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Indian Contract Act, 1872

Sector All SectorsPurpose Contracts & PropertyAct No. 9 of 1872Enacted 25 Apr 1872Ministry Law and Justice
All Acts Foreign Exchange Management Act, 1999 Indian Partnership Act, 1932

TaxByKK · Laws by Sector · taxbykk.com

Index of provisions · 11 chapters, 268 sections

1 PreliminaryI Of the Communication, Acceptance and Revocation of ProposalsII Of Contracts, Voidable Contracts and Void AgreementsIII Of Contingent ContractsIV Of the Performance of ContractsV Of Certain Relations Resembling Those Created by ContractVI Of the Consequences of Breach of ContractVIII Of Indemnity and GuaranteeIX Of BailmentX AgencyXI Of Partnership

Preliminary2 sections

  1. 1Short title. Extent. Commencement. Saving
  2. 2Interpretation-clause

Chapter I Of the Communication, Acceptance and Revocation of Proposals7 sections

  1. 3Communication, acceptance and revocation of proposals
  2. 4Communication when complete
  3. 5Revocation of proposals and acceptances
  4. 6Revocation how made
  5. 7Acceptance must be absolute
  6. 8Acceptance by performing conditions, or receiving consideration
  7. 9Promises, express and implied

Chapter II Of Contracts, Voidable Contracts and Void Agreements22 sections

  1. 10What agreements are contracts
  2. 11Who are competent to contract
  3. 12What is a sound mind for the purposes of contracting
  4. 13“Consent” defined
  5. 14“Free consent” defined
  6. 15“Coercion” defined
  7. 16“Undue influence” defined
  8. 17“Fraud” defined
  9. 18“Misrepresentation” defined
  10. 19Voidability of agreements without free consent
  11. 19APower to set aside contract induced by undue influence
  12. 20Agreement void where both parties are under mistake as to matter of fact
  13. 21Effect of mistakes as to law
  14. 22Contract caused by mistake of one party as to matter of fact
  15. 23What considerations and objects are lawful, and what not
  16. Void agreements
  17. 24Agreement void, if considerations and objects unlawful in part
  18. 25Agreement without consideration, void, unless it is in writing and registered, or is a promise to compensate for something done, or is a promise to pay a debt barred by limitation law
  19. 26Agreement in restraint of marriage, void
  20. 27Agreement in restraint of trade, void. Saving of agreement not to carry on business of which good-will is sold
  21. 28Agreements in restraint of legal proceeding void. Saving of contract to refer to arbitration dispute that may arise. Saving of contract to refer questions that have already arisen. Saving of a guarantee agreement of a bank or a financial institution
  22. 29Agreements void for uncertainty
  23. 30Agreements by way of wager, void. Exception in favour of certain prizes for horse-racing. Section 294A of the Indian Penal Code not affected

Chapter III Of Contingent Contracts6 sections

  1. 31“Contingent contract” defined
  2. 32Enforcement of contracts contingent on an event happening
  3. 33Enforcement of contracts contingent on an event not happening
  4. 34When event on which contract is contingent to be deemed impossible, if it is the future conduct of a living person
  5. 35When contracts become void which are contingent on happening of specified event within fixed time
  6. When contracts may be enforced, which are contingent on specified event not happening within fixed time
  7. 36Agreement contingent on impossible events void

Chapter IV Of the Performance of Contracts31 sections

  1. Contracts which must be performed
  2. 37Obligation of parties to contracts
  3. 38Effect of refusal to accept offer of performance
  4. 39Effect of refusal of party to perform promise wholly
  5. By whom contracts must be performed
  6. 40Person by whom promise is to be performed
  7. 41Effect of accepting performance from third person
  8. 42Devolution of joint liabilities
  9. 43Any one of joint promisors may be compelled to perform. Each promisor may compel contribution. Sharing of loss by default in contribution
  10. 44Effect of release of one joint promisor
  11. 45Devolution of joint rights
  12. Time and place for performance
  13. 46Time for performance of promise, when no application is to be made and no time is specified
  14. 47Time and place for performance of promise, where time is specified and no application to be made
  15. 48Application for performance on certain day to be at proper time and place
  16. 49Place for performance of promise, where no application to be made and no place fixed for performance
  17. 50Performance in manner or at time prescribed or sanctioned by promisee
  18. Performance of reciprocal promises
  19. 51Promisor not bound to perform, unless reciprocal promisee ready and willing to perform
  20. 52Order of performance of reciprocal promises
  21. 53Liability of party preventing event on which the contract is to take effect
  22. 54Effect of default as to that promise which should be first performed, in contract consisting of reciprocal promises
  23. 55Effect of failure to perform at fixed time, in contract in which time is essential. Effect of such failure when time is not essential. Effect of acceptance of performance at time other than that agreed upon
  24. 56Agreement to do impossible act. Contract to do an act afterwards becoming impossible or unlawful. Compensation for loss through non-performance of act known to be impossible or unlawful
  25. 57Reciprocal promise to do things legal, and also other things illegal
  26. 58Alternative promise, one branch being illegal
  27. Appropriation of payments
  28. 59Application of payment where debt to be discharged is indicated
  29. 60Application of payment where debt to be discharged is not indicated
  30. 61Application of payment where neither party appropriates
  31. Contracts which need not be performed
  32. 62Effect of novation, rescission, and alteration of contract
  33. 63Promisee may dispense with or remit performance of promise
  34. 64Consequences of rescission of voidable contract
  35. 65Obligation of person who has received advantage under void agreement, or contract that becomes void
  36. 66Mode of communicating or revoking rescission of voidable contract
  37. 67Effect of neglect of promisee to afford promisor reasonable facilities for performance

