THE INDIAN CONTRACT ACT, 1872

ACT NO. 9 OF 1872 · Enacted [25th April, 1872.] · 268 sections

PRELIMINARY

Section 1.Short title.

Section 2.Interpretation-clause.

OF THE COMMUNICATION, ACCEPTANCE AND REVOCATION OF PROPOSALS

Section 3.Communication, acceptance and revocation of proposals.

Section 4.Communication when complete.

Section 5.Revocation of proposals and acceptances.

Section 6.Revocation how made.

Section 7.Acceptance must be absolute.

Section 8.Acceptance by performing conditions, or receiving consideration.

Section 9.Promises, express and implied.

OF CONTRACTS, VOIDABLE CONTRACTS AND VOID AGREEMENTS

Section 10.What agreements are contracts.

Section 11.Who are competent to contract.

Section 12.What is a sound mind for the purposes of contracting.

Section 13.“Consent” defined.

Section 14.“Free consent” defined.

Section 15.“Coercion” defined.

Section 16.“Undue influence” defined.

Section 17.“Fraud” defined.

Section 18.“Misrepresentation” defined.

Section 19.Voidability of agreements without free consent.

Section 19A.Power to set aside contract induced by undue influence.

Section 20.Agreement void where both parties are under mistake as to matter of fact.

Section 21.Effect of mistakes as to law.

Section 22.Contract caused by mistake of one party as to matter of fact.

Section 23.What considerations and objects are lawful, and what not.

OF CONTRACTS, VOIDABLE CONTRACTS AND VOID AGREEMENTS — Void agreements

Section 24.Agreement void, if considerations and objects unlawful in part.

Section 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.

Section 26.Agreement in restraint of marriage, void.

Section 27.Agreement in restraint of trade, void.

Section 28.Agreements in restraint of legal proceeding void.

Section 29.Agreements void for uncertainty.

Section 30.Agreements by way of wager, void.

OF CONTINGENT CONTRACTS

Section 31.“Contingent contract” defined.

Section 32.Enforcement of contracts contingent on an event happening.

Section 33.Enforcement of contracts contingent on an event not happening.

Section 34.When event on which contract is contingent to be deemed impossible, if it is the future conduct of a living person.

Section 35.When contracts become void which are contingent on happening of specified event within fixed time.

Section 36.Agreement contingent on impossible events void.

OF THE PERFORMANCE OF CONTRACTS — Contracts which must be performed

Section 37.Obligation of parties to contracts.

Section 38.Effect of refusal to accept offer of performance.

Section 39.Effect of refusal of party to perform promise wholly.

OF THE PERFORMANCE OF CONTRACTS — By whom contracts must be performed

Section 40.Person by whom promise is to be performed.

Section 41.Effect of accepting performance from third person.

Section 42.Devolution of joint liabilities.

Section 43.Any one of joint promisors may be compelled to perform.

Section 44.Effect of release of one joint promisor.

Section 45.Devolution of joint rights.

OF THE PERFORMANCE OF CONTRACTS — Time and place for performance

Section 46.Time for performance of promise, when no application is to be made and no time is specified.

Section 47.Time and place for performance of promise, where time is specified and no application to be made.

Section 48.Application for performance on certain day to be at proper time and place.

Section 49.Place for performance of promise, where no application to be made and no place fixed for performance.

Section 50.Performance in manner or at time prescribed or sanctioned by promisee.

OF THE PERFORMANCE OF CONTRACTS — Performance of reciprocal promises

Section 51.Promisor not bound to perform, unless reciprocal promisee ready and willing to perform.

Section 52.Order of performance of reciprocal promises.

Section 53.Liability of party preventing event on which the contract is to take effect.

Section 54.Effect of default as to that promise which should be first performed, in contract consisting of reciprocal promises.

Section 55.Effect of failure to perform at fixed time, in contract in which time is essential.

Section 56.Agreement to do impossible act.

Section 57.Reciprocal promise to do things legal, and also other things illegal.

Section 58.Alternative promise, one branch being illegal.

OF THE PERFORMANCE OF CONTRACTS — Appropriation of payments

Section 59.Application of payment where debt to be discharged is indicated.

Section 60.Application of payment where debt to be discharged is not indicated.

Section 61.Application of payment where neither party appropriates.

OF THE PERFORMANCE OF CONTRACTS — Contracts which need not be performed

Section 62.Effect of novation, rescission, and alteration of contract.

Section 63.Promisee may dispense with or remit performance of promise.

Section 64.Consequences of rescission of voidable contract.

Section 65.Obligation of person who has received advantage under void agreement, or contract that becomes void.

Section 66.Mode of communicating or revoking rescission of voidable contract.

Section 67.Effect of neglect of promisee to afford promisor reasonable facilities for performance.

OF CERTAIN RELATIONS RESEMBLING THOSE CREATED BY CONTRACT

Section 68.Claim for necessaries supplied to person incapable of contracting, or on his account.

Section 69.Reimbursement of person paying money due by another, in payment of which he is interested.

Section 70.Obligation of person enjoying benefit of non-gratuitous act.

Section 71.Responsibility of finder of goods.

