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1. Chapter 1 Meaning And Essentials Of Contract

2. What is contract? According to section 2 of I ndian Contract Act, 1872 “ An agreement enforceable by law is contract.” Contract must have the following two elements: An agreement Enforceability of an agreement. Contract = Agreement + enforceability of an agreement Agreement: E very promise and every set of promises forming the consideration for each other is an agreement. Promise: A proposal when accepted, becomes a promise Agreement = offer + acceptance of offer

3. Enforceability of Agreement An agreement is said to be enforceable by law if it creates some legal obligation In other words, the parties to an agreement must bound to perform their promises and in case of default by either of them, must intend to sue. contract agreement Enforceability of an agreement Offer Acceptance Legal obligations

4. Types of Contracts (on the basis of creation) 1. Express Contract 2 . Implied Contract 3 . Tacit Contract

5. Contracts on the basis of Execution Executed Contract : . Executory Contract : . Partly Executed and Partly Executory Contract Unilateral Contract Bilateral contract

6. Contracts on the basis on Enforceability Valid Contract: Void contract: Void agreement : Voidable Contract: Illegal Agreement:

7. Essentials Of A Valid Contract All the agreements are contracts if they are made by free consent of the parties competent to contract, for a lawful consideration and with a lawful object and not hereby expressly declared to be void. There are 10 essential elements of valid contract Proper Offer and Acceptance An offer to be valid must fulfil certain conditions Must create legal relations Terms must be certain and unambiguous It must be communicated to the person to whom it is made

8. An acceptance to valid must be absolute and unqualified Must be in the prescribed manner It must be communicated an authorised person before offer lapses 2. Intention to create legal relationship 3. Capacity of Parties: The parties to an agreement must be competent to contract, a person must be major, must be of sound mind. 4. Lawful Consideration: An agreement must be supported by lawful consideration. Consideration means something in return. 5. Free consent: Consent is said to free when it is not caused by coercion, undue influence, fraud, misrepresentation.

9. 6. Lawful Object: T he object is considered lawful unless it is forbidden by law or is fraudulent or involves or implies injury to the person or property of another or is opposed to public policy. 7. Agreement not expressly declared void The agreement in restraint of something is void 8. Certainty of Meaning: Agreement must be certain and unambiguous. 9. Possibility of Performance: The terms of the agreement must be such as ere capable of performance. 10. Legal Formalities: The agreement must comply with the necessary formalities as to writing, registration, stamping etc.