The British Rulers established the Courts of Justice in India for three presidency towns of Mumbai, Madras and Calcutta in 18th century by Charters. Those three Courts introduced into their jurisdictions the English common and statute law in force during that period, to the extent the same were applicable to the Indian Contracts. Application of English Laws to Hindus and Mohammedans resulted into many inconveniences as a result whereof a statute of 1781 empowered the Court at Calcutta and of 1791 empowered the Courts of Mumbai and Madras to determine inter alia all matters of contract between Hindus and Mohammedans by their laws and usages. This continued till the Indian Contract Act was enacted in the year 1872. Since then the Indian Contract Act of 1872 is the law relating to contracts in India. It is based on English common law and includes concepts of proposal, promise, consideration, voidable contracts, void agreements, free consent, undue influence, fraud, misrepresentation, etc. similar to those found in English Law. As per the provisions of the Indian Contract Act all agreements are contracts if they are made by the free consent of the parties competent to contract, for a lawful consideration and with a lawful object and are not expressly declared to be void. The parties to a contract must either perform or offer to perform their respective promises unless such performance is dispensed with or excused under the provisions of the Act or of any other law. Promises bind the representative of the promisers in case of death of such promisers before performance, unless a contrary intention appears from the contract. When a contract has been broken the party who suffers by such breach is entitled to receive from the party who has broken the contract, compensation for any loss or damage caused to him thereby, which naturally arose in the usual course of things from such breach or which the parties knew, when they made the contract, to be likely to result from the breach of it. Under the Act it is also provided that when a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or, as the case may be, the penalty stipulated for. Even a person who rightfully rescinds a contract is entitled to a compensation for any damage which he has sustained for a non-fulfillment of the contract. The Indian Contract Act also lays down provisions of indemnity, guarantee, bailment and agency. Provisions relating to sale of goods and partnership which were originally in the act are now subject matter of separate enactments viz., the Sale of Goods Act and the Indian Partnership Act.