Sections

Section 2

Interpretation clause: proposal, acceptance, promise, consideration, agreement, reciprocal promises, void agreement, contract and voidable contract.

Section 3

Communication, acceptance and revocation of proposals

made by any act/omission of the party proposing, accepting or revoking, that intends to communicate it, or which has the effect of communicating it

Section 4

Communication when complete -

Proposal - when it becomes to the knowledge of the person to whom it is made.

Acceptance - as against the proposer, when it is put in a course of transmission to him so at to be out of the power of the acceptor; as against the acceptor, when it comes to the knowledge of the proposer.

Revocation - as against the person who makes it, when it is put into a course of transmission to the person to whom it is made, so as to be out of the power of the person who makes it; as against the person to whom it is made, when it comes to his knowledge.

Section 5

Revocation of proposals and acceptances

before completion of communication of acceptance

Section 6

Revocation how made -

notice, lapse of time, failure of condition, or death/insanity known to the acceptor.

Section 7

Acceptance must be absolute and unqualified; be expressed in some usual and reasonable manner, unless manner is prescribed.

If prescribed; and acceptance is not in that manner, the proposer may, within a reasonable time after the acceptance is communicated, insist that proposal shall be accepted in the prescribed manner; but; if he fails to do so, he accepts the acceptance.

Section 8

Acceptance by performing conditions, or receiving consideration

Performance of the conditions of proposal, for the acceptance of any consideration for a reciprocal promise which may be offered with a proposal, is an acceptance of the proposal.

Section 9

Promise, express and implied: made in words or otherwise.

Section 10

What agreements are contracts: competent parties, free consent, lawful consideration/object and no express voidness; other writing, witness and registration laws remain applicable.

Section 11

Who is competent to contract.— Every person is competent to contract who is of the age of majority according to the law to which he is subject, and who is of sound mind, and is not disqualified from contracting by any law to which he is subject.

Section 12

What is a sound mind for the purposes of contracting.— capable of understanding it and of forming a rational judgment as to its effect upon his interests; lucid intervals and temporary incapacity are exceptions to usual mental condition.

Section 13

“Consent” defined.— parties agree upon the same thing in the same sense.

Section 14

“Free consent” defined.—Consent is said to be free when it is not caused by— coercion, undue influence, fraud, misrepresentation or, mistake

Section 15

“Coercion” defined.— forbidden act/threat under IPC or unlawful detention/threat of detention of property to cause agreement.

Section 16

“Undue influence” defined.— is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other;

(2) — position to dominate the will of another: ○ (a) where he holds real or apparent authority over the other, or stands in a fiduciary relation to the other; or ○ (b) where he makes a contract with a person whose mental capacity is temporarily or permanently affected by reason of age, illness, or mental or bodily distress.

(3) — Burden of proof: once (i) one party is shown to be in a position to dominate the will of the other and (ii) the transaction appears, on its face or on the evidence, unconscionable, the burden shifts to the dominant party to prove the contract was not induced by undue influence.

Section 17

“Fraud” defined.— intent to deceive or induce another party to enter the contract: (1) the suggestion of a fact not believed to be true; (2) active concealment of a fact by one having knowledge or belief of it; (3) a promise made without any intention of performing it; (4) any other act fitted to deceive; (5) any such act or omission as the law specially declares to be fraudulent.

Section 18

“Misrepresentation” defined.— (1) innocent false statement of fact that induces the other party to contract; (2) any breach of duty which gains an advantage to person committing it by misleading another without intent to deceive, (3) causing a party to make a mistake as to the subject-matter of the agreement, however innocently.

Section 19

Contracts caused by coercion, fraud or misrepresentation are voidable. Exception: ordinary diligence may defeat voidability for fraud/misrepresentation; affected party may sometimes insist on performance.

Section 19A

Court may set aside a contract induced by undue influence absolutely or on just terms, including restoration of benefits.

Section 20

Agreement void where both parties are mistaken about an essential fact. Mistake about value alone is not essential.

Section 21

Mistake of Indian law does not make a contract voidable; foreign-law mistake is treated as mistake of fact.

Section 22

Unilateral mistake of fact does not by itself make a contract voidable.

Section 23

What considerations and objects are lawful, and what not.

The consideration or object of an agreement is lawful, unless— it is forbidden by law; or is of such a nature that if permitted, it would defeat the provisions of any law; or is fraudulent ; or involves or implies injury to the person or property of another; or the Court regards it as immoral, or opposed to public policy.

Section 24

If unlawful consideration/object is inseparable from the lawful part, the agreement is void.

Section 25

Agreement without consideration, void, unless it is in writing and registered or is a promise to compensate for something done or is a promise to pay a debt barred by limitation law -

Exceptions:
natural love/affection;
promise to compensate for voluntary or legally compellable act;
pay time-barred debt.

Section 26

Agreement restraining marriage of any person other than a minor is void.

Section 27

Restraint of trade is void to that extent. Exception: reasonable local restraint by seller of goodwill, subject to statutory conditions; other statutory exceptions may apply.

Section 28

Agreements restraining legal proceedings or unlawfully shortening enforcement periods are void to that extent. Exceptions include qualifying arbitration agreements and specified bank/financial-institution guarantee arrangements.

Section 29

Agreements with uncertain meaning that cannot be made certain are void.

Section 30

Wagering agreements are void and winnings are not recoverable by suit. Statutory horse-race prize contribution exception applies to qualifying sums of at least ₹500; state gambling laws may apply.

