Discharge of the contract

By performance By agreement or consent By impossibility By lapse of time By operation of law By breach of contract

By performance
Actual performance Attempted performance or tender( offer to perform)

Essentials of valid tenders

Unconditional Proper place and time Reasonable opportunity to the promisee for inspection of goods Made by proper person Exact amount should be tender In case of several promisee, an offer to any one of them is a valid tender

By agreement or consent
Novation( change of parties)

Alteration (change of terms) Recession (cancellation )

Remission (lesser fulfillment of the promise made ) Waiver (giving up of the right)

By impossibility
Initial impossibility Subsequent

Initial impossibility
Impossibility at the time of making. Example : 1. A agrees with B to discover a treasure by magic 2. A agrees to sell his horse to B . Unknown to both the parties that the horse was dead.

Subsequent impossibility
Destruction of subject-matter Example : A hall was booked for the marriage on certain dates. Death or personal incapacity Change of law Declaration of war Non existence

Exceptions
Difficulty of performance Commercial impossibility Default of third party Strikes, lockout and civil- disturbance Partial impossibility

Discharge by operation of law

Death Insolvency Merger Unauthorized material alteration

Discharge by breach of contract

Anticipatory breach 1. Expressed 2. Implied Actual breach

Offer
Intention Communication Definite

Legal rules to offer

It should give rise to the legal relationship Terms of offer must be definite Offer should be different from a declaration and invitation It must be communicated Offer should be made with a view to obtaining the assent Offer should not contain a term the noncompliance A statement of price is not an offer

Acceptance
Implied Expressed

Who can acceptance? To whom offer has made.

Legal rules as to acceptance

Must be absolute Must be communicated Must be according to the mode prescribed Must be given with in the reasonable time It can not precede an offer Must show an intention on the part of the acceptor to fulfill the terms Must be given to the party to whom offer is made It must be before offer lapses It can not be implied from silence

Consideration
It means something in exchange. it is an essential element required in a contract.

Consideration is something in return of a promise which consist of

Abstinence or forbearance Done at the desire of the promisor By the promisee Which can be either already executed or is in the process of execution or may still be executory

Element of consideration
Consideration must move at the desire of the promisor Consideration may move from the promisee or any other person Consideration is an act 1. As abstinence or forbearance 2. As forbearance 3. As detriment Consideration may be past, present or future

Rules
Adequacy Valuable in eye of law Real It must be something which a promisor is not already bound to do Lawful

Exceptions
Love and affection Compensation for past voluntary services Promise to pay time-barred debt Completed gift Agency Remission Guarantee

Stranger to a contract
A person who is not the party. Stranger to a contract Stranger to consideration

Capacity of parties
Minor: who is under the age of 18 years. Unsound mind : 1) A person usually of unsound mind but occasionally of sound mind. 2) A person usually of sound mind but occasionally of unsound mind.

Minors agreement
1. 2. 3. 4. 5. 6. An agreement by a minor is absolutely void as against him. beneficial agreements are valid contract No ratification on attaining the age of majority Rule of estoppels does not apply to a minor Minors liability for necessaries Specific performance a) contract is within the authority of guardian. B) it is for the benefit of minor. Minor partner (benefits of partnership) Minor agent Minor and insolvency Contract by minor and adult security of minor ( in contract of guarantee) Position of parents Minor shareholders Minors liability in tort

7. 8. 9. 10. 11. 12. 13. 14.

Disqualified
Citizen of a foreign country Foreign sovereigns and ambassadors Convict women Insolvent

Free consent
Consent is said to be free when it is not caused by 1. Coercion 2. Undue influence 3. Misrepresentation 4. Fraud 5. Mistake

Coercion
Force

Undue influence
1. The relations between the parties are such that one of the parties is in a position to dominate the will of the other.
Where he holds a real authority over the other Where he stand in a fiduciary relation to other Where he makes a contract with a person whose mental capacity is temporarily affected due to age, illness, or mental or bodily distress.

The party uses his position to obtain an unfair advantage over the other.

Undue influence
Husband and daughter Grandson and grandfather Landlord and tenant Creditors and debtors

Fraud
It any of the following acts committed by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party or to induce him to enter into the contract. a) The suggestion which is not true b)The active concealment of a fact by one having knowledge c) A promise made without any intention of performing d) Any other act fitted to deceive. e)Any such act or omission as the law specifically declares to fraudulent

Fraud
Above definition has following aspects: 1. Fraud can not be committed by a stranger 2. Fraud must have been committed upon the other party to the contract Can silence be fraudulent?

Mistake
It may be defined as an erroneous belief about something. a mistake by one or both of the parties assume significance because it may make the contract void or voidable.

Misrepresentation
It is the false representation of a statement of fact made innocently. 1. Positive assertion 2. Misleading 3. Inducing mistake about the subject matter