Formation of contract
Table of Contents
Introduction
A contract means an agreement which is enforceable by law. An agreement consists of reciprocal promises between the two Parties.
According to Section 2(h) of the Indian Contract Act, 1872, “As agreement enforceable by law is a contract.” All agreements are not enforceable by law and, therefore, all agreements are not contracts.
example, an agreement to sell a radio set may be a contract, but an agreement to go to see a movie may be a mere agreement no enforceable by law.
Agreement
According to Section 2(e) “Every promise and every set of promises forming the consideration for each other is an agreement.”
example, A promises to deliver his watch to B and in return B promises to pay a sum of Rs. 2,000 to A. There is said to be an greement between A and B.
Essentials of Valid Contract
- An agreement between the two parties
- Agreement should be between the parties who are competent to contract
- lawful consideration and lawful object
- free consent
- The agreement must not be one, which has been expressly declared to be void.
Classification of Contract
contracts may be classified according to;
(i) their subject matter;
(ii) their parties
(iii) their form (whether contained in deed in writing, whether express or implied;
(iv) their effect (whether bilateral or unilateral, whether valid, void or unenforceable).
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Reference
contract 1 – Dr R.K.Bangia