of Contract: Meaning and Definition
Law means a ‘set of rules’ which governs
our behaviour and relating in a civilized society. So there is no need of Law
in a uncivilized society. One to should know the law to which he is subjected
to because ignorance of law is no excuse.
Generally life in a civilized society is
regulated by a welfare state. The existence and growth of civilized society
requires peace, harmony, justice, social security and order which is possible
only through laws. Every country has a regulatory framework comprised by a
plethora of laws such as constitutional law, civil law, criminal law, tax law,
labour law, business law etc. Every law has a particular field of activity to
regulate and govern.
The Indian Contract Act occupies the
most important place in the Commercial Law. Without Contract Act, it would have
been difficult to carry on trade or any other business activity. It is not only
the business community which is concerned with the Contract Act, but it also
influences the entire society. The main object of contract act is to assure
that the rights and obligations which arise out of the contract are carried out
and in case of failure to do so, the remedies are made available to the
The Indian Contract Act is so much
infused in the daily lives that it affects all. For every purchase that one
does, or a loan taken from a banker, or a ride one takes in a bus and many
other transactions of daily life has its impact by Contract Act.
The English common law is the base for
the development of Indian Contract Act 1872. The Act came into force on 1st
September 1872, and applies to the whole of India except the state of Jammu and
Kashmir. This Act applies to the usage of trade and lays down the general
a. General Contracts
b. Special Contracts
As per the Indian Contract Act, 1872, a
“contract” is an agreement enforceable by law. The agreements not enforceable
by law are not contracts. An
“agreement” means ‘a promise or a
set of promises’ forming consideration for each other. A promise arises when a proposal is accepted.
By implication, an agreement is an accepted proposal. In other words, an
agreement consists of an ‘offer’ and its ‘acceptance’.
Agreement = offer / Proposal +
Contract = Agreement +
Enforceability by law