Major Provisions and Characteristics of Contract Law

1/5 - (1 vote)

Major Provisions and Characteristics of Contract Law

Provision Relating to Definitions

Among them the provision of definition is important one. There are definitions of contract, proposal and acceptance. ‘Contract’ means an agreement enforceable by law concluded between two or more parties for performing or not performing any work.

‘Proposal’ means a proposal presented by one person to another with the intent of obtaining his/her consent to do or not to do any work. ‘Consent’ means the consent given by the person to whom a proposal has been presented in the same meaning of that offer. Therefore it is the principal feature of the Contract law which has been made by the Muluki Civil Code 2074.

Provisions Relating to Autonomous Parties

It is one of the important provisions in Muluki Civil Code 2074 which retains important meaning. As provisioned in section 507 of the Muluki Civil Code 2074 states, “The parties to contract, subject to this Act shall be free to choose the form and content of contract and to determine consideration and its quantum, the terms and conditions of the contract and the nature of the remedy in the event of its violation, as well as to determine the measures for resolving disputes under the contract.” This provision has been deemed quite important. Therefore it can be adopted as the feature of the act.

Also Read : Difference Between Contract and Agreement

Provision Relating to General Contract

There has been the provisions of general contract in the Civil Code 2074. Leaving aside the specified provision of specific contract, this Civil Code deals with largely general and specific contract both. Or proposal, consent, qualification of the parties, autonomy of the parties, communication of proposal and its consent, quasi-contract, assignment of contract, performance and breach of contract, legal remedy, and specified time frame, etc. are under the domain of general contract which has been provisioned by Muluki Civil Code 2074. It is important provision.

Provision Relating to Specific Contract

Muluki Civil Code 2074 envisions general and specific contracts’ nature, form and process. Indeed, it is important provision. Except specific contract, the remaining other contracts are under the domain of general contract. Specific contract includes bailment, pledge, agency, indemnity, guarantee, sales of goods, carriage of goods, hire purchase contract, lease contract etc. To mention general and specific contract are the very important provisions of
the contract act.

Provision relating to parties competent to contract:

Section 506 of Muluki Civil Code 2074 has prescribed provision relating to parties competent to contract. Except following persons, any other person is competent to contract:
a. Minor
b. Person of unsound mind

However, a person who is usually of unsound mind, but occasionally of sound mind, may make a contract when he is of sound mind. Similarly, a person, who is usually of sound mind, but occasionally of unsound mind, may not make a contract when he is of unsound mind. Notwithstanding anything contained above, any person not qualified to enter into a specific contract under the prevailing law shall be deemed to be incompetent to conclude that contract.

As well, the guardian of a person who is incompetent or semi-incompetent to conclude a contract may conclude a contract on his/her behalf in his interest. Furthermore, while entering into a contract on behalf of legal person, the authorized director to manage the person or by the resolution of board of directors or other authorized person may enter into contract.

Provision Relating to Suspend and Alteration of Contract

The important provision of Muluki Civil Code 2074 is the provision of suspend and alteration of the contract. In case the parties to a contract agree, all or any of the portions of the work to be performed under the contract may be changed or amended, the time-limit for performing any work under the contract extended, the contract suspended by not making it obligatory to perform any work to be performed under the contract for some time, the work mentioned in the contract may be replaced by another work, or a new contract may be signed as a replacement of the original contract.

Likewise; In case any change or amendment is made in the contract a new contract shall be deemed to have been signed, and the contract shall become effective accordingly. In case a new contract is signed in this manner, liability under the initial contract need not be borne except when otherwise provided for in the contract.

Provisions Relating to Performance, Breach, and Legal Remedy of Contract

Muluki Civil Code 2074 has the provision of performing contract in detail. Similarly, the cause and result of the breach of the contract as well as the legal remedy in case of breach has been included in this act. All these stuffs are related with general and specific contract which is its salient provision.

Provision of Transferring Title and Obligation of Contract

The provisions of transferring title and liability are important features of contract law which has been made Muluki Civil Code 2074. Section 528 of the Civil Code states, “In case party to a contract dies or loses his/her senses, the rights accruing from the contract shall devolve on the heir to his/her property, and the heir shall also bear liability to the extent covered by the property received by him/her.

But the rights and liabilities accruing on the basis of personal skills and qualification shall not devolve on such heir.” But the considerable thing is that the contract based on personal skill efficiency and qualification is not assignable to another person.

Contract of Guarantee

Contract of guarantee is one of the principal features. It is a special contract which has been provisioned in Section 563 of the Muluki Civil Code 2074. If a person does not pay back the taken loan or the liability undertaken by him or does not fulfill to do so whereby the third party undertaken such loan or liability to pay back or fulfill, it is assumed to be contract of guarantee. In this contract if a debtor fails to pay the loan back under any condition, the guarantor ipso facto has to pay such loan. This contract ensures and assures the creditor for his loan.

