HYDERABAD

Indian Contract Act, 1872

[Act No. 9 of Year 1872, dated 25th. April, 1872]


Contents

Sections

Particulars

 

Preliminary

1


Short
title

2


Interpretation-clause

Chapter I

Communication,
Acceptance and Revocation of Proposals

3


Communication, acceptance and revocation of proposals

4


Communication when complete

5


Revocation of proposals and acceptances

6


Revocation how made

7


Acceptance must be absolute

8


Acceptance by performing conditions, or receiving consideration

9


Promises, express and implied

Chapter II

Contracts, Voidable Contracts,
and Void Agreements

10


What agreements are contracts

11


Who are competent to contract

12


What is a sound mind for the purposes of contracting

13


Consent defined

14


“Free consent” defined

15


“Coercion” defined

16


“Undue influence” defined

17


“Fraud defined

18


“Misrepresentation” defined

19


Voidability of agreements without free consent

19A


Power to set aside contract induced by undue influence

20


Agreement void where both parties are under mistake as to matter of fact

21


Effect of mistakes as to law

22


Contract caused by mistake of one party as to matter of fact

23


What
consideration and objects are lawful, and what not

24


Agreements void, if considerations and objects unlawful in part

25


Agreement without consideration, void, unless it is in writing and registered   or is a promise to compensate for something done or is a promise to pay a debt barred by limitation law

26


Agreement in restraint of marriage, void

27


Agreement in restraint of trade, void

28


Agreements in restraint of legal proceedings, void

29


Agreements void for uncertainty

30


Agreements by way of wager, void

Chapter III

Contingent Contracts

31


“Contingent contract” defined

32


Enforcement of contracts contingent on an event happening

33


Enforcement of contract contingent on an event not happening

34


When
event on which contract is contingent to be deemed impossible, if it is the future conduct of a living person

35


When contracts become void, which are contingent on happening of specified event within fixed time

36


Agreements contingent on impossible events, void

Chapter IV

Performance of
Contracts which must be Performed

37


Obligations of parties to contracts

38


Effect of refusal to accept offer of performance

39


Effect of refusal of party to perform promise wholly

40


Person by whom promise is to be performed

41


Effect of accepting performance from third person

42


Devolution of joint liabilities

43


Any one of joint promisors may be compelled to perform

44


Effect of release of one joint promisor

45


Devolution of joint rights

46


Time
for performance of promise, where no application is to be made and no time is specified

47


Time
and place for performance of promise, where time is specified and no application to be made

48


Application for performance on certain day to be at proper time and place

49


Place
for the performance of promise, where no application to be made and  no place fixed for performance

50


Performance, in manner or at time prescribed or sanctioned by promisee

51


Promisor not bound to perform, unless reciprocal promisee ready and willing to perform

52


Order of performance of reciprocal promises

53


Liability of party preventing event on which contract is to take effect

54


Effect of default as to the promise which should be performed, in contract consisting of reciprocal promises

55


Effect of failure to perform at fixed time, in contract in which time is essential

56


Agreement to do impossible act

57


Reciprocal promise to do things legal, and also other things illegal

58


Alterative promise, one branch being illegal

59


Application of payment where debt to be discharged is indicated

60


Application of payment where debt to be discharged is not indicated

61


Application of payment where neither party appropriates

62


Effect of novation, rescission, and alteration of contract

63


Promise may dispense with or remit performance of promise

64


Consequence of rescission of a voidable contract

65


Obligation of person who has received advantage under void agreement, or contract that becomes void

66


Mode
of communicating or revoking rescission of voidable contract

67


Effect of neglect of promisee to afford promisor reasonable facilities for performance

Chapter V

Certain Relations
Resembling those created by Contract

68


Claim for necessaries supplied to person incapable of contracting, or on his  account

69


Reimbursement of person paying money due by another, in payment of which  he is interested

70


Obligation of person enjoying benefit of non-gratuitous act

71


Responsibility of finder of goods

72


Liability of person to whom money is paid, or thing delivered, by mistake or under coercion

Chapter VI

The Consequences of
Breach of Contract

73


Compensation of loss or damage caused by breach of contract

74


Compensation for breach of contract where penalty stipulated for

75


Party
rightfully rescinding contract, entitled to compensation

Chapter VII

Sections 76-123

Chapter VIII

Indemnity and
Guarantee

124


“Contract of indemnity” defined

125


Right of indemnity-holder when sued

126


“Contract of guarantee”, “surety”, “principal debtor” and “creditor”

127


Consideration for guarantee

128


Surety’s liability

129


Continuing guarantee

130


Revocation of continuing guarantee

131


Revocation of continuing guarantee by surety’s death

132


Liability of two persons, primarily liable, not affected by arrangement between them that one shall be surety on other’s default

133


Discharge of surety by variance in terms of contract

134


Discharge of surety by release or discharge of principal debtor

135


Discharge of surety when creditor compounds with, gives time to, or agrees not to sue, principal debtor

136


Surety not discharged when agreement made with third person to give time to principal debtor

137


Creditor’s forbearance to sue does not discharge surety

138


Release of one co-surety does not discharge others

139


Discharge of surety by creditor’s act or omission impairing surety’s eventual remedy

