Law of Contract - I

Course Outline

B.A.LL.B. (Hons.) – I Year

Course Objectives
1 Fundamental Concepts
Develop an understanding of fundamental concepts relating to contracts,
including the meaning of agreement, contract, and the distinction between the
two.

2 Legal Regime
Gain insight into the legal regime relating to contracts in India, including the
Indian Contract Act, 1872, and its application in various contexts.

3 Economic Activities
Explore the significance of contractual principles in the context of economic
activities, understanding how contracts facilitate and regulate business
transactions.

4 Theory and Practice

Combine theoretical aspects of contracts with practical experience of
enforcement, bridging the gap between legal theory and real-world application.
Learning Outcomes
1 Demonstrate Fundamental Concepts
Students will be able to demonstrate a comprehensive understanding of fundamental concepts
relating to contracts, including the elements of a valid contract and the different types of
contracts.

2 Knowledge of Legal Regime

Students will be equipped with the knowledge of the legal regime in India for regulating
contracts, including the Indian Contract Act, 1872, and its provisions.

3 Significance of Contracts
Students will be able to elaborate on the significance of contracts in economic activities,
understanding their role in facilitating trade, commerce, and other economic transactions.

4 Theoretical and Practical Application

Students will be able to understand the theoretical aspects of contracts and apply them in
practical situations, demonstrating their ability to analyze and solve real-world contract law
problems.

5 Emerging Areas in Contract Law

Students will be able to elaborate on the prospects of and issues with emerging areas in the law
Course Plan
Formation of an Agreement 1
9 Lecture Sessions

2 Consideration
6 Lecture Sessions

Capacity to Contract 3
5 Lecture Sessions

4 Consent
9 Lecture Sessions

Regulation and Limitations 5

on Freedom of Contracts
9 Lecture Sessions
6 Performance of Contract
7 Lecture Sessions

Discharge of a Contract 7
5 Lecture Sessions

8 Remedies for Breach of Contract

10 Lecture Sessions
MODULE – I – FORMATION OF AN
AGREEMENT
1. Meaning, Nature & Significance of Law of Contracts
2. Contract Theory
3. Historical Evolution of Law of Contract in India
4. Elements of Valid Contract - Overview
5. Contract and Agreement
6. Kinds of Contract
MODULE – I – FORMATION OF AN
AGREEMENT
1. Offer & Acceptance
1. Various forms
2. Essential Elements
3. Communication and Modes of Communication
4. Revocation- Mode of Revocation of Offer.
5. Invitation to Offer
 Case Laws on Offer &
Acceptance
• Carlill v. Carbolic Smoke Ball Co. (1891-4) All ER Rep.127
• Pharmaceutical Society of Great Britain v. Boots Cash Chemist
(Southern) Ltd. (1952) 2 All ER Rep. 456
• Balfour v. Balfour (1918-19) All ER 860 (CA)
• Lalman Shukla v. Gauri Datt (1913) XL ALJR 489 (All.)
• Bhagwandas Goverdhandas Kedia v. M/s. Girdharilal Parshottamdas &
Co., AIR 1966 SC 543
• Harvey v. Facey (1893) AC 552
• Felthouse v. Bindley (1862) 11 CB 869
 MODULE II – CONSIDERATION
Sections: Section 2(d), 2(f), 23 and 25, Indian Contract Act, 1872

1. Meaning and Nature of Consideration – Nudum Pactum

2. Rules for Consideration
3. Adequacy of Consideration
4. Past, Present and Future Consideration
5. Doctrine of Privity of Contract
6. Exceptions to the Rule of Consideration
7. Unlawful Consideration and its Effect.
 Case Laws on Consideration
• Kedarnath Bhattacharji v. Gorie Mahomed (1886) 7 I.D. 64
(Cal.)
• Doraswami Iyer v. Arunachala Ayyar (1935) 43 LW 259
(Mad.)
• Abdul Aziz v. Masum Ali, AIR 1914 All. 22
• Venkata Chinnaya Rau v. Venkataramaya Garu (1881) 1 ID
137 (Mad.)
• Nawab Khwaja Muhammad Khan v. Nawab Husaini
Begam (1910) LR 37 I.A.152
MODULE III: CAPACITY TO CONTRACT
Sections 10, 11, 12, 64, 65, 68, Indian Contract Act, 1872; Specific Relief Act,
1963, section 33; Indian Majority Act, 1875