Chapter V Of Certain Relations Resembling Those Created by Contract5 sections

  1. 68Claim for necessaries supplied to person incapable of contracting, or on his account
  2. 69Reimbursement of person paying money due by another, in payment of which he is interested
  3. 70Obligation of person enjoying benefit of non-gratuitous act
  4. 71Responsibility of finder of goods
  5. 72Liability of person to whom money is paid, or thing delivered, by mistake or under coercion

Chapter VI Of the Consequences of Breach of Contract51 sections

  1. 73Compensation for loss or damage caused by breach of contract. Compensation for failure to discharge obligation resembling those created by contract
  2. 74Compensation for breach of contract where penalty stipulated for
  3. 75Party rightfully rescinding contract, entitled to compensation. [CHAPTER VII SALE OF GOODS.][Repealed]
  4. 76[Repealed]
  5. 77[Repealed]
  6. 78[Repealed]
  7. 79[Repealed]
  8. 80[Repealed]
  9. 81[Repealed]
  10. 82[Repealed]
  11. 83[Repealed]
  12. 84[Repealed]
  13. 85[Repealed]
  14. 86[Repealed]
  15. 87[Repealed]
  16. 88[Repealed]
  17. 89[Repealed] [DELIVERY.][Repealed]
  18. 90Repealed.]
  19. 91[Repealed]
  20. 92[Repealed]
  21. 93[Repealed]
  22. 94[Repealed] [SELLER’S LIEN.][Repealed]
  23. 95[Repealed]
  24. 96[Repealed]
  25. 97[Repealed]
  26. 98[Repealed] [STOPPAGE IN TRANSIT.][Repealed]
  27. 99[Repealed]
  28. 100[Repealed]
  29. 101[Repealed]
  30. 102[Repealed]
  31. 103[Repealed]
  32. 104[Repealed]
  33. 105[Repealed]
  34. 106[Repealed] [RESALE.][Repealed]
  35. 107[Repealed] [TITLE.][Repealed]
  36. 108[Repealed] [WARRANTY.]Repealed.]
  37. 109[Repealed]
  38. 110[Repealed]
  39. 111[Repealed]
  40. 112[Repealed]
  41. 113[Repealed]
  42. 114[Repealed]
  43. 115[Repealed]
  44. 116[Repealed]
  45. 117[Repealed]
  46. 118[Repealed] [MISCELLANEOUS.][Repealed]
  47. 119[Repealed]
  48. 120[Repealed]
  49. 121[Repealed]
  50. 122[Repealed]
  51. 123[Repealed]

Chapter VIII Of Indemnity and Guarantee24 sections

  1. 124“Contract of indemnity” defined
  2. 125Rights of indemnity-holder when sued
  3. 126“Contract of guarantee”, “surety”, “principal debtor” and “creditor”
  4. 127Consideration for guarantee
  5. 128Surety’s liability
  6. 129“Continuing guarantee”
  7. 130Revocation of continuing guarantee
  8. 131Revocation of continuing guarantee by surety’s death
  9. 132Liability of two persons, primarily liable, not affected by arrangement between them that one shall be surety on other’s default
  10. 133Discharge of surety by variance in terms of contract
  11. 134Discharge of surety by release or discharge of principal debtor
  12. 135Discharge of surety when creditor compounds with, gives time to, or agrees not to sue, principal debtor
  13. 136Surety not discharged when agreement made with third person to give time to principal debtor
  14. 137Creditor’s forbearance to sue does not discharge surety
  15. 138Release of one co-surety does not discharge others
  16. 139Discharge of surety of creditor’s act or omission impairing surety’s eventual remedy
  17. 140Rights of surety on payment or performance
  18. 141Surety’s right to benefit of creditor’s securities
  19. 142Guarantee obtained by misrepresentation invalid
  20. 143Guarantee obtained by concealment invalid
  21. 144Guarantee on contract that creditor shall not act on it until co-surety joins
  22. 145Implied promise to indemnify surety
  23. 146Co-sureties liable to contribute equally
  24. 147Liability of co-sureties bound in different sums

