Essentials of valid contract
Essentials Elements of a Valid Contract
Introduction:
Contract is simply an agreement between two or more persons to do something.
It is a legal relationship consisting of the rights and duties of the contracting parties; a promise or set of promises constituting an agreement between the parties that gives each a legal duty to the other and also the right to seek a remedy for the breach of those duties. Contract Act 1872 contains the law relating to contracts. It provides the rules relating to commercial transactions and determines the circumstances in which promises made by the parties to a contract shall be legally binding on them. It is a very important branch of mercantile law.Meaning and Definition of Contract:
Relevant provisions:
Essentials of a contract:
1. Parties:
2. Agreement:
(a) Offer/Proposal:
(b) Acceptance
Agreement is defined as:
3. Legal Relationship:
Contracting parties must have intention to make legal relationship. There are agreements which do not result into contract within the meaning of that term e.g where two parties agree to take a walk together would not amount to legal contract.
4. Enforceability:
Contract as defined "An agreement enforceable at law"
Thus to make a contract there must be “an agreement and that agreement
enforceable by law”. An agreement enforceable, when it fulfills the
conditions which are indicated in sec 10.
5. Free consent:
(a) Consent:
(b) Free consent:
Case law:
Bala Devi vs Majumdar (1918) 41 Mad. 33
An illiterate woman executed a deed of gift under the impression that
she was executing the deed to her nephew for managing her land.
The evidence showed that she never intended to execute the gift, nor
was the deed ever read or explained to her.It was held that there was
not consent.
6. Lawful Consideration:
- It is forbidden by law or
- It is of such nature that, if permitted it would defeat the provisions of any law or
- It is fraudulent or
- It involves or implies injury to the person or property of another or
- It is opposed to public policy.
7. Lawful Object:
The word object means "purpose". In order to make a valid contract its
object must be lawful.
The object is unlawful if it cannot be achieved without violation of
some law or doing something immoral or opposed to public policy.
8. Capacity of Parties:
As sec 10 states "All agreements are contracts if they are made by
free consent of the parties competent to contract". So a valid
agreement requires the parties to be competent to contract.
Who is competent to contract?
Sec 11 defines:
Every person is competent to contract if he is of the age of majority
according to the law to which he is subject, is of sound mind and is
not disqualified from contracting by any law to which he is
subject.
So incompetency is caused by three things
(a) Minority (b) Unsoundness of mind (c) Status of person
according law to which he is subject.
9. Certainty:
10. Possibility of performance:
11. Not declared void:
12. Legal formalities:
Conclusion:
A contract is an agreement which is enforceable at law. An agreement becomes enforceable at law when it fulfills some conditions. These conditions may be called essentials of valid contract. If any of the essential element is missing the contract is either void, voidable illegal or unenforceable in the eye of law.
Relevant questions:
- What is Contract?
- What is legal contract?
- What is essential elements of contract?
- What is contract according to contract act 1872?
- Which Contracts enforceable at law?
- Discuss the essentials of contract.
- Define Contract, give its essentials.
- Discuss the statement "An agreement enforceable at law is a contract"
- Explain the essentials of valid contract.
- Essentials of valid contract.
- Uncertain terms may make contract void?
- Essentials and legal rules for valid contract.