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LAB Contract 1

This document discusses the essential elements of a valid contract under Indian law. It defines key terms like proposal, acceptance, and agreement. The essential elements of a valid contract are: offer and acceptance, lawful consideration and object, capacity of parties, free consent, certainty of meaning, possibility of performance, and compliance with legal formalities. Agreements can be express or implied contracts. Contracts are classified as executed, executory, unilateral, or bilateral depending on preformation. The key difference between an agreement and a contract is that an agreement becomes a contract if it is enforceable by law and meets all other requirements.

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33 views

LAB Contract 1

This document discusses the essential elements of a valid contract under Indian law. It defines key terms like proposal, acceptance, and agreement. The essential elements of a valid contract are: offer and acceptance, lawful consideration and object, capacity of parties, free consent, certainty of meaning, possibility of performance, and compliance with legal formalities. Agreements can be express or implied contracts. Contracts are classified as executed, executory, unilateral, or bilateral depending on preformation. The key difference between an agreement and a contract is that an agreement becomes a contract if it is enforceable by law and meets all other requirements.

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Onestopfordramaaddicts Freak
Copyright
© © All Rights Reserved
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Download as PDF, TXT or read online on Scribd
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LEGAL ASPECTS OF

BUSINESS
By
SHAUNAK R. VYAS
Advocate, Gujarat High Court

Batch: TY-2022 Learn & Develop the Skill Topic:


GLS BBA Essentials
Indian Contract Act, 1872
• Indian Contract Act, 1872
• Essentials of a valid contract;
• Types of Contract;
• Difference between Agreement
and Contract.
What agreements are Contract…?
Section- 2 (h):
An agreement enforceable by
law is a contract.

Section- 2 (e):
Every promise and every set of
promises, forming the consideration
for each other, is an agreement.
Section-10: What agreements are Contracts:
Section- 10:
All agreements are contracts if
they are made by the free consent of
parties competent to contract, for a
lawful consideration and with a lawful
object, and are not hereby expressly
declared to be void.

 Nothing herein contained shall affect any


law in force in India and not hereby
expressly repealed, by which any
contract is required to be made in
writing or in this presence of witnesses,
or any law relating to the registration of
documents.
Is it a contract…?
Essentials of a valid Contract:
1. Proper offer and Proper
Acceptance (with intention to
create legal relationship);
2. Lawful Consideration and Lawful
Object;
3. Capacity to Contract;
4. Free Consent;
5. Agreements not declared void or
illegal;
6. Certainty of meaning;
7. Possibility of performance of an
agreement;
8. Necessary Legal Formalities.
1. Proper offer and Proper Acceptance (with
intention to create legal relationship):
Section- 2 (a):
When one person signifies to
another his willingness to do or to abstain
from doing anything, with a view to obtaining
the assent of that other to such act or
abstinence, he is said to make a PROPOSAL.

Section- 2 (b):
When the person to whom the
proposal is made signifies his assent
thereto, the proposal is said to be
accepted.
2. Lawful Consideration & Lawful Object:

3. Competency of Parties:

Boss Baby Lunatic Person Insolvent Person


Section-11: Who are competent to Contract:
Section- 11:
Every person is competent to
contract who is of the age of majority
according to law to which he is
subject, and who is of sound mind,
and is not disqualified from
contracting by any law to which he is
subject.

Not Competent:
• Minors;
• Persons in a state of unsound mind;
• Persons who are disqualified from
contracting by any law to which he is
subject.
4. Free Consent:
No Coercion;
No Undue Influence;
No Fraud (practiced upon the party
thereto);
No Misrepresentation.
5. Agreements Not Declared Void Or Illegal:
Agreements Expressly Declared Void.
Indian Contract Act, 1872 defines
several agreements as void or illegal.
Section-24 to 30 defines void or illegal
agreements;
6. Certainty of Meaning & Possibility of
performance of agreement:
Must have clarity;
No Ambiguity; and
Possibility and not initial or
impossibility or subsequent
impossibility.
In absence of this condition, the
agreement becomes void.
8. Compliance Of Necessary Legal Formalities:
Registration Act, 1908;
Indian Stamp Act, 1899 or Gujarat
Stamp Act;
Insurance Act, 1938.
Maritime Insurance Act, 1938
Types of Contract:
On the basis of validity: Difference
Implied Contract & Quasi Contract:
Implied contract: Patient comes Quasi-contract : Patient treated by
to the hospital for checkup doctor in the garden
On the basis of Preformation:
Executed Contract :
Any Consideration Paid : Sell-Purchase (Immediate
Consideration/ Promises completed)
Executory Contract :
Reciprocal Promise : Tuition Fees (Promises About to be
fulfilled in future)
Unilateral Contract :
One Sided –Only one party having obligation : Missing
Persons/ Pet
Bilateral Contract :
Promises outstanding on both sides : India-US Bilateral
Agreement
Key Differences between agreement & Contract:
THANK YOU:

BBA- 2022

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