Contract Law - Key Vocabulary (Indian Contract Act 1872)

Vocabulary-style flashcards covering core terms from the lecture notes on contract law, including formation, validity, types, illegality, performance, discharge, termination, and remedies.

Contract

A legally enforceable agreement between two or more parties, formed by offer and acceptance with consideration and intended to be enforceable by law (Sec. 2(h)).

Offer

A firm proposal by one party to do or abstain from doing something, capable of acceptance to form a contract.

Acceptance

A positive agreement to the terms of an offer, creating a contract when communicated and known to the offeror.

Consideration

Something of value exchanged between the parties as the price of the promise (money, goods, services, or promises).

Legal capacity

Ability to enter into a contract; generally excludes minors, persons of unsound mind, and certain others lacking competence.

Free consent

Consent free from coercion, undue influence, fraud, or misrepresentation; essential for validity.

Legal purpose

The contract must be for a lawful object and not against the law or public policy.

Void contract

A contract that is not legally binding from the outset due to illegality, incapacity, impossibility, etc.

Voidable contract

A contract that is valid at first but may be voided at the option of one party due to factors like coercion, undue influence, fraud, or misrepresentation.

Express contract

Terms are explicitly stated, either in writing or orally.

Implied contract

An agreement inferred from conduct, actions, or circumstances rather than stated words.

Unilateral contract

One party makes a promise in exchange for the other party's performance.

Bilateral contract

Both parties promise to perform.

Illegal contract

A contract whose purpose or consideration is illegal or prohibited by law; void under Section 23 and related principles.

Meeting of minds

Mutual understanding and agreement on essential terms (consensus ad idem) between the parties.

Valid contract (Section 10 essentials)

A contract that is legally enforceable, requiring free consent, competence, lawful consideration and object, and not void under law.

Mistake of fact

Error about a fundamental fact; can render a contract voidable under section 20.

Mistake of law

Error about the law; generally does not void a contract.

Restraint of marriage

An agreement restraining marriage is void.

Restraint of trade

An agreement restraining trade is void.

Restraint of legal proceedings

An agreement restraining legal actions is void.

Void-ab-initio contract

Contracts that never come into existence from inception (e.g., minor’s contract).

Performance

Carrying out the duties and promises as required by the contract.

Tender of performance

Offer to perform one’s obligations; may be equivalent to actual performance if accepted.

Discharge of contract

Termination of contractual obligations by performance, by breach, by agreement, or by other recognized modes.

Termination of contract

Ending an agreement before complete performance, for reasons such as breach, mutual consent, impossibility, force majeure, or convenience.

Damages

Compensation for breach of contract, including ordinary, special, nominal, and vindictive (exemplary) damages.

Liquidated damages

Pre-determined damages specified in the contract to be paid if a breach occurs.

Specific performance

A court order requiring a party to fulfill their contractual obligations.

Injunction

A court order restraining a party from acting or compelling cessation of ongoing action; a remedy in contract law.

Quantum meruit

“As much as earned”—compensation for the value of work done when there is no contract or in breach scenarios.

Rescission

Cancellation of a contract with restoration of parties to their pre-contract position.

Force majeure

Unforeseeable events (e.g., natural disasters, war) that excuse or delay performance.

Impossibility of performance

Performance becomes physically or legally impossible, excusing obligation.