INTRODUCTION
The word ‘Contract’ means a deal between two or more persons. In other words, the contract is an agreement between the parties, which is enforceable by the law. It is well defined under the INDIAN CONTRACT ACT, 1872.
Force majeure means any event which was not anticipated or controlled by the parties to the contract, and that event becomes the hurdle in the continuation of the contract. Force majeure is not explicitly defined under any Indian statutes. It is defined in the Black’s Law Dictionary.
‘CONTRACT TERMS’ UNDER THE INDIAN CONTRACT ACT, 1872
Section 2(h) of the Indian Contract Act, 1872 defines a contract as “an agreement enforceable by law”.
In other words, a contract is a legal document where two or more parties agrees on any act or event which is enforceable by the law.
- There are must be two or more parties to the contract which is enforceable by the law, and the parties must fulfill the following essential conditions to enter into a valid contract.
- Offer
- Acceptance
- Consideration
- Capacity
- Lawful purpose
There must be an offer made by the party to the other party who wishes to come into a contract. The other party must accept the offer made to her/him for a valid contract without any force or influence. Both the parties must be capable of entering into a contract which is enforceable by the law.
Express Contract
You’ll likely be a celebration to contracts in your everyday routine. Everything from eating at a restaurant to purchasing a home includes some sort of a contract. The subsequent are a number of the foremost common contracts that are used.
An express contract is that the commonest contract type. During this sort of contract, all elements are specifically stated. This will be written or done orally. Either way of offer, acceptance and consideration must bind the parties together legally. And both parties to the contract must clearly understand the terms and conditions.
An agreement works an equivalent way. In an agreement, like negotiating the worth of a replacement car, the parties agree on a group price, a monthly payment schedule if applicable and any warranties or guarantees included within the offer. Once acceptance is formed, and consideration is exchanged between the parties to the contract, the contract for the vehicle becomes binding and enforceable by the law. As long as both parties are upholding their promise, the car can’t be returned at a later date, nor can the salesperson request the car back from the new owner.
Also Read – E-Contract : It’s A Lot More Than The ‘I Agree Button’
Implied In-Fact Contract
Every contract is not as transparent as an expressed contract. An implied-in-fact contract binds parties together through a mutual agreement and intent, but there are not any expressed terms of the agreement. The agreement holds mutual intention supported facts and circumstances and an inexpensive assumption from the circumstances and relations between the parties. For an implied-in-fact contract to be enforceable, there are a couple of elements that has got to be present:
→An unambiguous offer and acceptance
→Mutuality of both parties to be sure to the contract
→Consideration
The elements are often determined by the behaviors of the parties. For instance, when a guest orders a steak at a restaurant, it’s assumed that the steak is going to be cooked and served to the guest’s liking and therefore the guest has every intention of paying for the meal.
Contracts are of various types. A method of understanding contracts is by dividing them into two types: Absolute and Contingent.
An absolute contract is one where the promisor performs the contract with none condition. Contingent contracts, on the opposite hand, are those where the promisor performs his obligation only certain conditions are met.
Section 31 of the Indian Contract Act. One thousand eight hundred seventy-two talks about the contingent contracts that if two or more than two persons enter into the contract to do or not to do something, if an event that guarantees the contract does or does not happen, then it is a contingent contract. For example,
A makes a contract with C to buy C’s horse if A survives B. (This contract is enforceable by the law unless b dies in A’s lifetime.
A makes a contract with D to sell a car to him at a specified price if C to whom the car has been offered refuses to but it. (Here contract cannot be enforced by law unless C refuses to buy the car.)
While force majeure has not been defined under any Indian Statues but some reference is found under section 32, the Indian contract act that states the enforcement of contracts contingent on an event happening. [1]Contingent contract to do or not to do anything if an uncertain future event exits cannot be enforced by law unless and until that event has happened. If the event becomes impossible, such contracts become VOID.
In contract terms, a force majeure clause provides temporary reprieve to a celebration from performing its obligations under a contract upon the occurrence of an act of God event.
Also Read – What is the Minor’s Position in the Law of Contract?
In the case related to the contingent contract of the Indian contract Act,1872 M/S J.P.Builders & Anr vs A.Ramadas Rao & Anr on 22 November 2010, [2]By pointing out various clauses in the MoU (Ex. A-2), Ms Nalini Chidambaram, learned senior counsel for the appellants heavily contended that inasmuch as the contract was depending upon uncertain events of the Indian Bank, agreeing for OTS, the contract entered is contingent depending on the move of the Indian Bank. According to her, inasmuch as various clauses insist on certain impossible conditions at the hands of the Indian Bank, the contract entered into between the plaintiff and defendants becomes impossible and void. Though such an argument was advanced before us, there was no such specific plea in their written statement, and the Trial Court has not framed the separate issue and considered the same. Irrespective of the above position, in view of the assertion made by learned senior counsel, we intend to discuss and give our answer.
[1] Section 32, of the Indian contract act; law of contract; R. L. Meena
[2]https://indiankanoon.org/docfragment/1041253/?formInput=contingent%20contract%20%20doctypes%3A%20judgments,
This Article Written by Sheetal Maan, Student of FAIRFIELD INSTITUTE OF MANAGEMENT AND TECHNOLOGY
