The freedom of the
parties is limited by two factors. There are certain laws for the protection of
the employees, and an employer cannot, therefore, induce his employees to enter
into any contract favourable to the employer.
A standard form contract
is a document which is generally printed, containing terms and conditions, with
certain blanks to be filled in. It is prepared by the business people. The
customer has only to sign it. Therefore, from his standpoint, the freedom to
contract is restricted. Many of the contracts now being entered into by
consumers are not the result of individual negotiations; rather they are
one-sided contracts.
The law
of contract in India is contained in the Indian Contract Act, 1872. This Act is
based mainly on English common law, which is to a large extent made up of
judicial precedents. (there being a separate contract act in England). It
extends to the whole of India except the state of Jammu and Kashmir and came
into force on the first day of September 1872 (Sec.1 Indian Contract Act,
1872). The act is not exhaustive.
Essentials of a contract
Sec.10 provides that all
agreements are contracts, if they are made by free consent of parties,
competent to contract, for a lawful consideration, and with a lawful object,
and are not expressly declared by law to be void. To constitute a contract,
there must be an agreement between two or more than two parties. No one can
enter into a contract with himself. An agreement is composed of two elements –
offer or proposal by one party and acceptance thereof by the other party.
Effect of absence of one
or more essential elements of a valid contract: If one or more essentials of a valid
contract are missing, then the contract may be either voidable, void, illegal
or unenforceable.
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