Valid contracts and it’s Elements

Mahesh Gupta

The Indian contract act,1872 came into force on 1st Day of sep. 1872.

It extends to the whole of India except Jammu &Kashmir.

An agreement enforceable by law is a contract.

For example:-A agrees to sell his car to B for Rs. 50,000.This agreement gives rise to obligation of

part of A to deliver the car and B to make the payment.

(Parties are bound to do Something)

When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted.

Proposal when accepted becomes a promise.

1.Free consent of parties

2.Competent to contract

3.Lawul consideration 4.Lawful object

5.Not declared to be void

6.Possibility of performance

Consent is said to be free when it is not caused by coercion, fraud, misrepresentation or mistake.

For example:-A threatens to kill B if he does not sell his property worth 10 lacks to him at Rs.50,000.

This is voidable at the option of B(as the consent is caused by coercion)

Section 11 deals with capacity of the persons to enter into contracts.

According to section 11 person competent to contract are:-

1. Person who has attained majority

2. Is of sound mind and

3.Not disqualified from contracting by the law to which he is subject.

The agreement must be supported by consideration .

Consideration means SOMETHING Return(quid pro quo)

The agreement is enforceable only when both the parties give something and get something in return .

Consideration may consist of an act or promise to do or abstain from doing something.

A agrees to sell his car to B or Rs.50,000.Here B’s promise to pay the sum of rupees 50,000 is consideration of A’s promise to sell the car and A’ s promise to sell the car is the consideration for B’s promise to pay rupees 50,000.

The object of the agreement must be lawful.The object is consideration lawful unless it is

forbidden by LAW.

A,B & C agree to share profit acquired by them by fraud.

In this case object of the agreement is not lawful.

There are certain agreements which are expressly declared void by the law.

The agreement must not have been declared void.

Agreement in restraint o marriage is void.A agrees to pay B Rs. 1,00,000 if he does not

marry C this is in restraint of marriage and hence void.

According to section 56 of the contract act, the agreement should be possible o performance , otherwise the agreement is void.

According to section 29 of the contract act, the agreement must be certain or capable of being made certain, If not the agreement is void.

Prepared by…….Mahesh gupta

THANK YOU