An agreement must have been made by free consent of the parties. This is important as each of the parties involved will know when to renew their contracts if they need to. The aggrieved party should be able to obtain relief through law in the event of breach of contract. Essential Elements of a Valid Contract All the requirements of a valid contract such as free consent, consideration, competency of the parties, lawful object and consideration must be fulfilled. If the agreement is induced by mutual mistake which is material to the agreement, it would be void Sec. As the details of these essentials form the subject-matter of our subsequent chapters, we propose to discuss them in brief here.
A proposal when accepted becomes a promise. Now that you know about these classifications, you should be able to identify the type of contract you would be in. Thus, i an arbitration agreement must be in writing as per the Arbitration and Conciliation Act, 1996; ii an agreement for a sale of immovable property must be in writing and registered under the Transfer of Property Act, 1882 before they can be legally enforced. Lawful Consideration Something in return is Consideration. Intention to create legal relations: There must be an intention among the parties that the agreement should be attached by legal consequences and create legal obligations. For example, an agreement in restraint of marriage, an agreement in restraint of trade, and an agreement by way of wager have been expressly declared void under Sections 26, 27 and 30 respectively. A contract is legally binding when it enforceable by the law.
Lawful objects: According to Sec. The first step towards creating a contract is that one person shall signify or make a proposal or offer to the other, with a view to obtaining the acceptance of that another person to whom the offer is made. B delivered to A 20 bags of rice at Rs. Writing and registration: Oral contract is a valid contact. N sang the song but M did not bring the saree for her.
However the contract must be in writing and registered, if so required by any law, for example, gift, mortgage, sale, lease under the Transfer of Property Act 1882, Memorandum and Articles of Association of a Company under the Indian Companies Act, contracts under sub sections 10 and 3 of section 25 of the Indian Contract Act, etc. In this article, we will provide you with essential information, tips, and and samples that will definitely be of great help to your contract-making needs. The object for which the agreement has been entered into must not be fraudulent, illegal, immoral, or opposed to public policy or must not imply injury to the person or property of another. It must be possible to ascertain the meaning of the agreement, for otherwise, it cannot be enforced. It is presumed in commercial agreements that parties intend to create legal relations. The contracts must be capable of being performed.
This agreement is valid because the meaning of the agreement could be easily ascertained from the circumstances of the case. What Are the Parts of a Contract? It is a social agreement. According to Section 10, all agreements are contracts if they are made by the free consent of the parties, competent to contract, for a lawful consideration, with a lawful object, are not expressly declared by the Act to be void, and, where necessary, satisfy the requirements of any law as to writing or attestation or registration. The consideration or object of an agreements is unlawful if — 1 2 3 4 5 it is forbidden by law; or is of such a nature that, if permitted it would defeat the provisions of any laws is fraudulent; or involves or implies injury to the person or property of another the court regards it as immoral or opposed to public policy In each of these cases, the consideration or object of an agreement is said to be unlawful. This is an essential element because both parties should agree to the same things in a contract.
Although it may be necessary, it is not ultimately a must as it is not all the time convenient. A contract is an agreement or an arrangement between two or more parties about something of interest. Genuine and Free Consent Free consent is another essential element of a valid contract. A general offer, on the other hand, is one, which is made to public in general and it may be accepted by any person who fulfils the conditions mentioned in it. Certainty: The terms of a contract should be clear. When the defendant was due to return to Ceylon, his wife could not accompany him because of her health.
Free Consent There must be free consent of the parties to the contact. Not declared to be void. Because of this, there have been a lot of fraudsters who make use of these contracts to convince people that they are legit. An agreement must not be expressly declared to be void : A void agreement is not enforceable by law Sec 2 g. Consent of parties must be free, for example it must not have been obtained 1 coercion, 2 undue influence, 3 fraud, 4 misrepresentation, or 5 mistake. Consideration: When at the desire of the promisor the promisee or any other person has done or abstained from doing, or does or abstains from doing or promises to do or to abstain from doing something such act or abstinence or promise is called a consideration for the promise.
According to Section 11 of Indian Contract Act, 1872. For example, if I enter into an agreement or contract with you to do something illegal, that contract in the first place can never be valid simply because the object of the contract is not legal. That means, the goods must be sold for some price. The agreement is not enforceable. Consideration need not be in cash or in kind.
Lawful Object The object of an agreement must be lawful. Intention to Create Legal Relationship The intention of the parties to a contract must be to create a legal relationship between them. Sections 24-30 specify certain types of agreements which have been expressly declared to be void. Legal Formalities The agreement must comply with the necessary formalities as to writing, registration, stamping etc. Under different sections of the Contract Act, 1872, the following agreements have been said to be expressly void, viz :- i Agreements made with the parties having no contractual capacity, e. Consideration has been defined as the price paid by one party for the promise of the other.