Indian Contract Act Section 2 — Interpretation-clause
CHAPTER XI OF PARTNERSHIP
Commercial / Corporate
Summary
Clause (a) defines a proposal. When one person tells another that they are willing to do something, or to stop doing something, in order to get that other person's agreement to that action or stopping, that first person is said to make a proposal.
Clause (b) defines acceptance. When the person to whom the proposal is made agrees to it, the proposal is said to be accepted. Once a proposal is accepted, it becomes a promise.
Clause (c) gives names to the parties. The person who makes the proposal is called the promisor, and the person who accepts the proposal is called the promisee.
Clause (d) defines consideration. When, at the request of the promisor, the promisee or any other person has done something, or stopped doing something, or promises to do something or stop doing something, that act, abstinence, or promise is called consideration for the promise.
Clause (e) defines an agreement. Every promise, and every set of promises, that form the consideration for each other, is an agreement.
Clause (f) defines reciprocal promises. Promises that form the consideration, or part of the consideration, for each other are called reciprocal promises.
Clause (g) defines a void agreement. An agreement that cannot be enforced by law is said to be void.
Clause (h) defines a contract. An agreement that can be enforced by law is a contract.
Clause (i) defines a voidable contract. An agreement that can be enforced by law at the choice of one or more of the parties, but not at the choice of the other party or parties, is a voidable contract.
Clause (j) defines when a contract becomes void. A contract that stops being enforceable by law becomes void at the point when it stops being enforceable.
Official Text
In this Act the following words and expressions are used in the following senses, unless a contrary intention appears from the context:—
(a) When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal; that Act is in force, to be taken as part of this Act—see Act 4 of 1882, s. 4. Reg. 8 of 1965, s. 3 and Sch., to Pondicherry by Act 26 of 1968, s. 3 and Sch. and has been declared to be in force in—
(b) When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise;
(c) The person making the proposal is called the “promisor”, and the person accepting the proposal is called the “promisee”;
(d) When, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise;
(e) Every promise and every set of promises, forming the consideration for each other, is an agreement;
(f) Promises which form the consideration or part of the consideration for each other are called reciprocal promises;
(g) An agreement not enforceable by law is said to be void;
(h) An agreement enforceable by law is a contract;
(i) An agreement which is enforceable by law at the option of one or more of the parties thereto, but not at the option of the other or others, is a voidable contract;
(j) A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable.