The Law of contracts in India defines a Contract as an agreement enforceable by law that offers personal rights and imposes personal obligations, which the law protects and enforces against the parties to the agreement. The general law of contract is based on the conception, in which the parties have, by an agreement, created legal rights and obligations, which are purely personal and are only enforceable by action against the party in default.
Section 2(h) of the Indian Contract Act, of 1872[2] defines a contract as “An agreement enforceable by law”. The word ‘agreement’ has been defined in Section 2(e) of the Act as ‘every promise and every set of promises, forming consideration for each other
Validity & formation of a Contract:
According to legal scholar Sir John William Salmond, a contract is “an agreement creating and defining the obligations between two or more parties” For the formation of a contract the process of proposal or offer by one party and the acceptance thereof by the other is necessary. This generally involves the process of negotiation where the parties apply their minds to make an offer and acceptance and create a contract.
Standard Form Contracts:
The law of contract has in recent times faced a problem, which is assuming new dimensions. The problem has arisen out of the modern large-scale and widespread practice of concluding contracts in a standardized form. People upon whom such exemption clauses or standard form contracts are imposed hardly have any choice or alternative but to adhere. This gives a unique opportunity to the giant company to exploit the weakness of the individual by imposing upon him terms, which may go to the extent of exempting the company from all liability under the contract. It is necessary and proper that their interests should be protected. The courts have therefore devised some rules to protect the interest of such persons
Post-Termination non-compete clauses in employment contracts:
Indian courts have consistently refused to enforce post-termination non-compete clauses in employment contracts, viewing them as “restraint of trade” impermissible under Section 27 of the Indian Contract Act, 1872 (the Act), and as void and against public policy because of their potential to deprive an individual of his or her fundamental right to earn a livelihood
Contract- II: Bailment:
Contracts of Bailment are a special class of contract. These are dealt with in Chap. IX from S.148 to 181 of the Indian Contract Act, 1872. Bailment implies a sort of one person temporarily going into the possession of another. The circumstance in which this happens is numerous. Delivering a cycle, watch, or any other article for repair, delivering gold to a goldsmith for making ornaments, delivering garments to a dry cleaner, delivering goods for carriage, etc. are all familiar situations that create the relationship of ‘Bailment’.
A Study of Contract Labour (Regulation and Abolition) Act, 1970:
Contract laborers also suffer from inferior labor status, casual nature of employment, lack of job security, and poor economic conditions. It was also observed that in some cases the contract laborers did the same work as the workers directly employed by the industrialist but were not paid the same wages and the same working conditions. This practice of contract labor has also led to the exploitation of these laborers as they are not employed directly by the employer. This practice of exploitation was and still is very much prevalent in India, therefore to encounter such a problem and also to regulate the conditions of these laborers the Govt. passed an Act called the Contract Labour (Regulation and Abolition) Act, of 1970
Contract Labour:
Basic instinct. Hearing the concept of labor, what strikes the minds of the layman is the name of soakingly clad men and women who work at construction sites, factories, and alongside the roads, working in the scorching sun and pitiful conditions. Does it ever come to the minds of the general public that these laborers have a huge set of laws governing and safeguarding their rights? yes. Probably some of us do know about labor laws. Ever given a second thought about the implementation of these laws and regulations which are painstakingly formulated? Not that they are not followed at all but come on! We’re aware of the scene here in our country
E-Contracts:
It’s an undisputed fact that E-Commerce has become a part of our daily life. One such justification for the popularization of E-Commerce would be immoderate technological advancement. E-Commerce, as the name suggests, is the practice of buying and selling goods and services through online consumer services on the internet. The ‘e’ used before the word ‘commerce’ is a shortened form of ‘electronic’. The effectiveness of E-Commerce is based on electronically made contracts known as E-Contracts. Although E-Contracts are legalized by Information Technology Act still majority feel insecure while dealing online. The reason is a lack of transparency in the terms & conditions attached to the contract and the jurisdiction in case of a dispute that may arise during the pendency of a transaction with an offshore site
Specific performance of Contracts:
Specific performance is equitable relief, given by the court to enforce against a defendant, the duty of doing what he agreed by contract to do. Thus, the remedy of specific performance is in contrast with the remedy by way of damages for breach of contract, which gives pecuniary compensation for failure to carry out the terms of the contract. Damages and specific performance are both, remedies available upon breach of obligations by a party to the contract; the former is a ‘substitutional’ remedy, and the latter a ‘specific’ remedy. The remedy of specific performance is granted by way of exception.
The Contract Labour (Regulation And Abolition) Act, 1970:
The Object of the Contract Labour Regulation and Abolition) Act, 1970 is to prevent the exploitation of contract labor and also to introduce better conditions of work. A workman is deemed to be employed as Contract Labour when he is hired in connection with the work of an establishment by or through a Contractor. Contract workmen are indirect employees. Contract Labour differs from Direct Labour in terms of an employment relationship with the establishment and method of wage payment.
Regulation of Contract Labour:
Contract Labour is one of the acute forms of unorganized labor. Under the system of contract, labor workers may be employed through contractors on a contract basis. Workmen shall be deemed to be employed as contract labor or in connection with the work of an establishment when he is hired in or in connection with such work by or through a contractor, with or without the knowledge of the principal employer. In this class of labor, the contractors hire men (contract labor) who do the work on the premises of the employer, known as the principal employer but are not deemed to be the employees of the principal employer. The range of tasks performed by such contract workers varies from security to sweeping and catering and is steadily increasing. It has been felt, and rightly too, that the execution of work on contract through a contractor who deployed the contract labor was to deprive the labor of its due wages and privileges of the labor class.