140


Rights of surety on payment or performance

141


Surety’s right to benefit of creditor’s securities

142


Guarantee obtained by misrepresentation, invalid

143


Guarantee obtained by concealment, invalid

144


Guarantee on contract that creditor shall not act on it until co-surety joins

145


Implied promise to indemnify surety

146


Co-sureties liable to contribute equally

147


Liability of co-sureties bound in different sums

Chapter IX

Bailment

148


“Bailment”, “bailor” and “bailee” defined

149


Delivery to bailee how made

150


Bailor’s duty to disclose faults in goods bailed

151


Care
to be taken by bailee

152


Bailee when not liable for loss, etc, of thing bailed

153


Termination of bailment by bailee’s act inconsistent with conditions

154


Liability of bailee making unauthorized use of goods bailed

155


Effect of mixture with bailor’s consent, of his goods with bailee’s

156


Effect of mixture, without bailor’s consent, when the goods can be separated

157


Effect of mixture, without bailor’s consent, when the goods cannot be separated

158


Repayment, by bailor, of necessary expenses

159


Restoration of goods lent gratuitously

160


Return of goods bailed, on expiration of time or accomplishment of purpose

161


Bailee’s responsibility when goods are not duly returned

162


Termination of gratuitous bailment by death

163


Bailer entitled to increase or profit from goods bailed

164


Bailor’s responsibility to bailee

165


Bailment by several joint owners

166


Bailee not responsible on redelivery to bailor without title

167


Right of third person claiming goods bailed

168


Right of finder of goods may sue for specified reward offered

169


When finder of thing commonly on sale may sell it

170


Bailee’s particular lien

171


General lien of bankers, factors, wharfingers, attorneys and policy brokers

172


“Pledge”, “pawnor”, and “pawnee” defined

173


Pawnee’s right of retainer

174


Pawnee
not to retain for debt or promise other than that for which goods pledged-Presumption in case of subsequent advances

175


Pawnee’s right as to extraordinary expenses incurred

176


Pawnee’s right where pawnor makes default

177


Defaulting pawnor’s right to redeem

178


Pledge by mercantile agent

178A


Pledge by person in possession under voidable contract

179


Pledge where pawnor has only a limited interest

180


Suit by bailor or bailee against wrong-doer

181


Appointment of relief or compensation obtained by such suits

Chapter X

Agency Appointment
and Authority of agents

182


“Agent” and “principal” defined or to represent another

183


Who
may employ agent

184


Who
may be an agent

185


Consideration not necessary

186


Agent’s authority may be express or implied

187


Definitions of express and implied authority

188


Extent of agent’s authority

189


Agent’s authority in an emergency

190


When agent cannot delegate

191


“Sub-agent” defined

192


Representation of principal by sub-agent properly appointed

193


Agent’s responsibility for sub-agent appointed without authority

194


Relation between principal and person duly appointed by agent to act in business of agency

195


Agent’s duty in naming such person

196


Right of person as to acts done for him without his authority-effect of ratification

197


Ratification may be expressed or implied

198


Knowledge requisite for valid ratification

199


Effect of ratifying unauthorized act forming part of a transaction

200


Ratification of unauthorized act cannot injure third person

201


Termination of agency

202


Termination of agency, where agent has an interest in subject-matter

203


When
principal may revoke agent’s authority

204


Revocation where authority has been partly exercised

205


Compensation for revocation by principal, or renunciation by agent

206


Notice of revocation or renunciation

207


Revocation and renunciation may be expressed or implied

208


When
termination of agent’s authority takes effect as to agent, and as to third persons

209


Agent’s duty on termination of agency by principal’s death or insanity

210


Termination of sub-agent’s authority

211


Agent’s duty in conducting principal’s business

212


Skill and diligence required from agent

213


Agent’s accounts

214


Agent’s, duty to communicate with principal

215


Right of principal when agent deals, on his own account, in business of agency without principal’s consent

216


Principal’s right to benefit gained by agent dealing on his own account in business of agency

217


Agent’s right of retainer out of sums received on principal’s account

218


Agent’s duty to pay sums received for principal

219


When
agent’s remuneration becomes due

220


Agent not entitled to remuneration for business misconducted

221


Agent’s lien on principal’s property

222


Agent to be indemnified against consequences of lawful acts

223


Agent to be indemnified against consequences of acts done in good faith

224


Non-liability of employer of agent to do a criminal act

225


Compensation to agent for injury caused by principal’s neglect

226


Enforcement and consequences of agent’s contract

227


Principal how far bound, when agent exceeds authority

228


Principal not bound when excess of agent’s authority is not separable

229


Consequences of notice given to agent

230


Agent cannot personally enforce, nor be bound by, contracts on behalf of principal

231


Right of parties to a contract made by agent not disclosed

232


Performance of contract with agent supposed to be principal

233


Right of person dealing with agent personally liable

234


Consequence of inducing agent or principal to act on belief that principal or agent will be held exclusively liable

235


Liability of pretended agent

236


Person falsely contracting as agent, not entitled to performance

237


Liability of principal inducing belief that agent’s unauthorized acts were authorized

238


Effect, on agreement, of misrepresentation or fraud by agent

Chapter XI 

Of Partnership [Repealed by the
Indian Partnership Act, 1932 (9 of 1932)]

Schedule

Enactments [Repealed by the Repealing and Amending
Act, 1914 (10 of 1914)]

 


Foot Notes

WHEREAS it is expedient to define and amend certain
parts of the law relating to contracts;

It is hereby enacted as follows: -