• Legal Disability and Inability to Enter into Contract,

• Contract with Minor
• Contract with Persons suffering from Insanity and Lunacy
• Contract with Persons disqualified by Law
 Case Laws on Capacity to
Contract
• Mohori Bibee v. Dhurmodas Ghose (1903) 30 I.A. 114
• Khan Gul v. Lakha Singh, AIR 1928 Lah. 609
• Ajudhia Prasad v. Chandan Lal, AIR 1937 All. 610
 MODULE IV: FREE CONSENT
Sections 13 – 22, Indian Contract Act, 1872

• Consent – Definition,
• Free Consent and Vitiating Elements
• Consent caused by Coercion
• Consent caused by Undue Influence
• Consent caused by Fraud
• Consent caused by Misrepresentation
• Consent caused by Mistake
• Rule regarding Silence – When Consent – When Not?
 Case Laws on Free Consent
• Raghunath Prasad v. Sarju Prasad (1923) 51 I.A. 101
• Subhas Chandra Das Mushib v. Ganga Prasad Das Mushib
AIR 1967 SC 878
• Lakshmi Amma v. T. Narayana Bhatta, 1970 (3) SCC 159
• Tarsem Singh v. Sukhminder Singh (1998) 3 SCC 471
 MODULE V: LIMITATIONS ON FREEDOM
OF CONTRACT
Sections 23 – 31, Indian Contract Act, 1872

• Legality of Object • Agreements in Restraint of

• Void and Voidable Agreements Trade
• Agreements against Public Policy • Agreements in Restraint of
Legal Proceedings
• Agreements with Unlawful
Consideration • Ambiguous and Uncertain
Agreements,
• Agreements without
Consideration • Wagering Agreements: Its
• Agreements in Restraint of exceptions,
Marriage • Contingent Contracts
 Case Laws on Limitations on
Freedom to Consent
• Gherulal Parakh v. Mahadeodas Maiya, AIR 1959 SC 781
• Niranjan Shankar Golikari v. Century Spinning &
Manufacturing Co. Ltd., AIR 1967 SC 1098
• Central Inland Water Transport Corpn. Ltd. v. Brojo Nath
Ganguly (1986) 3 SCC 156
• Dhurandhar Prasad Singh v. Jai Prakash University, AIR
2001 SC 2552
MODULE VI: PERFORMANCE OF CONTRACT
Sections 37 – 56, Indian Contract Act, 1872

• Rules regarding Performance

• Joint Promisors
• Doctrine of Frustration
• Impossibility of Performance
• Quasi Contracts (Sec 67 – 72)

Case Laws: Satyabrata Ghose v. Mugneeram Bangur & Co. AIR 1954 SC 44
MODULE VII: DISCHARGE OF CONTRACT
Sections 61– 67, Indian Contract Act, 1872

• Discharge by Mutual Agreement or Consent

• Discharge by Lapse of Time
• Discharge by Operation of Law -Discharge by Novation –
Remission, Accord and Satisfaction
• Discharge by Breach of Contract – Actual & Anticipatory
Breach - Consequences
 Case Laws on Discharge of
Contract
• M/s. Alopi Parshad & Sons Ltd. v. Union of India AIR 1960
SC 588
• Punj Sons Pvt. Ltd. v. Union of India AIR 1986 Del. 158
• Easun Engineering Co. Ltd. v. The Fertilizers & Chemicals
Travancore Ltd. AIR 1991 Mad. 158
 MODULE
VIII:
REMEDIES
FOR BREACH
OF
CONTRACT
 Case Laws on Remedies
• Hadley v. Baxendale (1843-60) All ER Rep. 461
• AKAS Jamal v. Moolla Dawood, Sons & Co. (1915) XX C.W.N. 105
• Karsandas H. Thacker v. M/s. The Saran Engineering Co. Ltd.,
• AIR 1965 SC 1981
• Maula Bux v. Union of India AIR 1970 SC 1955
• Shri Hanuman Cotton Mills v. Tata Air Craft Ltd.1969 (3) SCC 522
• Ghaziabad Development Authority v. Union of India AIR 2000 SC 2003
• Oil & Natural Gas Corporation Ltd. v. Saw Pipes Ltd. (2003) 4 SCALE 92
READING LIST
 BOOKS
• Primary Text Books
• Nilima Bhadbhade, Pollock & Mulla, Indian Contract & Specific Relief Acts (15th
ed., 2017, Lexis Nexis)
• J. Beatson, Anson’s Law of Contract (29th ed. OUP, 2010)
• H.K. Saharay, Dutt on Contract – The Indian Contract Act, 1872 (11th ed., 2013,
Eastern Law House)
• Avtar Singh, Law of Contract and Specific Relief (12th ed., 2017, Eastern Book
Company)
Please bear in mind that the readings listed in the course manual are only
indicative in nature. With prior intimation, reading list can be altered.