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    Essential Elements of A Valid Contract

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    devilznitein
    An agreement only becomes a valid, enforceable contract if it contains certain essential elements: (1) agreement involving an offer and acceptance, supported by consideration where both parties receive something of value; (2) free consent between competent parties without coercion, undue influence, fraud or mistake; and (3) certainty of terms so the contract is not vague. For a contract to be valid, it must meet all of these requirements to create binding legal obligations between the parties.

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    Essential Elements of A Valid Contract

    Uploaded by

    devilznitein
    455 views14 pages
    An agreement only becomes a valid, enforceable contract if it contains certain essential elements: (1) agreement involving an offer and acceptance, supported by consideration where both parties receive something of value; (2) free consent between competent parties without coercion, undue influence, fraud or mistake; and (3) certainty of terms so the contract is not vague. For a contract to be valid, it must meet all of these requirements to create binding legal obligations between the parties.

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    Essential Elements of a Valid Contract

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    An agreement only becomes a valid, enforceable contract if it contains certain essential elements: (1) agreement involving an offer and acceptance, supported by consideration where both parties receive something of value; (2) free consent between competent parties without coercion, undue influence, fraud or mistake; and (3) certainty of terms so the contract is not vague. For a contract to be valid, it must meet all of these requirements to create binding legal obligations between the parties.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    455 views14 pages

    Essential Elements of A Valid Contract

    Uploaded by

    devilznitein
    An agreement only becomes a valid, enforceable contract if it contains certain essential elements: (1) agreement involving an offer and acceptance, supported by consideration where both parties receive something of value; (2) free consent between competent parties without coercion, undue influence, fraud or mistake; and (3) certainty of terms so the contract is not vague. For a contract to be valid, it must meet all of these requirements to create binding legal obligations between the parties.

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    Download as ppt, pdf, or txt
    of 14

    Essential Elements of Valid Contract

    CONTRACT
    = AGREEMENT + ENFORCEABILITY

    An agreement enforceable by law is Contract. - Section 2(h) There must be legal relationship.

    Agreements of social or domestic nature are not contracts. Examples:


    Invitation to a Birthday party Invitation to a Dinner etc

    VOID AGREEMENT
    = AGREEMENT + NO ENFORCEABILITY

    An agreement not enforceable by law is said to be void agreement. Section 2(g) A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable. Section 2 (j) Example: An agreement with minor

    ESSENTIAL OF A VALID CONTRACT

    ESSENTIAL OF A VALID CONTRACT


    AGREEMENT
    Every promise and every set of promises, forming the consideration for each other, is an agreement. {Section 2(e)} A person makes a proposal (Offer). When it is accepted by other, it becomes a promise (Acceptance). Thus, Offer + Acceptance = Promise However, promise cannot be one sided. Only a mutual promise forming consideration for each other is agreement. Thus, Promise + Consideration = Agreement

    ESSENTIAL OF A VALID CONTRACT


    FREE CONSENT

    Two or more persons are said to consent when they agree upon the same thing in the same sense. (Section 13)

    ESSENTIAL OF A VALID CONTRACT


    FREE CONSENT
    Consent of both parties must be free. Consent is said to be free when it is not caused by (1) coercion, as defined in section 15 (2) undue influence, as defined in section 16 (3) fraud, as defined in section 17 (4) misrepresentation, as defined in section 18 (5) mistake, subject to the provisions of sections 20, 21 and 22.

    ESSENTIAL OF A VALID CONTRACT


    WHO ARE COMPETENT TO CONTRACT?

    Every person is competent to contract who is of the age of majority according to the 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. (Section 11)

    ESSENTIAL OF A VALID CONTRACT


    CONSIDERATION =>SOMETHING IN RETURN

    When, at the desire of the promisor, the promisee or any other person
    has done or abstained from doing (PAST), or does or abstains from doing (PRESENT), or promises to do or to abstain from doing, something (FUTURE),

    such act or abstinence or promise is called a consideration for the promise. -Section 2 (d) A promise without consideration is not agreement

    PERFORMANCE OF CONTRACT
    CONTRACTS WHICH MUST BE PERFORMED

    The parties to a contract must


    either perform, or offer to perform, their respective promises,
    actual performance or attempted performance, i.e. offer to perform

    10

    Elements of a Contract Intention to Create Legal Relations

    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: Balfour v Balfour.

    Elements of a Contract Certainty of Terms

    The terms of a contract should be clear. In other words, the contract must not be vague. Contracts which are vague cannot be enforced.

    AGREEMENTS NOT DECLARED EXPRESSLY VOID

    There are Certain agreements which have been expressly declared void by the law. Thus an agreement made by parties should not fall in this category.

    August 21, 2009

    Copyright Dipak Parmar

    13

    Writing and registration

    Oral contract is a valid contact. However the contract must be in writing and registered, if so required by any law, for example, gift, mortgage, sale, lease under the Transfer of Property Act 1882, Memorandum and Articles of Association of a Company under the Indian Companies Act
    August 21, 2009 Copyright Dipak Parmar 14

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