What is law?
• Definition:- Law includes all the rules and
principles which regulate our relations with
other individuals and with the state.
• Holland, a jurist, defines ‘law’ as rules of
external human action enforced by the
sovereign political authority, i.e., the state.
• In the words of Salmond, “law is the body
of principles recognised and applied by
the state in the administration of justice.

Object of Law
• The object of law is order, and the result of
order is that men are enabled to look
ahead with some sort of security as to the
future.
• In a society like ours law has to serve as a
vehicle of social change and as harbinger
of social justice
• “ignorantia juris not excusat”

Mercantile law
• The term ‘mercantile law’ is used to denote that
branch of law which is concerned with such
matters as are usually the subject of what may
be called mercantile transactions, i.e., it deals
with contractual situations and the rights and
obligations arising out of mercantile transactions
between mercantile persons.
• A mercantile person may be a single individual ,
a partnership, or a joint stock company.
• The term ‘mercantile law’ is used to denote the
aggregate body of those legal rules which are
connected with trade, industry and commerce.

Sources of mercantile law
• The bulk of the Indian mercantile law is based
on and follows, the English mercantile law.
• The sources of Indian mercantile law are:-
• Common law
• equity
• Statute law
• Judicial decisions or precedents
• Customs and usages

The Indian Contract Act of 1872
• The law of contract introduces
definiteness in business transactions. It is
the most important branch of business
law.
• The law of contract is that branch of law
which determines the circumstances in
which promises made by the parties to a
contract shall be legally binding on them.

The Act
• The Act deals with:-
• General principles of law of contract
(Sec. 1 to 75 ) , deals with:-
1. Stages in the formation of the contract
2. Essential elements
3. Performance or breach &
4. Remedies for breach of contract.

The Act
• Special contracts (Secs. 124 to 238 )
deals with:-
1. Indemnity & Guarantee
2. Bailment & Pledge
3. Contract of Agency

Definition of contract
• A contract is an agreement made between two or more
parties which the law will enforce. Sec. 2(h) defines a
contract as an agreement enforceable by law.
• Agreement and its enforceability
• An agreement is defined as “every promise and every
set of promises, forming consideration for each other”.
Sec. 2(c)
• A promise Sec. 2(b):- “when the person to whom a
proposal is made signifies his assent thereto, the
proposal is said to be accepted. A proposal when
accepted, becomes a promise.”
• Agreement = offer+acceptence.
• Consensus ad idem