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1. Essential of contract
PRESENTED BY :- 1. KANAK BINAYAKIYA
2. SHEKHAR SURANA
3. ABHAY CHAWLA
4. MUDIT BHURA
PRESENTED TO :- DIVYA UTKARSHA

2. Meaning of contract
 Indian Contract Act defines a contract as “an
agreement, enforceable by law” [Section 2(h)]

3. Essential of valid contract
Essentials
1.Offer and
acceptance
2.Intention to create
legal relation
3.Free consent
4.Lawful
consideration
5.Capacity to
contract
6.Legal objective 7.Certainty 8.Possibility
9.Writing and
registration

4. 1. Offer & Acceptance Should be
Present
 At least two parties are needed to enter into a contact. One party has
to make an offer and other must accept it.
 The person who makes the 'proposal' or 'offer' is called the
'promisor' or 'offeror'. While, the person to whom the offer is made
is called the 'offeree’ or ‘promisee’. There must be an 'offer' and an
'acceptance' to the offer, resulting into an agreement.

5. Essential of valid offer
 Express or Implied
 Legal relations
 Definite and clear Communicated to the Offeree
 Should not contain negative conditions
 Subject to any conditions
 Must not contain cross offers
 Different from invitation to offer
 Specific or General

6. Essential of Valid Acceptance
 Given by the Offeree
 Absolute & Unconditional
 In a prescribed manner
 Communicated to the Offeror
 Express or Implied
 Follow the offer
 Given within reasonable time

7. 2. Intention to create legal relationship
A contract requires that the parties intend to enter into a legally binding
agreement. That is, the parties entering into the contract must intend to
create legal relations and must understand that the
agreement can be enforced by law.

8. Case Law
 In Balfour V. Balfour, a husband promised to pay
maintenance allowance every month to his wife,
so long as they remain separate. When he failed to
perform this promise, she brought an action to
enforce. As it is an agreement of domestic nature,
it was held that it does not contemplate to create
any legal obligation

9. 3. Free Consent
 'Consent' means the parties must have agreed upon
the same thing in the same sense.
 Or Consent means knowledge & approval of the parties
concerned.
Example:- A threatened to shoot B if he (B) does not lend
him Rs 2000 & B agreed to it. Here the agreement is entered
into under coercion and hence voidable at the option of B

10. According to Section 14, Consent is said to be free
when it is not caused by-
(1) Coercion, or
(2) Undue influence, or
(3) Fraud, or
(4) Miss-representation, or
(5) Mistake.
An agreement should be made by the free consent of the
parties.

11. 4. Lawful consideration
 Consideration would generally mean ‘compensation’ for doing or
omitting to do an act or deed.
 It is also referred to as ‘quid pro quo’ viz ‘something’ in return for
another thing. Such a consideration should be a lawful
consideration.
Example- A agrees to sell his books to B for Rs 100. B’s promise to
pay Rs 100 is the consideration for A’s promise to sell his books &
A’s promise to sell the books is the consideration for B’s promise to
pay Rs 100.

12. 5. Capacity to Contract
 The parties making the contract must be legally competent. Law
prohibits
1. Minor
2. Person of unsound mind (excluding the Lucid intervals)
3. Person who are otherwise disqualified like an alien enemy,
insolvents, convicts, etc from entering into any contract.

13. 6. Legality of Object
The object of an agreement must be valid. Object
has nothing to do with consideration. It means the
purpose or design of the contract. Thus, when one
hires a house for use as a gambling house, the
object of the contract is to run a gambling house.

14. An agreement is unlawful, if it is
(i) Illegal
(ii) Immoral
(iii) Fraudulent
(iv) Of a nature that, if permitted, it would defeat the provisions of any law
(v) Causes injury to the person or property of another
(vi) Opposed to public policy.

15. 7. Certainty
 The terms of a contract must not be vague or uncertain.
 If an agreement is vague and its meaning cannot be
ascertained, it cannot be enforced.

16. 8. Possibility of Performance
 The terms of a contract must be such as are capable of
performance. An agreement to do an impossible act is
void and is not enforceable by law.

17. 9. Writing & registration
 Generally, a contract may be oral or in writing. However, certain
contracts are required to be in writing and may even require
registration. Therefore, where law requires an agreement to be put
in writing or be registered, the same must be complied with.
 For instance, the Indian Trusts Act requires the creation of a trust to
be reduced to writing.

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