Written Assignment On

LAW OF CONTRACT

Submitted By:

Prosenjeet Singh

LLB. (Hons.),Sem.-I (2016-2019)

Class Roll No. : 129

University Roll No. :..

Law College Dhanbad

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Table of Contents Page No.

1. Define a proposal. What are its essential ingredients .................................... 2, 3

2. Acceptance is to an offer what a lighted match is to a train of gunpowder. Explain 4

3. Discuss briefly the various mode of discharging of contract. 5,6,7

4. Bibliography 8

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1. Define a proposal. What are its essential ingredients?

Proposal is defined in the following words :

"When one person signifies to another his willingness to do or to abstain from doing anything
with a view to abstaining the ascent of that other such or such act or abstinence he is said to
make a proposal."

( i ). The person who makes the proposal is called proposer offerer or promisor.

( ii ). The person to whom offer is made is called offer or promisee.

KINDS OF PROPOSAL

1. General Proposal :-
When proposal is made with the entire world it is called general proposal. But contract is made
only with the person who performs the conditions of the proposal.

2. Specified Proposal :-
It is made to specific person or specific class. It is also accepted by specific person.

3. Express Proposal :-
When the proposal is expressed in words or in writing it is called express proposal.

4. Implied Proposal :-
When the proposal is conveyed by the contract of the offerer, it is called implied proposal.

ESSENTIAL OF VALID PROPOSAL:-

Following are the important conditions:

1. Legal Relationship:-
It is essential for a valid proposal that it must be made with the intention of creating legal
relationship otherwise it will be only invitation. A social invitation may not create legal
relationship.

Example: - Mr. Jhon invites Mr. Robbin t dinner and he accepts. It does not create any legal
relations.

2. Clear Terms and Conditions :-

Proposal should be certain clear, understandable and simple. It may not create any confusion in
the mind of proposee should be prcised and definite.

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Example :- Mr. Agha offers to sell his house to Miss. Peenu for Rs. 10 lac she agrees. It is a
contract and create legal relationship.

3. General and Specific Offer :-

When proposal is opened to the general public it is called general proposal on the other hand
when it is made to the specific person, it is called specific offer. In case of general proposal
contract is made with person who accepts the offer.

4. Must be Communicated :-
It is also an important rule for the validity of proposal. Without communication acceptance of
proposal by the proposee is not possible. How an offer can be accepted unless it has been bought
to the knowledge of a person to whom it is made.

5. Assent Must be an Object :-

Proposal without object will not be valid. The object of the proposal must be to get the assent of
the other party to whom the offer has been made.

6. Distinction Between Proposal and Invitation :-

Proposal is different than the invitation of tenders. Price list of goods and quotation. These are
only invitation of an offer and not the proposal.

7. Communication Method :-
There are three methods of communication proposal can be made orally, in writing or by
conduct. Generally proposals are made orally or writing.

8. Acceptable Proposal :-
If the acceptance of the proposal is not possible then it will be not a valid proposal. It is essential
that acceptance must be possible.

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2. Acceptance is to an offer what a lighted match is to a train of gunpowder. Explain

The position relating to revocation of proposal and acceptance has been described by Anson in
the following words,
Acceptance is to offer what a lighted match is to a train of gunpowder. It produces something
which cannot be recalled or undone.
This statement primarily holds good under English law.
Here, Gunpowder = offer and lighted match = acceptance
When a lighted match is shown to a train of gunpowder, it explodes and something
happens which cannot be undone. Similarly, and offer once accepted cannot be revoked. But so
long a lighted match is not shown, the gunpowder remains inert and can be removed, similarly an
offer can be revoked before it is accepted.
Similarly, once acceptance is given it cannot be revoked. But under Indian Contract Act,
acceptance can be revoked by resorting to quicker means of communication, so that the offerer
learns about it before acceptance. Thus, the above statement doesnt hold in relation to
revocation of acceptance under Indian law.

Essential of a Valid Acceptance

Must be absolute and unqualified:

In order to be binding, there must be an unqualified acceptance to all the terms of the
offer, whether material or immaterial, major or minor. If the parties are not ad idem on all the
matters concerning the offer can acceptance, there is no contract. The proposal, therefore, must
be accepted into.
Must be communicated to the offeror:
The communication of acceptance may be express or implied. A mere resolve or mental
determination on the part of the offeree to accept an offer, when there is no external
manifestation of the intention to do so, is not sufficient. A communication to any other person is
an ineffectual as if no communication has been made.
Must be according to the mode prescribed:
The offer must be accepted according to the mode prescribed and if no mode is
prescribed, the offeror may intimate to the offeree within a reasonable time that the acceptance is
not according to the mode prescribed and may insist that the offer must be accepted in the
prescribed mode only. If he does not inform the offeree, he is deemed to have accepted the
acceptance.
Note:
Acceptance must be given within a specified time; if time is not mentioned then it should be
given within a reasonable time.
Acceptance cannot precede an offer.
It must show an intention on the part of the acceptor to fulfill the terms of the promise.
Acceptance must be only by the party or parties to whom the offer is made.
Acceptance must be made before the offer lapse or before the offer is withdrawn.
Silence cannot be the mode of acceptance.
Acceptance may be expressed or implied.

