Vidhi Codex

The Contract Act, 1977

The Contract Act, 1977

Civil1977192 sections

This Act sets out the law of contracts in Jammu and Kashmir. It covers how proposals are made, accepted and revoked, who is competent to contract, free consent, lawful consideration and object, and which agreements are void. It also covers performance and breach of contracts, and damages.

Start reading →Read full ActSections
  1. 1. Short title, extent and commencement
  2. 1A. It shall come into force on the 1st day of Baisakh,1978.
  3. 2. Interpretation clause
  4. 3. Communication, acceptance and revocation of proposals
  5. 4. Communication when complete
  6. 5. Revocation of proposals and acceptance
  7. 6. An acceptance may be revoked at any time before the communication of the acceptance is complete as against the acceptor, but not afterwards.
  8. 7. Acceptance must be absolute
  9. 8. Acceptance by performing conditions, or receiving consideration
  10. 9. Promises, express and implied
  11. 10. In so far as such proposal or acceptance is made otherwise that in words, the promise is said to be implied.
  12. 11. Who are competent to contract
  13. 12. What is a sound mind for the purposes of contracting
  14. 13. A person who is usually of sound mind, but occasionally of unsound mind, may not make a contract when he is of unsound mind.
  15. 14. "Free consent" defined
  16. 15. Consent is said to be so caused when it would not have been given but for the existence of such coercion, undue influence, fraud, misrepresentation or mistake.
  17. 16. A has employed coercion, although his act is not an offence by the law of England, and although section 506 of the Ranbir Penal Code was not in force at the time when or place where the act was done.
  18. 17. This is a transaction in the ordinary course of business, and the contract is not induced by undue influence.
  19. 18. A is not bound to inform B.
  20. 19. Voidability of agreements without free consent
  21. 19A. The sale is voidable at the option of A.
  22. 20. Agreement void where both parties are under mistakes as to matter of fact
  23. 21. The agreement is void.
  24. 22. The contract is not voidable.
  25. 23. What considerations and objects are lawful and what not
  26. 24. Every agreement of which the object or consideration is unlawful is void.
  27. 25. Agreement without consideration void, unless it is in writing and registered
  28. 26. In any of these cases, such an agreement is a contract.
  29. 27. Agreement in restraint of trade void
  30. 28. Provided that such limits appear to the Court reasonable, regard being had to the nature of the business.
  31. 29. Agreements void for uncertainty
  32. 30. Agreements by way of wager void
  33. 31. "Contingent contract" defined
  34. 32. Enforcement of contracts contingent on an event happening
  35. 33. If the event becomes impossible, such contracts become void.
  36. 34. When event on which contract is contingent to be deemed impossible, if it is the future conduct of a living person
  37. 35. When contracts become void which are contingent on happening of specified event within fixed time
  38. 36. Agreement contingent on impossible events void
  39. 37. Obligation of parties to contracts
  40. 38. A promise may be enforced by the legal representatives of the promisee in the event of the death of such promisee before performance, unless a contrary intention appears from the contract.
  41. 39. An offer to one of several joint promisees has the same legal consequences as an offer to all of them.
  42. 40. Person by whom promise is to be performed
  43. 41. In other cases, the promisor or his representatives may employ a competent person to perform it.
  44. 42. Devolution of joint liabilities
  45. 43. Any one of joint promisors may be compelled to perform
  46. 44. Effect of release of one joint promisor
  47. 45. Devolution of joint right
  48. 46. Time for performance of promise where no application is to be made and no time is specified
  49. 47. Time and place for performance of promise where time is specified and no application to be made
  50. 48. Application for performance on certain day to be at proper time and place
  51. 49. Place for performance of promise where no application to be made and no place fixed for performance
  52. 50. Performance in manner or at time prescribed or sanctioned by promisee
  53. 52. The debt is discharged as soon as B puts into the post a letter containing the note duly addressed to A.
  54. 53. Liability of party preventing event on which contract is to take effect
  55. 54. The contract is voidable at the option of B ; and, if he elects to resigned it, he is entitled to recover from A, compensation for any loss which he has incurred by its non-performance.
  56. 55. B's promise to pay need not be performed, and A must make compensation.
  57. 56. Agreement to do impossible act
  58. 57. The contract to act on those occasions becomes void.
  59. 58. The second set is for an unlawful object, namely, that B may use the house as a gambling house, and is a void agreement.
