A contracts with B to make and deliver to B, by a fixed day, for a specified price, a certain piece of machinery. A does not deliver the piece of machinery at the time specified, and, in consequences of this; B is obliged to procure another at a higher price than the which he was to have paid to A, and is prevented from performing a contract which B had made with a third person at the time of his contract with A (but which had not been then communicated to A), and is compelled to make compensation for breach of that contract.

The Indian Contract Act of 1872 is a legal framework that regulates contracts in India and is applicable to all states except Jammu & Kashmir. It was first published on April 25, 1872, and has 266 sections. The act is based on English Common Law and has been amended several times to keep up with changing economic conditions.  The act defines a contract as an agreement that is enforceable by law. It also defines an agreement as every promise and every set of promises that form the consideration for each other. A valid contract is formed when certain essential elements are present,... Show more

The Indian Contract Act of 1872 is a legal framework that regulates contracts in India and is applicable to all states except Jammu & Kashmir. It was first published on April 25, 1872, and has 266 sections. The act is based on English Common Law and has been amended several times to keep up with changing economic conditions. 

The act defines a contract as an agreement that is enforceable by law. It also defines an agreement as every promise and every set of promises that form the consideration for each other. A valid contract is formed when certain essential elements are present, including:
Offer and acceptance
Lawful consideration
Capacity to contract
Free consent
Lawful object
Certainty of terms 

All the signing parties must consider getting something in return in the form of rights, profits, interests, etc.. A contract will be deemed illegal if it is unlawful, can challenge or attack any section of any law, cause harm to any individual, or if the Court considers it to be immoral. 
The act covers the following topics: What is a contract, Essentials of a contract, Types of contract based on validity, Types of contract based on formation, and Types of contract based on performance.
 

Related Test: Transfer of Property Act, 1872 Practice Test

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