N-5/07 FEB
CONTRACTS

This is a aspect of life which has been in practise since time immemorial. take a few examples-

a) A person in barter system exchanges 10 kg of rice with 100 kg of firewood.It has few noticeable attributes-1) the rate of exchange is predetermined,2) quality of product in exchange is known to both the parties.3) the barter is always conducted in presence of others and this condition is automatically met by virtue of this transaction so there is a witness,4) the missing thing is a written document5) the barter was a recognised form of transaction in society so it had social sanction.
IS IT A CONTRACT? Yes it is contract in every aspect.

b) You go to a shop and purchase rice , 10 kg in quantity for rs 400 then take a cash memo and pay for it. Now see the attributes, 1) the shopkeeper has displayed the rate of sale of rice, 2) the shopkeeper has kept the goods displayed or has kept the sample,3) the purchaser notifies the quantity he intends to purchase.4) the seller signifies his agreement to sell the desired quantity indirectly as he accepts the quantity asked to be sold 5)the purchaser pays for the amount on productuion of cash memo6) the shopkeeper accepts the money and mark the cash memo as paid.7) the purchaser takes over the goods. 8) there is no other document except the cash memo.

IS IT A CONTRACT? Yes, it is.

NOW take another example.

c) You go for a life insurance policy. you search for a policy provider and your policy document is readied. Your policy starts. SEE the attributes-1) there is a policy provider who displays in advance his mandate.2) the policy purchaser accepts that mandate in his mind while selecting the policy provider.3) the policy purchaser signifies his agreement to mandate by approaching policy provider and filling up the form.4) the policy purchaser completes his obligation by paying the premium. 5) the policy provider hands over the policy document and receipt for premium.6) the person becomes a policy holder which will run for its terms.7) there are two documents- policy bond and premium receipt.

IS IT A CONTRACT? Yes it is.

Thus we find that in our daily life we execute the contracts every now and then. sometime knowingly and somtimes unknowingly. from these transaction it is not difficult to see the various components necessary for entering into a valid & sustainable contract. But the real question which comes into picture is that at a given time what attributes are being termed as valid& sustanable and what are NOT. This ASPECTS not only changes with passage of time but it changes also from place to place i.e. from society to society. The principle of natural justice which has been taken from Britsh Law in 19th centuray, has been a changing concept over time in British society itself from 19th centuray to 21th centuaruy. the interpretation and meaning of principle of natural justice has been changing from muslim society to Britsh society to Indian society to african society. What is found to be totally unethical in Britsh society today & for that matter Britsh Law has been found to be ethical and socially acceptable in muslim society in GULFand elsewhere.
In most of the societies the agreement entered into between two parties with free will & consent has been termed to be a valid contract which is legally enforceable. BUT THE MILLION DOLLAR QUESTION IS- is there really free will existing?
Now take example of a contractor who wants to take up the work in a society where claimants for work are two many and works is less and there is a one person also who has the authority to award the work. OR take a example where there are few contractors who specializes in some specialist work for which a lot of scope exists in the society are available. The idle situation enshrined in constitution where both the parties are equal and enter into contract with free will - really does not occur in reality. There is bound to be two unequal parties in a trasaction and then how there can be free will existing between two unequal parties. Then how the contract can be termed as legally sustainable and enforceable. These are few parameters which comes into picture while framing the contract document and while making the contracts.

Let us take from here on very first point,i.e. Principle of Natural Justice. this becomes of more importance since most of the countries including India follows the Britsh model of Law. You see first ,how the meaning of natural justice has been changing in the British society itself from 19th century to 21 century.

This series will continue and we will share views threadbare in every ascpects of contract.
To be continued