Terminology of Contract Law
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| Terminology of Contract Law |
Bilateral vs. Unilateral Contract;
Bilateral Contract;
A bilateral contract has the following conditions:
- Bi means two so in this contract two parties are involved.
- Contract is concluded i.e. proposal and acceptance are made and this is the most important element in bilateral contract.
- Performance is taken in the same time or it may be taken in the future.
Examples;
1. A proposes a mobile to B with a certain price and he/she accepts it and performance
is also taken on the same time. Then it is a bilateral contract.
2. If A proposes B to teach him/her in the month of June and he/she will give him/her a certain amount of money per month and B accepts to do so, then it is also a bilateral contract. Here the contract is concluded, but the performance would be taken later on.
Unilateral Contract;
.A unilateral contract has the following conditions;
- Uni means one, so in this contract one party is involved.
- Performance is needed in the start.
- Conclusion is made later on.
Actually no contract is possible without at least two parties, but originally this contract is initiated by a single party, so it is called unilateral contract.
Example;
Example is Reward for Lost Good.
In this case A announces that he/she has lost his/her valet, anyone who found it would be granted Rs. 1000/-. So in this case the performance is prior to conclusion.
Breaching of a contract;
If any party of the parties refuses to fulfil the contract, then he has breached the contract and he/she is called the Breacher. Breaching a contract is a wrong and this wrong is actionable and not punishable. And this is the reason that it is a civil wrong and not an offence.
Every breach is not actionable. Only that breach is actionable which results a loss. A suit is filed in the court which results damages as a compensation for the aggrieved person and in some cases specific performance is preferred.
Anticipatory Breach;
It is the breach of a contract before the performance which was decided to be taken in the future. It has two forms.
1. Repudiation of a Contract;
If one of the parties expressly says that he is not ready to fulfil a contract, then it is said as repudiation of a contract. So the contract is breached and the aggrieved person can file a suit in the court on the same time when the contract was breached or at the time of performance decided.
2. Impossibility of Performance;
If one of the parties fails to perform the contract concluded as a result of giving up the profession or any other reason, and does not refuses expressly, then it is called impossibility of performance. In this case, the aggrieved can file a suit in the court as discussed above.
Loss in Case of Breach;
If a loss is made to one of the parties, concluded a contract, and a suit is filed in the court, then the court compensate the aggrieved one. The loss in this case is of a known amount. It is said that the loss is fixed. In terms of law it is called Liquidated Loss. It may be in the form of damages or in the form of specific performance or in the form of injunction.
Remedies for Breach of a Contract;
The remedies discussed for a breach of a contract are as;
- Damages
- Specific Performance
- Injunction
Damages;
In case of a contract, loss is always in property. So this loss is always liquidated. So the breachor is bound to pay the loss. The loss includes only the extra amount spent. One may also claim that he has wasted time and has got mental shock by searching the same thing on the same price, but these things are not included in loss legally. Similarly one may also claim for the expenses on the suit. It is payable, if the court orders the breachor to do so.
Specific Performance;
In some cases, when a contract is breached, then the breachor is ordered by the court for specific performance. Specific performance is to bound the breachor to provide the same thing on which the contract was concluded.
Example;
If A proposes antique to B and B accepts it and after proposal and acceptance if A breaches the contract and sells the antique to someone else. Now if B files a suit in the court, then A is bound to provide the same antique to B.
Injunction;
In common language, it is called stay order. In legal terms, it is an order of the
court to someone to do something or not to do.
The difference between damages and injunction is;
Damages is for past contract while injunction is for a future contract when
breached.
Example;
If A proposed B that;
- A will teach B for one year.
- A will not teach any where else.
Now it happened that;
- A does not teach B
- A has started teaching elsewhere.
A files a suit in the court against B, then the court bounds A to;
- Provide damages to B for not teaching B,
- Injunction not to teach anywhere else,
- Injunction to teach A.
Quasi Contract;
Quasi is a Latin word which means Semi. So Quasi Contract means semi contract.
Actually it is not a valid contract, but it seems to be a contract, and the law presumes it as a valid contract.
Example;
A person whose age is below the age of majority and buys something of daily needs for
his life from a store and then at the time of payment he refuses to pay. The storekeeper files
a suit in the court, then the court presumes it as a valid contract, although his age is below
the age of majority, only and only if the things he has bought was of daily needs.
If these things were not of daily needs, then the contract is not valid and the court cannot
bound the person to pay.
