Indian Contract Act, 1872
The Indian Contract Act, 1872 sets out core rules for agreements and contracts in India, including formation, free consent, performance, breach, indemnity, guarantee, bailment, pledge and agency.
Whereas it is expedient to define and amend certain parts of the law relating to contracts, it is hereby enacted as follows.
Study guide
Understand the Act before reading section by section
The Indian Contract Act supplies the general vocabulary and rules used to decide whether an agreement is legally enforceable. It moves from proposal and acceptance through consent, lawful objects, performance and breach, then deals with several special relationships.
The Act does not contain all Indian contract law. Its former sale-of-goods and partnership chapters were repealed when separate Acts were enacted, while other subjects may also be governed by special statutes, state amendments and the terms of the transaction.
Chapters and study guides
- PreliminaryThe Preliminary provisions identify the Act and define its core building blocks: proposal, promise, consideration, agreement, contract, void and voidable arrangements, and reciprocal promises. These definitions recur throughout the Act.2 sections
- Chapter 1: Communication, Acceptance and Revocation of ProposalsChapter I explains how proposals, acceptances and revocations are communicated and when each communication is complete. It also requires acceptance to be absolute and recognizes acceptance by conduct in the situations described by section 8.7 sections
- Chapter 2: Contracts, Voidable Contracts and Void AgreementsChapter II contains the central enforceability rules. It addresses capacity, consent and free consent; coercion, undue influence, fraud, misrepresentation and mistake; lawful consideration and objects; and categories of void agreements.22 sections
- Chapter 3: Contingent ContractsChapter III deals with contracts whose operation depends on a collateral uncertain event. The provisions distinguish an event happening from it not happening, address time limits, and make agreements contingent on impossible events void.6 sections
- Chapter 4: Performance of ContractsChapter IV follows a contract through performance. It covers who must perform, time and place, reciprocal promises, appropriation of payments, when performance is excused, novation and rescission, and the consequences of a promisee failing to provide reasonable facilities.31 sections
- Chapter 5: Certain Relations Resembling Those Created by ContractChapter V covers obligations resembling those created by contract even though an ordinary contract may be absent. Its examples include necessaries supplied to an incapable person, reimbursement of an interested payer, non-gratuitous acts, finders of goods and money paid by mistake or under coercion.5 sections
- Chapter 6: Consequences of Breach of ContractChapter VI states the statutory rules for compensation after breach. Section 73 addresses loss naturally arising in the usual course or within the parties' contemplation, section 74 addresses a named sum or penalty, and section 75 protects a party who rightfully rescinds.3 sections
- Chapter 8: Indemnity and GuaranteeChapter VIII distinguishes indemnity from guarantee and then sets out the rights and liabilities of the indemnity-holder, surety, principal debtor and creditor. It also deals with continuing guarantees, variance, discharge, securities and contribution between co-sureties.24 sections
- Chapter 9: BailmentChapter IX covers bailment, care of goods, unauthorized use, mixtures, return and liens. It then addresses pledge, the pawnee's rights on default, redemption and certain pledges made by persons with limited or defective title.35 sections
- Chapter 10: AgencyChapter X defines principal and agent, creation and extent of authority, sub-agents, ratification, termination, the agent's duties and accounts, and how agency affects third parties. It also covers undisclosed principals and unauthorized acts.57 sections
Key terms
- Proposal
- A person's signification to another of willingness to do or abstain from doing something, made with a view to obtaining the other's assent.
- Section 2, Section 3
- Consideration
- An act, abstinence or promise done at the desire of the promisor, as described in the Act's interpretation clause.
- Section 2, Section 25
- Voidable contract
- A contract enforceable at the option of one or more parties, but not at the option of the other party or parties.
- Section 2, Section 19
- Free consent
- Consent that is not caused by coercion, undue influence, fraud, misrepresentation or the mistake addressed by the Act.
- Section 13, Section 14
- Contingent contract
- A contract to do or not do something if an event collateral to the contract happens or does not happen.
- Section 31
- Guarantee
- A contract to perform a promise or discharge the liability of a third person in case of that person's default.
- Section 126
- Bailment
- Delivery of goods for a purpose, on a contract that they will be returned or otherwise dealt with when that purpose is accomplished.
- Section 148
- Agent
- A person employed to do an act for another or to represent another in dealings with third persons.
- Section 182
Scope and limits
- Sections 76–123, formerly concerning sale of goods, were repealed by the Indian Sale of Goods Act, 1930.
- Sections 239–266, formerly concerning partnership, were repealed by the Indian Partnership Act, 1932.
- The central text may be affected by state amendments and special legislation. The explanations here orient a reader to the statutory structure; they do not decide whether a particular agreement is enforceable.
Official reference: India Code, Legislative Department — checked: 29 September 2026.