BRF

Name : killa Neha
Roll no.: 26605021018

Subject : Business Regulatory Framework
Paper code : GE5B - 11
College name : Bengal school of Technology And
Management
Department : BBA {2022-2023}
 Introduction to Indian contract Act
1872
TOPIC  Offer
 Acceptance
 Consideration
 Capacity of party
 Free Consent of Parties
The Indian Contract Act, 1872 prescribes the law relating to contracts in India and is the key act
regulating Indian contract law. The Act is based on the principles of English Common Law. It is
applicable to all the states of India. It determines the circumstances in which promises made by
the parties to a contract shall be legally binding. Under Section 2(h), the Indian Contract Act
defines a contract as an agreement which is enforceable by law. There are mainly four conditions
which have to be satisfied to form a valid contract, i.e. free consent of parties to the contracts,
competent to contract, for a lawful consideration and with a lawful object.
 Development
INTRODUCTION TO INDIAN CONTRACT  The Act as enacted originally had 266 Sections,
ACT 1872
• General Principles of Law of Contract – Sections 01 to 75
• Contract relating to Sale of Goods – Sections 76 to 123
• Special Contracts- Indemnity, Guarantee, Bailment & Pledge and Agency – Sections 124 to
238
• Contracts relating to Partnership – Sections 239 to 266
 At present the Indian Contract Act may be divided into two parts:
• Part 1: Deals with the General Principles of Law of Contract – Sections 1 to 75
• Part 2: Deals with Special kinds of Contracts such as

• Contract of Indemnity and Guarantee
• Contract of Bailment and Pledge
• Contract of Agency.
OFFER
Section 2(a) of the Indian Contract Act
defines a proposal as:
“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”.
 The person who makes the offer is
called the ‘offeror’ or ‘promisor’ and
the person to whom the offer is made is
called the ‘offeree’ or ‘promisee’:
 1. An offer may be express or implied.
2. An offer may be specific or general.
3. An offer must be made with a view
to create legal relationship.
4. Offer must be distinguished from an
invitation to offer.
5. An offer must be communicated to
the offeree.
6. The terms of offer must be certain &
may include an act or an abstinence
7. An offer may be conditional and all
special terms & conditions must be
communicated along with the offer.
8. An offer must not be “negative” in
terms. An offer should not contain a
term the non-compliance of which
would amount to acceptance.
9. An intention to make an offer in the
future does not result in an offer.
ACCEPTANCE
Section 2(b) states that

“A proposal when accepted becomes a promise”
and defines ‘acceptance’ as

“When the person to whom the proposal is made signifies his assent thereto, the proposal
is said to be accepted.”
1. Acceptance must be absolute and unqualified.

2. Acceptance must be given only by the person to whom the offer is made.
3. Acceptance may be expressed in words, spoken or written or may be given by conduct.
4. Acceptance must be expressed in the prescribed manner or when nothing is prescribed
then in some usual and reasonable manner.
5. Acceptance must be communicated by the acceptor.
6. Acceptance must be given within a reasonable time and before the offer lapses and or is
revoked.
7. Acceptance must succeed the offer.
8. Rejected offers can be accepted only, if renewed.
9. Generally acceptance cannot be presumed from silence.
CONSIDERATION
 Section 2(d) of the Indian Contract Act defines consideration as: 'When, at the desire of the promisor, the promisee or any other person has done or
abstained, from doing or does or abstains from doing, or promises to do or to abstain from doing something, such act or abstinence or promise is
called a consideration
 FOR EX: A agrees to sell his house to B for 10,000 rupees. Here, B's promise to pay the sum of 10,000 rupees is the consideration for A's
promise to sell the house and A's promise to sell the house is the consideration for B's promise to pay the 10,000 rupees . These are lawful
considerations.
 CAPACITY OF PARTY
 According to Section 11, “Every person is competent to contract who is of the age of majority according to the law to which he is subject, and who is of sound mind
and is not disqualified from contracting by any law to which he is subject.”
 So, we have three main aspects:
1. Attaining the age of majority
2. Being of sound mind
3. Disquilified person
FREE CONSENT OF PARTY
 In the Indian Contract Act, the definition of Consent is given in Section 13, which states that “it is when two or more persons agree upon
the same thing and in the same sense”. So the two people must agree to something in the same sense as well.

Let’s say for example A agrees to sell his car to B. A owns three cars and wants to sell the Maruti. B thinks he is buying his Honda. Here A
and B have not agreed upon the same thing in the same sense. Hence there is no consent and subsequently no contract.
 Now Free Consent has been defined in Section 14 of the Act. The section says that consent is considered free consent when it is not caused
or affected by the following,
1. Coercion
2. Undue Influence
3. Fraud
4. Misrepresentation
5. Mistake
A promises to give B ₹500 on his birthday as a present. A fails to fulfil it. B
wants to file a suit against A for the amount. Advise B
B can not file a suit against A . The promise of birthday present out of love and affection
does not result into any legal agreement hence no liability.
CONCLUSION
a "contract" is an agreement enforceable by law. The agreements are not enforceable by law
are not contracts. An "agreement" means 'a promise or a set of promises' forming consideration
for each other. And a promise arises when a proposal is accepted. Every business follows Indian
contract act 1872 and run their business according to law

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Name : killa Neha

Roll no.: 26605021018

• Contract relating to Sale of Goods – Sections 76 to 123

• Contracts relating to Partnership – Sections 239 to 266

• Part 1: Deals with the General Principles of Law of Contract – Sections 1 to 75

• Part 2: Deals with Special kinds of Contracts such as

Section 2(b) states that

and defines ‘acceptance’ as

1. Acceptance must be absolute and unqualified.

 So, we have three main aspects:

1. Attaining the age of majority

2. Being of sound mind

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