The Master Contractual Flowchart

Before diving into units, visualize the life of a contract:

  1. Offer + Acceptance = Agreement.
  2. Agreement + Enforceability (Capacity, Free Consent, Legal Object, Consideration) = Contract.
  3. Breach → Leads to Remedies (Damages, Specific Performance).

Unit I: Formation & Consideration

  • Essential Ingredients:
    • Offer & Acceptance: Must be communicated; silence is not acceptance.
    • Consideration (Sec. 2d): The “Price” for the promise. India follows “Stranger to consideration can sue” (Chinnaya v. Ramaya), but “Stranger to contract cannot”.
  • The “Nudum Pactum” Rule: A bare promise without consideration is void.
  • Invitation to Offer: Items on a shelf or advertisements are NOT offers; they are invitations for you to make an offer (Harvey v. Facey).

Unit II: Capacity & Free Consent

  • The Minor Rule: A minor’s agreement is Void-ab-initio (dead from the start). Mohori Bibee v. Dharmodas Ghose is your landmark here.
  • Beneficial Agreements: Contracts for a minor’s benefit (like education) are enforceable.
  • Vitiating Factors (The “Consent Killers”):
    • Coercion (Sec. 15): Physical threat.
    • Undue Influence (Sec. 16): Mental pressure (e.g., Doctor-Patient).
    • Fraud (Sec. 17): Intentional lie.
    • Misrepresentation (Sec. 18): Innocent mistake.
    • Mistake (Sec. 20): Both parties are wrong about a fact.

Unit III: Legality & Void Agreements

  • Unlawful Objects (Sec. 23): If the goal is illegal, immoral, or against public policy, the contract is dead.
  • Strictly Prohibited Restraints:
    • Restraint of Marriage (Sec. 26).
    • Restraint of Trade (Sec. 27).
    • Restraint of Legal Proceedings (Sec. 28).
  • Wagering (Sec. 30): Pure bets are void. Distinguish this from Contingent Contracts (Sec. 31) (like insurance), which are valid.

Unit IV: Performance & Appropriation

  • Who Performs? : The Promisor, their Agent, or a Third Party (if accepted).
  • Joint Promises (Sec. 42): Liability is joint and several.
  • Appropriation of Payment (Sec. 59-61): If a debtor owes multiple debts, they have the right to say which debt they are clearing first.

Unit V: Impossibility & Quasi-Contracts

  • Doctrine of Frustration (Sec. 56): If the subject matter is destroyed (like a hall burning down), the contract is discharged due to impossibility (Taylor v. Caldwell).
  • Breach: Can be Anticipatory (refusing before the date) or Actual (refusing on the date).
  • Quasi-Contracts (Sec. 68-72): These are not contracts but “implied” duties to prevent Unjust Enrichment (e.g., a finder of lost goods must try to find the owner).

Unit VI: Government Contracts & Remedies

  • Government Contracts (Art. 299): Must be in writing and signed in the name of the President/Governor; otherwise, they are void.
  • Remedies for Breach:
    1. Damages (Sec. 73): Compensation for loss (Hadley v. Baxendale).
    2. Quantum Meruit: “As much as earned”—payment for work already done.
    3. Specific Performance: Ordering the party to actually do the job.
    4. Injunction: Stopping a party from doing something.

Final Revision Checklist

  • [ ] Can you define Consensus-ad-idem?
  • [ ] Can you explain why a minor cannot be asked to return money? (Mohori Bibee)
  • [ ] Can you distinguish between a Wager and Insurance?
  • [ ] Do you know the three requirements for a Government Contract under Art. 299?

High-Impact Latin Maxim: Pacta Sunt Servanda (Agreements must be kept). Use this in your conclusion for any answer on Performance or Breach.

PreviousNext