Business Law – Law of Contract Act

The Indian Contract Act was passed by British India in 1872. This law is applicable throughout the country, except the states of Jammu and Kashmir. This act deals mostly with the guidelines and principles related to contracts.
This law can be subdivided into two parts −
● Sections 1 to 75 are related to general principles of contracts.
● Sections 124 to 238 are related to special kinds of contracts such as indemnity and guarantee, bailment, pledge and agency.
ü According to the Contract Act, a contract can be defined as an agreement which can be enforced by law. When two parties mean the same thing in the similar sense at the same time and work for the same purpose, they are termed to be at a point of agreement.
ü Section 2(e) of the Contract Act defines an agreement to be a set of promises, which form the considerations of both the parties. Obligation can be defined as an action or a duty to which a person is committed morally as well as legally.
ü Both agreement and obligation constitute to form a contract. Any agreement related to social matters cannot be considered as a contract. A legal relationship must be created between the two parties to constitute a contract.