Contract & Agreement

1. Contract & Agreements
By- Dr Sapna Dadwal

2. Unit -1
Topic to be covered
• Definition of contract
• Difference between agreement
and contract
• Essential elements of valid
contract
• Classification of contract

3. Contract
• Section 2(h) of the Indian contract Act defines
a contract as an agreement enforceable by
law.
• In simple words a contract is an exchange of
promise between two persons ,giving birth to
legal obligation and if one the person defaults,
the other person can sue him in the court of
law,

4. Agreements vs. Contract

5. Essential elements of valid contract
There must be an agreement
Intention to create legal relations
Lawful consideration
Capacity of parties
Free and genuine consent
Lawful Object
Writing and registration
Certainty
Possibility of performance
Agreement not Declared Void

6. Essential elements of valid contract
Agreement- There must be a lawful offer and a
lawful acceptance of the offer. To constitute the a
contract there must be an agreement.
Intention to create legal relationship- There must
be an intention among the parties to create legal
relation.
Lawful Consideration-Consideration means price
paid by the one party for the promise of other. An
agreement is legally enforceable if both the
parties are giving something each other,

7. Essential elements of valid contract
• Capacity of parties-The parties to an agreement
must be competent to contract, otherwise it can
not be enforced by court of law.
• Free and Genuine Consent- Free consent of all
the parties to an agreement is other essential
element of a valid contact.
• Lawful Object- For formation of valid contract it is
very important that parties must enter for a
lawful object.

8. Essential elements of valid contract
Writing and registration-A contract may be
oral or in writing but in certain cases the
contract must be in writing and registered .
Example-Pay a time barred debt must be in
writing.
Certainty- An agreement must be capable of
being certain , A vague or uncertain
agreements can not be enforced in court of
law.

9. Essential elements of valid contract
Possibility of Performance-An agreement to
do an act impossible in itself is void so
agreement should be possible to perform.
Agreement not declared Void- The agreement
must not be one which the law declares to be
either illegal or void.

10. Classifications of Contract
I. On the basis of Enforceability
 Valid Contract-An agreement is valid when it
fulfills all the essential elements of contract
given in section 10 of Indian Contract Act.
 Void Contract- A contract which can not be
enforce in court of law.
 Void Agreement-An agreement which is not
enforceable by law is void agreement.

11. Classifications of Contract
 Voidable Contract-An agreement which is
enforceable by law at the opinion of one or
more parties.
 Illegal Contract-It is a contract which is forbidden
by law.
 Unenforceable Contract-A contract is good in
substance but because of some technical defect
,both parties can not enforce it.

12. Classifications of Contract
2. On the basis of Formation
 Express Contract-Where offer and
acceptance has taken in express manner, it
may be written or oral
 Implied Contract-Where offer and
acceptance has made by conduct only.
 Quasi Contract-Quasi contracts is created by
law as there is no intention of the parties to
enter into a contract.

13. Classifications of Contract
3. On the basis o Performance
 Executed Contract-Where both the parties have done
their jobs.
 Executory Contract-Where one or both the parties to
the contract have still to perform their obligations.
4.On the Basis of obligation
 Unilateral Contract-where only one party has to
perform its promise. These are one sided contract.
 Bilateral Contract-Where performance is outstanding
on the part of both the parties.