CONTRACT – Section 2(h)
“ An
CONTRACT
Agreement
Enforceable
By Law Is a
Contract.”
Prof. Dipak Wakchaure/ Amrutvahini MBA / 205-
LAB/2025
CONTRACT – Section 2(h)
"A contract is an agreement enforceable
by law."
This definition emphasizes that a contract is not
merely an agreement between parties but an
agreement that is legally enforceable, meaning
that the parties can seek legal remedies if the
terms of the contract are not upheld by one of the
parties.
Prof. Dipak Wakchaure/ Amrutvahini MBA / 205-LAB/2025
AGREEMENT – Section 2(e)
Agreement is a promise or set of
promises.
AGREEMENT Offer +
Acceptance
Prof. Dipak Wakchaure/ Amrutvahini MBA /
205-LAB/2025
ESSENTIAL ELEMENTS OF A
VALID CONTRACT
Section No- 10
For a contract to be valid, it typically must include
the following essential elements:
Prof. Dipak Wakchaure/ Amrutvahini MBA / 205-LAB/2025
E S S E N T I A L E L E M E N T S O F A VA L I D
CONTRACT
1 . P r o p e r O ff e r a n d P r o p e r A c c e p t a n c e .
2 . I n t e n t i o n t o C r e a t e L e g a l Re l a t i o n s h i p .
3. Lawful Consideration.
4. Competent parties.
5 . Fr e e C o n s e n t .
6. Lawful Object.
7. Certainty of Meaning.
8 . Po s s i b i l i t y o f Pe r f o r m a n c e .
9 . N o t D e c l a r e d t o b e v o i d o r I l l e g a l b y L a w.
1 0 . L e g a l Fo r m a l i t i e s . Prof. Dipak Wakchaure/ Amrutvahini MBA /
205-LAB/2025
Proper Offer:
One party must make a clear and specific offer to
another party, expressing an intention to enter into an
agreement.
Proper Acceptance:
The other party must unconditionally accept the offer,
agreeing to the terms and conditions as presented.
Consideration:
There must be something of value exchanged between
the parties as part of the agreement, such as money,
goods, services, or a promise to do something.
Prof. Dipak Wakchaure/ Amrutvahini MBA / 205-
LAB/2025
Definition of Offer & Acceptance
Section 2 (a) of the Contract Act defines Offer
as –
‘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 an offer'.
Section 2 (b) of the Contract Act states that,
‘when the person to whom the offer is made
signifies his assent there to, the offer is said to
be accepted. Prof. Dipak Wakchaure/ Amrutvahini MBA / 205-
LAB/2025
Consideration.
Consideration is known as quid pro-quo or
SOMETHING IN RETURN.
It may be cash, kind, act or abstinence and may be in
past, present or future.
It should not be unlawful, immoral and against the
public policy.
Prof. Dipak Wakchaure/ Amrutvahini MBA / 205-LAB/2025
Free Consent.
'Consent' means the parties must have agreed upon the
same thing in the same sense.
According to Section 14, Consent is NOT said to be free
when it is caused by-
(1) Coercion
(2) Undue influence
(3) Fraud
(4) Misrepresentation
(5) Mistake.
An agreement should be made by the free consent of the
parties.
Prof. Dipak Wakchaure/ Amrutvahini MBA /
205-LAB/2025
Legal capacity:
All parties entering into the contract must have the legal
capacity to do so.
This means they are of legal age and sound mind, and they
are not under duress or undue influence.
Legal purpose:
The contract must be formed for a lawful and legitimate
purpose.
Contracts with illegal or immoral objectives are not valid.
Certainty and possibility of performance:
The terms and conditions of the contract must be clear and
certain, and it must be possible to perform the obligations
outlined in the contract.
Prof. Dipak Wakchaure/ Amrutvahini MBA / 205-LAB/2025
Intention to create legal relations:
The parties must intend for the contract to have
legal consequences and be enforceable by law.
Legal formalities (in some cases):
Some contracts may require specific formalities,
such as being in writing or signed by the parties,
to be valid.
These elements ensure that a contract is legally
enforceable and that all parties are bound by its terms.
If any of these elements is missing or not met, the contract
may be considered invalid or unenforceable.
Prof. Dipak Wakchaure/ Amrutvahini MBA / 205-LAB/2025
