Important Doctrines/Principles under Contract Law

This article titled ‘Important Doctrines/Principles under Contract Law’ deals with various important doctrines and principles used in Contract Law along with brief descriptions.

Important Doctrines/Principles under Contract Law

1. Doctrine of Consideration

The doctrine of consideration can be found in Section 2(d) of the Indian Contract Act and is one of the most important doctrines of contract law. This doctrine regulates the freedom of an individual to form contracts. For an agreement to become a contract i.e., an agreement that can be enforced by law, consideration forms one of the most important elements. Consideration can be interpreted as “something in exchange,” i.e., quid pro quo which is a crucial aspect in determining the parties’ actual desire to form a legal relationship.

2. Doctrine of Intention to Create Legal Relations

Without an intention to get into a legally binding relationship, parties can never enter into a contract. An agreement can only be legally enforceable if the parties to the agreement wish it to be so and fulfil other requisites of a contract therefore this doctrine forms an important aspect of Contract Law.

3. Doctrine of Privity of Contract

The doctrine of privity of contract, though not explicitly laid down by the Indian Contract Act; is implied throughout the same and hence forms a crucial aspect of Contract Law. This doctrine establishes that only parties to a contract can be permitted to sue the other parties in case a breach of contract arises, and therefore, only the parties to a contract can legally have their rights and liabilities enforced in a court of law.

4. Doctrine of Promissory Estoppel

. It states that when one party of a contract makes a clear and explicit promise to another party with the intention of forming a legal relationship and the latter party acts in furtherance of the same, the promise then becomes an obligation, and the former party cannot back out of the contract as it would be in contradiction to the values of equity and fairness.

5. Doctrine of Absolute Acceptance

This doctrine is laid down by Section 7 of the Indian Contract Act which states that for a proposal to be converted into a legally enforceable promise, the acceptance provided must be absolute and unqualified in nature.

6. Doctrine of Implied Contracts

This doctrine is laid down by Section 9 of the Indian Contract Act. It distinguishes between express and implied forms of proposal and acceptance of a contract wherein the former is communicated in the form of words while the latter is made through a medium that does not employ words. Both implied and express forms of contract are equally binding on parties.

7. Doctrine of Frustration of Contract

The doctrine of frustration can be found in Section 56 of the Indian Contract Act. It lays down the various factors and circumstances wherein a contract may become unlawful or impossible to complete. In such a case, the contract becomes void.

8. Doctrine of Necessity

This doctrine, laid down by Section 68 of the Indian Contract Act, states that in a situation wherein an individual is incapable of entering into a contract or where anyone who is legally bound to be supported by the individual is provided by necessary supplies and essentials for the endurance of life, the person who has supplied such supplies is bound to be compensated from the property of such an incapable person.

9. Doctrine of Ratification of Contract

The doctrine of ratification, established by Section 196 of the Indian Contract states that when an act is done on behalf of an entity without his knowledge or authority, the same can further be either ratified or disowned by the entity. If the act is ratified, the same effects will follow as if the act had been performed by the authority of the individual.

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