Aspects of contract law!

Law of Contract

The law of contract is one of the major and vital parts of every transaction. We may not go or pass any day without applying contract. The laws relation to contract in our country is controlled and regulated by the contract Act 1872.

Definition of contract

According to section 2(h) of the contract Act 1872 and agreement enforced by law is a contract.

According to the Prof Salmond “The contract is an agreement creating and defining obligation between prates.”

According to Sir Fedric Pollock “Every agreement and promises enforceable act is a contract.”

According to Anson “A contract is an agreement enforce at law made between two or person by which right are acquired by one or more to act or forbearance on the part of the other.

Essential element of contract

An agreement becomes enforceable by law when it fulfills certain condition. This condition is the essential element of contract and these are giving below

1.  Parties to contract

2.  capacity of the prates

3.   Lawful offer

4.  Lawful acceptance

5.  Lawful consideration

6.  Free consent

7.  Intention to create legal relation

8.  Lawful purpose and object

9.  certainty

10.     10. specific subject matter

11.     11. possibilities of performance

12.     12. Not declared as void

13.     13. Formalities

1. Parties to contract: There must be two or more parties to make a contract.

2. Capacity of the prates: All the parties to the contract must be major under the majority act 1885. Under this act a person becomes major in the age of 18. On the other hand he may be a person of sound mind and a person of unsound mind may not enter in to a contract.

3. Lawful offer: There must be an offer to make a contract. Here lawful offer means an offer which is supported by the contract Act 1872.

4. Lawful acceptance: There must be a lawful acceptance to make a contract. Here lawful acceptance means an acceptance which is supported by the contract Act 1872.

5. Lawful consideration: There must be a lawful consideration to make a contract. Here lawful consideration means an offer which is supported by the contract Act 1872.

6. Free consent: To make contract it is essential that the consent of the parties to enter in to the contract is free. Here free consent means the consent which is not affected by coercion, undue influence, mistake, misrepresentation, and fraud.

7. Intention to create legal relation: By a contract the Intention of the parties must be expressed they are creating a legal relationship.

8. Lawful purpose and object: A contract must be made to lawful purpose and object. Here lawful object means the object which is supported all existing laws of Bangladesh.

9. Certainty: The language and expression of the contract must be certain by which the actual intention of the parties is expressed.

10. Specific subject matter: In every case the subject matter of the contract must be specific.

11. Possibilities of performance: A contract may not be for such a form which is impossible to perform.

12. Not declared as void: A contract must be a form which is not declared as void with any relevant loss. 

13. Formalities: A contract may be writer or oral and registered or none registered according to the provision of relevant to loss.

                                                     

Abuse of contract law in our life

Free consent

An agreement is valid only it is the result of the “free consent” of all the parties to it. Section 13 of the Act defines the meaning of the term ‘consent’ and Section 14 specifies under what circumstances consent is ‘free’.

Section 13 “Two or more person are said to consent when they agree upon the same thing in the same sense.”

Section 14 “This Section lies down that consent is not free if it is caused by

1.  Coercion

2.  undue influence

3.  Freud

4.  Misrepresentation

5.  Mistake

so, we can say that free consent is the consent which is give in absence of Coercion , undue influence, Freud, Misrepresentation or Mistake

1. Coercion

Coercion is define in section 15 or the contract Act 1872 as flows

“Coercion is the committing or threatening of commit any act forbidden by the penal code or unlawful detaining or threatening to detain any property to the prejudice of any person whatever with the intention of causing any person to enter into an agreement.”

Effects of Coercion: A contract brought about by Coercion is void able at the option of the party whose consent was so caused.

2. Undue influence

Undue influence is define in section 16 or the contract Act 1872 as flows

“One parties is in a position to dominate the will or the other and he uses the position to obtain an unfair advantage over the other is called Undue influence.”

Effects of undue influence: A contract brought about by undue influence is void able at the option of the party whose consent was so caused.

3. Freud

Freud is define in section 17 or the contract Act 1872 as flows

“The term “Freud” includes all acts committed by a person with a view to deceive another person. “To deceive” means to “induce a man to believe that a thing a true which is false.”

Finally we can say that Freud is the Misrepresentation without intention.

Effects of Freud: A contract brought about by Freud is void able at the option of the party whose consent was so caused.

4. Misrepresentation

Misrepresentation is define in section 17 or the contract Act 1872 as flows

Misrepresentation means and includes

a)    Unwarranted Assertion: The positive coercion in a manner not warranted by the information of the person making it of that which is not true, though he believe it to be true.

b)    Breach of Duty: Any breach of duty which, without intent to deceive, gains an advantage to the person committing it or anyone claiming under him by misleading another to his prejudice or to the prejudice of any one claiming under him.

c)    Innocent Mistake: Causing however innocently, a party to an agreement to make a mistake as to the substance of the thing which is the subject of the agreement.

Effects of Misrepresentation: A contract brought about by Misrepresentation is void able at the option of the party whose consent was so caused.

5. Mistake

Mistake may be defined as a erroneous belief concerning something consent cannot be said to be “Free” when an agreement is entered into under a mistake. An agreement is valid as a contract only when the parties agree upon the same thing in the same sense.

USE of contract law in Bangladesh

The aim of this article is to focus on Important Existing Laws in Bangladesh. There are numerous laws in Bangladesh including those enactments which were inherited from yesteryear enacted by various authorizes according to competence under the constriction in force at the related time, these in herniated legislation are existing laws while using meaning of article 152(1) on the constitution of Bangladesh. The directory the existing laws may be classified as Supreme Law, Laws Relating to Civil Proceeding, Land Laws, Muslim Personal Laws, Other personal Law, Business Laws , Labour Law, Fiscal Laws Military Laws etc.

WHY NECESSARY FOR BANKing and business?

For any individual, it is essential to know the elements of a contract if he is engaged in business or in buying and selling goods and properties. It is essential for a banker to know the elements of a contract because a bank frequently enters into contract with the depositors, customers and borrowers. Opening of accounts is in fact entering into contract. The relationship that arises between the depositor and a banker is essentially contractual.

Similarly when a banker advances money to the borrowers, he actually enters into a contract with the borrowers who undertake to repay. In view of this, it is essential for a banker to have some knowledge about the law of contract since all contracts are governed by this law.

Conclusions

Four main conclusions can be drawn from the aforegoing brief excursion into this evolving area of law:

Firstly, the acquis communautaire provides a solid foundation for the formation of contract by the principle of freedom of contract and the principle that the agreement is crucial for the binding of the parties.

Secondly, existing EC law recognizes the pattern of formation of contract by offer and acceptance (even if the details of this mechanism are not to be seen precisely within acquits).

Thirdly, within acquits new instrument has developed to protect weaker parties in special situations: the right of withdrawal. It intervenes in the contracting process only in clearly limited situations; but it seems possible to design some more general rules on the exercise and the effects of these rights.

Finally, the acquits permits taking into account the important role of advertising, labeling and similar public statements in due to contracting its concept of the binding effect of pre-contractual statements. This concept can be extended to other types of contract within a future more coherent European contract law