The components of the Law of Contract ensure that the law itself defines its implication and boundary within the enforcement of civil obligations

The components of the Law of Contract ensure that the law itself defines its implication and boundary within the enforcement of civil obligations.-illustrate &explain

Introduction

We enter into contracts in our everyday general activities. Paying fare to the taxi driver amounts to entering into a contract. When you recharge your prepaid cell phone account, you have entered into a contract. You go to a restaurant and take snacks; you have entered into a contract. In such cases, we do not even realize that we are making a contract. In the case of people engaged in trade, commerce and industry, they carry on business by entering into contracts. But who ensures that everyone acts properly in each and every contract and what will be the remedy when one party does not perform by his/her obligations – the law of contract confirms that the enforcement of civil obligations are practiced accordingly.

Law of Contract

The law relating to contracts is to be found in the Indian Contract Act, 1872. The law of contracts differs from other branches of law in a very important respect. It does not lay down so many precise rights and duties which the law will protect and enforce; it contains rather a number of limiting principles, subject to which the parties may create rights and duties for themselves and the law will uphold those rights and duties. Thus, we can say that the parties to a contract, in a sense make the law for themselves.

Section 2(h)[1] of the Indian Contract Act, 1872 defines a contract as an agreement enforceable by law. Section 2(e) defines agreement as “every promise and every set of promises forming consideration for each other.” Section 2(b)[2] defines promise in these words: “When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal when accepted becomes a promise.”

According to Salmond a contract is an “agreement creating and defining obligations between the parties.” According to Sir William Anson, “A contract is an agreement enforceable at law made between two or more persons, by which rights are acquired by one or more to acts or forbearances on the part of the other or others.

From the above definition of promise, it is obvious that an agreement is an accepted proposal. The two elements of an agreement are:

(i) Offer or a proposal; and

(ii) An acceptance of that offer or proposal.

Only those agreements which are enforceable at law are contracts. The Contract Act is the law of those agreements which create obligations, and in case of a breach of a promise by one party to the agreement, the other has a legal remedy.

Thus, a contract consists of two elements:

(i) An agreement; and

(ii) Legal obligation, i.e., it should be enforceable at law.

A legal obligation having its source in an agreement only will give rise to a contract. For an example, A agrees to sell his motorcycle to B for Tk. 100,000. The agreement gives rise to a legal obligation on the part of A to deliver the motorcycle to B and on the part of B to pay Tk. 100,000 to A. The agreement is a contract. If A does not deliver the motorcycle, then B can go to a court of law and file a suit against A for non-performance of the promise on the part of A.

On the other hand, if A has already given the delivery of the motorcycle and B refuses to make the payment of price, A can go to the court of law and file a suit against B for non-performance of promise.

Civil Obligations

In order to understand civil obligation, first we need to understand what it means by obligation in general. Obligation is a generic term for any type of legal duty or liability. In other words, obligation is the requirement to do what is imposed by law, promise, or contract; a duty. In its general and most extensive sense, obligation is synonymous with duty. In a more technical meaning, it is a tie which binds us to pay or to do something agreeably to the laws and customs of the country in which the obligation is made.

A civil obligation is one which has a binding operation in law, vinculum juris, and which gives to the obligee the right of enforcing it in a court of justice; in other words, it is an engagement binding on the obligor.

According to Article 1156 of the Civil Code, civil obligations are obligations which give to the creditor or oblige a right under the law to enforce their performance in courts of justice.

Civil obligations are of different kinds according to the source from where they come from. Civil obligations bind under law and give a remedy. For example, under Civil Code Article 689[3], there is an enclosed estate A which has access to a road. The law will create access to the road. A is dominant and B is serviant.

Sources of Civil Obligations

1) Legislation: Created by the law

2) Dilects and quasi-dilects: Created by damages

3) Contracts and quasi-contracts

Law of Obligations and Contracts

When we discuss about civil obligations, another relevant topic comes into our focus as we should also understand the terms related to the law of obligations and contracts. Law of obligation is one of the sources of civil obligation which is the legislation related to the obligations of a contract.

The Law of Obligations and Contracts is the body of rules which deals with the nature and sources of obligations and the rights and duties arising from agreements and particular contracts.[4]

How Contract Law Enforces Civil Obligations

So far we have discussed about what is contract, what is law of contract and what is civil obligation. It is specifically defined in the Article 1157 of the Civil Code that obligations arise from contracts. So it is clearly visible that Law of Contract defines its boundary within the implication of civil obligations. But the question is that are those civil obligations created voluntarily or not.

