That a contract laws are created voluntarily which means it is in accordance to the parties involved in a contract that makes the laws in between them

That a contract laws are created voluntarily which means it is in accordance to the parties involved in a contract that makes the laws in between them-Illustrate &explain

1. Introduction

We enter into contract every day, knowingly or unknowingly. Taking a seat in a bus, putting a coin in the weighing machine, taking snacks from a cafeteria, or may be buying some clothes from a store all involves making contracts. In these cases we don’t even realize that we have entered into a contract. In cases of large dealing such as international trade or large scale retailing, membership, we do realize we have made a contract as we engage in formal ways to initiate a contract.

2. Agreement

To understand what a contract is, we must first learn about agreement.

“A meeting of minds with the understanding and acceptance of reciprocal legal rights and duties are as to particular actions or obligations, which the parties intend to exchange; a mutual assent to do or refrain from doing something; a contract”.

An agreement therefore is a meeting of minds of two distinct parties to one subject matter. This entitles them to change their rights and duties with one another. Along with agreement come responsibilities or better stated obligations. Although in an agreement there are obligations to be met as a requirement of parties, some an agreement is not enforced by law and upon non-performance of duties prior stated in the agreement the sufferer cannot take such an incident to the courts of law. Once which are enforceable are the contracts. An agreement is not always synonymous with a contract because it might lack an essential element of a contract, such as consideration.

An example of an agreement A invites B to a date with A at afternoon. B agrees to come. At afternoon B came as promised to a beforehand, but after long hours of waiting, A did not show up at all. B was surprised, shocked and hurt. Or A comes and denies entertaining B. In such cases B being shattered, has nothing to do as it was an agreement and no remedies from A can be expected.

“When two parties are working together to reach an agreement, they often have a great deal of debate about the major points and terms, especially when the agreement surrounds a contentious issue. The process of nailing down the basics of the agreement leads to an agreement in principle, in which both parties arrive at a set of generally agreed-upon terms that will be used in the final contract. This is essentially the foundation of the contract, used when drafting the language because it includes everything the parties have negotiated.”

3. Contract

Hence if we were to define contract law, we would say “Contract is an agreement having a lawful object entered into voluntarily by two or more parties, each of whom intends to create one or more legal obligations between or among them. “5

An example of a contract: A is a clothing brand and B is a buying house. A orders 10,000 pieces of a product to B and asks him to initiate a contract where B is obliged to process, manufacture, pack and deliver the ordered clothing on a certain date on a specified[2] location in order to get the payments from the produce. Under such conditions, if B agrees, then only A and B are under a contract where both parties remain accountable for each other’s actions. Upon failing to perform the obligation by any party, the other party holds rights to sue the defaulter and take him to the courts.

“The law of contract deals with agreements which can be enforced to courts of law. The law of contract is the most important part of commercial law because every commercial transaction starts from an agreement between two or more persons.” 6

There lay a very important difference between the law of contract and other branches of law. It does not protect as many rights and duties which can be protected and enforced by law. It contains rather a number of principles, which are limited in nature, subject to which the parties may create rights and duties for themselves, and law will uphold those rights and duties. Thus, it can be said that parties who makes a contract between themselves, in a sense makes law between themselves and the contract is made valid when both (or more in cases) agree upon the set rules. This leaves the parties to frame any rules they like (provided it does not cross any limits of legal prohibition) in accordance to the subject of their contract and law will give effect to it.

The law relating to contracts can be found in the Indian Contract Act, 1872, which states that Extent, commencement – It extends to all of India except the State of Jammu and Kashmir; and it shall be in action from September, 1872. Enactment repealed –“ [***] Nothing herein contained shall affect the provisions of any Statute, Act or Regulation not hereby expressly repealed, nor any usage or customs of trade, nor any incident of any contract, not inconsistent with the provisions of this Act. “[3]

In this act, the words and explanations are used in the following sense

· One is said to make a proposal when one person shows his/her interest to do or not to do something in expectation of gaining approval of the other.

· The proposal is said to be accepted when the person to whom proposal has been made approves of it. On approval, a proposal instantly transforms into a promise

· The person or party who makes a proposal is called the “Promisor” and one who agrees to the given clauses and obligations is the one known as a “Promisee”

· Every promise and every set of promises, forming the consideration for each other, is an agreement;

· Promises which create consideration for one another are called reciprocal promises.

