Nishanth
What is a contract?
The term ‘contract’ is defined under section 2(h) of Indian Contract Act,1872. The said provision defines contract as “An agreement enforceable by law”
Agreement – Section 2(e) defines agreement as “Every promise and every set of promises forming the consideration for each other”
When an agreement becomes a contract?
After an agreement is formed it becomes a contract only when enforced by law. The conditions of enforceability are stated under Section 10.
Section 10 reads that “every contract is an agreement but every agreement is not a contract.” An agreement becomes a contract when the following condition are satisfied:
Free consent of parties,
Competency of parties,
Lawful consideration,
Not declared void by law.
Elements of Valid contracts?
To create valid, enforceable contracts under state and federal laws, you must include the following required elements;
Offer and acceptance:
A contract must have an offer and acceptance. One party makes an offer and the other party accepts the terms of the offer.
Legal Object:
The object should be legal, it cannot be illegal; for instance, the law will not uphold an Employment Contract that requires someone to commit a crime, such as theft.
The Capacity of the parties:
The law uses age as a threshold for determining the capacity by setting 18 or 21 years as the age of adulthood. The parties must demonstrate their legal capacity to enter into a contract; this means they must have a complete understanding of the nature and effect of the contract.
Consideration:
Consideration is a price or value that is exchanged for an offer. Though it is usually monetary, consideration can be any right, interest, or benefit – as there is an exchange of something of value.
When these elements are fulfilled, the contracts become valid.
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