Indian Contract Act, 1872 - Vocabulary Flashcards

A complete set of vocabulary flashcards covering key terms, statutory provisions, vitiating factors, and case law from the Indian Contract Act, 1872.

Proposal / Offer — Sec 2(a)

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.

Acceptance — Sec 2(b)

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

Promisor

The person making the proposal (offeror).

Promisee

The person accepting the proposal (offeree / acceptor).

Agreement — Sec 2(e)

Every promise and every set of promises forming the consideration for each other; fundamentally, Agreement = Offer + Acceptance.

Void Agreement — Sec 2(g)

An agreement not enforceable by law.

Contract — Sec 2(h)

An agreement enforceable by law; fundamentally, Contract = Agreement + Enforceability by law.

Voidable Contract

An agreement which is enforceable by law at the option of one or more of the parties thereto, but not at the option of the other(s).

Express Offer

An offer made in express spoken or written words.

Implied Offer

An offer inferred from the conduct or circumstances of the parties.

General Offer

An offer made to the public at large, which any member of the public who fulfills the condition may accept and claim the reward.

Specific Offer

An offer made to a specific person or group, which only that specific person or group can accept.

Cross Offer

A situation where two parties make identical offers to each other at the same time, unaware of each other's offer, which does not amount to acceptance.

Counter-Offer

A reply to an offer that rejects the original offer and substitutes a new one.

Expressed Acceptance

Acceptance given orally or in writing.

Implied Acceptance

Acceptance shown through conduct.

Consideration — Sec 2(d)

When, at the desire of the promisor, the promisee (or any other person) does or abstains from doing something, such act or abstinence is called consideration for the promise.

Mohori Bibee v. Dharmodas Ghose

A landmark case holding that an agreement entered into with a minor is void ab initio (void from the very beginning).

Consent — Sec 14

Condition existing when two or more persons agree upon the same thing in the same sense (consensus ad idem).

Raffles v. Wichelhaus

A landmark case where two parties referred to different ships named Peerless, resulting in no meeting of minds and making the contract void.

Coercion — Sec 15

Committing, or threatening to commit, any act forbidden by the IPC, or the unlawful detaining, or threatening to detain, any property to the prejudice of any person, with the intention of causing that person to enter into an agreement.

Ranganayakamma v. Alwar Sett

A case where a widow was prevented from removing her husband's corpse until she consented to an adoption, held to be consent obtained by coercion.

Fiduciary Relationship

A relationship of trust and confidence, such as solicitor–client, trustee–beneficiary, doctor–patient, or parent–child.

Undue Influence — Sec 16

Occurs where one party, in a position to dominate the will of another (often via a fiduciary relation), uses that position to obtain an unfair advantage over the other.

Fraud — Sec 17

Acts committed by a party or its agent to deceive another into a contract, such as a false suggestion of a fact known to be untrue or active concealment of a known fact.

Misrepresentation — Sec 18

An innocent false statement made without any intention to deceive, but which the maker genuinely believes to be true, inducing the other party to enter the contract.

Bilateral Mistake — Sec 20

A situation where both parties are mistaken about a fact essential to the agreement, rendering the agreement void.

Unilateral Mistake — Sec 22

A situation where only one party is mistaken about a fact, leaving the contract valid.

Maintenance

An agreement against public policy involving promising to support litigation in which one has no genuine interest.

Champerty

An agreement against public policy involving funding another's litigation in exchange for a share of the proceeds.

Gherulal Parakh v. Mahadeodas Maiya & Ors. (1959)

A Supreme Court case holding that any agreement against public policy is injurious to the public and is therefore void.

Clay v. Yates (1856)

An English Court case holding that every agreement whose object or consideration is unlawful is void.

Allen v. Rescous (1676)

An English Court case holding that an agreement whose object was assault (an illegal act intended to injure a person) was void.

Contract of Indemnity

An agreement where one party (the indemnifier) promises to protect the other (the indemnified / indemnity-holder) against loss caused either by the indemnifier's own conduct or by the conduct of a third party.