“An agreement enforceable by law is a contract” Comment and explain the essentials of a valid contract in brief.
Posted on: Monday, September 18, 2017
Generally contract means a promise or agreement made by two or more persons enforceable by law. According to Indian Contract Act 1872 Section 2(h) defined. “An agreement enforceable by law is a contract.” Hence, agreement and legal enforceability creates an agreement as contract. Section 10 defines
“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 void. The contract to be made in writing by law of land or in the presence of witnesses or be registered, if required” On the basis of the above definitions and judgment given by judges, help us to mention the following essentials of a valid contract :
(1) Atleast two parties are required to enter into a contract that is promisor and romisee.
(2) Agreement : Proposal and acceptance must be absolute and unconditional.The two identical Cross-offers and successive counter offer are only offer and not agreement.
(3) The intention should be to create legal relations not the social, domestic, political relations.
(4) Contractual capacity among persons who is not minor, insane and disqualified by law of the land.
(5) Consent or Consensus ad idem. The parties are said to consent when they agree upon the same thing in the same sense. (Section13).
6) Free Consent : According to Section14, the consent is said to be free when it is not caused by
- i) coercion, or ii) undue influence, or iii) fraud, or iv) misrepresentation or v) mistake.
(7) Consideration : Except some exceptions, an agreement without consideration is void. It means quid pro-quo. It must be lawful and real and not illusory.
(8) The lawful object and its consideration must be legal.
(9) The agreement must have certain meaning.
(10) An agreement to be valid must be possible to be performed.
(11) The agreements must not be declared void by the law of the land.
(12) Compliance of legal formalities is required.
Hence, every agreement to be enforceable by law must possess all these essential elements for a contract. If any of the element is missing in an agreement, such agreement is not enforceable by law.