Section 72.Liability of person to whom money is paid, or thing delivered, by mistake or under coercion.

OF THE CONSEQUENCES OF BREACH OF CONTRACT

Section 73.Compensation for loss or damage caused by breach of contract.

Section 74.Compensation for breach of contract where penalty stipulated for.

Section 75.Party rightfully rescinding contract, entitled to compensation.

SALE OF GOODS.][Repealed.].

Section 76.[Repealed.].

Section 77.[Repealed.].

Section 78.[Repealed.].

Section 79.[Repealed.].

Section 80.[Repealed.].

Section 81.[Repealed.].

Section 82.[Repealed.].

Section 83.[Repealed.].

Section 84.[Repealed.].

Section 85.[Repealed.].

Section 86.[Repealed.].

Section 87.[Repealed.].

Section 88.[Repealed.].

Section 89.[Repealed.].

SALE OF GOODS.][Repealed.]. — [DELIVERY.][Repealed.].

Section 90.Repealed.].

Section 91.[Repealed.].

Section 92.[Repealed.].

Section 93.[Repealed.].

Section 94.[Repealed.]

SALE OF GOODS.][Repealed.]. — [SELLER’S LIEN.][Repealed.].

Section 95.[Repealed.].

Section 96.[Repealed.].

Section 97.[Repealed.].

Section 98.[Repealed.]

SALE OF GOODS.][Repealed.]. — [STOPPAGE IN TRANSIT.][Repealed.].

Section 99.[Repealed.].

Section 100.[Repealed.].

Section 101.[Repealed.].

Section 102.[Repealed.].

Section 103.[Repealed.].

Section 104.[Repealed.].

Section 105.[Repealed.].

Section 106.[Repealed.].

SALE OF GOODS.][Repealed.]. — [RESALE.][Repealed.].

Section 107.[Repealed.].

SALE OF GOODS.][Repealed.]. — [TITLE.][Repealed.].

Section 108.[Repealed.].

SALE OF GOODS.][Repealed.]. — [WARRANTY.]Repealed.].

Section 109.[Repealed.].

Section 110.[Repealed.].

Section 111.[Repealed.].

Section 112.[Repealed.].

Section 113.[Repealed.].

Section 114.[Repealed.].

Section 115.[Repealed.].

Section 116.[Repealed.].

Section 117.[Repealed.].

Section 118.[Repealed.].

SALE OF GOODS.][Repealed.]. — [MISCELLANEOUS.][Repealed.].

Section 119.[Repealed.].

Section 120.[Repealed.].

Section 121.[Repealed.].

Section 122.[Repealed.].

Section 123.[Repealed.].

OF INDEMNITY AND GUARANTEE

Section 124.“Contract of indemnity” defined.

Section 125.Rights of indemnity-holder when sued.

Section 126.“Contract of guarantee”, “surety”, “principal debtor” and “creditor”.

Section 127.Consideration for guarantee.

Section 128.Surety‟s liability.

Section 129.“Continuing guarantee”.

Section 130.Revocation of continuing guarantee.

Section 131.Revocation of continuing guarantee by surety‟s death.

Section 132.Liability of two persons, primarily liable, not affected by arrangement between them that one shall be surety on other‟s default.

Section 133.Discharge of surety by variance in terms of contract.

Section 134.Discharge of surety by release or discharge of principal debtor.

Section 135.Discharge of surety when creditor compounds with, gives time to, or agrees not to sue, principal debtor.

Section 136.Surety not discharged when agreement made with third person to give time to principal debtor.

Section 137.Creditor‟s forbearance to sue does not discharge surety.

Section 138.Release of one co-surety does not discharge others.

Section 139.Discharge of surety of creditor‟s act or omission impairing surety‟s eventual remedy.

Section 140.Rights of surety on payment or performance.

Section 141.Surety‟s right to benefit of creditor‟s securities.

Section 142.Guarantee obtained by misrepresentation invalid.

Section 143.Guarantee obtained by concealment invalid.

Section 144.Guarantee on contract that creditor shall not act on it until co-surety joins.

Section 145.Implied promise to indemnify surety.

Section 146.Co-sureties liable to contribute equally.

Section 147.Liability of co-sureties bound in different sums.

OF BAILMENT

Section 148.“Bailment”, “bailor” and “bailee” defined.

Section 149.Delivery to bailee how made.

Section 150.Bailor‟s duty to disclose faults in goods bailed.

Section 151.Care to be taken by bailee.

Section 152.Bailee when not liable for loss, etc., of thing bailed.

Section 153.Termination of bailment by bailee‟s act inconsistent with conditions.

Section 154.Liability of bailee making unauthorized use of goods bailed.

Section 155.Effect of mixture, with bailor‟s consent, of his goods with bailee‟s.

Section 156.Effect of mixture, without bailor‟s consent, when the goods can be separated.

Section 157.Effect of mixture, without bailor‟s consent, when the goods cannot be separated.

Section 158.Repayment, by bailor, of necessary expenses.

Section 159.Restoration of goods lent gratuitously.

Section 160.Return of goods bailed on expiration of time or accomplishment of purpose.

