore property or money acquired under the void agreement.

Is a minor personally liable when falsely representing age in a contract?

No, the minor is not personally liable.

What distinguishes an idiot from a lunatic?

An idiot has permanently lost mental power, a lunatic has alternating sanity and insanity.

What is the mental state of a drunken or intoxicated person regarding contracts?

They cannot think rationally while intoxicated.

Who are persons disqualified by law from contracting?

Alien enemy, convict, insolvent, foreign diplomat, company beyond its memorandum, and married woman.

What does coercion consist of under the IPC?

Committing or threatening an offence or unlawfully detaining property to cause agreement.

When does undue influence exist between parties?

When one party dominates another's will through a near relationship to gain unfair advantage.

What is a key feature of fraud compared to misrepresentation?

Fraud involves intentional deception that actually deceives the other party.

How is misrepresentation defined in contrast to fraud?

An innocent false representation acted upon without knowledge of its falsity.

When does silence amount to fraud?

When silence is equivalent to speech, including partial truth that deceives.

How is a mistake of domestic law treated compared to a mistake of fact?

It is not treated like a mistake of fact.

How is a mistake of foreign law treated legally?

It has the same effect as a mistake of fact.

What types of mistakes may concern agreements?

Bilateral, unilateral, or mistakes about the subject matter.

When is an agreement considered void due to its object or consideration?

When it is forbidden by law, fraudulent, injures a person or property, immoral, or opposes public policy.

Name one example of a public-policy void agreement.

Trading with an alien enemy is an example of a public-policy void agreement.

What distinguishes champerty from maintenance in litigation assistance?

Champerty involves sharing proceeds, maintenance does not.

Are agreements in restraint of trade always valid?

No, they are void except for specified exceptions like partnership restrictions and arbitration agreements.

What defines a wagering agreement?

A promise to pay money on an uncertain event with equal chances, no interest or control, and a common betting intention.

Are wagering agreements legal in India?

They are expressly void in India.

Can a loser recover a deposit from the winner in a wagering agreement after payment?

No, the loser cannot recover it from the winner after payment by the stakeholder.

What triggers performance in a contingent contract?

An uncertain collateral event happening or not happening triggers performance.

What is a quasi-contractual obligation based on?

It is imposed by law to prevent unjust enrichment, not agreement.

What kind of right does a quasi-contractual obligation create?

It creates a right in personam.

Name one cause of quasi-contractual obligations.

Supply of necessaries to an incompetent person is one cause.

Can a supplier impose personal liability on an incompetent person?

No, personal liability cannot be imposed on the incompetent person.

From what can a supplier recover when supplying necessaries to an incompetent person?

From the incompetent person's property, including that of persons they support.

What must a finder of goods do to fulfill their duty?

They must take reasonable care and seek the true owner.

What expenses may a finder of goods recover?

Lawful preservation expenses may be recovered.

How can a contract be discharged?

By performance, impossibility, lapse of time, law, agreement, or breach.

What conditions must a valid tender meet?

It must be unconditional, timely, at proper place, verifiable, to promisee or agent, by able person, covering whole obligation.

What can a promisee do if the promisor refuses to perform?

Cancel or continue the contract and claim damages.

Who may demand performance when a contract benefits a third person?

Only the promisee may demand performance.

What distinguishes initial impossibility from supervening impossibility?

Initial impossibility makes contract void from start; supervening arises from unexpected events later.

What is the difference between actual and anticipatory breach?

Actual breach is failure on due date; anticipatory breach is declaration before due date of non-performance.

Name remedies available for breach of contract.

Rescission, damages, specific performance, injunction, quantum meruit, and various damages types.

What is a contract of indemnity?

A promise to save another from loss caused by the promisor or another person.

What does a contract of guarantee involve?

Performing a promise or discharging a third person's liability on default.

What distinguishes a specific guarantee from a continuing guarantee?

A specific guarantee covers one transaction; a continuing guarantee covers a series.

How can a continuing guarantee be revoked?

By notice to the creditor or the surety's death for future transactions.

Does revoking a continuing guarantee affect liability for past transactions?

No, liability for transactions before revocation remains unaffected.

What is the nature of the surety's liability compared to the principal debtor's?

It is secondary and ordinarily equal to the principal debtor's liability.

Can the creditor proceed against the surety before the principal debtor?

Yes, unless otherwise agreed, the creditor may proceed against the surety first.

Name one way a surety may be discharged.

By revocation, death, release of the principal debtor, unauthorized variance, or creditor conduct impairing remedy.

What is bailment in contract law?

Delivery of goods for a purpose under contract with return or disposal after.

What are the essential elements of bailment?

Contract, delivery, purpose, return or disposal, with no consideration needed.

What distinguishes actual delivery in bailment?

It transfers physical possession of the goods.

What distinguishes symbolic delivery in bailment?

It transfers control through an act like handing over keys.

What duty does the bailee have regarding the goods?

To take reasonable care and avoid unauthorized use or mixing.

What rights does the bailee have for charges due?

The right of lien over the goods.

What is a pledge in terms of bailment?

Bailment of goods as security for debt or promise payment.

What rights does a pawnee have over pledged goods?

To retain, sell, sue for deficit, and pay surplus to the pawnor.

What is agency in legal terms?

A relationship where an agent acts for a principal with a third person.

How can agency be created?

By express authority, implied authority, estoppel, necessity, or ratification.

To what date does ratification relate back?

The date of the original act.

What distinguishes a special agent from a general agent?

A special agent is appointed for a specific act, a general agent for transactions within authority.

Name one duty an agent must follow towards the principal.

An agent must follow the principal's directions.

Under what conditions may an agent be personally liable?

By express agreement, trade custom, non-disclosure, nonexistent principal, excess authority, or foreign principal.

What differentiates a sub-agent from a substituted agent?

A sub-agent acts under the original agent's control; a substituted agent is appointed with the principal's consent.

How can an agent's authority be terminated?

By revocation, renunciation, completion, death, insanity, or insolvency of the principal.