06 Jul 1Q. Define contract? Discuss the essential elements of a valid contract?(Or)Law of contract is not the whole of law of agreement nor whole law of obligation. Discussenumerating the essentials of a valid contract?(or)The parties to a contract in a essence make the law for themselves 1 Comments Anand pratp says: email@example.com 7/6/2019 2:49:54 PM Meaning:” A contract is an agreement made between two (or) more parties which the law willenforce.”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 nocontract 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)undueinfluence, 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 otherwords “something in return”.· The agreement is enforceable only when both the parties give something and get something inreturn.· 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.