Section 161.Bailee‟s responsibility when goods are not duly returned.

Section 162.Termination of gratuitous bailment by death.

Section 163.Bailor entitled to increase or profit from goods bailed.

Section 164.Bailor‟s responsibility to bailee.

Section 165.Bailment by several joint owners.

Section 166.Bailee not responsible on re-delivery to bailor without title.

Section 167.Right of third person claiming goods bailed.

Section 168.Right of finder of goods.

Section 169.When finder of thing commonly on sale may sell it.

Section 170.Bailee‟s particular lien.

Section 171.General lien of bankers, factors, wharfingers, attorneys and policy-brokers.

OF BAILMENT — Bailments of pledges

Section 172.“Pledge”, “Pawnor” and “Pawnee” defined.

Section 173.Pawnee‟s right of retainer.

Section 174.Pawnee not to retain for debt or promise other than that for which goods pledged.

Section 175.Pawnee‟s right as to extraordinary expenses incurred.

Section 176.Pawnee‟s right where pawnor makes default.

Section 177.Defaulting pawnor‟s right to redeem.

Section 178.Pledge by mercantile agent.

Section 178A.Pledge by person in possession under voidable contract.

Section 179.Pledge where pawnor has only a limited interest.

OF BAILMENT — Suits by bailees or bailors against wrong-doers

Section 180.Suit by bailor or bailee against wrong-doer.

Section 181.Apportionment of relief or compensation obtained by such suits.

AGENCY — Appointment and authority of agents

Section 182.“Agent” and “principal” defined.

Section 183.Who may employ agent.

Section 184.Who may be an agent.

Section 185.Consideration not necessary.

Section 186.Agent‟s authority may be expressed or implied.

Section 187.Definitions of express and implied authority.

Section 188.Extent of agent‟s authority.

Section 189.Agent‟s authority in an emergency.

AGENCY — Sub-agents

Section 190.When agent cannot delegate.

Section 191.“Sub-agent” defined.

Section 192.Representation of principal by sub-agent properly appointed.

Section 193.Agent‟s responsibility for sub-agent appointed without authority.

Section 194.Relation between principal and person duly appointed by agent to act in business of agency.

Section 195.Agent‟s duty in naming such person.

AGENCY — Ratification

Section 196.Right of person as to acts done for him without his authority.

Section 197.Ratification may be expressed or implied.

Section 198.Knowledge requisite for valid ratification.

Section 199.Effect of ratifying unauthorized act forming part of a transaction.

Section 200.Ratification of unauthorized act cannot injure third person.

AGENCY — Revocation of authority

Section 201.Termination of agency.

Section 202.Termination of agency, where agent has an interest in subject-matter.

Section 203.When principal may revoke agent‟s authority.

Section 204.Revocation where authority has been partly exercised.

Section 205.Compensation for revocation by principal, or renunciation by agent.

Section 206.Notice of revocation or renunciation.

Section 207.Revocation and renunciation may be expressed or implied.

Section 208.When termination of agent‟s authority takes effect as to agent, and as to third persons.

Section 209.Agent‟s duty on termination of agency by principal‟s death or insanity.

Section 210.Termination of sub-agent‟s authority.

AGENCY — Agent’s duty to principal

Section 211.Agent‟s duty in conducting principal‟s business.

Section 212.Skill and diligence required from agent.

Section 213.Agent‟s accounts.

Section 214.Agent‟s duty to communicate with principal.

Section 215.Right of principal when agent deals, on his own account, in business of agency without principal‟s consent.

Section 216.Principal‟s right to benefit gained by agent dealing on his own account in business of agency.

Section 217.Agent‟s right of retainer out of sums received on principal‟s account.

Section 218.Agent‟s duty to pay sums received for principal.

Section 219.When agent‟s remuneration becomes due.

Section 220.Agent not entitled to remuneration for business misconducted.

Section 221.Agent‟s lien on principal‟s property.

AGENCY — Principal’s duty to agent

Section 222.Agent to be indemnified against consequences of lawful acts.

Section 223.Agent to be indemnified against consequences of acts done in good faith.

Section 224.Non-liability of employer of agent to do a criminal act.

Section 225.Compensation to agent for injury caused by principal‟s neglect.

AGENCY — Effect of agency on contracts with third persons

Section 226.Enforcement and consequences of agent‟s contracts.

Section 227.Principal how far bound, when agent exceeds authority.

Section 228.Principal not bound when excess of agent‟s authority is not separable.

Section 229.Consequences of notice given to agent.

Section 230.Agent cannot personally enforce, nor be bound by, contracts on behalf of principal.

Section 231.Rights of parties to a contract made by agent not disclosed.

Section 232.Performance of contract with agent supposed to be principal.

Section 233.Right of person dealing with agent personally liable.

Section 234.Consequence of inducing agent or principal to act on belief that principal or agent will be held exclusively liable.

Section 235.Liability of pretended agent.

Section 236.Person falsely contracting as agent not entitled to performance.

Section 237.Liability of principal inducing belief that agent‟s unauthorized acts were authorized.

Section 238.Effect, on agreement, of misrepresentation or fraud by agent.