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  • Anand pratp says:
    anandpratp.786@rediffmail.com
    7/6/2019 2:49:54 PM

    Meaning:” A contract is an agreement made between two (or) more parties which the law will

    enforce.”

    Definition: According to section 2(h) of the Indian contract act, 1872. “An agreement enforceable bymlaw is a contract.

    According to SALMOND, a contract is “An agreement creating and defining obligations between the parties”

    Essential elements of a valid contract:

    According to section 10, “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 not here by expressly declared to be void”

    In order to become a contract an agreement must have the following essential elements, they are follows:-

    1) Offer and acceptance:

    · To constitute a contract there must be an offer and an acceptance of that offer.

    · The offer and acceptance should relate to same thing in the same sense.

    · There must be two (or) more persons to an agreement because one person cannot enter into an agreement with himself.

    2) Intention to create legal relationship:

    · The parties must have intention to create legal relationship among them.

    · Generally, the agreements of social, domestic and political nature are not a contract.

    · If there is no such intention to create a legal relationship among the parties, there is no

    contract between them.

    Example: BALFOUR (vs) BALFOUR (1919)

    Facts: A husband promised to pay his wife a household allowance of L 30 (pounds) every month. Later the parties separated and the husband failed to pay the amount. The wife sued for allowance.

    Judgment: Agreements such as there were outside the realm of contract altogether. Because there is no intention to create legal relationship among the parties.

    3) Free and Genuine consent:

    · The consent of the parties to the agreement must be free and genuine.

    · Free consent is said to be absent, if the agreement is induced by a)coercion, b)undue

    influence, c)fraud, d)Mis-representation, e)mistake.

    4) Lawful Object:

    · The object of the agreement must be lawful. In other words, it means the object must not be

    (a) Illegal, (b) immoral, (c) opposed to public policy.

    · If an agreement suffers from any legal flaw, it would not be enforceable by law.

    5) Lawful Consideration:

    · An agreement to be enforceable by law must be supported by consideration.

    · Consideration means “an advantage or benefit” moving from one party to other. In other

    words “something in return”.

    · The agreement is enforceable only when both the parties give something and get something in

    return.

    · The consideration must be real and lawful.

    6) Capacity of parties: (Competency)

    · The parties to a contract should be capable of entering into a valid contract.

    · Every person is competent to contract if

    (a). He is the age of majority.

    (b). He is of sound mind and

    (c). He is not dis-qualified from contracting by any law.

    · The flaw in capacity to contract may arise from minority, lunacy, idiocy, drunkenness, etc..,

    7) Agreement not to be declared void:

    · The agreements must not have been expressly declared to be void u/s 24 to 30 of the act.

    Example: Agreements in restraint of trade, marriages, legal proceedings, etc..,

    8) Certainty:

    The meaning of the agreement must be certain and not be vague (or) indefinite.

    · If it is vague (or) indefinite it is not possible to ascertain its meaning.

    Example:

    ‘A’ agrees to sell to ‘B’ a hundred tones of oil. There is nothing whatever to show what kind of a oil intended. The agreement is void for uncertainty.

    9) Possibility of performance:

    · The terms of an agreement should be capable of performance.

    · The agreement to do an act impossible in itself is void and cannot be enforceable.

    Example:

    ‘A’ agrees with ‘B’, to put life into B’s dead wife, the agreement is void it is impossible of performance.

    10) Necessary legal formalities:

    · According to Indian contract Act, oral (or) written are perfectly valid.

    · There is no provision for contracting being written, registered and stamped.

    · But if is required by law, that it should comply with legal formalities and then it should be complied with all legal (or) necessary formalities for its enforceability.

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