Preliminary

Section 1. Short title

This Act may be called the Contract Act, 1872.

Extent Commencement

It extends to the whole of Pakistan; and it shall come into force on the first day of September, 1872.

Enactments repealed

This Act shall not repeal any other laws, or change any customs or contracts that are not inconsistent with this Act.

Section 2. Interpretation clause

In this Act the following words and expressions are used in the following senses, unless a contrary intention appears from the context.

Sub-Section 2 (a). Proposal/Offer

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.

Sub-Section 2 (b). Promise

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.

Sub-Section 2 (c). Promiser & Promisee

The person making the proposal is called the “promisor,” and the person accepting the proposal is called the “promisee”.

Sub-Section 2 (d). Consideration

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.

Sub-Section 2 (e). Agreement

Every promise and every set of promises, forming the consideration for each other, is an agreement.

Sub-Section 2 (f). Reciprocal promises

Promises which form the consideration or part of the consideration for each other are called reciprocal promises.

Sub-Section 2 (g). Void agreement

An agreement not enforceable by law is said to be void.

Sub-Section 2 (h). Contract

An agreement enforceable by law is a contract.

Sub-Section 2 (i). Voidable contract

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.

Sub-Section 2 (j). Void contract

A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable.