ACKNOWLEDGEMENT

I would like to extend my special thanks and

gratitude to my professor Miss Anshi Agrawal
ma’am , who gave me the golden opportunity to
work upon this project and it gave me an insightful
experience to learn about the various things about
contracts and I’m really thankful to my respected
ma’am for explaining and teaching the topic in
depth which helped me a lot in the successful
completion of this project within the limited time
frame .

Anshika Upadhyay
semester 3
BA.LL.B ( hons )
 INTRODUCTION

Contracts happen between two parties in day-to-day life even

when we go outside to buy some goods and materials, we make
a contract in simple daily routine . From big business deals to
small agreements, contracts are everywhere and when two
parties enter into a contract they perform the contractual
obligation according to the law, and all the parties are equally
responsible to perform their respective obligation.

Therefore in this project work , I will discuss about the law of

contract , its concept and meaning . Furthermore ,the essentials
of the conracts are also discussed herein .Lets delve into the
topic deeper .
 WHAT IS AN CONTRACT ?
Let’s use an illustration here, if a person has contracted to purchase a
property with his friend and the other person has made an agreement to
purchase the property then to most of the individuals both the scenarios
look similar to each other, but it is not so but most of the time people use
these two terms simultaneously .
Agreement and contracts are two very different terms in the purview of
law.

ILLUSTRATION TO UNDERSTAND CONTRACT

To understand the concept of contract we will also understand the terms
proposal, promise, consideration and agreement .

ILLUSTRATION – if A asks B if he wants to buy his air conditioner

for an amount of 30,000 and B accepts to buy it then here A has made a
proposal to B and B has showed the acceptance to the offer and when
the proposal or offer has been accepted it becomes a promise and it is
defined under Section 2 clause (b) of the Indian Contract Act .
And there was consideration between A & B as he was getting ₹30,000
and B was getting an air conditioner , thus promise and consideration
together forms and agreement , and it is defined under the Section 2
clause (e) as “ every promise and every set of promises, forming the
consideration for each other is an agreement”, and for an agreement to
become a contract there is only one requirement which is the
enforceability of agreement by law which makes it a contract .
Contract has been defined under Section 2 clause (h) of the Indian
Contract Act as, “ an agreement enforceable by law is the contract ’’.
Therefore a contract is an accepted proposal that is enforceable by law
creating legal obligations to be performed by both the parties .
Following are the definitions of contract by scholars .
ANSON – “ Contract is an agreement enforceable at law made between
two or more persons by which rights are acquired bye one or more to
acts or forbearances on the part of the others.”
SIR FREDERICK POLLOCK –“ Every agreement and promise
enforceable at law is a contract.”

ESSENTIALS OF A VALID CONTRACT

Section 10 of the Indian Contract Act lays down the essentials which are
required to make an agreement into a valid contract , it reads as “ all
agreements are contracts if they are made by the free consent of the
parties competent to contract, for a lawful consideration and with the
lawful object, and are not hereby expressly declared to be void”.
The essentials offer valid contract are enlisted in the following:
❖ offer and acceptance
❖ competency to the contract
❖ lawful consideration and lawful object
❖ free consent of the parties
❖ not expressly declared void
❖ legal requirements .

OFFER AND ACCEPTANCE -- An offer is the first thing for the

formation of a contract and the person making an offer is called offerer
and the person to whom the offer is made is called an offeree who
accepts the offer, these both things are very important for initiating a
contract and it should not be done in ignorance as in the case of Lalman
Shukla v Gauri Dutt (1913), the defendant’s boy went missing,
accordingly and his servant ( Plaintiff ) was sent to search for the boy,
in the meantime a missing poster was released by the defendant,
promising to pay a certain sum, to the person who finds the boy. The
servant, unaware of such an offer succeeded to find the boy. Once he
discovered that such an offer existed he asked for the consideration, but
the same was denied. The court ruled in favour of the Defendant, by
holding that Plaintiff was ignorant of offer and thus the performance of
the promise does not amount to acceptance .

