When did Indian Contract Act came into force?
Ans: 1st September, 1872.
2. What are the general principles of Indian Contract Act.
Ans: The Indian Contract Act, 1872 lays down general principles relating to formation and enforceability of contracts; rules governing the provisions of an agreement and offer; the various types of contracts including those of indemnity and guarantee, bailment and pledge and agency.
3. What is the most important branch of Indian Contract Act.
Ans: The Law of Contract constitutes the most important branch of Mercantile or Commercial Law.
4. What is a Contract?
Ans: The Indian Contract Act has defined “Contract” in Section 2(h) as “an agreement enforceable by law”.
5. A Contract can be defined into two distinct parts what are they?
Ans: A contract essentially consists of two distinct parts. First, there must be an agreement. Secondly, such an agreement must be enforceable by law.
6. A contract can be a combination of the two elements?
Ans: yes, A contract therefore, is a combination of the two elements:
— An agreement, and
— An obligation.
7. What is an Agreement?
Ans: An agreement gives birth to a contract. As per Section 2(e) of the Indian Contract Act every promise and every set of promises, forming the consideration for each other, is an agreement.
8. What is a promise?
Ans: According to Section 2(b) of the Indian Contract Act “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.
9. When an Agreement comes into existence?
Ans: An agreement, therefore, comes into existence when one party makes a proposal or offer to the other party and that other party signifies his assent thereto.
10. Is an agreement is the sum total of offer and acceptance. True or False Ans: True, an agreement is the sum total of offer and acceptance.
11. What is an Obligation?
Ans: An obligation is the legal duty to do or abstain from doing what one has promised to do or abstain from doing.
12. When a contractual Obligation arises?
Ans: A contractual obligation arises from a bargain between the parties to the agreement who are called the promisor and the promise. Section 2(b) says that when the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted; and a proposal when accepted becomes a promise.
13. Name the Agreements which are not Contracts.
Ans: Agreements in which the idea of bargain is absent and there is no intention to create legal relations are not contracts. These are:
a) Agreements relating to social matters.
b) Domestic arrangements between husband and wife.
14. What is envisages in section 10 of Indian Contract Act, 1872.
Ans: Section 10 of the Indian Contract Act, 1872 provides that “all agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void”.
15. What are the essential elements of Valid Contract. Ans: The essential elements of a valid contract are:
(i) An offer or proposal by one party and acceptance of that offer by another party resulting in an Agreement — consensus-ad-idem.
(ii) An intention to create legal relations or an intent to have legal consequences.
(iii) The agreement is supported by a lawful consideration.
(iv) The parties to the contract are legally capable of contracting.
(v) Genuine consent between the parties.
(vi) The object and consideration of the contract is legal and is not opposed to public policy.
(vii) The terms of the contract are certain.
(viii) The agreement is capable of being performed i.e., it is not impossible of being performed
16. What are the elements required to form a valid contract. Ans: Therefore, to form a valid contract there must be:
— An agreement
— Based on the genuine consent of the parties
— Supported by a lawful consideration
— Made for a lawful object, and
— Between the competent parties
17. What is an offer .
Ans: As per Indian Contract Act, 1872 defines ‘offer’ under section 2(a) which states that when a 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 proposal.
18. What is proposer?
Ans: The person making the proposal or offer is called the proposer or offeror.
19. What is Offeree?
Ans: The person to whom the proposal is made is called the offeree.
20. The synonymous of The word ‘proposal’ is
21. What is an offer?
Ans: An offer is a proposal by one person, whereby he expresses his willingness to enter into a contractual obligation in return for a promise, act or forbearance.
22. What are the rules for Governing Offers?
Ans: A valid offer must comply with the following rules:
(a) An offer must be clear, definite, complete and final. It must not be vague
(b) An offer must be communicated to the offeree. An offer becomes effective only when it has been communicated to the offeree so as to give him an opportunity to accept or reject the same.
(c) The communication of an offer may be made by express words-oral or written-or it may be implied by conduct.
(d) The communication of the offer may be general or specific. Where an offer is made to a specific person it is called specific offer and it can be accepted only by that person. But when an offer is addressed to an uncertain body of individuals i.e. the world at large, it is a general offer and can be accepted by any member of the general public by fulfilling the condition laid down in the offer’.
23. Which section of Indian contract act deals with Lapse of Offer.
Ans: Section 6
24. What are the modes of Lapse of an Offer?
Ans: Section 6 deals with various modes of lapse of an offer. It states that an offer lapses if—
(a) It is not accepted within the specified time (if any) or after a reasonable time, if none is specified.
(b) It is not accepted in the mode prescribed or if no mode is prescribed in some usual and reasonable manner,
(c) The offeree rejects it by distinct refusal to accept it;
(d) Either the offeror or the offeree dies before acceptance;
(e) The acceptor fails to fulfil a condition precedent to an acceptance.
(f) The offeree makes a counter offer, it amounts to rejection of the offer and an offer by the offeree may be accepted or rejected by the offeror.
25. How revocation of offer done by the Offeror?
Ans: 1. An offer may be revoked by the offeror at any time before acceptance.
2. Revocation must be communicated to the offeree, as it does not take effect until it is actually communicated to the offeree
3. An offer to keep open for a specified time (option) is not binding unless it is supported by consideration.