Contract:
Law of contract:
The law relating to contracts in Pakistan is contained in the contract act, 1872. it extends to the whole of Pakistan and came in to force on the 1st day of September, 1872. It deals with:
1 general principle governing all types of contracts (sec. 1-75).
2 contracts of indemnity, guarantee, bailment, pledge, and agency (sec. 124-238).
Initially, sections 76-123 and sections 239-266 relating to sale of goods and partnership were contained in the contract act in the contract act but were subsequently repealed and a separate sale of goods act, 1930 and a partnership act, 1932 came into force.
Definition of contract:
Some definitions are as follows:
Pollack: “a contract is an agreement creating and defining obligations between the parties".
Sir William Anson: “an agreement enforceable by law made between two or more persons, by which rights are acquired by one or more to acts or forbearance on the part of other or others."
Sec. 2(h) of contract Act provides "an agreement enforceable by law is a contract." thus a contract consists of two elements:
(a) Agreement (b) enforceability by law
1. Agreement:
Sec 2(e) defines agreement as, "every promise and every set of promises, forming the consideration for each other, is an agreement."
section2 (b) defines promise as, "when the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise."
A promise come in to existence when one party makes a proposal to the other party and that other party gives consent. Therefore, a contract is an agreement, an agreement is a promise and a promise is an accepted proposal.
Example:
A offers to sell his car to B for Rs.5 lac. B gives acceptance. It is an agreement.
2. Enforceability:
An agreement is enforceable if it is recognized by court. In order to be enforceable by law, the agreement must create legal obligations between the parties. Thus, the term agreement is wider than a contract. All contracts are agreements but all agreements are not contracts. Agreements are of two types:
a. social agreements:
Social agreements are not enforceable because they do not create legal obligations between the parties. In such agreements, the parties do not intend to create legal relations.
b.Legal agreements:
Legal agreements are enforceable because they create legal obligations between the parties. In such agreements the parties intends to create legal relations. All business agreements are contracts as there is an intention to create legal obligations.
Examples:
A invites B to a dinner. B accepts the invitation but does not attend. A can not sue B for damages. it is a social agreement.
A promises to sell his car to B for Rs .4 lac. It is a legal agreement because it creates legal obligations. This agreement is a contract.
Law of contract:
The law relating to contracts in Pakistan is contained in the contract act, 1872. it extends to the whole of Pakistan and came in to force on the 1st day of September, 1872. It deals with:
1 general principle governing all types of contracts (sec. 1-75).
2 contracts of indemnity, guarantee, bailment, pledge, and agency (sec. 124-238).
Initially, sections 76-123 and sections 239-266 relating to sale of goods and partnership were contained in the contract act in the contract act but were subsequently repealed and a separate sale of goods act, 1930 and a partnership act, 1932 came into force.
Definition of contract:
Some definitions are as follows:
Pollack: “a contract is an agreement creating and defining obligations between the parties".
Sir William Anson: “an agreement enforceable by law made between two or more persons, by which rights are acquired by one or more to acts or forbearance on the part of other or others."
Sec. 2(h) of contract Act provides "an agreement enforceable by law is a contract." thus a contract consists of two elements:
(a) Agreement (b) enforceability by law
1. Agreement:
Sec 2(e) defines agreement as, "every promise and every set of promises, forming the consideration for each other, is an agreement."
section2 (b) defines promise as, "when the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise."
A promise come in to existence when one party makes a proposal to the other party and that other party gives consent. Therefore, a contract is an agreement, an agreement is a promise and a promise is an accepted proposal.
Example:
A offers to sell his car to B for Rs.5 lac. B gives acceptance. It is an agreement.
2. Enforceability:
An agreement is enforceable if it is recognized by court. In order to be enforceable by law, the agreement must create legal obligations between the parties. Thus, the term agreement is wider than a contract. All contracts are agreements but all agreements are not contracts. Agreements are of two types:
a. social agreements:
Social agreements are not enforceable because they do not create legal obligations between the parties. In such agreements, the parties do not intend to create legal relations.
b.Legal agreements:
Legal agreements are enforceable because they create legal obligations between the parties. In such agreements the parties intends to create legal relations. All business agreements are contracts as there is an intention to create legal obligations.
Examples:
A invites B to a dinner. B accepts the invitation but does not attend. A can not sue B for damages. it is a social agreement.
A promises to sell his car to B for Rs .4 lac. It is a legal agreement because it creates legal obligations. This agreement is a contract.