The contract is defined under section 2(h) of the Indian Contract Act, 1872 that states Contract as ‘An agreement enforceable by law’. The contract is the final step of a deal, for forming a contract there should be at least two parties to the contract, second, there should be an offer and acceptance by one party to another party which eventually results in to promise. The promise is defined under sec 2(b) as a proposal when accepted becomes a promise. This all results into consideration that is something in return for something. Therefore, if A promises B to sell his car at Rs.50000 then in return B will promise A to buy his car buying giving the asked amount which will result in consideration. Thirdly, the agreement is defined under sec 2(e) as every promise and every set of promises forming consideration for each other is an agreement. When an agreement fulfills all the valid essentials given under law, a contract is formed. So, let us see what the essentials are

  1. Agreement
  2. Legal intention

One must have a legal intention or a legal object while forming an agreement for example if A invites B for a dinner at her place and B doesn’t show up. Then in that case A cannot sue B as the agreement was not made with any legal intention hence cannot result in a valid contract.

  1. Free consent

Consent given by the promisee to the promisor should be free of nature and must not be caused on the basis of undue influence, coercion, misrepresentation, cheating, fraud, or mistake. However, if done so may result in a void contract.

  1. Competent or eligible to the contract

The parties to the contract must come within the capacity of the contract that it must not belong to a minor age, unsound mind, or person disqualified by any law to which they are subject.

  1. Lawfully considered

Consideration must be real and valuable in the eyes of law. The parties to the contract must be obligated to fulfill their part of the deal to the other party.

  1. Lawful object

As mentioned earlier must have legal object or purpose of an agreement should be lawful in nature.

  1. Not expressly declared void

That it must be legal and not void under the law for an example if A offers to sell B  two pair of elephant teeth and B in return accept the deal and pay A the asked amount. However, A does not fulfill his part of the deal can B seek redressal from the court of law. Then no he cannot as the deal is illegal in the eyes of law and hence is Void Ab Initio.

  1. Capable of Performance

That is the agreement must be capable of performance and should not be either wagering contract that is an agreement based on an uncertain event. For example, if A agrees to pay B if it rains today then this agreement is not valid as it is based on an uncertain event. Similarly, it should also not belong to a contingent contract that is based on a bet.

  1. Legal formalities

The contract must fulfill the entire essential asked by the law. If the law asks that a witness must be present while signing a contract or party to the contract must submit certain documents, affidavits, or stamps then it must be fulfilled by the parties.

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