Passage
The Indian Contract Act brings within its ambit the contractual rights that have been granted to the citizens of India. It endows rights, duties and obligations on the contracting parties to help them to successfully conclude business- from everyday life transactions to evidencing the businesses of multi-national companies. The Indian Contract Act, 1872 was enacted on 25th April 1872 [Act 9 of 1872] and subsequently came into force on the first day of September 1872. The essence of the India Contract Act has been modelled on that of the English Common Law. The extent of modifications made in the Act as per the Indian conditions and its adaptability to the Indian economy is an important area of research. In this regard it is pertinent to note that since the enactment of the Act there have been no amendments and thus the Law that was made in 1872 still stands good. However, these are questions of interpretation that not only depend on the text of the Act, but also on the English authorities that framed the law and before it, the subsequent development of law. However, the relevancy of such a system in modern times is questioned as the complexity in the nature of the economic systems as well as the increasing demand and supply systems due to the change in the wants and needs of the human beings came to the fore. Also, money had evolved as the medium of exchange such that the value of every commodity could now be quantified. Thus, in such an era of greater economic transaction one finds the existence of Contract Laws and with it, their relevance. The Indian Contract Act codifies the way we enter a contract, execute a contract and implement provisions of a contract and effects of breach of a contract. The contractual capacity is restricted in certain situations otherwise it is the prerogative of the individual to contract. There are specific areas which deal with property, movable goods and specific performance such as the Transfer of Property Act, The Sale of Goods Act and The Specific Relief Act. Some of these Acts, were originally a part of the Indian Contract Act enacted in 1872 but were later codified as separate laws. Moreover, the Act is not retrospective in nature. Hence a contract entered prior to 1st September 1872, even though to be performed after passing of this Act is not hit by this Act. Hence, we arrive at the conclusion that the basic framework of contracting is covered in the Indian Contract Act and it is an important area of law, with roots deep in the history of civilization.
1. Which one of the following options showcases the exact summary of the passage?
a. The Indian Contract Act codifies the way we enter into a contract, execute a contract and implement provisions of a contract and effects of breach of a contract. The contractual capacity is restricted in certain situations otherwise it is the prerogative of the individual to contract.
b. The Indian Contract Act is no longer relevant in this era dominated by Global markets and high – value transactions.
c. The Indian Contract Act is an important area of law, with roots deep in the history of civilization.
d. The Indian Contract Act endows rights, duties and obligations on the contracting parties to help them to successfully conclude business- from everyday life transactions to evidencing the businesses of multi-national companies.
2. Which of the following situations would have had its provisions originally a part of the Indian Contract Act, 1872, but now has its own separate laws?
a. Contracts between Indian corporations and that of Multi-National and Transnational corporations.
b. Enforcing contracts with minors, or in the name of minors, or by people in the interest of minors.
c. Specific provisions which deal with immovable property, movable goods and specific performance.
d. Preserving the rights of a person who had entered into the contract due to misrepresentation, misinterpretation or fraud.
3. What would be the reasoning behind the threat to the relevancy of the Indian Contract Act today?
a. Its presence has seen over a hundred years and most laws and legal framework cannot be considered valid
b. Laws comes with an expiry date and the expiry date for the Indian contract Act is sooner than later
c. Globalization and new economic traditions have taken the contracts to a more advanced stage now, that a more detailed framework would be needed
d. The framers of the Indian contract Act weren’t able to foresee the change in society and mode of operation of the economic world and hence a new law is required.
4. The Indian Act Contract is still valid even after more than a hundred years and this can be attributed to which of the following?
a. The sharp genius luminaries of the English legal world from where the contract law has been taken had a unique ability to predict the future
b. Economic advancement has only changed the mode through which contracts are formed and has not changed the principles based on which contracts are entered into
c. The common law is a very advanced source which has been able to bind economic development and legal development
d. The Indian contract law is now obsolete and has to be replaced by a new framework which takes into consideration the modern-day needs
5. Which might be a sound reasoning for the fact that the contract law in India has been modelled after the British Common Law?
a. Britain was a legally advanced territory and its legal framework were of a superior quality and hence its contract law was taken by several countries
b. Indian has been under colonial rule under the English and hence their laws and customs had to be enforced in the Indian Territory
c. Indian legal system and structure were on the lines of the common law system and hence this suited Indian society the best
d. Since, Britain was a colonial power, it was an unwritten rule that its customary laws and legal traditions had to be made effective all over the world.
6. Which of the following events is likely to trigger an amendment in the Indian Contract laws since its establishment?
a. The partition of India and Pakistan into two separate nations with independent economic policies and fiscal policies
b. The Globalization and Liberation policy of the Indian Government which removed all the barriers that previously existed and has opened up Indian Economy
c. The Demonetization of Indian currency notes by the Government of India to remove the unaccounted money from the economy
d. The implementation of a single rate of taxation for all citizens and corporations in India.
7. The authors tone while concluding the passage was?
a. Optimism about the future of the Contract Act
b. Critical about the future of the Contract Act
c. Admiration that Contract Law Framework has lasted this long
d. Indifference towards the subject itself
Correct Answers;
1. Option – a
The Indian Contract Act codifies the way we enter into a contract, execute a contract and implement provisions of a contract and effects of breach of a contract. The contractual capacity is restricted in certain situations otherwise it is the prerogative of the individual to contract.
2. Option – c
Specific provisions which deal with immovable property, movable goods and specific performance.
3. Option – c
Self-explanatory
4. Option – b
Economic advancement has only changed the mode through which contracts are formed and has not changed the principles based on which contracts are entered into
5. Option – c
The Globalization and Liberation policy of the Indian Government which removed all the barriers that previously existed and has opened up Indian Economy
6. Option – b
7. Option – c
