Indian Contract Law Case Study

Introduction

The law of contract in India is contained in the Indian Contract Act, 1872. The law extends to the whole of India except the state of Jammu and Kashmir and came into force on September 1, 1972. It does not deal with all the branches of the contract law. There are separate acts, dealing with contracts relating to negotiable instruments, insurance etc. The law of contract is applicable not only to the business community but also to others. All of us enter into a number of contracts each day without even realising so. For instance, there is a contract made when we buy a packet of chocolate from the shop.

Objective

The objective of the Indian Contract Act, 1872 is to lay down the legal rules relating to promises- their formation, performance and their enforceability. This ensures healthy trade and commerce by making the parties liable for the promises they have made.

Competency to Contract

According to Sec 10, an essential agreement of a valid contract is that the contracting parties must be competent to contract

Section 11 lays down that every person is competent to contract who is of the age of majority according to the law

Such a minor will have a right to such share of property or profits of the firm as may be agreed upon and he would have access to, inspect, and copy the accounts of the firm. The minor cannot participate in the management of the business and shall not share losses except when liability to third parties has risen but then too it is up to his share in the partnership assets. He cannot be made personally liable for any obligations of the firm, although he may accept those obligations after attaining majority if he thinks fit to do