CONTENTS

• Essential Elements of Contract *Proper Offer & Acceptance *Intention to Create Legal Relationship *Free Consent *Capacity of Parties *Lawful Consideration

Essentials of a Contract

-According to Sec 10, "all agreements are contract if they are made by

free consent of the parties competent to contract, for a lawful consideration and with a lawful object and are not hereby expressly declared to be void."

Essential elements of a contract

proper offer & acceptance

legal relationshi -p

free consent

capacity of parties

lawfulconsideration

Proper Offer & 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.

Proper Offer & Acceptance

Intention to Create Legal Relationship

• In case, there is no such intention to create a legal relationship on the part of parties, then there is no contract.

• Agreements of social or domestic nature do not make legal relations.

Free Consent

• 'Consent' means the parties must have agreed upon the same thing in the same sense.

• According to Section 14, Consent is said to be free when it is not caused by-

(1) Coercion, or (2) Undue influence, or (3) Fraud, or (4) Mis-representation, or (5) Mistake. An agreement should be made by the free consent of the parties.

Capacity of Parties

• The parties of an agreement must be competent. If either of the parties does not have the capacity to understand the contract, then the contract is not valid.

• The following persons are incompetent to contract. (a) Minors, (b) Persons of unsound mind, and (c) persons disqualified by law

Lawful Consideration

• In the words of Pollock, "Consideration is the price for which the promise of the another is brought."

• Consideration is known as quid pro-quo or something in return.

References

•Wikipedia

•Business Law by P.C.Tulsian

•Lecture Notes