CA Foundation Law Mercantile law-Indian Contract Act 1872
What is Mercantile Law?
Mercantile law means the laws which regulate trade and commerce. These laws are an integral part of social life.
Indian Mercantile Laws is an outcome of British law. It is further classified into contract act, sale goods act, and Indian partnership act
What is a Contract?
”The Indian Contract Act deals with the enforcement of rights and duties on the contracting parties.”
Contract means an agreement between any two persons. The Indian Contract Act deals with the enforcement of rights and duties on the contracting parties.
Extent and Applicability- Law related to contracts in India is contained in the Indian Contract Act 1872, which was passed by British India and is based on the Principles of English common law.
The contract requires the following points-
1. Two Parties- There must be at least two parties to constitute a contract.
2. An agreement- A Proposal from the side of one party to do or abstain from doing a particular act and its acceptance by the other party are the two essential elements of an agreement.
3. An obligation- An obligation is a legal duty to do or abstain from doing something.
Essential elements of a valid contract-
1. An agreement, i.e proposal, and acceptance.
2. Intention to create a legal relationship
2. Lawful consideration
3. Competent parties
4. Free consent
5. Not expressly declared void by law
6. Certainty and possibility of performance.
7. Compliance with legal formalities.
Terminologies:-
1. Proposal- 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.
2. Promise- 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.
3. Agreement- Every promise and set of promises forming consideration for each other is an agreement.
4. Contract- An agreement enforceable by law is a contract.
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