· Void is termed when an agreement is not enforceable by law. Again agreement which is enforceable by law is called a contract. A contract enforces civil obligations.8

4. Civil obligations

Before we dig deeper into the question, we must have a clear idea of what an obligation is and more specific-a civil obligation. In general term, the word obligation refers to duty, responsibility or a promise. 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. The term obligation also signifies the instrument or writing by which the contract is witnessed. Civil obligations are therefore Civil laws, and civil laws are laws to resolve non-criminal disputes as for example divorce, child custody or may be property ownership. These disputes are taken to the civil court and in this system, a highly structured and rigid code of rules is observed to the letter, and an expert judge decides cases without the help of jury and without any reference to precedent 9[4]. A more formal definition would say that civil obligation is said to be a bond containing a penalty, with a condition annexed for the payment of money, performance of covenants or the like; it differs from a bill which is generally without a penalty or condition though it may be obligatory.10

There are two types of obligations, imperfect obligations and perfect obligations. As the name suggests, imperfect obligations are one which has no bindings or responsibility between men to man. This means neither of the party remains accountable for the non-performance of a contract other than their respective God. Examples include charity and gratitude. On the other hand, a perfect obligation is the one which required both the parties to exchange favors or something of their common interest. Example includes international trade where a garment manufacturer has to deliver the garments to the buyer at a buyer specified and seller agreed date in order for the seller to gate paid. Therefore both the parties here engage in a perfect obligation. “These obligations are natural, moral or civil. A civil obligation is one which has a binding operation in law, vinculum juris, and which gives to the promisee the right of enforcing it in a court of justice; in other words, it is an engagement binding on the obligor.” [5] Civil obligations are further subdivided into express or implied, conditional or pure, secondary or primitive, accessory or principal, absolute and alternative, determinate or indeterminate, divisible or indivisible, penal or single and joint or several.

5. Voluntarily created civil obligations

As we have already discussed what civil obligations or civil laws are, we move on to the next part of the question in hand: Voluntarily created civil obligations. Now what is voluntarily created civil obligations? Voluntary refers to the act of something someone performs on their own willingness or without any objections. If someone willingly works for an individual or an organization without being paid, we refer them as volunteers as they have willingly agreed to serve the individual or organization without a cost. Charity or donations are also considered to be voluntary payments as making such donations or doing charity won’t get the individual or organization any direct returns. Voluntary decisions are therefore those which one takes willingly and agrees to its consequences. Therefore voluntarily created civil law refers to the laws that one has created willingly. Law of contract as defined earlier, involves laws between two or more parties which are created between themselves as a settlement of one party for the actions undertaken by another party. We can therefore state the law of contract involves a perfect obligation as one party remains accountable for its actions upon another,

6. Enforcement of the civil obligations

Now as we look into the whole question altogether: the contract law confines itself to the enforcement of voluntarily created civil obligation, we understand that when a law of contract is initiated, the parties engage themselves in certain obligations, duties or responsibilities which are to be performed as abided the contract. These laws are created voluntarily or otherwise stated by the understanding of the parties, and both the parties agree between themselves in order to initiate the law of contract. It is to be noted if any party fails to agree or disapprove of any clause or settlements, he/she is no longer entitled to the contract and thus any laws or debt remains between them.

If the contract is initiated, then the laws that abide the contract are also in action and failure to meet those obligations may make the defaulter guilty and may to charge by the courts.

7. Conclusion

In the essay above we expect that we have made us clear that there is a noticeable difference between an agreement and a contract. We have also discussed that a contract laws are created voluntarily which means it is in accordance to the parties involved in a contract that makes the laws in between them. Upon non-performance of the obligations set as per contract, the defaulter can be sued and taken to the courts of law. In today’s world where there are business all over us and a significant rise in international business, law of contract and its implications and limitations should be made crystal clear to all. Everybody should have knowledge about such a matter which will not only help the businessmen to be more aware but also help general consumers to be aware of traps by businesses. As my first paragraph stated that we are knowingly or unknowingly engaging ourselves in contracts everyday by even accomplishing the petty jobs like taking a bus to work, we should learn about the obligations we create voluntarily which contract law can enforce.

[1] See Gulshan, S.S & Kapoor, G.K. (2005). Chapter 1; Law of contracts. Business and corporate Laws for C.C professional Examination-2. India: New age international

2 See definition of agreement. Retrieved from legal-dictionary.thefreedictionary.com(web). Available at: www.legal-dicitonary.thefreedictionary.com/agreements

[2] 6 Sen, A.K & Mitra J.K. (2008-ed25). Commercial law including company law. Kolkata, India: World Press (pp-13)

[3] 7 See Indian Bare Acts (Indian Contract act, 1872). Act no.8, year 1872. Dated 25th April 1872

8 seeFicci Arbitration and conciliation tribunal. Retrieved February 21, 2013 http://www.ficci-arbitration.com/htm/ruleandcts.htm . direct link: www.ficci-arbitration.com/act/ContractAct1872.doc

[4] 9 See definition of civil law. business dictionary. Retrieved February 21,2013 from http://www.businessdictionary.com/definition/civil-law.html

10 See OBLIGATION-the lectic law library. Retrieved February 21,2013 from http://www.lectlaw.com/def2/o001.html

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