Topics: Contract, Contract law, Law Pages: 3 (718 words) Published: May 13, 2014
Define contract. Explain the essentials of valid contract.

A voluntary, deliberate, and legally binding agreement between two or more competent parties. Contracts are usually written but may be spoken or implied, and generally have to do with employment, sale or lease, or tenancy.

1.Essentials of a valid contract
All agreements are not contracts. Only that agreements which is enforceable at law is a contract. An agreement which is enforceable at law cannot be contract. Thus, the term agreement is more wider in scope than contract. All Contracts are agreements but all agreements are not contracts. An agreement, to be enforceable by law, must possess the essential elements of a valid contract as contained in section 10 of the Indian Contract Act. According to Section 10, "All agreements are contract if they are made by the free consent of the parties, competent to contract, for a lawful consideration and with a lawful object and are not expressly declared to be void." As the details of these essentials form the subject-matter of our subsequent chapters, it is proposed to dismiss them in brief here. The following are the essential elements of a valid contract : 1. Offer and Acceptance. In order to create a valid contract, there must be a 'lawful offer' by one party and 'lawful acceptance' of the same by the other party. 2. Intention to Create Legal Relationship. In case, there is no such intention on the part of parties, there is no contract. Agreements of social or domestic nature do not contemplate legal relations. 3. Lawful Consideration. Consideration has been defined in various ways. "Consideration is the price for which the promise of another is brought. Further, consideration is known as quid pro-quo or something in return. 4. Capacity of parties. The parties to an agreement must be competent to contract. If either of the parties does not have the capacity to contract, the contract is not valid. According the following...
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