
Important Definitions & Concepts – Indian Contract Act, 1872
1. Contract (Section 2(h))
Definition: An agreement enforceable by law.
Explanation: Only those agreements which are legally binding become contracts.
2. Agreement (Section 2(e))
Definition: Every promise and every set of promises forming consideration.
Explanation: All contracts are agreements, but not all agreements are contracts.
3. Proposal / Offer (Section 2(a))
Definition: Willingness to do or abstain from doing something to obtain assent.
Explanation: It is the starting point of a contract.
4. Acceptance (Section 2(b))
Definition: Assent to the proposal.
Explanation: Converts an offer into a promise when accepted.
5. Promise (Section 2(b))
Definition: Accepted proposal.
Explanation: Once accepted, a proposal becomes a promise.
6. Consideration (Section 2(d))
Definition: Something done or promised in return.
Explanation: Essential for validity; “no consideration, no contract” (with exceptions).
7. Void Agreement (Section 2(g))
Definition: Not enforceable by law.
Explanation: Has no legal effect from the beginning.
8. Voidable Contract (Section 2(i))
Definition: Enforceable at the option of one party.
Explanation: Valid until rescinded by the aggrieved party.
9. Express Contract
Definition: Formed by words (spoken/written).
Explanation: Terms are clearly stated.
10. Implied Contract
Definition: Formed by conduct or circumstances.
Explanation: No explicit words; inferred from actions.
11. Quasi-Contract
Definition: Obligation imposed by law.
Explanation: Not a real contract; prevents unjust enrichment.
12. Competency to Contract (Section 11)
Definition: Capacity of parties to contract.
Explanation: Must be major, of sound mind, and legally qualified.
13. Free Consent (Section 14)
Definition: Consent not caused by coercion, undue influence, fraud, misrepresentation, or mistake.
Explanation: Ensures fairness in agreements.
14. Coercion (Section 15)
Definition: Threatening or committing unlawful acts to compel agreement.
Explanation: Makes contract voidable.
15. Undue Influence (Section 16)
Definition: Dominating another’s will to gain advantage.
Explanation: Common in fiduciary relationships.
16. Fraud (Section 17)
Definition: Intentional deception.
Explanation: Makes contract voidable and gives right to damages.
17. Misrepresentation (Section 18)
Definition: Innocent false statement.
Explanation: No intent to deceive but affects consent.
18. Mistake (Sections 20–22)
Definition: Erroneous belief about fact.
Explanation: Bilateral mistake makes agreement void.
19. Contingent Contract (Section 31)
Definition: Depends on uncertain future event.
Explanation: Enforceable only on occurrence/non-occurrence of event.
20. Bailment (Section 148)
Definition: Delivery of goods for a purpose upon contract.
Explanation: Goods must be returned or disposed after purpose.
🎯 Exam Tip:
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📌 Focus on Section 2 definitions (VERY IMPORTANT)
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📌 Link definitions with practical examples
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📌 Practice problem-based questions
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📌 Revise frequently for retention