Week 2-3 Contract And Its Types

Contract

Definition: The term contract is defined as an agreement between two or more parties which has a binding nature, in essence, the agreement with legal enforceability is said to be a contract. It creates and defines the duties and obligations of the parties involved.

Process of Contract

process of contractFirst and foremost, an offer is made by one party to another, which when accepted by the party to whom it is made, leads to the agreement. If that agreement is enforceable in the court of law, it is known as a contract.

Essential Elements of a Contract

Elements of Contract

  1. Agreement: The primary element that creates a contract between parties is an agreement, which is a result of offer and acceptance, that forms consideration for the parties concerned.
  2. Free Consent: Consent of the parties is another important aspect of a contract, which means the parties entering into the contract, must agree upon the same thing in the same sense. The consent of the parties is said to be free when it is not influenced by coercion, undue influence, fraud, misrepresentation and mistake.
  3. Competency: Competency refers to the capacity of the parties to enter into the contract, i.e. he/she has reached the age of maturity, he/she must be of sound mind, and he/she is not disqualified from contracting, as per the law like the alien enemy, foreign sovereigns, etc.
  4. Consideration: It implies the price agreed to be paid for the promisor’s obligation by the promisee. It must be adequate and lawful.
  5. Lawful object: The object for which the contract is created must be lawful, or else it is declared as void.
  6. Not expressly declared as void: The law should not expressly declare the contract as void, such as contract in restraint of marriage, trade or legal proceedings.