DEFINITION OF CONTRACT “Every agreement and promiseenforceable at law is a contract.”Pollack “An agreement enforceable by law is acontract.” Contract Act, 1872
1.Agreement “Every promise and every set of promises,forming the consideration for each other, isan agreement.” “When a proposal accepted , becomes aPromise.” A Promise come into existence, when oneparty makes proposal and other party givesConsent.
2. Enforceability An agreements is enforceable if, it is recognized by the courts. Enforceability: The agreement must create legalobligations. Between the parties.
Types of AgreementsAGREEMENT = OFFER + ACCEPTANCE1. Social Agreements:o Not enforceableo Do not create legal obligationso Between the parties.2. Legal Agreements:o Enforceableo They create legal obligationso Between the parties.
Essentials of a Valid Contract1. Offer and Acceptance.Lawful offer.Lawful Acceptance.Must satisfy the requirements of Contract Act.2. Legal Obligation.Parties must Create Legal Obligations.Fails to Fulfill , liable for that.
3. Free Consent. Parties Agreed upon Same thing in the same sense Not obtained byCoercion , Undue influence , FraudMisrepresentation
4. Not Expressly DeclaredVoid.Expressly declared void by the law.e.g. Restraint to Trade.
5. Lawful Consideration.Something given or obtainedSome benefit to the other partyMust be lawful6. Capacity of Parties.Competent to ContractAge of Majority,Sound Mind,Not Disqualified
7. Writing and Registration.Oral and WrittenWritten Easy to prove in the Court.Registration and Witnesses8. Certainty of Terms.Clear , Complete and Certain.Other wise becomes Void.
9. Possibility of Performance.Capable of Being Performed.Legally and Physically Performed.10. Lawful Object.Made for lawful Object.Illegal, public policy against , injury , Fraud.
KINDS OF CONTRACT According to Enforceability.VALID CONTRACTEnforceable.All Essentials Present.Legal ObligationBreach of Contract – Remedies
VOIDABLE CONTRACTEnforceable at the option of theParties Consent of the Parties is NotFree. Avoid - Void Confirm - Valid.
VOID CONTRACT. Void means Not Binding in Law. Not Void From the Beginning Subsequently becomes void due tosome Reasons.
UNENFORCEABLECONTRACT Cannot be Enforced Technical DefectsILLEGAL AGREEMENTIts Performance Forbidden by Law.If Permitted it will defeats the Provisionsof Law.
VOID AGREEMENTSNot Enforceable by lawDoes not create legal obligationsVoid ab initioExcept Free Consent EssentialsMissingE.g. Minor and With out Consideration
Conclusion Contract, an agreement which isenforceable by the law. Legal agreements are essential for thecommercial/Business transactions. Fulfilling the Essentials of valid Contractis mandatory for the purpose of itsenforceability.