Chapter IX Of Bailment35 sections

  1. 148“Bailment”, “bailor” and “bailee” defined
  2. 149Delivery to bailee how made
  3. 150Bailor’s duty to disclose faults in goods bailed
  4. 151Care to be taken by bailee
  5. 152Bailee when not liable for loss, etc., of thing bailed
  6. 153Termination of bailment by bailee’s act inconsistent with conditions
  7. 154Liability of bailee making unauthorized use of goods bailed
  8. 155Effect of mixture, with bailor’s consent, of his goods with bailee’s
  9. 156Effect of mixture, without bailor’s consent, when the goods can be separated
  10. 157Effect of mixture, without bailor’s consent, when the goods cannot be separated
  11. 158Repayment, by bailor, of necessary expenses
  12. 159Restoration of goods lent gratuitously
  13. 160Return of goods bailed on expiration of time or accomplishment of purpose
  14. 161Bailee’s responsibility when goods are not duly returned
  15. 162Termination of gratuitous bailment by death
  16. 163Bailor entitled to increase or profit from goods bailed
  17. 164Bailor’s responsibility to bailee
  18. 165Bailment by several joint owners
  19. 166Bailee not responsible on re-delivery to bailor without title
  20. 167Right of third person claiming goods bailed
  21. 168Right of finder of goods. May sue for specific reward offered
  22. 169When finder of thing commonly on sale may sell it
  23. 170Bailee’s particular lien
  24. 171General lien of bankers, factors, wharfingers, attorneys and policy-brokers
  25. Bailments of pledges
  26. 172“Pledge”, “Pawnor” and “Pawnee” defined
  27. 173Pawnee’s right of retainer
  28. 174Pawnee not to retain for debt or promise other than that for which goods pledged. Presumption in case of subsequent advances
  29. 175Pawnee’s right as to extraordinary expenses incurred
  30. 176Pawnee’s right where pawnor makes default
  31. 177Defaulting pawnor’s right to redeem
  32. 178Pledge by mercantile agent
  33. 178APledge by person in possession under voidable contract
  34. 179Pledge where pawnor has only a limited interest
  35. Suits by bailees or bailors against wrong-doers
  36. 180Suit by bailor or bailee against wrong-doer
  37. 181Apportionment of relief or compensation obtained by such suits

Chapter X Agency57 sections

  1. Appointment and authority of agents
  2. 182“Agent” and “principal” defined
  3. 183Who may employ agent
  4. 184Who may be an agent
  5. 185Consideration not necessary
  6. 186Agent’s authority may be expressed or implied
  7. 187Definitions of express and implied authority
  8. 188Extent of agent’s authority
  9. 189Agent’s authority in an emergency
  10. Sub-agents
  11. 190When agent cannot delegate
  12. 191“Sub-agent” defined
  13. 192Representation of principal by sub-agent properly appointed. Agent’s responsibility for sub-agent. Sub-agent’s responsibility
  14. 193Agent’s responsibility for sub-agent appointed without authority
  15. 194Relation between principal and person duly appointed by agent to act in business of agency
  16. 195Agent’s duty in naming such person
  17. Ratification
  18. 196Right of person as to acts done for him without his authority. Effect of ratification
  19. 197Ratification may be expressed or implied
  20. 198Knowledge requisite for valid ratification
  21. 199Effect of ratifying unauthorized act forming part of a transaction
  22. 200Ratification of unauthorized act cannot injure third person
  23. Revocation of authority
  24. 201Termination of agency
  25. 202Termination of agency, where agent has an interest in subject-matter
  26. 203When principal may revoke agent’s authority
  27. 204Revocation where authority has been partly exercised
  28. 205Compensation for revocation by principal, or renunciation by agent
  29. 206Notice of revocation or renunciation
  30. 207Revocation and renunciation may be expressed or implied
  31. 208When termination of agent’s authority takes effect as to agent, and as to third persons
  32. 209Agent’s duty on termination of agency by principal’s death or insanity
  33. 210Termination of sub-agent’s authority
  34. Agent’s duty to principal
  35. 211Agent’s duty in conducting principal’s business
  36. 212Skill and diligence required from agent
  37. 213Agent’s accounts
  38. 214Agent’s duty to communicate with principal
  39. 215Right of principal when agent deals, on his own account, in business of agency without principal’s consent
  40. 216Principal’s right to benefit gained by agent dealing on his own account in business of agency
  41. 217Agent’s right of retainer out of sums received on principal’s account
  42. 218Agent’s duty to pay sums received for principal
  43. 219When agent’s remuneration becomes due
  44. 220Agent not entitled to remuneration for business misconducted
  45. 221Agent’s lien on principal’s property
  46. Principal’s duty to agent
  47. 222Agent to be indemnified against consequences of lawful acts
  48. 223Agent to be indemnified against consequences of acts done in good faith
  49. 224Non-liability of employer of agent to do a criminal act
  50. 225Compensation to agent for injury caused by principal’s neglect
  51. Effect of agency on contracts with third persons
  52. 226Enforcement and consequences of agent’s contracts
  53. 227Principal how far bound, when agent exceeds authority
  54. 228Principal not bound when excess of agent’s authority is not separable
  55. 229Consequences of notice given to agent
  56. 230Agent cannot personally enforce, nor be bound by, contracts on behalf of principal. Presumption of contract to contrary
  57. 231Rights of parties to a contract made by agent not disclosed
  58. 232Performance of contract with agent supposed to be principal
  59. 233Right of person dealing with agent personally liable
  60. 234Consequence of inducing agent or principal to act on belief that principal or agent will be held exclusively liable
  61. 235Liability of pretended agent
  62. 236Person falsely contracting as agent not entitled to performance
  63. 237Liability of principal inducing belief that agent’s unauthorized acts were authorized
  64. 238Effect, on agreement, of misrepresentation or fraud by agent