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3. Discuss briefly the various mode of discharging of contract.

The contract gets discharge by following ways

1. Discharged by performance
2. Discharged by mutual agreement
3. Discharged by lapse of time
4. Discharged by operation of law
5. Discharged by impossibility of performance
6. Discharged by breach of contract

1. Discharged by performance
Discharged by performance takes place when the parties to the contract fulfill their obligations
arising under the contract. In such case, the parties are discharged and the contract comes to an
end. The performance of the contract may be:
Actual performance : where both the parties perform their promises. Attempted performance:
where a party offers to perform his obligation under the contract but the other party refuses to
accept the performance
2. Discharge by mutual agreement or consent
The contractual obligation may be discharged by agreement among the parties to the contract.
The parties to the contract may agree to rescind the contract, alter the contract or substitute it
with a new contract. In such a case, the original contract gets discharged. A contract may
terminate by mutual consent in any one of the following ways:
A. Novation :
Novation takes place when
A new contract is substitute for an existing one between the same parties.
A new contract is substituted for an existing one where the contract on the same terms is entered
into between one of the parties and the third party.
On novation, the original contract is discharged and need not to be performed. However, the
novation should take place before the expiry of the time for the performance of the original
contract.
B. Alteration
The parties to a contract may mutually decide to alter certain terms of the contract. When the
parties to a contract, agree to alter the contract, the original contract is rescinded an need not be
perform. For alteration, the benefitting party has to pay some consideration to the other party.
Difference between Novation and Alteration
a. In Novation, there may be change in the terms of the contract or in the parties to the contract.
However, in Alteration there is change only in the terms of the contract an not in the parties to
the contract.
b. In Novation there is a substitution of an existing contract with a new one. But in Alteration there
is no such substitution but only a change in some terms and condition of the original contract.

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C. Recession
Recession means termination of a contract. Where parties mutually decide to cancel the terms of
the contract, the contract need not be performance. In recession, the old contract is cancelled and
no new contract comes into existence.
D. Remission
Remission is said to be done where a party to the contract agrees to:
Dispense with (waive the performance)
Accept a lesser amount or lesser degree of performance for full discharge of contract.
Extends the time of performance.
For remission, no consideration is required to be paid by benefitting party. Once the party agrees
for remission, it cannot be revoked. However, the remission may be conditional.
E. Waive
Waive means abandonment or intentional relinquishment of a right under a contract. promise
may dispense with performance of a promise. When a party waives his rights under a contract
the other party is released from his obligation. Consideration is not necessary for waiver.
3. Discharged by lapse of time
The right and obligation under a contract can be enforced only within a specified period called
the period of limitation. The limitation Act has prescribed the period of limitation for various
contracts. After the expiry of the ,imitation period, the contractual rights cannot be enforced and
the contract comes to an end due to a lapse of limitation period.
4. Discharged by operation of law
A contract may be discharged by operation of law in the following cases -
A. Death of the promisor
Contracts, the performance of which involves personal skill or ability of the promisor, comes to
an end with the death of the promisor.
B. Insolvency
When a person is declared insolvent by insolvency court, he is discharged from all his liabilities
incurred prior to his adjudication.
C. Merger
When an inferior right accruing to party in a contract merges into a superior right accruing to the
same party, then the contract conferring inferior rights is discharged.
By unauthorized alteration of terms of a written document : where any of the parties to a contract
makes any material alteration to the terms of the contract makes any material alteration to the
terms of the contract without seeking the consent of the other party, the contract can be avoided
by the other party at his will.
5. Discharged by impossibility of performance
An agreement to do an impossible act is void ab initio. When an act subsequently becomes
impossible or unlawful, it becomes void. Impossibility may be of two types:
A. Impossibility existing at the time of making the contract
When the parties agree upon doing something which is impossible, the agreement is void
whether the fact of impossibility was known or not known to the parties at the time of making
the contract. Where at the time of contracting, the promisor alone knows about the impossibility
or he should have known it with reasonable diligence then the promise can claim compensation
for damages on account of non-performance.

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B. Supervening impossibility
Impossibility which arises subsequent to making of the contract is called supervening
impossibility. If the contract was capable of performance at the time of making it, but
subsequently because of some event which the promisor could not prevent, the performance
becomes impossible or unlawful, the contract becomes void and the parties are discharged from
their obligations.
A contract is discharged by supervening impossibility in the following cases
Destruction of subject matter
Death of personal incapacity
Change of law
Declaration of war
Non - existence or non occurrence of a particular state of things

6. Breach of Contract -
Breach of contract is a legal cause of action in which a binding agreement or bargained-
for exchange is not honored by one or more of the parties to the contract by non-performance or
interference with the other party's performance.
Illustration
A, a singer, contract with B the manager of a theatre, to sing at his theatre for one year,
and to abstain from singing at other theatres during the period. She absents herself. B cannot
compel A to sing at his theatre (as it is a personal contract), but he may sue her for an injunction
restraining her from singing at the other theatres.

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Bibliography

Avtar Singh ,Textbook on Law Of Contract & Specific Relief.-Sixth Edition