Essentials of a valid Contract PPTs.pptx

details on essentials of a valid contract

1. Essentials of a valid Contract

2. What is a contract? According to Section 2(h) of The Indian Contract Act, 1872 An agreement enforceable by law is called as contract. In simple words, Contract = Agreement + Enforceability

3. Section 10 of the Indian contract Act 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 not hereby expressly declared to be void.

4. Essentials under Section 10 Agreement- In order to form a valid contract there should be lawful offer by one party and lawful acceptance by the other. Free consent- Consent is said to be free when it is not caused by coercion, undue influence, fraud, misrepresentation or mistake. Competency of Parties- Every person is competent to contract who is of the age of majority, and who is of sound mind and is not disqualified from contracting by any law. ( Mohori Bibee v Dharmodas Ghose) Lawful consideration- It is referred to as ‘quid-pro-quo’ i.e. something in return. Legal Object- Section 23 states that consideration or object is not lawful if it is prohibited by law, or it is such as would defeat the provisions of law, if it is fraudulent or involves injury to the person or property of another or court regards it as immoral or opposed to public policy. The agreement entered into must not be which thelaw declares to be either illegal or void.

5. Other essentials Two Parties- One party making the offer and the other party accepting it. Intention to create legal relationship- The parties must intent to create legal obligations. (Balfour v. Balfour) Legal formalities- Legal formalities if any required for particular agreement such as registration, writing, they must be followed. Certainty of meaning- The Agreement must be certain and not vague or indefinite. Possibility of performance- The terms of the agreement should be capable of being performed.

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