ESSENTIAL ELEMENTS OF A VALID CONTRACT

ESSENTIAL ELEMENTS OF A VALID CONTRACT

  01:47    Rahul R

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ESSENTIAL ELEMENTS OF A VALID CONTRACT

Section 10 of the Indian Contract Act, 1872 provides that "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 nothereby expressly declared to be void".

The essential elements of a valid contract are:

(i)   An offer or proposal by one party and acceptance of that offer by another party resulting in an agreement-consensus-ad-idem.

(ii)   An intention to create legal relations or an intent to have legal consequences.

    (iii)  The agreement is supported by lawful consideration.

(iv)  The parties to contract are legally capable of contracting.

(v)   Genuine consent between !he parties.

(vi)  The object and consideration of the contract is legal and is not opposed to

       public policy.

(vii) The terms of the contract are certain.

(viii) The agreement is capable of being performed Ie., it is not impossible of being

performed.

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THE INDIAN CONTRACT ACT

THE INDIAN CONTRACT ACT

  01:40    Rahul R

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THE INDIAN CONTRACT ACT

The Law of Contract Constitutes the most important branch of mercantile or commercial law. It affects everybody, more so, trade, commerce anq industry. It may be said that the contract is the foundation of the civilized world.The law relating to contract is governed by the Indian Contract Act, 1872 (Act No. IX of 1872). The preamble to the Act says that it is an Act "to define and amend certain parts of the law relating to contract". It extends to the whole of India except the State of Jammu and Kashmir.The Act mostly deals with the general principles and rules governing contracts. The Act is divisible into two parts. The first part (Section 1-75) deals with the general principles of the law of contract, and therefore applies to all contracts irrespective of their nature. The second part (Sections 124-238) deals with certain special kinds ofcontracts, e.g., Indemnity and guarantee, bailment, pledge, and agency.

The term contract has been defined by various authors In the following manner:

"A contract is an agreement creating and defining obligations between the parties".

                                                                                                                                 -Salmond

"A contract is an agreement enforceable at law, made between two or more persons, by which rights are acquired by one or more to acts or forbearances on thepart of the other or others".                                                                                                                                               -Anson

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