Essentials Of A Valid Contract
Meaning Of Contract-
In simple language we can say that a contract is basically an agreement which is in written form which contains certain promises which are to be performed by both the contracting parties and when such type of agreement becomes enforceable by law then such type of agreement becomes a contract and if such party violates the promises written in the contract then it would be breach of contract and strict legal action will be taken and contract will be repudiated.
Under Contract Act,1872 Contract is basically defined under section 2(h) and it as an ‘Agreement which is enforceable by law’. An agreement is basically defined under section 2(e) as every promise and every set forming the consideration of each other for each other and a promise is defined as accepted proposal. An agreement is regarded as contract when it becomes enforceable by law.
Contract= Enforceability + Agreement
Essentials Of A Valid Contract-
Essentials of a valid contract is basically defined under Section 10 of the Indian contract act and it states the following conditions which are required to make the contract valid-
Offer- Firstly, there must be offer from one of the party as without any offer the contract is not possible.
Acceptance Of Offer-Secondly, the offer must be affected by the party to whom the offer was given. For example- If an offer is given to D to C so it has to be accepted by B only.
Consensus ad-idem- Thirdly, one of the important thing which means meeting of minds as the parties of the contract must accept the terms of the contract and also have the same
Legally Competent- Fourthly, both the parties of the contract must be legally competent as if the contract is done by the person who is of unsound mind or is under 18 years of age or is a minor then under that case the contract is void.
Consideration- Fifthly, for the performance of the contract there must be something given in consideration as something given for the performance of promise which is being given by both the contracting parties.
Offer And Acceptance-
Offer and acceptance are the benchmark for the formation of contract as there can be no contract unless there is an offer and such offer must be accepted and once an offer is accepted then it becomes promise.
It is the first benchmark for the formation of the contract. Under this cast the person making an offer is called offeror or proposer and who is accepting the offer is called as offeror or the proposer.
Under the Indian contract act,1872 offer/proposal is basically defined under section 2(a) and it is defined as-
When person signifies to another his willingness to door abstrain from doing anything with a view of obtaining the asset of that other to such act then it is said to make a proposal.
Offer And Invitation to Offer-
These are the two different terms as an invitation to offer to others is not an offer under the Indian contract Act,1872 and invitation to offer basically includes advertisements, tenders, goods on display and vice versa so this is an invitation to offer.
It is basically the second step for the formation of a contract as stated earlier as under this acceptance means when the person to whom the offer has made has accepted it so this is acceptance. It is basically defined under Section 2(b) of the Indian Contract Act, 1872 and the most perspective of the acceptance is the performance of the offer and the ignorance of the offer is not an acceptance but if an act done which amounts to acceptance but acceptor being unaware of the offer then under that case it is not a valid acceptance.
A contract isformed when a person makes an offer and when such offer is being accepted by the another person then that becomes an agreement.
Consideration is basically defined under section 2(d) of the Contract Act,1872 and it act of doing something or abstrain from doing something by the promisor it is of past,present or of future.
According to section 10 of the Indian Contract Act,1872 a contract is not valid if it is not entered with free consent. Free Consent is basically defined under section 14 of the Indian Contract Act,1872 and it states that free consent is not given when the party is under coercion, undue influence, fraud, misrepresentation and mistake.
Under section 10 it is clearly stated that the contract will be made with the free consent but both the parties must be competent to enter into contract as if the contract is made with the minor, the person who is of below 18 years of age or with the person who is of unsound mind then under that case the contract made will be void ab intio i.e void from the beginning as it will not be legally enforceable.
So these are some of the valid essentials in order to form a valid contract which have to be fulfilled as it has to be made with proper lawful object and be legally binding on both the contracting parties.