ROLE OF CONTRACTS ACT IN EVERYDAY LIFE.

Introduction:

Law isn’t something that is only used in palatial courtrooms or highly successful legal firms. It is a subject that we, knowingly or unknowingly, use in our day-to-day lives. From the moment we wake up in the morning till the moment we go to sleep at night, the law is in some way or the other entwined with our common everyday activities. Of all the Acts I have befriended to date, I feel the principles of the Indian Contract Act, 1872 have the maximum significance and use in our daily transactions. I do not wish to deeply indulge in the complexities that revolve around the Contract Act. Although I am sure that it is a nightmare for many law students but if someone is able to feel the beauty of the Act then it instantly becomes one of the easiest Acts to master. This is precisely what I wish to highlight in this blog.

Definition Clause and Sale of Goods Act:

Without much ado let’s dive into a regular day of any normal working individual. One of the first things anyone is most likely to perform early in the morning is to wake up and pay a visit to the local vegetable market or the grocery shop. Getting goods in exchange for money is one of the most common yet classic examples of a typical contract. The amount is the consideration for the goods bought. And the goods form the consideration for the amount paid. A contract is necessarily a pair of considerations except in certain cases where it is a gift or a gratuitous act where the satisfaction of performing the act for someone, who is a close relative, is the consideration in itself. The contracts concerning buying and selling of goods are one of the most common of all contracts and as such a separate Act has been dedicated just for the purpose of resolving any dispute arising due to it- The Sale of Goods Act, 1930[1] which was primarily a part of the Indian Contract Act but later repealed. The next thing he most probably does is have his breakfast and leave for work. Assuming that he uses public transport, he will most likely take a bus or taxi to his place of work. When he books an uber ride from his smartphone then it is called an explicit contact, which may be either oral or written. But if he just hops onto a bus then it is automatically assumed that he is aware of where the bus is traveling and is willing to pay the fare for the travel. That, in the terms of the Act, is an implied contract[2].

Special Contract: Agency:

During the day he does different types of work. But if it’s the end of the week then he might organize a party to celebrate the upcoming weekend with his colleagues. In such a scenario he sends his attender or personal assistant to convey his plan to the rest of his colleagues. This is a contract of agency[3] where his attendee is acting as an agent on behalf of his principal, who is the protagonist in this piece. The conveying of his idea to others is called making a proposal[4].

Dependent on happening or non-happening of events: Contingent Contract.

Just as his agent leaves his chamber, he notices that the sky is slightly turning gray. So his colleagues inform the agent of a counterproposal that if by the evening it still doesn’t rain, then they will go out for tea. The agent comes back and informs the principal of the counterproposal[5]. The principal finally calls up his colleagues to inform them that he is fine with this counter plan. When this confirmation comes in the knowledge of the others, a contingent contract[6] is formed, i.e., a contract that is dependent on the happening or not happening of an event.

Bailment:

Finally, it’s evening and thankfully the downpour hasn’t yet begun. So they take a car and go to the nearest coffee shop. The moment they reach, the chauffeur comes up and takes the keys to the car for parking. This is a contract of bailment[7].

Guarantee:

At the tea party, they discuss their hardships in life. It turns out that one of them was going through a serious economic crisis and borrowed some money from another colleague saying that his brother will pay back the entire amount if he is unable to do so in a month. This exchange of proposals and acceptance lead to the birth of a contract of guarantee[8] where the brother is the surety, the person borrowing the money is called the principal debtor and the third person who is lending the money and will ultimately get it back is called the creditor.

Duty of finder of goods[9]:

They were so engrossed in their conversation that one of them forgets his wallet on the coffee table. In such a scenario it becomes the liability, responsibility and duty of the coffee shop to put in their best efforts to find the owner of the wallet and return it to him. This, although is not a formal contract but resembles the nature of the same. Thus, it is called a quasi contract[10].

Pledge:

Our protagonist finally comes back home in a public vehicle, sits at his study and signs the papers for pawning his house to gather money for his daughter’s higher studies abroad. This is a contract of pledge[11]. He then emails the signed documents to the concerned bank and goes to sleep mentally preparing himself to face another day after the weekend.

Conclusion:

With this, I come to the end of the usual contracts all of us make every day without even realizing it. But it must also be kept in mind that a contract becomes legally binding and enforcement or compensation can only be asked if there is an intent between the parties to enter into a legal relationship. This was the most important observation in the landmark case of Balfour v. Balfour[12]. Another very important point is that the consent to perform the contract must be out of his own free will[13] when he is in a sane condition of mind[14]. An intoxicated person is incapable of entering into a contract, and so is a minor[15], i.e., a person who is below the age of 18 years according to the Indian Majority Act, 1875. So the next time a child comes up and borrows money from you, please keep in mind that you might never be able to legally recover that money.

Author(s) Name:  Adrita Dey (Calcutta University, Department of Law)

References:

[1] Act 3 of 1930.

[2] Indian Contract Act, 1872, s 9.

[3] Indian Contract Act, 1872, s 182.

[4] Indian Contract Act, 1872, s 2(a).

[5] Indian Contract Act, 1872, s 7.

[6] Indian Contract Act, 1872, s 31.

[7] Indian Contract Act, 1872, s 148.

[8] Indian Contract Act, 1872, s 126.

[9] Indian Contract Act, 1872, s 71.

[10] Indian Contract Act, 1872 s 68.

[11] Indian Contract Act, 1872, s 172.

[12] [1919] 2 KB 571

[13] Indian Contract Act, 1872, s 14.

[14] Indian Contract Act, 1872, s 12.

[15] Indian Contract Act,1872, s 11.

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