BBA Business Law Notes Unit 1st Contract
BBA Business Law Notes Unit 1st Contract :- In This Article, You Can Find Meaning Contract BBA Business law Notes . and contract, Acceptance, Consideration, Capacity of Parties free consent, Performance of Contracts, Means That Its Is Best Topic of Business Law Study For BBA 1st Semester Year . Here You Find Topic Wise,Chapter Wise, Subject Wise Study Material BBA Management introduction of management And other Links of Related to the Business Law. How To Learn BBA Business law Notes Thanks For Read This Article.
According to section 2(h) of Indian Contract Act, “An agreement enforceable by law is a Contract”. Section 2(e) defines an agreement as, “Every promise and every set of promise, forming the consideration for each other is an agreement”. Section 2(b) defines a promise as, “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.”
“A contract is an agreement creating and defining the obligations between parties.”
Thus, a contract consists of two major elements : An agreement and its enforceability by law. To make a contract, there must be an agreement and the agreement must be enforceable by law.
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Variours Types of contracts (BBA Business law Notes)
1. Valid Contract : A valid contract in one which fulfills all the essential elements of a contract. It is fully enforceable by law.
2. Void Contract : A contract which ceases to be enforceable by law at a later stage, is called a void contract. It may become void due to : (i) Supervening impossibility, (ii) Subsequent illegality, (iii) Repudiation of a voidable contract. These problems arise subsequent to the formation of contract.
3. Voidable Contract : A contract is voidable if it is caused by coercion or under influence of fraud or misrepresentation. Such a contract is voidable at the option of aggrieved party. He may or may not opt to get it enforced. Such a contract is fully valid till it is avoided. If it is avoided, it become void.
4. Illegal Contract : An illegal contract is contract which is against a law enforced in the country or against public policy or criminal in nature or immoral. Such a contract creates no legal right and obligation. It is fully null and void. Rather, it may attract some penalties and prosecution also on the parties.
Essential Elements of Valid Contract(BBA Business law study material)
A contract has been defined in Section 2(h) as “an agreement enforceable by law. “To be enforceable by law, an agreement must possess the essential elements of a valid contract or contained in Section 10,29 and 56. According to section 10, all agreements are contract if they are made by the free consent of the parties. Competent to contract, for a lawful consideration, with a lowful object are not expressly declared by the art to be void and where necessary, satisfying the requirements of any law as to writing or attestation or registration.
1. Offer and acceptance : There must be a ‘lawful offer’ and a ‘lawful acceptance’ of the offer, thus resulting in an agreement. The adjective ‘lawful’ implies that the offer and acceptance must satisfy the requirements of the contract in relation thereto.
2. Intention to create legal relationship : Parties enter into a contract must intend to constitute legal relationship. If there is no such intention, there can be no contract between them. An agreement to dine at a friend’s house is not an agreement intended to create legal relation and is not a contract. But an agreement to buy and sell goods are intended to create some legal relationship and therefore contracts.
For Expample : M promises his wife N to ge her a saree if she will sing a song. N sang the song but M did not bring the saree for her. N cannot bring an action in a court to enforce the agreement as it lacked the intention to create legal relation.
3. Free consent : There must be free consent to the parties to the contract. According to section 14, consent is said to be free when it is not caused by :
(ii) Undue influences.
If the consent of the parties is not free then no valid contract comes into existence.
For Example : X threatens to kill Y if he does not sell his house to X. Y agrees to sell his horse to X. In this case, y s consent has been obtained by coercion and therefore, it cannot be regarded as free.
4. Capacity of parties : The parties to an agreement must be competent to contract, otherwise it cannot be enforced by a court of law. In order to be competent to contract the parties must be of the age of majority and of sound mind and must not be disqualified from contracting by any law to which they are subject (Section 11).
For example : Ramesh, a minor borrowed 4,000 from suresh and executed mortgage of his property in favour of the lender. This was not valid and the money advanced to minor could not be recovered.
5. Lawful consideration : The most important element is the presence of consideration which can be said to be the price for the promise. The consideration must be lawful. An agreement made without consideration and the lawfulness of considerations.
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6. Lawful objects : For the formation of a valid contract, it is also necessary that the parties to an agreement must agree for a lawful object. Accounting to Section (23) the object for which the agreement has been entered into must not be fraudulent or illegal or immoral or opposed to public or must not imply injury to the person or property of another. If the object is unlawful for one or the other of the reason mentioned above the agreement is void.
7. Writing and registration : According to the Indian contract Act in Section (25) a contract may be oral or in writing. But in certain special cases it lays down that the agreement to be valid must be in writing and registered.
8. Certainty : Section 29 of the contract Act provides that “Agreements, the meaning of which is not certain or capable of being made cartain are void. “in order to give rise to valid ascertain the meaning of the agreement, for otherwise, it cannot be enforced.
For Example : A agree to sell ‘B’ a hundred tons of oil”. There is nothing whatever to show what kind of oil was intended. The agreement is void for uncertainty.