The Indian Contract Act 1872 establishes the framework for contracts in India. It covers the formation of contracts including offer and acceptance, what constitutes a valid contract through elements like capacity, consideration and consent, and discharge of contractual obligations. Key aspects covered include defining a contract as an agreement with offer and acceptance along with the intention to create legal obligations, as well as what qualifies as an offer, acceptance, and the requirements for a contract to be valid such as the capacity of parties and consideration.