Contract of Indemnity

Contract relating to indemnity is also a special contract. It has been provisioned in section 571 of the Muluki Civil Code 2074. While performing the contract under the instruction of the contracting parties, in case there may be any harm to any party or to the third party resulting from the action, he may bear the compensation to pay, is known as indemnity contract. Contract of indemnity is also known as contract of compensation.

Contract of Subrogation

There is the provision of contract of subrogation in Muluki Civil Code 2074 in Section 572. It lies within the principal provision. The loss or damage shall be in accord with the concluded contract between the parties. In case the amount nor mentioned in the contract, it shall be reasonable or appropriate or compensation shall be paid or arrangements be made for payment to the partly affected by loss or to his heir in case he is dead or in case, there has been such damage or loss.

The person paying the amount shall be deemed to have subrogated the person who has borne the loss or damage in accord within of the Civil Code, and accordingly the subrogate or may have the compensation in consideration of such damage recovered from the party who causes such loss. Such type of legal provision was not there previously.

Contract of Bailment

Contract of bailment is deemed to be in case any person delivers any property to another person on a returnable basis or for handling it over to any other person of selling it as ordered by him. Provided that a deed must be executed while bailing any property worth more than five thousand. The oral deed while bailing shall not be valid. Here, property means any moveable assets and title to such assets. It is a principal provision mentioned in section 575 of the Muluki Civil Code 2074.

Contract Relating to Pledge

In section 585 of Muluki Civil Code 2074, there is a discussion of the contract relating to pledge. It is a special provision. In case any person has got a pledge while supplying credit to anybody as a security for what credit or got any property as a deposit in the form of a guarantee to perform any work while having any work performed a contract relating to pledge shall be deemed to have been made.

The pledge property means any moveable or immovable properly and title or document establishes title to that property. This legal provision eases the borrowing, between debtor and creditor.

Contract of Sale of Goods

There is a provision of a contract of sale of goods in Section 554 of the Muluki Civil Code 2074. It is an important provision. Here, goods mean only the moveable property. It does not represent immovable property. In case any seller agrees to hand over any goods to the buyer instantly or in future by getting a price, a contract relating to sale of goods shall be deemed to have been made. This contract can be unconditional and conditional both.

This contract can be made with a provision to sell goods owned by the seller at the moment or those to be produced or acquired by him in future.

Contract Relating to Agency

Contract relating to agency also falls under special provisions. It is a special contract which has been provisioned in Section 591 of the Muluki Civil Code 2074. Any person may appoint any other person as his agent to perform anything on his behalf, except something connected with his personal skills or to conduct business as her agent of any transaction with a third person on his behalf or to represent himself to such person, or to establish any kind of legal relation with the person appointing an agent and a third person, and in case an agent is so appointed, it is assumed to be the contract relating to agency.

In such a contract the principal has his agent perform the job which has legal validity. The agent creates legal relations between the principal and the third party.

Contract of Carriage of Goods

Indeed contract relating to the carriage of goods falls under an important provision. Such provision manages well the transaction of goods. Section 602 of the Muluki Civil Code 2074 has this provision. This contract is deemed to be made if it provides for the transportation of goods from one place to another. This contract has no other alternative to import and export goods from one part of the world to another part. Transportation of goods can be done via different mediums.

Provision of lease contract:

The provision relating to lease contract has been contained in Section 610 of Muluki Civil Code 2074. According to which a person having title or ownership over anything concludes into contract authorizing another person to use the thing or use the benefit to be acquired from such thing for any specified period by obtaining rent regularly, it is deemed that lease contract has been concluded. This is an important provision.

Provision of hire purchase contract:

The provision relating to hire purchase contract has been provisioned in Section 624 of Muluki Civil Code 2074. Hire purchase contract must be held in writing. According to which if any person gives any goods to any person in rent under following conditions, it is deemed that hire purchase has been concluded:

  • If the owner of goods has handed over any goods to another in consideration of update payment of installment, the person in possession of goods has right to use the goods.
  • The person getting the goods in rent can purchase such goods.
  • After payment of last installment the ownership of such goods is transferred to the person who has got the goods in rent..

Provision Relating to Indirect Contract or Quasi-Contract

Quasi-contract falls under the principal provision of the Act. Section 648 of the Muluki Civil Code 2074, has this provision. The written deed of the contracting parties is not said to be quasi contract. In other words, the deed not expressed in writing by parties but the law has created the liability which another party is to be bound to fulfill, is called quasi contract or indirect contract. Though it is not expressed and written deed, it has quite important role in short, the creation of obligation despite the real contract is called indirect contract.