Section 31

Contingent contract: performance depends on an uncertain collateral event happening or not happening.

Section 32

Contract contingent on event happening is enforceable only when it happens; void if it becomes impossible.

Section 33

Contract contingent on event not happening is enforceable when that event becomes impossible.

Section 34

Event depending on a person's future conduct becomes impossible when that person acts so as to make the specified conduct impossible in the relevant circumstances.

Section 35

Contingent event within fixed time: rules determine enforceability or voidness when time expires or the event becomes impossible.

Section 36

Agreement contingent on an impossible event is void, whether or not parties knew it was impossible.

Section 37

Parties must perform or offer to perform promises unless excused by law; representatives are generally bound unless personal performance or contrary intention applies.

Section 38

Valid, unconditional offer of performance refused by promisee protects promisor against non-performance liability if proper time, place and opportunity for inspection are provided.

Section 39

Refusal or disabling oneself from performing the whole promise lets the promisee end the contract unless they accept its continuation.

Section 40

Personal promises must be performed by the promisor; otherwise a competent person may perform.

Section 41

Acceptance of performance from a third person prevents later enforcement of the same promise against the original promisor.

Section 42

Joint liabilities pass to surviving promisors and representatives according to statutory rules, unless contract indicates otherwise.

Section 43

Promisee may compel any joint promisor to perform the whole promise; contribution between promisors applies, including sharing a defaulting promisor's loss.

Section 44

Release of one joint promisor does not discharge the others or necessarily remove the released promisor's contribution liability to co-promisors.

Section 45

Joint promisees' rights pass to survivors and representatives according to statutory rules, unless contract indicates otherwise.

Section 46

If no time is specified and performance requires no application, it must occur within a reasonable time; this is a question of fact.

Section 47

If a day is fixed and no application is needed, performance may occur during usual business hours at the proper place.

Section 48

If promisee must apply on a specified day, application must be made at a proper place and during usual business hours.

Section 49

If no place is fixed and no application is needed, promisor must ask promisee to appoint a reasonable place and perform there.

Section 50

Performance may be made in the manner or at the time prescribed or sanctioned by the promisee.

Section 51

For simultaneous reciprocal promises, a promisor need not perform unless the promisee is ready and willing to perform their reciprocal promise.

Section 52

Reciprocal promises must be performed in the contractually specified order, or the order required by the nature of the transaction.

Section 53

If one party prevents the event on which a contract depends, the other may avoid the contract and claim compensation.

Section 54

If a party fails to perform the promise that must be performed first, they cannot demand the reciprocal promise and must compensate for resulting loss.

Section 55

Failure to perform at fixed time: if time is essential, contract is voidable at promisee's option; if not essential, compensation for delay may apply. Acceptance of late performance generally bars delay compensation unless notice is given at acceptance.

Section 56

Agreement to do an inherently impossible act is void; later impossibility or unlawfulness makes a contract void. Promisor who knew or should have known of initial impossibility must compensate; mere hardship or expense is not automatically impossibility.

Section 57

Where reciprocal promises contain legal and illegal parts, the legal part may be enforceable if separable; illegal part is void.

Section 58

In an alternative promise with one legal and one illegal branch, only the legal branch can be enforced.

Section 59

If debtor indicates which debt a payment should discharge, creditor must apply it accordingly.

Section 60

If debtor gives no indication, creditor may apply payment to any lawful debt due and payable, including a time-barred debt.

Section 61

If neither party appropriates payment, apply it to debts in order of time; equal-standing debts are discharged proportionately.

Section 62

Novation, rescission or alteration by agreement replaces, cancels or changes the original contract, which need not then be performed.

Section 63

Promisee may dispense with or remit performance of promisee.

Every promisee may dispense with or remit, wholly or in part, the performance of the promise made to him, or may extend the time for such performance, or may accept instead of it any satisfaction which he thinks fit.

Section 64

Consequences of rescission of voidable contract.

On rescission of a voidable contract, the other party need not perform further promises; rescinding party must restore benefits received so far as possible.

Section 65

Obligation of person who has received advantage under void agreement, or contract that becomes void.

person is bound to restore such advantage, or to make compensation for it.

Section 66

Rescission of a voidable contract must be communicated or revoked under the rules applying to communication/revocation of proposals.

Section 67

If promisee neglects or refuses reasonable facilities for performance, promisor is excused to the extent prevented.

Section 68

Claim for necessaries supplied to person incapable of contracting, or on his account.— Supplier of necessaries to an incapable person, or someone they are legally bound to support, may be reimbursed from that person's property. No personal contractual liability is imposed on the incapable person.

Section 69

A person interested in paying another's legally payable debt who pays it may claim reimbursement, provided they are not a mere volunteer.

Section 70

Lawful non-gratuitous act or delivery: compensation or restoration is due if another enjoys the benefit. Act must not be intended as a gift.

Section 71

Finder of goods has the responsibilities of a bailee.

Section 72

Money paid or goods delivered by mistake or coercion must be repaid or returned, subject to applicable law.

Section 73

Compensation for losses naturally arising from breach or contemplated by parties; remote and indirect losses are not recoverable.

Section 74

For a named sum or penalty, court awards reasonable compensation not exceeding the stipulated amount. The named sum is a ceiling, not automatic entitlement.

Section 75

Party rightfully rescinding contract, entitled to compensation.— A party who rightfully rescinds a contract may claim compensation for damage caused by the other party's non-fulfilment.