News By/Courtesy: Nikshetaa Jain | 04 Jun 2020 5:23am IST

HIGHLIGHTS

  • No explicit provision in the Indian Contract Act, 1872
  • Some case laws of Common law
  • General presumption

Section 2(a) of the Indian Contract Act, 1972 defines proposal as to when one person signifies to another his willingness to do or abstain from doing anything, intending to obtain the assent of that other to such act or abstinence, he is said to propose. While proposing, there must be an intention to create legal relations. There is no such provision in the Indian Contract Act requiring that an offer or its acceptance should be made to create a legal relationship. But in Common law it is settled that to create a contract, the parties must have a common intention to enter into legal relations.

In Balfour v Balfour, the defendant and his wife went to England for a vacation. The defendant was supposed to return home, but his wife was advised to stay in England because of her health. The defendant agreed to pay 30 Euros per month as maintenance. Afterward, a difference arose between them, which resulted in their separation. Thus, the defendant stopped paying an allowance. The wife’s claim to recover the arrears was dismissed as the parties did not have an intention to create legal obligations.

In Mc Gregor v Mc Gregor, a husband and wife withdrew complaints against each other after agreeing. According to the agreement, the husband would pay her an allowance and the wife would refrain from pledging his credit. It was held that it was a valid contract as the parties had the intention to enter into legally binding obligations.

In Jones v Padavatton, a divorced woman was living in Washington along with her son, and worked as an accountant. Her mother, who lived in Trinidad requested her to leave service, to take legal education in England, and finally come back to Trinidad as a practicing lawyer. The mother undertook her expenses. The daughter did not complete her course in five years, and she also remarried. Thus, the mother stopped paying for her costs. The court held that there was an agreement but only for a sufficient period, and that period of five years was enough for the daughter to complete her education. Also, the mother was not responsible for supporting her husband.

Thus, the intention of the parties is to be ascertained from the terms of the agreement and the surrounding circumstances. The general presumption is that in arrangements based on social relations, parties do not intend legal consequences to follow, whereas, in an agreement based on business relations, parties intend legal consequences.

THIS ARTICLE DOES NOT INTEND TO HURT THE SENTIMENTS OF ANY INDIVIDUAL, COMMUNITY, SECT, OR RELIGION ETCETRA. THIS ARTICLE IS BASED PURELY ON THE AUTHOR'S PERSONAL VIEWS AND OPINIONS THE EXERCISE OF THE FUNDAMENTAL RIGHT GUARANTEED UNDER ARTICLE 19(1)(A) AND OTHER RELATED LAWS BEING FORCE IN INDIA FOR THE TIME BEING.

Section Editor: Pushpit Singh | 04 Jun 2020 5:24am IST


Tags : #consideration, section 2(d)

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