Question

Explain the essentials of a Valid Contract

Answer 1

1. Offer and Acceptance: There must be two parties to an agreement namely one party making the offer and the other party accepting it.
2. Legal Relationship: The parties must have the intention to create legal relations between them. An agreement of Social or domestic nature is not at all a contract.
3. Lawful Consideration (quid pro quo): As per Contract Act under Sec.2(d) Consideration means something in return. A contract without consideration becomes invalid.
4. Lawful Object (Section 23): The object of the agreement should be lawful and legal. It must not be immoral, illegal, or opposed to public policy.
5. Free Consent (Section 13 & 14): Consent of the parties must be free and genuine. Consent means agreeing upon the same thing in the same sense at the same time i.e. there should be a consensus – ad – idem. Consent is said to be free when it is not caused by coercion, undue influence, fraud, misrepresentation, or mistake.
6. The capacity of Parties (Section 11): The parties to a contract must have the capacity (legal ability) to make a valid contract.
7. The certainty of Terms (Section 29): The agreement should be clear to the parties of the agreement. The agreement must be precise.
8. Possibility of Performance (Section 56): The terms of the agreement should be capable of performing. An agreement to do an act, impossible in itself cannot be enforced.
9. Not declared Void: The agreement should be such that it should be capable of being enforced by law. Certain agreements have been expressly declared illegal or void by the law.
10. Necessary Legal Formalities: A contract may be oral or in writing. Where a particular type of contract is required by law to be in writing and registered, it must comply with necessary formalities as to writing, registration, and attestation.