FORMATION OF CONTRACT:

FORMATION OF CONTRACT:

Section 10 of the Indian Contracts Act, 1872

All agreements are contracts, If they are - made by the free consent of the parties- competent to contract- for a lawful consideration and- with a lawful object And, are not hereby expressly declared to be void.

Discharge or Termination of ContractThe formation of Contract gives rise to rights and obligations for the contracting parties. A Contract is a legal bond (vinculum juris) and it binds the parties to it.Then, how long they continue to be, so legally bound? May be for - a few minutes or hours; or - a few days or months; or - a year or a few years; or - unto the death of one of the parties to it.One day or the other, the contract must be put to an end. - When both parties fulfill their respective obligations or - when the parties get out of the legal bond, somehow, The contract is said to be discharged / terminated. Modes of Discharge or Termination of Contract 1- by Performance [Sec - 37 and 38] 2- by Impossibility of Performance [Sec 56]3- by Agreement-resulting in [Sec62 and 63] 4- by Operation of Law 5- by Laps of Time, and [Law of Limitation]6- by Breach of Contract [Sec-39]

Modes of Discharge or Termination of Contract. A contract may be discharged or terminated 1- by Performance [Sec - 37 and 38]

2- by Impossibility of Performance [Sec 56] Law will not compel anyone to perform an act which is impossible. Be it initial or supervening. [As a matter Public Policy]

3- by Agreement resulting in [Sec62 and 63]

a) Novation: substitution of the existing contract by a new contract mutually. New contract may be between the same parties or different parties.

b) Rescission: cancellation of the existing contract (i) mutually , or (ii) by aggrieved party, or (iii) by the party where the consent is not free.

4 3- by Agreement resulting in [Sec62 and 63] c) Alteration: Change in the terms and conditions of the existing contract mutually. Parties continue to be the same. d) Remission: Accepting lesser performance than actually due under the contract. It includes any extension of time of performance.

e) Waiver: Abandonment of a right which a party is entitled to under the contract.

f) Accord and satisfaction: Accepting any other satisfaction than the performance originally agreed.

4.Discharge or Termination by Operation of law A Contract may be discharged/terminated by Law in the following cases: - by Death of Promisor: Where the personal volition and skill of the promisor is the consideration for the contract.

- by Insolvency: Upon declaration by court.

- by Merger: Rights & liabilities becoming vested in the same person

- by Alteration: Alteration of any material part in written contract without consent of other party

- by Notice: within 6 months of attaining the age of majority under Partnership Act. 5. Discharge or Termination of Contract by Laps of TimeEvery Contract mentions the time during which it should be performed.If no time is mentioned, it should be performed within a reasonable time. What is a reasonable time depends upon each particular case.The laps of - time agreed, or - reasonable time discharges the Contract.6. Breach of Contract.A Contract comes to an end, when any party to it- refuses to perform its part of obligation (s).

If such refusal occurs before due date of - fulfillment of its promise or - performance of its obligations it is known as Anticipatory Breach. If such refusal occurs - at the time of performance; or - during the course of performance it is called Current Breach.Remedies for Breach of ContractA Breach of Contract entitles the aggrieved party:- to rescind the contract and also - to sue the defaulting party for damages.The aggrieved party may take other remedies available to it under Specific Relief Act, such as- Specific Performance of the contract, or- request for issue of Injunction Order etc., Applicability of Law of Limitation to Contracts.If a contract is not performed, the aggrieved party has a right to enforce its rights available under the contract.Law will come to the rescue of the aggrieved party only when it seeks legal remedy in time. Law will not support indolent and lazy who do not act in time. [vigil Antibus, non dormantibus, jura] So, the rights can be enforced at any time before it becomes barred by the Law of Limitation.Therefore, an action to enforce rights available under a contract must be taken within 3 years of- Due date of performance, or- Date of Breach in India.