This document outlines the key elements required for a valid contract according to Indian law. It discusses the nine essential elements as follows: 1) There must be an offer and acceptance between two parties showing mutual assent. 2) The parties must intend to create legal relations and understand the agreement can be enforced. 3) Consent must be free and not obtained through coercion, undue influence, fraud or mistake. 4) There must be lawful consideration such as an exchange of goods or services. 5) The parties must have the capacity to contract and not be minors or otherwise legally restricted. 6) The object of the agreement must be lawful and not illegal, immoral,

1. DEPARTMENT OF RURAL MANAGEMENT
TEACHER INCHARGE- Dr. ABHILASH BABU
AJEET KUMAR
ROLL NO- 4460

2. CONTRACT
According to sec.2(h), a contract is defined as an
agreement enforceable by law.
Agreement- According to sec.2(e), every promise or
set of promises forming consideration for each other.
Promise- According to sec.2(b), when the person to
whom the proposal is made signifies his assent
thereto, the proposal is said to be accepted.
Proposal when accepted becomes a promise.

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. 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.
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

6. 3. Free Consent
Consent means knowledge & approval of the parties
concerned.
Consent would be considered as free consent if it is not
vitiated by coercion, undue influence, fraud,
misrepresentation or mistake.
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.

7. 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.

8. 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.

9. 6. Legality of Object
The object of the agreement must be lawful. 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.

10. 7. Certainity
 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.

11. 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.

12. 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.