Provision Relating to Contingent Contract

In case a contract has been made to perform or not to perform any work if any event happens in future the contract shall not create any liability until such event happens. Such provision is in section 513 of the Muluki Civil Code 2074. It is an important provision. In case a contract has been made under the circumstance that a person performs any specific work in future, if he fails to do so or he cannot do so due to unforeseen event, it does not create any liability.

But in case a contract has been forged with a provision to perform or not to perform any work if any event happens in future, liability shall emerge if the event is impossible to happen.

Provision Relating to Issue Order by the District Court

Section 541 of the Muluki Civil Code 2074 has the provision that if any party does not possible to perform the contract another party can take any legal action. So he can go to the district court to get justice under the contract made between them. The party aggrieved by such action or conduct may file a lawsuit in the court to avoid such action or conduct.

It is really relevant and important. In case the aggrieved party, files a lawsuit in the court, the court may issue an appropriate order to any party to stop his specific action or conduct instantly to settle the dispute which may console the aggrieved party.

Provision Relating to Specific Performance of Contract

Among the major provisions of the Muluki Civil Code 2074 in Section 540 the specific performance of contract is one of them. In case the cash recovery paid in consideration of the real loss faced by the aggrieved party as a result of the breach of contract is not adequate, the party in loss may demand the performance of the contract a stipulated specific performance instead of making a claim for compensation.

But in all cases, such demand cannot be made. In case the situation is such that the contract cannot be executed, or the subject of the contract is destroyed. Basically, the specific performance of a contract is to perform the contract as it is. But in every case, it is not possible.

Provision of lawful contract can be executed:

The provision relating to the contract to be executed pursuant to law has been prescribed in Section 505 of Muluki Civil Code 2074. According to which if a contract is concluded under the following conditions, it is deemed that the contract is concluded to be executed pursuant to law:

a. Consent expressed by the person entering into a contract to bind him/herself.
b. Capacity or qualification of a person entering into a contract.
C. Certain matters create obligation.
d. Lawful obligation

In this way, a contract may be created by writing, or orally or impliedly from the conduct of the parties. However, if the formation of a contract any particular procedure or formality is required, such contract cannot be enforced without fulfilling of such procedure or formality.

Provision Relating to Follow the Prevailing Law

Section 505(3) of the Muluki Civil Code 2074 has the provision to follow the law that is prevailing at the moment in case the existing law prescribes that any specific procedure must be followed for executing any specific contract, or that any specific contract, must be registered at any governmental office, a contract signed without fulfilling such formalities shall not be valid.

It is an important provision to make a valid contract by the contracting parties, it focuses on the legal formalities to be fulfilled. e.g., to use postal tickets, official seal, registration in the Land Revenue office etc.

Provision Regarding Offer to Public

Section 511 of the Muluki Civil Code 2074 has the provision to make a public offer. In case any person by means of an advertisement advances a proposal in public of the effect that he will pay a specific prize or any person for performing any work any work mentioned in the advertisement and in case any person performs the work mentioned in the advertisement.

The advertiser shall pay the specific prize to the person. But if any person performs the work without knowing the advertisement. He is not liable to receive the remuneration or reward. This provision must be taken as important because the remuneration mentioned for a specific purpose, must bear its promise, it is its assumption.

Visit More Related Posts

CLICK HERE!

Major Provisions or Characteristics of Contract Law

1. Provision Relating to Definitions
2. Provisions Relating to Autonomous Parties
3. Provision Relating to General Contract
4. Provision Relating to Specific Contract
5. Provision relating to parties competent to contract:
6. Provision Relating to Suspend and Alteration of Contract
7. Provisions Relating to Performance, Breach, and Legal Remedy of Contract
8. Provision of Transferring Title and Obligation of Contract
9. Contract of Guarantee
10. Contract of Indemnity
11. Contract of Subrogation
12. Contract of Bailment
13. Contract Relating to Pledge
14. Contract of Sale of Goods
15. Contract Relating to Agency
16. Contract of Carriage of Goods
17. Provision of lease contract:
18. Provision of hire purchase contract:
19. Provision Relating to Indirect Contract or Quasi-Contract
20. Provision Relating to Contingent Contract
21. Provision Relating to Issue Order by the District Court
22. Provision Relating to Specific Performance of Contract
23. Provision of lawful contract can be executed:
24. Provision Relating to Follow the Prevailing Law
25. Provision Regarding Offer to Public

This site is a free online educational website portal. It collects & shares educational as well as job related contents and Careers Offers.

error: Content is protected !!