Commercial Law Notes


Contract Act

Chapter Objectives

After studying this chapter you should be able to understand:

1. Introduction
2. Definition
3. Formation of the Contract
4. Communication, acceptance and revocation of proposal

Introduction

In everyday life there is no difference between the terms contract, promise and agreement but the legal interpretations are different for each of the terms

Definitions

Proposal

A) The suggestion by the offerer is technically called a ‘proposal’ and the consent given by the offeree is technically known as ‘acceptance’
B) 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.

How Proposal is Made

1. By words (spoken or written)
2. By conduct and behavior

Cross Offer

When two parties make similar offers to each other without knowing of each other’s offer

Termination of Offer

1. Offer lapses after expiry of specified or reasonable time

2.Offer terminates when rejected by the offeree
3. Offer terminates when revoked before acceptance
4. Offer lapses by death etc. of offeree or offeree before acceptance
5. Offer terminates by counter offer

Promise, Promisor, and Promisee

Promise Is the accepted proposal. The proposer is the promisor and the proposee is the promisee.

Thus in order to convert a proposal into a promise the acceptance is absolutely essential

Acceptance

When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted

Further points to be noted

 
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