The doctrine of Frustration & Force-Majeure Clause:
The requirements of Force-Majeure are:
(a) It must proceed from a cause not brought about by the defaulting party’s default.
(b) The cause must be inevitable and unforeseeable.
(c) The cause must make the execution of the contract wholly impossible.
The Calculation of Damages in EPC Contracts in India:
The engineering & construction industry, especially that in India, is dynamic and highly volatile, making it susceptible to tremendous amounts of litigation and other forms of alternative dispute resolution. The rapid and substantial growth in the magnitude of this industry has resulted in the increased need for information about the rights and obligations of the various players involved in the execution of a particular work of construction. It has become essential that proper attention is given to asserting one’s rights and discharging one’s obligations as laid down by the law and also by a correct understanding of the meaning and interpretation of the terms of the contract governing such relationships, as otherwise, the basis of estimates and calculations made will become infructuous
Liquidated Damages:
The Indian Contract Act, of 1872, provides a basic structure of the law of contract in India, its enforcement, and various provisions regarding non-performance and the breach of contract. This report is aimed to highlight provisions regarding liquidated damages in case of a breach of the contract and to bring about a comparative study between India and England regarding it. Thus, before knowing what exactly liquidated damages are, it is important to understand the consequences of a breach of contract and the damages awarded in case of a breach. A party who is injured by the breach of a contract may bring an action for damages and Damages means compensation in terms of money for the loss suffered by the injured party. Thus, in the contract when these damages are awarded it is known as liquidated damages
Privity of contract and third party beneficiary in a contract:
The doctrine of privity of contract means that only those involved in striking a bargain would have the standing to enforce it. In general, this is still the case, only parties to a contract may sue for the breach of a contract, although in recent years the rule of privity has eroded somewhat and third-party beneficiaries have been allowed to recover damages for breaches of contracts they were not a party to. There are two times when third-party beneficiaries are allowed to fall under the contract. The duty owed test looks to see if the third party was agreeing to pay a debt for the original party. The intent to benefit test looks to see if circumstances indicate that the promisee intends to give the beneficiary the benefit of the promised performance. Any defense allowed to parties of the original contract extends to third-party beneficiaries[1]. A recent example is in England, where the Contract (Rights of Third Parties) Act 1999 was introduced
Contract Ratification:
Ratification is in law equivalent to previous authority it may be expressed or it may be affected impliedly by conduct.[1] Sections 196 and 197 of the act show that an act done by a person who is not authorized to do it, but who purports to act as an agent for another person, can be retrospectively ratified by such other person. From this, it follows logically, that such an act on the part of the person purporting to act as an agent is not void but voidable. If it is not ratified it becomes void but if it is ratified it will be validated.
Relevance of Quasi-Contracts:
There are certain situations wherein certain persons are required to perform an obligation even though he hasn’t broken any contract nor committed any tort. For instance, a person is obligated to restore the goods left at his home, by mistake, and keep it in good condition. Such obligations are called quasi-contracts
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Choice of law by the parties to the contract:
In this era of globalization where a contract contains one or more foreign elements, the complicated question proceeding that arises is that of ascertaining its applicable law. The such difficulty stems from the multiplicity and diversity of connecting factors and each of them may arise in a different jurisdiction for instance the place where the contract was made; the place of performance; the place of business of the parties; the place of payment; the currency of payment; domicile or nationality o the parties and so on. So to avoid this situation parties are granted the freedom to select the law to govern their contract under the provisions of the Rome convention. The inclusion of a choice of law clause is such an everyday matter in international contracts that its absence would be to ignore commercial realities
E-contracts & issues involved in its formation:
With the advancements in computer technology, telecommunication, and information technology the use of computer networks has gained considerable popularity in the recent past, computer networks serve as channels for electronic trading across the globe. By electronic trading, we don’t just mean the use of computer networks to enter into transactions between two human trading partners by facilitating communication but electronic trading or electronic commerce also means those contracts which are entered between two legal persons along with the aid of a computer program which acts as an agent even when it has no consciousness of its own but also by initiating it
Standard Form Contract:
The Law of Standard Form Contracts rests on intuitions of the common mass. This research paper explores these intuitions and examines intended consumer behavior in common contracting contexts. Firstly, the research paper focuses on the need for Standard Form Contracts and their justification. After the clear explanation of the term and its use in the practical world, the focus shifts to the legal issue, as to what are the problems with the issuance of Standard Form Contracts on a large scale, and how it can prove to be exploitative nature. Further, the paper discusses the basic tendency of the consumers towards the acceptance of the Standard Form Contracts, the reasons for such acceptance, and how the party issuing the Standard Form Contract can take advantage of the consumer’s ignorant behavior
Section 65 of the Indian Contract Act, 1872 with special reference to Discharge of a Contract by Frustration:
The effects of frustration with special reference to the restitution of advantages or benefits received by a party, not entitled to such advantage or benefit. On account of an agreement being deemed void, after certain obligations are fulfilled by either party, there would continue to subsist, rights to make good the loss caused. Section 65 of the Indian Contract Act, of 1872, states