  60. 59. This is a valid contract to deliver rice and void agreement as to the opium.
  61. 60. This payment is to be applied to the discharge of the debt of which B had demanded payment.
  62. 61. Application of payment where neither party appropriates
  63. 62. If the debts are of equal standing, the payment shall be applied in discharged of each proportionally.
  64. 63. B still owes C 1,000 rupees, and no new contract has been entered into.
  65. 64. Payment to B of 1,000 rupees is a discharge of B's demand.
  66. 65. Obligation of person who has received advantage under void agreement or contract that becomes void
  67. 66. A is not bound to make compensation to B for the loss of the profits which B would have made if A had been able to sing but must refund to B the 1,000 rupees paid in advance.
  68. 67. Effect of neglect of promisee to afford promisor reasonable facilities for performance
  69. 68. A is excused for the non-performance of the contract if it is caused by such neglect or refusal.
  70. 69. A is entitled to be reimbursed from B's property.
  71. 70. Obligation of person enjoying benefit of non-gratuitous act
  72. 71. A is not entitled to compensation from B, if the circumstances show that he intended to act gratuitously.
  73. 72. Liability of person to whom money is paid, or thing delivered, by mistake or under coercion
  74. 73. He is entitled to recover so much of the charge as was illegally excessive.
  75. 74. Compensation for breach of contract where penalty stipulated for
  76. 75. This is a stipulation by way of penalty.
  77. 124. B is entitles to claim compensation for the damage which he has sustained through the non-fulfillment of the contract.
  78. 125. This is a contract of indemnity.
  79. 126. "Contract of guarantee", "surety", "principal debtor" and "creditor"
  80. 127. A guarantee may be either oral or written.
  81. 128. The agreement is void.
  82. 129. A is liable not only for the amount of the bill but also for any interest and charges which may have become due on it.
  83. 130. The guarantee given by A was not a continuing guarantee, and, accordingly, he is not liable for the price of the four sacks.
  84. 131. A is liable upon his guarantee.
  85. 132. Liability of two persons primarily liable, not affected by arrangement between them that one shall be surety on others default
  86. 133. The fact that A, to the knowledge of C, made the note as surety for B is no answer to a suit by C against A upon the note.
  87. 134. A is discharged from his liability as the contract has been varied inasmuch as C might sue B for the money before the 1st of March.
  88. 135. C is discharged from his surety-ship.
  89. 136. Surety not discharged when agreement made with third person to give time to principal debtor
  90. 137. Creditor's forbearance to sue does not discharge surety
  91. 138. A is not discharged from his surety-ship.
  92. 139. Discharge of surety by creditor's act or omission impairing surety's eventual remedy
  93. 140. A is not liable to B on his guarantee.
  94. 141. Surety's right to benefit of creditor's securities
  95. 142. A is not discharged.
  96. 143. Guarantee obtained by concealment invalid
  97. 144. Guarantee on contract that creditor shall not act on it until co-surety joins
  98. 145. Implied promise to indemnify surety
  99. 146. A cannot recover from B more than the price of the rice actually supplied.
  100. 147. As between the sureties, A is liable to pay 250 rupees, B 250 rupees and C 500 rupees.
  101. 148. A, B and C have to pay each the full penalty of his bond.
  102. 149. Delivery to bailee how made
  103. 150. Bailor's duty to disclose faults in goods bailed
  104. 151. B is responsible to A for the injury.
  105. 152. Bailee when not liable for loss, etc. of thing bailed
  106. 153. Termination of bailment by bailee's act inconsistent with conditions
  107. 154. This is at the option of A, a termination of the bailment.
  108. 155. A is liable to make compensation to B for the injury to the horse.
  109. 156. Effect of mixture, without bailor's consent, when the goods can be separated
  110. 157. A is entitled to have his 100 bales returned, and B is bound to bear all the expense incurred in the separation of the bales and any other incidental damages.
  111. 158. B must compensate A for the loss of his flour.
  112. 159. Restoration of goods lent gratuitously
  113. 160. Return of goods bailed on expiration of time or accomplishment of purpose
  114. 161. Bailee's responsibility when goods are not duly returned
  115. 162. Termination of gratuitous bailment by death
  116. 163. Bailor entitled to increase or profit from goods bailed
  117. 164. B is bound to deliver the calf as well as the cow to A.
  118. 165. Bailment by several joint owners
  119. 166. Bailee not responsible on redelivery to bailor without title
  120. 167. Right of third person claiming goods bailed
  121. 168. Right of finder of goods; may sue for specific reward offered
  122. 169. When finder of thing commonly on sale may sell it
