What is Contract?
Contract is an agreement with specific terms between two or more persons or entities in which there is a promise to do something in return for a valuable benefit known as contract. Since the law of contracts is at the heart of most business dealings. There are two important elements in Agreeement of Contracts, i.e. 1) A proposal or an offer
2) An acceptance of that proposal or offer
Essential Elements of a Valid Contract:-
a) Agreement: - A negotiated and usually legally enforceable understanding between two or more parties. Although a binding contract can result from an agreement, an agreement typically documents the give-and-take of a negotiated settlement and a contract specifies the minimum acceptable standard of performance. b) Intention to create legal relationship: - One of the essential elements in the creation of a binding contract, this intention is implied by the fact that it is not expressly denied. Intention to bind the other party with the involved legal obligations. c) Free and genuine contract:-Two parties must give their Free and genuine contract to the term of agreement. Such consent should not obtain one or more of following manners i.e. I. By coercion
II. By undue influence
III. By fraud
IV. By misrepresentation
V. By mistake
If the consent would be proved to have been obtained in one or more of the aforementioned manner, such contract automatically declared as voidable contract. d) Lawful consideration:- Consideration is an essential element for the formation of a contract. It may consist of a promise to perform a desired act or a promise to refrain from doing an act that one is legally entitled to do. In a bilateral contract—an agreement by which both parties exchange mutual promises—each promise is regarded as sufficient consideration for the other. In a unilateral contract, an agreement by which one party makes a promise in exchange for the other's performance, the performance is consideration for the promise, while the promise is consideration for the performance. Consideration must have a value that can be objectively determined. Example:- To make a gift or a promise of love or affection is not enforceable because of the subjective nature of the promise. e) Lawful object: - Courts will not enforce contracts that are illegal or violate public policy. Such contracts are considered void. For example, a gambling contract would be illegal in many states. f) Agreements not declared void or illegal:- The sagreement should be such Which have not been expressly declared as illegal or void by any law of the land. Such agreement would naturally be not enforceable by law just for this single reason. g) Necessary legal formalities: - legal formalities are the legal obligations which are to be performed or fulfill by each and every organization by performing legal formality a unique image of organization is created in the mind of employees and other stake holders.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, following person disqualified into valid agreement or contract: a) Minors
b) Mentally incompetent person and
c) Person who are declared incompetent through their status. MINORS
Section 3 of Indian Majority 1875,a minor is a person who has not completed 18years of age. But then in the following specific cases, a minor is said to attain the majority on the completion of his 21 years of age ,instead : 1. Where a guardian of minor’s person or property is appointed under the guardians and wards act ,1890. 2. Where a court of wards assumes the superintendence of the minor’s property. For example :
* If A is born in India on the 1st January 1850, and has an Indian domicile . B guardian of A is appointed by court of...
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