Essentials of a valid contract

meaning of contract, agreement , and its essentials as well

1. ESSENTIALS OF A VALID CONTRACT PRESENTED BY: SHUBHAM KUSHWAHA (167554)

2. INTRODUCTION

3. OFFER ACCEPTANCE AGREEMENT AGREEMENT ENFORCEABILITY CONTRACT

4. ESSENTIALS 1. OFFER AND ACCEPTANCE 3. LAWFUL CONSIDERATION 2. INTENTION TO CREATE LEGAL RELATIONSHIP 4. CAPACITY TO CONTRACT 5. FREE CONSENT 8. LEGAL FORMALITIES 7. POSSIBILTY OF PERFORMANCE 9. CERTAINITY 6. LAWFUL OBJECT

5. OFFER AND ACCEPTANCE At least two parties are needed to enter into a contract. One party has to make an offer and other must accept it. The person who makes the 'proposal' or 'offer' is called the ' promisor ' or ' offeror '. While, the person to whom the offer is made is called the ' offeree ’ or ‘ promisee ’. There must be an 'offer' and an 'acceptance' to the offer, resulting into an agreement.

6. INTENTION TO CREATE LEGAL RELATIONSHIP When two parties enter into an agreement, their intention must be to create a legal relationship between them. Agreements of social or domestic nature do not contemplate legal relationship.

7. LAWFUL CONSIDERATION An agreement to be enforceable by law must be supported by consideration. It is a general rule: “NO CONSIDERATION, NO CONTRACT.”

8. CAPACITY TO CONTRACT In a contract, both the parties (i.e. offerer and acceptor) must be capable of entering into contract. Law prohibits: Minors Persons of unsound mind Person who are otherwise disqualified like an alien enemy, insolvents, convicts, etc from entering into any contract.

9. FREE CONSENT 'Consent' means the parties must have agreed upon the same thing in the same sense (Section 13). Consent is said to be free when it is not caused by: Coercion (Sec. 15) Undue Influence (Sec. 16) Misrepresentation (Sec. 17) Fraud (Sec. 18) Mistake (Sec. 20,21,22)

10. LAWFUL OBJECT The object of the contract must be lawful. It must not be illegal, fraudulent, immoral, or opposed to public policy. If an agreement suffers from any legal flaw, it would not be enforceable by law.

11. POSSIBILITY OF PERFORMANCE The agreement must be to do the act whose performance is possible. The agreement to do an act whose performance is impossible is not enforceable by law.

12. LEGAL FORMALITIES Generally, a contract may be oral or in writing. However, certain contracts are required to be in writing and may even require registration. Therefore, where law requires an agreement to be put in writing or be registered, the same must be complied with.

13. CERTAINITY The terms of a contract must not be vague or uncertain. If an agreement is vague and its meaning cannot be ascertained, it cannot be enforced.

14. THANK YOU