Page 11 - DCOM103_COMMERCIAL_LAW

Commercial Law

Notes

Note You should be concerned about contract law because it determines how parties
to the contract will need to keep the promises they make. Although very few contracts ever
end up in court, if the parties to a contract disagree on something and are unable to resolve
the disagreement, they may have to resort to the judicial process.

Task S, a singer, contracts with M, the manager of a theatre, to sing at the latter’s
theatre for two evening in every week during the next two months. M engages to pay her
` 300 for each evening’s performance. On the seventh evening, S willfully absents herself
from the theatre. M, in consequence, wants to rescind the contract and claim compensation

for the loss suffered by him through the non-fulfilment of the contract by S. Advise. [Hint.
M is entitled to rescind contract and claim compensation. S.75]

1.3 Classification of Contracts
Contracts on the basis of creation:
1. Express contract: Express contract is one which is made by words spoken or written.

Example: X says to Y, will you may buy a car for ` 100000? Y says to X, I am ready
to buy you car for ` 100000. It is an express contract made rally.

Example: X writes a letter to Y, I offer to sell my car for ` 100000 to you. Y send
a letter to Y, I am ready to buy you car for ` 100000. It is an express contract made in
writing.
2. Implied contract: An implied contract is one which is made otherwise than by works
spoken or written. It is inferred from the conduct of a person or the circumstance of the
particular case.

Example: X, a coolie in uniform picks up the bag of Y to carry it from railway
platform to the without being used by Y to do so and Y allow it. In this case there is an
implied offer by the coolie and an implied acceptance by the passenger. Now, there is an
implied contract between the coolie and the passenger is bound to pay for the services of
the coolie.
3. Quasi or constructive contract: It is a contract in which there is no intention either side to
make a contract, but the law imposes contract. In such a contract eights and obligations
arise not by any agreement between the practice but by operation of law. E.g. where certain
books are delivered to a wrong address the addresses is under an obligation to either pay
for them or return them.
Contracts on the basis of execution:
1. Executed contract: It is a contract where both the parties to the contract have fulfi lled their
respective obligations under the contract.

Example: X offer to sell his car to Y for ` 1 lakh, Y accepts X offer. X delivers the
car to y and Y pays ` 1 lakh to X. It is an executed contract.

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