Chapter XI Of Partnership28 sections

  1. 239[Repealed]
  2. 240[Repealed]
  3. 241[Repealed]
  4. 242[Repealed]
  5. 243[Repealed]
  6. 244[Repealed]
  7. 245[Repealed]
  8. 246[Repealed]
  9. 247[Repealed]
  10. 248[Repealed]
  11. 249[Repealed]
  12. 250[Repealed]
  13. 251[Repealed]
  14. 252[Repealed]
  15. 253[Repealed]
  16. 254[Repealed]
  17. 255[Repealed]
  18. 256[Repealed]
  19. 257[Repealed]
  20. 258[Repealed]
  21. 259[Repealed]
  22. 260[Repealed]
  23. 261[Repealed]
  24. 262[Repealed]
  25. 263[Repealed]
  26. 264[Repealed]
  27. 265[Repealed]
  28. 266[Repealed]
  29. SCHEDULE—[Repealed]

About this Act

The Indian Contract Act, 1872 is the general law of contracts in India. It sets out when an agreement becomes an enforceable contract, what makes consent free, which agreements are void, and how contracts are performed, discharged and enforced after breach.

The Act does not set up any regulator; disputes under it are decided by civil courts and arbitral tribunals. Its general principles in Sections 1 to 75 are followed by chapters on specific contracts: indemnity and guarantee, bailment and pledge, and agency.

The original provisions on sale of goods (Sections 76 to 123) and partnership (Sections 239 to 266) are shown as repealed. These subjects are now governed by the Sale of Goods Act, 1930 and the Indian Partnership Act, 1932.

Who it applies to

  • Every individual, firm, company and other person entering into an agreement governed by Indian law
  • Lenders, creditors and sureties dealing with guarantees and indemnities
  • Banks, warehouses, carriers and others holding goods as bailees or pawnees
  • Principals and agents, including employees and intermediaries acting for a business
  • Courts and arbitrators deciding contractual disputes and claims for compensation

Good to know

Key chapters
Chapter II (contracts, voidable contracts and void agreements, Sections 10 to 30), Chapter VI (consequences of breach, Sections 73 to 75), Chapter VIII (indemnity and guarantee, Sections 124 to 147) and Chapter X (agency, Sections 182 to 238).
Repealed parts
Sections 76 to 123 (sale of goods) and Chapter XI on partnership (Sections 239 to 266) remain in the numbering but carry no operative text.

Frequently asked questions

Which section lists the essentials of a valid contract?

Section 10, read with Section 11 on competence to contract and Sections 13 to 22 on consent.

Which section deals with compensation for breach of contract?

Section 73. Section 74 covers breach where a penalty or sum is named in the contract.

Is an agreement in restraint of trade valid?

Section 27 treats such agreements as void, subject to the saving set out in that section.

Where are contracts of guarantee defined?

Section 126 in Chapter VIII, which runs from Section 124 to Section 147.

Which provisions deal with pledge?

Sections 172 to 181 in Chapter IX on bailment.