Contract law of Nepal is found in Part-5 of the National Civil Code 2074 (2017) (“Civil Code”).
Contract law of Nepal is based on the fundamental concept of obligation. If there is a legal compulsion for one to do or to abstain from doing any act, an obligation is created if one omits to do or does such an act. A person shall fulfill the obligation of any matter which has been so maintained or created as to be fulfilled by the person or which the person has undertaken to fulfill.
A contract is one of the various sources of obligation.
A contract shall be deemed to be concluded when an agreement enforceable by law is concluded between two or more persons to do or abstain from doing any act. A contract shall be deemed to have been concluded once the person to whom an offer has been made by another person communicates his or her acceptance thereto.
A contract shall be enforceable when following conditions are fulfilled:
- consent expressed by contracting party to be bound by the contract
- contracting party being capable or qualified to enter into the contract
- specific object creating obligation
- lawful obligation
Parties may approach the court of law for the following purposes:
- to prevent a person from breaching a contract
- to compel a person to perform the respective contractual obligation
- to extract compensation for breach of contract or arising from termination of contract
Parties may approach the concerned district court having jurisdiction to seek legal relief in relation to any contract. The generally applicable limitation period for filing a lawsuit concerning a contract is 2 years from the date the cause of action arises.
Disclaimer: The contents of this page are for general information purposes only and shall not be construed as legal advice. Please contact our legal professionals for accurate assistance.
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