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.
4. 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.
5. 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.
6. 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.
