Essential elements of valid
- 1. Essential Elements of Valid Contract AKSHAY CHANDRATREYA LLM, 15010143053 SYMBIOSIS LAW SCHOOL
- 2. SEC 10 OF THE INDIAN CONTRACT ACT "All agreements are contract if they are made by the free consent of the parties, competent to contract, for a lawful consideration and with a lawful object and are not expressly declared to be void."
- 3. ESSENTIALS OF A VALID CONTRACT OFFER AND ACCEPTANCE INTENTION TO CREATE LEGAL RELATIONSHIP LAWFUL CONSIDERATION CAPACITY OF PARTIES FREE CONSENT LAWFUL OBJECT CERTAINTY POSSIBILITY OF PERFORMANCE NOT DECLARED TO BE VOID OR ILLEGAL LEGAL FORMALITIES
- 4. OFFER AND ACCEPTANCE In order to create a valid contract, there must be a 'lawful offer' by one party and 'lawful acceptance' of the same by the other party.
- 5. Intention to Create Legal Relationship Agreements which create legal relations or are capable of creating legal relations are contracts, for example, an invitation to a dinner does not create any legal relation and therefore is not a contract. Husband & Wife Agreements The courts consider domestic arrangements between husband and wife to be social agreements and not legally enforceable.
- 6. Lawful Consideration Consideration has been defined in various ways. According to Blackstone, "Consideration is recompense given by the party contracting to another.“ In other words of Pollock, "Consideration is the price for which the promise of the another is brought.“ Consideration is something in return.
- 7. CAPACITY OF PARTIES The parties to an agreement must be competent to contract. If either of the parties does not have the capacity to contract, the contract is not valid. According the following persons are incompetent to contract. (a) Minors, (b) Persons of unsound mind, and (c) Persons disqualified by law to which they are subject.
- 8. FREE CONSENT 'Consent' means the parties must have agreed upon the same thing in the same sense. According to Section 14, Consent is said to be free when it is not caused by:- Coercion , or Undue influence , or Fraud , or Misrepresentation , or Mistake. An agreement should be made by the free consent of the parties.
- 9. LAWFUL OBJECT The Object is said to be lawful only when:- it is not forbidden by law; it is not of such nature that if permitted it would defeat the provision of any law; it is not fraudulent; it does not involves an injury to the person or property of any other; the court does not regards it as immoral or opposed to public policy.
- 10. CERTAINTY According to Section 29, "Agreement the meaning of which is not Certain or capable of being made certain are void."
- 11. POSSIBILITY OF PERFORMANCE If the act is impossible in itself, physically or legally, if cannot be enforced at law. Example: Mr. A agrees with B to discover treasure by magic. Such Agreements is not enforceable.
- 12. NOT DECLARED TO BE VOID OR ILLEGAL The agreement though satisfying all the conditions for a valid contract must not have been expressly declared void by any law in force in the country. Agreements mentioned in Section 24 to 30 of the Act have been expressly declared to be void for example agreements in restraint of trade, marriage, legal proceedings etc.
- 13. LEGAL FORMALITIES An oral Contract is a perfectly valid contract, expect in those cases where writing, registration etc. is required by some statute. In India writing is required in cases of sale, mortgage, lease and gift of immovable property, negotiable instruments; memorandum and articles of association of a company, etc. Registration is required in cases of documents coming within the scope of section 17 of the Registration Act.
- 14. “All the elements mentioned above must be in order to make a valid contract. If any one of them is absent the agreement does not become a contract.”
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