According to the Article 1159 of the Civil Code, obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. A contract is a meeting of minds between two parsons whereby one binds himself, with respect to the other, to give something or to render some service. There are two requirements in this article:

1. Binding force

2. Requirement of a valid contract

It is understandable from the above discussion that the parties in a contract enter voluntarily to perform some specific task which can be defined as their obligation. These obligations arise by entering into a contract and both the parties mutually agree to perform the tasks of the contract. We can see that civil obligations are somewhat derived from contracts between two or more parties. Voluntaries is the key point here we need to properly understand.

Voluntary obligation is the hallmark of contract but the choices we make in contract are highly constrained. Contract is supposed to be voluntary but it is not always the case. The commitments we make in contract are materially and morally constrained. Voluntariness is so central to the law and theory of contract; we must make better sense of it.

Reconsider what it means for contract to be voluntary. Contracts consist in (voluntary) promises but these promises act on background duties. Contract also consists of (voluntary) waivers but the content of these turns on the claims we forego. Contractual obligation is voluntary because promise and waiver are classic normative powers; we are able to change our moral and legal position just by communicating an intention to do so. Ordinary promises are likely to be situated within intimate relationships with thick pre-existing norms and obligations.

One might argue that the duties created by reliance or receipt of a benefit are not properly regarded as involuntary duties because they are incurred in the context of voluntary exchange. But if the act of exchange renders related obligations wholly voluntary then many duties outside of contract, including in the realm of tort, are similarly voluntary. Many duties of care in tort arise upon the voluntary assumption of a role – sometimes in the context of exchange.[5] They are involuntary in that the duties attach upon assumption of the role irrespective of whether they are ever expressly contemplated or embraced. The fact that a person exercises some control over the circumstances giving rise to liability does not make voluntary the duty to compensate. Again, contract is understood to be voluntary in the sense that individuals aim to assume the obligation later enforceable against them and the obligation attaches by way of words and acts usually intended to communicate this aim.

Conclusion

At the end of the discussion it indicates that whenever civil obligations are taken into account, the law of contract is always there as contracts are one of the main sources of civil obligations. The fact is that a contract is made between two parties voluntarily and that process creates civil obligations for those contracting parties which are enforced by the law. As a result, in a sense, enforcement of voluntarily created civil obligations is backed by the Law of Contract. The components of the Law of Contract ensure that the law itself defines its implication and boundary within the enforcement of civil obligations.

References

1. Indian Contract Act of 1872

2. Indian Contract Act of 1872

3. Article 1156 of the Civil Code, http://glennavendano.com/Course_Lectures/ECE_Laws/GenProvisionsObligations.pdf, Accessed on 17th February, 2013

4. Article 689 of the Civil Code, http://glennavendano.com/Course_Lectures/ECE_Laws/GenProvisionsObligations.pdf, Accessed on 17th February, 2013

5. http://glennavendano.com/Course_Lectures/ECE_Laws/GenProvisionsObligations.pdf

6. Article 1159 of Civil Code, http://glennavendano.com/Course_Lectures/ECE_Laws/GenProvisionsObligations.pdf, Accessed on 17th February, 2013

7. Bagchi, A. Voluntariness and contract interpretation

8. Jody Kraus, Legal Theory and Contract Law: Groundwork for the Reconciliation of Autonomy and Efficiency, in LEGAL AND POLITICAL PHILOSOPHY 385, 395-410 (E. Villanueva ed., 2002)

9. MacCormick, N., Raz, J. Voluntary Obligations and Normative Powers, 46 ARISTOTELIAN SOC. SUPP. 79 (1972).

10. Barbara Fried, Is as Ought: The Case of Contracts, 92 VA. L. REV. 1375, 1382 (2006)

11. Zastrow v. Journal Communications, Inc., 718 N.W.2d 51, 61-62 (Wis. 2006)

[1] Indian Contract Act of 1872

[2] Indian Contract Act of 1872

[3] Article 689 of the Civil Code, http://glennavendano.com/Course_Lectures/ECE_Laws/GenProvisionsObligations.pdf, Accessed on 17th February, 2013

[4] http://glennavendano.com/Course_Lectures/ECE_Laws/GenProvisionsObligations.pdf

[5] Zastrow v. Journal Communications, Inc., 718 N.W.2d 51, 61-62 (Wis. 2006)

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