  123. 170. Bailee's particular lien
  124. 171. B is not entitled to retain the coat until he is paid.
  125. 172. "Pledge", "pawnor" and "pawnee" defined
  126. 173. The bailee is called the "pawnee".
  127. 174. Pawnee not to retain for debt or promise other than that for which goods pledged
  128. 175. Pawnee's right as to extraordinary expenses incurred
  129. 176. Pawnee's right where pawnor makes default
  130. 177. If the proceeds of the sale are greater than the amount so due, the pawnee shall pay over the surplus to the pawnor.
  131. 178. Pledge by mercantile agent
  132. 178A. Pledge by person in possession under voidable contract
  133. 179. Pledge where pawnor has only a limited interest
  134. 180. Suit by bailor or bailee against wrong-doer
  135. 181. Apportionment of relief or compensation obtained by such suits
  136. 182. "Agent" and "principal" defined
  137. 183. Who may employ agent
  138. 184. Who may be an agent
  139. 185. Consideration not necessary
  140. 186. Agent's authority may be expressed or implied
  141. 187. Definitions of express and implied authority
  142. 188. B has an implied authority from A to order goods from C in the name of A for the purposes of the shop.
  143. 189. B may purchase timber and other materials, and hire workmen, for the purpose of carrying on the business.
  144. 190. When agent cannot delegate
  145. 191. "Sub-agent" defined
  146. 192. Representation of principal by sub-agent properly appointed
  147. 193. Agent's responsibility for sub-agent appointed without authority
  148. 194. Relation between principal and person duly appointed by agent to act in business of agency
  149. 195. Agent's duty in naming such person
  150. 196. B is not responsible to A for the proceeds.
  151. 197. If he ratifies them, the same effects will follow as if they had been performed by his authority.
  152. 198. Knowledge requisite for valid ratification
  153. 199. Effect of ratifying unauthorised act forming part of transaction
  154. 200. Ratification of unauthorized act cannot injure third person
  155. 201. The notice cannot be ratified by B, so as to be binding on A.
  156. 202. Termination of agency where agent has an interest in subject-matter
  157. 203. A cannot revoke this authority, nor is it terminated by his insanity or death.
  158. 204. Revocation where authority has been partly exercised
  159. 205. A can revoke B's authority to pay for the cotton.
  160. 206. Notice of revocation or renunciation
  161. 207. Revocation and renunciation may be expressed or implied
  162. 208. This is an implied revocation of B's authority.
  163. 209. The payment is good as against D, the executor.
  164. 210. Termination of sub-agent's authority
  165. 211. Agent's duty in conducting principal's business
  166. 212. B must make good the loss to A.
  167. 213. B is bound to make good to A the profit which he might have made by the 100 bales of cotton at the time the ship arrived, but not any profit he might have made by the subsequent rise.
  168. 214. Agent's duty to communicate with principal
  169. 215. Right of principal when agent deals on his own account in business of agency without principal's consent
  170. 216. Principal's right to benefit gained by agent dealing on his own account in business of agency
  171. 217. Agent's right of retainer out of sums received on principal's account
  172. 218. Agent's duty to pay sums received for principal
  173. 219. When agent's remuneration becomes due
  174. 220. Agent not entitled to remuneration for business misconducted
  175. 221. Agent's lien on principal's property
  176. 222. Agent to be indemnified against consequences of lawful acts
  177. 223. Agent to be indemnified against consequences of acts done in good faith
  178. 224. Non-liability of employer of agent to do a criminal act
  179. 225. Compensation to agent for injury caused by principal's neglect
  180. 226. Enforcement and consequences of agent's contracts
  181. 227. Principal how far bound when agent exceeds authority
  182. 228. A is bound to pay the premium for the policy on the ship, but not the premium for the policy on the cargo.
  183. 229. A may repudiate the whole transaction.
  184. 230. In spite of the knowledge of his agent, B may set-off against the price of the goods a debt owing to him from C.
  185. 231. Rights of parties to a contract made by agent not disclosed
  186. 232. Conduct induced such third persons to believe that such acts and obligations were within the scope of the agent's authority.
  187. 233. Right of person dealing with agent personally liable
  188. 234. Consequences of inducing agent or principal to act on belief that principal or agent will be held exclusively liable
  189. 235. Liability of pretended agent
  190. 236. Person falsely contracting as agent not entitled to performance
  191. 237. Liability of principal inducing belief that agent's unauthorized acts were authorised
  192. 238. Effect on agreement, of misrepresentation or fraud by agent

PDF: pending for this language.