essential elements of valid contract
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VALID CONTRACT AND ESSENTIAL ELEMENTS OF ESSENTIAL CONTRACTSTRANSCRIPT
07/04/23 19:33Raza Lilani . [email protected]
ESSENTIAL ELEMENTS OF A VALID CONTRACT
07/04/23 19:33Raza Lilani . [email protected]
OUTLINE
1. Offer and Acceptance
2. Contractual capacity
3. Free Consent
4. Consideration
5. Void agreement
6. Agreement in written
07/04/23 19:33Raza Lilani . [email protected]
OFFER & ACCEPTANCE
• First essential of a valid contract is agreement
Proposal Acceptance
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WHAT IS PROPOSAL OR OFFER?
• Section 2(a)
• when one person signifies to another his willingness to do or
• to abstain from doing anything, • with a view to obtaining the assent of
that other to such act or abstinence, • he is said to make a proposal;
07/04/23 19:33Raza Lilani . [email protected]
07/04/23 19:33Raza Lilani . [email protected]
ESSENTIAL OF VALID OFFER
• Express or Implied
• Legal relations
• Definite and clear
• Different from invitation to offer
• Specific or General
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• Communicated to the Offeree
• Should not contain negative conditions
• Subject to any conditions
• Must not contain cross offers
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OFFER OR PROPOSAL CAN BE REVOKEDBY
• Sending a notice of REVOCATION
• Laps of time
• Failure to fulfill conditions
• Death or Insanity of Offeror
• Revocation of offer by Offeree
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• Counter offer by the Offeree
• Death or Insanity of Offeree
• Subsequent Illegality
• Destruction of Subject matter
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ACCEPTANCE
Section 2(b)
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;
07/04/23 19:33Raza Lilani . [email protected]
07/04/23 19:33Raza Lilani . [email protected]
ESSENTIAL OF VALID ACCEPTANCE
• Given by the Offeree
• Absolute & Unconditional
• In a prescribed manner
• Communicated to the Offeror
• Express or Implied
• Follow the offer
• Given within reasonable time
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Communication of Offer, Acceptance and Revocation
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COMMUNICATION WHEN COMPLETE
Communication of a proposal:
•The communication of a proposal is complete when it comes to the knowledge of the person to whom it is made.
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ILLUSTRATION
A proposes, by letter, to sell a house to B at a certain price .
The communication of the proposal is complete when B receives the
letter.
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COMMUNICATION OF AN ACCEPTANCE
• The communication of an acceptance is complete,–
• as against the proposer, when it is put in a course of transmission to him, so as to be out of the power of the acceptor;
07/04/23 19:33Raza Lilani . [email protected]
As against proposerAs against acceptor
when it is put in a course of transmission to him, so as to be out of the power of the
acceptor ;
as against the acceptor, when it comes to the knowledge of the proposer
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ILLUSTRATION
B accepts A's proposal by a letter sent by post
Communication complete
As against AAs against B
When the letter is posted by B
When the letter is received by A
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THE COMMUNICATION OF A REVOCATION
• The communication of a revocation is complete
• as against the person who makes it, when it is put into a course of transmission to the person to whom it is made, so as to be out of the power of the person who makes it;
07/04/23 19:33Raza Lilani . [email protected]
as against the person who makes it ,
as against the person to whom it is made
when it is put in a course of transmission to the person to whom it is made , so as to be out of the power of the who makes
it ;
when it comes to his knowledge
The communication of a revocation is complete
07/04/23 19:33Raza Lilani . [email protected]
ILLUSTRATIONA revokes his proposal by telegram
Revocation is complete
As against AAs against B
when the telegram is dispatched
when B receives it
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ILLUSTRATIONB revokes his acceptance by telegram .
Revocation is complete
As against AAs against B
when it reaches him when the telegram is dispatched
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• Revocation means:
• 1) mutual cancellation of a contract by the parties to it.
• 2) withdrawing an offer before it is accepted.
• 3) cancelling a document before it has come into legal effect or been acted upon, as revoking a will.
REVOCATION OF PROPOSALS & ACCEPTANCES
SECTIONS 5 & 6
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Revocation of a ProposalRevocation of Acceptance
A proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer but not the afterwards
An acceptance may be revoked at any time before the communication of the acceptance is complete as against the acceptor but not the afterwards
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COMMUNICATION OF REVOCATIONOF A PROPOSAL
The Person who makes Revocation
The Person to whom Revocation made
Letter of Revocation of Proposal
Letter posted on 10th April
Letter received on 12th April
Communication completes as against B on 12th April
Communication completes as against A on 10th April
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COMMUNICATION OF REVOCATIONOF ACCEPTANCE
The Person who makes Revocation
The Person to whom Revocation made
Letter posted on 10th April
Letter received on 12th April
Communication completes as against B on 12th April
Communication completes as against A on 10th April
Letter of Revocation of Acceptance
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FACTS:
1.Mr. Ali proposed by letter dispatched on 1st April, to sell his car to Mr. Kamran in Karachi.2.Mr. Kamran received the proposal on 3rd April and gave his acceptance by letter posted 4th April.3.Mr. Kamran received acceptance letter on 6th April4.On 10th April Mr. Ali wrote a letter revoking his proposal.5.The letter was received by Mr. Kamran on 12th April.
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Questions:
1.Whether contract has been effected?2.On what date communication of proposal complete
3.On what date communication of Acceptance complete
1.as against A and2.As against B
4.Was revocation of effect?
07/04/23 19:33Raza Lilani . [email protected]
1. Contract has been effected when communication of acceptance complete.
2. Communication of proposal complete
1. As against A on 1st April
3. Communication of Acceptance complete
1. as against A on 4th April and
2. As against B on 6th April
ANSWER
07/04/23 19:33Raza Lilani . [email protected]
Held
THE REVOCATION WAS OF NO EFFECT UNTIL IT REACHED B
The contract made on the date when acceptor accepts the proposal
on 4th April.
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• A proposal is revoked:
• (1) by the communication of notice of revocation by the proposer to the other party;
•(2) by the lapse of the time prescribed in such proposal for its acceptance, or, if no time is so prescribed, by the lapse of a reasonable time, without communication of the acceptance;
REVOCATION HOW MADE
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• (3) by the failure of the acceptor to fulfill a condition precedent to acceptance; or
• (4) by the death or insanity of the proposer, if the fact of his death or insanity comes to the knowledge of the acceptor before acceptance.