Definition and Essential elements of a Valid Contract:
Definition of Contract:
A contract is an agreement enforceable by law. There are two parts in contract:1. an agreement
2. legal enforcement
We can say that any agreement that can be enforced in a court of law is a contract.
Agreement:
Every promise and set of promises forming the consideration for each other is an agreement.Agreement = Offer + Acceptance
Essential elements of a Valid Contract:
Essential elements means the elements which are necessary to be present in order to make a contract legally enforceable.
1. Free consent:
The consent of the parties to a contract must be free ie the consent should not be obtained through means of fraud,misrepresentation,undue influence,mistake, coercion. ( for beginners: consent means agreeing to the terms and conditions of the contract and entering into it. eg: A agrees to sell an apple to B at 10 rupees. here A's willingness to sell the apple is his consent.2. Competency to Contract:
The parties to the contract must be competent. Here competency doesnt mean any ability or skill . It means the following:a) Major.
b) of sound mind.
c) persons not disqualified by law.
we can also say that a minor, person of unsound mind and persons disqualified from law are not competent to contract.
3. Legality of Object:
The object of the contract should be legal and not illegal. illegal objects would make the contract void ab initio that is void since the beginning.eg: A B and C agree to share among themselves gains arising out of a illegal business. This is not a valid agreement as the object is unlawful.4. Consideration:
Every contract must have a lawful consideration.Consideration means something in return( need not be adequate). It is also called a recompense. The consideration to a contract must be lawful as well. It cannot be something prohibited by law. Eg: A agrees to pay B rs 1000 for no consideration this is not a valid agreement... A agrees to pay B rs 500 for a horse valued at 1000. This is a valid agreement as consideration is something in return and need not be adequate.
6. Valid Offer and Acceptance:
Every contract is made by a valid offer and acceptance.offer- a person is said to make an offer when he signifies his willingness to do or to abstain from doing something in order to obtain the assent of the other to such act or abstinence.
acceptance- Signifying ones willingness to such act or abstinence mentioned above is a acceptance.