COMPETENCY TO THE CONTRACT -- As per the section 10 of the

Act, parties must be competent to the contract and section 11 tells about
who are competent to contract which lays down the conditions for every
person who is the age of majority , sound mind and not disqualified from
contracting by any law can come into contract .
LAWFUL CONSIDERATION AND LAWFUL OBJECT -- When
agreement is supported by consideration it becomes an contract and
according to section 10 consideration and object of the contract should
be lawful , accordingly section 23 defines the consideration and object
of an agreement is lawful unless it is forbidden by law , it is fraudulent
,or implied injury to the other person or the court considers it as
immoral or against public policy .
FREE CONSENT OF THE PARTIES -- Section 14 of the act defines free
consent that is essential to enter into a valid contract and consent
should not be given under coercion, and you influence, fraud,
misrepresentation and mistake . If the consent is made through this
element then the contract is voidable at the option of the party.
LEGAL REQUIREMNTS -- Section 10 of the Act tells about the required
formalities in legal aspects which are necessary to comply with and
these are writing and registration , presence of witnesses or as per the
formalities .

TYPES OF CONTRACT

Classification of contracts can be done on the basis of enforceability,

formation and execution .

On the basis of enforceability there are valid contract ,voidable

contract, void agreements , unenforceable contract, and illegal
agreement. While on the basis of formation there can be expressed
contract , implied contract and quasi contract and on the basis of
execution there is executed and executory contract. Lets understand
them in more detail .

VALID CONTRACT – A valid contract is an agreement enforceable by

law and an agreement becomes enforceable by law when all the
essentials of a valid contract as laid in section 10 are fulfilled .

VOID CONTRACT -- Section 2 clause (j) of the Act defines a void

contract as “ a contract with ceases to be enforceable by law becomes
void when it ceases to be enforceable”. Thus all those contracts that are
not enforceable are void ab initio .

VOIDABLE CONTRACT -- In a voidable contracts the parties which are

competent has the option to enforce or reject the contract if there
agreement terms are not respectful for example contracts that were
made when one party had undue influence on the other may stand
voidable .

VOID AGREEMENT – An agreement not enforceable by law is said to

be void under Section 2 clause (g) of the contract Act , thus a void
agreement does not give rise to any legal consequences because it is
void from the beginning in the eye of the law .

UNENFORCEABLE CONTRACTS -- It is a contract which is actually

valid but cannot be enforced by the court of law due to unavailability of
record, but if the parties perform the agreement it will be valid but the
court will not force them to do so .

ILLEGAL AGREEMENTS -- Illegal agreements are always void ab

initio , for example contracts for the sale and distribution of controlled
substances such as drugs is illegal that these agreements are done to
perform the illegal activities.

EXPRESSED CONTRACTS -- An express contract is one that is defined

by the terms and conditions either in writing or verbally. The terms of an
agreement are clearly communicated between the parties which removes
ambiguity and uncertainty . Express contracts are more reliable because
they are legally binding and satisfy the requirements of a contract.

IMPLIED CONTRACTS -- These contracts are more ambiguous simply

because they are not written down or communicated clearly , this means
they can be harder to enforce this something goes wrong and it's very
common that suing someone for breach of contract will be difficult if the
terms haven't been documented .

QUASI - CONTRACTS – A quasi contract is a legal obligation imposed

by law upon a person for the benefit of other even in the absence of a
contract which is based on the principle of equity .

EXECUTED CONTRACTS -- It is a contract where both the parties to

the contract have fulfilled their respective obligations and it is also
known as completed contracts .
EXECUTORY CONTRACTS -- It is a contract in which the competent
parties have to still perform their respective obligations or duty for the
completion of the contract and there is one more type under this i.e.,
bilateral contracts .
 BIBLIOGRAPHY
For the successful completion of this project I have taken help from the
following sources :-
❖ contract and specific relief by Avtar Singh
❖ www.lawcornell.edu
❖ study.com
❖ www.contractscounsel.com
❖ www.studocu.com
❖ www.vakilsearch.com
❖ cilexlawschool research paper