Origin and Development of Contract Law

By Prashansa Shah

About 144 years old is our Indian Contract Act, and since then, it has been very much active and developing. The contracts and contract making today, reaches new dimensions with numerous variations and innovations, but still holding on to the prime purpose of safeguarding the parties’ interests and expectations.

As we analyse the origin and development of laws of contract, one of its core purposes has always been to facilitate and ensure smooth functioning of business and exchange.

The emergence and development of contract law derives most of its history from the industrial revolution. Since ancient times, it was the growth of trade and commerce that enhanced the need to have contracts.

After the inception of civilization, eventually people realised, that performing activities that involved exchange and transactions with each other, was is a very vital and unalienable part of their livelihood. As commerce flourished through this idea, the need to safeguard the same from false practices and non fulfilment of promises also arose.

However, the scenario was such that there was lack of a formal and systematic mechanism to rule over the transactions and abide the parties to perform and fulfil their duties and promises. Absence of any such rule, created disharmony, quarrels and disputes, leading to increase in losses, frauds, non-uniformity and thus non reliability and unrest in the society.

In order to avoid the unnecessary chaos and such unpredictability, laws were formulated. The frequency of people approaching the courts for breach of contracts increased, as everyone wanted to secure their commercial interests and expectations. Consequently, a huge collection of caselaws developed with the courts and the inception of specific laws eventually took place.


Widespread encouragement was given to the recognition of contractual obligations and towards the evolution of ‘rights of parties’, by virtue of contracts rather than by status. Evidently, the development of laws of contract was seen as an ideal development of the whole society where it was absorbed. This is because binding promises and contracts gave rise to contractual obligations governed by laws and conferred rights and remedies to the parties. All this eradicated some of the ill-terms of the society which perpetuated inequality in the name of status and superiority. A sense of equality was developed with the freedom of contracts, and at the same time, certain restrictions upheld by the law also prevented misuse of such powers and freedom.

“The movement of all progressive societies has hitherto been from status to contract.”[1] Is indeed very well observed, as we see the positive changes in the society with the emergence of contract law.



The Indian Contract Act, 1872, governs the contractual affairs within the jurisdiction of India. India being a country with colonial history, the English Law of Contracts has been a major source of derivation and inference for the formation of Indian contract laws. However, owing to the difference of situations and circumstances, the Indian contract law suits itself, to the Indian scenario and at various places differs from the English rule.

[1] Quoted by Sir Henry Maine. He holds some of the splendid and widely noted works on study of societies and their development.


Competition in Space – The commercial regime of private players

By Hariharan Vignesh

Launching satellites into orbit, once the exclusive domain of the U.S. and Soviet governments, today is an industry in which companies in the United States, Europe, China, Russia, Ukraine, Japan, and India compete. In the United States, the National Aeronautics and Space Administration (NASA) owns and launches its space shuttle. Private sector companies provide launch services for other NASA launches, and many of those for the Department of Defense (DOD). Commercial customers purchase launch services from the U.S. companies or their competitors. Since the early 1980s, Congress and successive Administrations have taken actions, including passing several laws, to facilitate the U.S. commercial space launch services business. The Federal Aviation Administration (FAA) regulates the industry

Several entrepreneurial U.S. companies have been attempting to develop RLVs through private financing. Many have encountered difficulties in obtaining financing from the financial markets, and some have sought government loan guarantees or tax credits. Some have received limited direct government funding through various contracts. One company, SpaceX, headed by Elon Musk (creator of PayPal), asserts that it will dramatically reduce the cost of reaching orbit with its partially reusable Falcon launch vehicle i.e The first Falcon launch, of small DOD communications satellites.

Europe, China, Russia, Ukraine, India, and Japan offer commercial launch services in competition with U.S. companies. Most satellites are manufactured by U.S. companies or include U.S. components and hence require export licenses, giving the United States considerable influence over how other countries participate in the commercial launch services market. The United States negotiated bilateral trade agreements with China, Russia, and Ukraine on “rules of the road” for participating in the market to ensure they did not offer unfair competition because of their non-market economies.

Europe: The European Space Agency (ESA) developed the Ariane family of launch vehicles. The first test launch of an Ariane was in 1979; operational launches began in 1982. ESA continued to develop new variants of Ariane. Ariane 5 is the only version now in use. ESA also is developing a smaller launch vehicle, Vega, whose first launch is expected in 2005. Operational launches are conducted by the French company Arianespace. Arianespace conducts its launches from Kourou, French Guiana, on the northern coast of South America. Arianespace also markets Russia’s Soyuz launch vehicle and ESA is planning to build a launch site for Soyuz at Kourou.

India: India conducted its first successful orbital space launch in 1980. Its ASLV and PSLV launch vehicles can place relatively small satellites in low Earth orbit. India is developing a larger vehicle (GSLV) capable of reaching geostationary orbit. The GSLV, which uses Russian cryogenic engines that were the subject of a dispute between the United States and Russia (discussed earlier), made its first operational flight in September 2004.

The U.S. Congress has been debating issues involving the domestic launch services industry for many years. Part of the debate has been focused on satellite export issues (discussed below). Another part concerns what the government should do to stimulate development of new launch vehicles by the private sector, particularly in a market that is stagnant or declining. That debate focuses on whether tax incentives or loan guarantees should be created for companies attempting to develop lower cost launch vehicles. Tax incentive advocates argue that loan guarantee programs allow the government to pick winners and losers; loan guarantee advocates argue that tax incentives are insufficient to promote necessary investment in capital intensive projects.

Thereby, it is evidently clear that competitive regime needs to established in order to feed both public and private partnership between governmental and non-governmental entities to survive and thrive in the market of the future.