Question

Define contract. discuss the essentials of valid contract. Also explain whether all types of agreement give rise to a valid contract.

Answer 1

A contract is a voluntary legally binding agreement between two or more parties.  Contract is a branch of the law of obligations in jurisdictions of the civil law tradition. Contract law is concerned about the rights and duties that results from agreements.

  

All contracts are agreement but not all agreement is contract.

Only that agreement that is enforced by law is contract.

For an agreement to be legally valid must have the essentials of valid contract as per section 10 of the Indian contract act.

 

According to section 10 “ All agreements are contracts if they are made by the free consent of parties, competent to contract, for a lawful consideration and with a lawful object and are not expressly declared to be void”  

 

Essentials of Valid Contract:

 

1. Offers and Acceptance: For a contract to be valid there must be a lawful offer by one party and lawful acceptance by another party.

  

2.  Legal Relationship: For a agreement to be valid, the parties must create legal relationship. For Agreement of social or domestic nature, legal relationship is not considered.

  

3.    Lawful Consideration:  Consideration has been defined as the price paid by one party for the promise of the other. An agreement is enforceable only when both the parties get something and give something.

 

 4.  Capacity of Parties:  Parities to an agreement must be capable to contract. Even if one of the parties is not capable of contract, then the contract is invalid.

 

 5.  Free Consent: The parties must agree upon same thing in the same sense.

 

 6. Lawful Objects: Object of an agreement must be valid. It means the design of the contract.

 

7.  Writing and Registration: A contract may be oral or in writing according to Contract Act. It is required for the validity of a contact that the agreement must be in writing and signed and attested by witness and registered if so required by the law.

 

8. Certainty: According to Section 29 of the Contract Act, “Agreements the meaning of which are not certain or capable of being made certain are void.”

 

9. Possibility of Performance: According to section 56 lays “An agreement to do an act impossible in itself is void.”

 

 10. Not Expressly Declared Void: Condition for the contract should be capable of performance.