What are the nature of contract?

Answer 1

The law of contract is that branch of law which determines the circumstances

in which promise made by the parties to a contract shall be legally binding on them. All of us

enter into a number of contracts everyday knowingly or unknowingly. Each contract creates

some right and duties upon the contracting parties. Indian contract deals with the

enforcement of these rights and duties upon the parties. Indian Contract Act, 1872 came

into effect from 1

st

September, 1872. It extends to the whole of India except the state of

Jammu and Kashmir.

CONTRACT [SECTION 2(h)]: A contract is "an agreement enforceable by law". Thus,

CONTRACT = AGREEMENT (+) ENFORCEABILITY BY LAW

"All contracts are agreements but all agreements are not contracts"

AGREEMENT [SECTION 2(e)]: An agreement means, "Every promise or every set of promises,

forming consideration for each other".

AGREEMENT = PROMISE(S) BY ONE PARTY (+) PROMISE(S) BY THE OTHER

PARTY

PROMISE [SECTION 2(b)]: "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."

PROMISE = PROPOSAL + ACCEPTANCE

PROPOSAL/OFFER [SECTION 2(a)]: A person is said to make a proposal when "he signifies to

another his willingness to do or to abstain from doing anything with a view to obtaining

assent of that other to such act or abstinence"

PROPOSAL = WILLINGNESS TO DO OR ABSTAIN FROM DOING

(+) WILLINGNESS' TO OBTAIN ASSENT OF THE OTHER PARTY TO

SUCH ACT OR ABSTINENC

CONSIDERATION [SECTION 2(d)]: "When, at the desire of the promisor, the promise or any

other person has done or abstained from doing, or does or abstains from doing or promises to

do or to abstain from doing something, such cat or abstinence is called consideration". In

other words, consideration is something in return.