Contract and its Ingredients Every One Should Know

The Law of contract has been promulgated with the spirit that there should be some statutory legal lines between which contracting parties should act and their obligations to each other should not be violated. A contract is private rule making instrument where by he provisions are enforced by law which mainly lays down procedure rules regarding contract.

Nothing indicates which of the two prices was to be awarded
What is contract in law & Its Essential Ingredients

Definition of a Contract in Law

Definition of a contract according to Black Law Dictionary

An agreement between two or more person creating obligations that are enforceable or otherwise recognizable at law. 

Statutory Definition of Contract

Section 2(h) of Contract Act provides "An agreement enforceable by law is a contract" The a contract consists of two elements.

A-    An agreement

B-    Te agreement must be enforceable at law.

Essence of A Valid Contract 

     I t is essence of a contract that there should be an aggregation anentium". The meeting to the minds of contracting parties.

 Terms of Contract

    A contract is a consensual act, the parties being free to settle any terms they please.

Essentials of a valid contract

A valid contract is enforceable and binding. In a valid contract all the parties are legally bound to perform their part of the contract. According  to section 10. "All agreements are contracts if they are entered into with the free assent of parties who are competent to contract, for a legitimate consideration, and with a lawful intent, and if they do not have the Essentials of a valid contract hereby expressly declared to be void. Where necessary, the agreements must satisfy the requirements of law regarding writing, attestation or registration",

The essential of a valid contract are as follows;-

I-    Offer and acceptance. A proposal and its acceptance is universally acknowledged process for the making of an agreement. 

Example: "A says to be that he will sell his car to him for Rs.8 lac. This is an offer, if B accepts this offer, there is an acceptance.

 II-    Legal obligations. Contract create legal obligations. A promise which is not voluntary and by which the parties do not intend to create any legal obligation cannot be deemed a contract.

 Example: "A husband promised to pay his wife an allowance of 30 pounds every months. Later, the parties separated and the husband failed to pay. The wife sued. Held that the wife was not entitled as agreement did not crate legal obligations (Belfour Vs Belfour).

III-    Lawful Consideration.  A consideration is one of the essential elements of a failed contract. The law will not enforced a contract unless it is made with consideration. So consideration must be lawful and legal.

Example: "A finds B's purse and gives it to him. B promises to gave A R.500. This is a contract.

IV-    Capacity of Parties. Every person of sound mind who is of the age of majority and who is not disqualified from contracting by law is competent to contract. So one of essential conditions of a valid contract is competency of parties to made contract.

Example. A is 20 years old, who promises to sell his car to B for Rs.3,00,000/-. it is a valid contact because A is competent to contract.

V-    Free Consent. "Consent" is a legal term of wide importance which would include both express and implied Connivance and tacit consent would also fall under the legal definition of the term. For a Valid contract, it is necessary that the consent of the parties must be free and without duress.

When consent is acquired without force, undue influence, fraud, deception, or mistake, it is considered free. If the consent of either of the parties is not obtained free, the agreement cannot become  contract (Section 14)

Example: A compels B to enter into a contract on the point of gun. it is not a valid contract as the consent of B is not free.

VI-    Lawful Object. A contract which is entered into with the object of committing an illegal act is unenforceable. The object of agreement must not be against the basic principles of law i.e. fraudulent, illegal, immoral opposed to public policy, imply injury to the person or property of another. Every agreement, with unlawful object or consideration is illegal and therefore void. (Section 23).

Example:

a-    A, promises to pay B Rs.5 lac if B cause death of C. The agreement is illegal as its object is unlawful.

b-    A hires a house to use for gambling. The object of the agreements unlawful, so it is illegal.

VII-    Writing and Registration. The purpose of construction of terms of written agreement being to find out the intention of the parties to the agreement by looking to words used.

Example. A verbally promise to sell his horse to Y for 10,000 it is valid contract because the law does not require it to be in writing.

VIII-    Certainty of terms. According to section 20, Agreements, the meaning of which is not certain necessary requirement that an agreement in order to be kindly must be sufficiently definite to enable the court to gain it a practicable meaning.

Example. A agrees to sell to C "my white horse for rupees ten thousand or rupees 5 thousands".

Nothing indicates which of the two prices was to be awarded. The agreement is void. (AR 1961 SC 1285).

Possibility of Performance. A valid contract must be enforceable. A contract to perform an impossible act is void. If the act is legally or physically impossible to be performed, the agreement cannot be enforced by law (section 56 of Contract Act 1872)

Example     (a)    A agrees with B to discover a treasure by magic, the agreement is not enforceable.

                    (b)    A agrees with B to to put life into B's dead brother. The agreement is void a it is impossible to perform.

Sometimes the performance of a contract is quite impossible when it is made by parties due to even subsequently happens which render its performance impossible and unlawful. In such case contract become void.

Example

(i)    Where for example after making contract of marriage, one of the parties gone mde,

(ii)    Where contract is made for import of goods and import of forbidden by law, the contract is such a case become void,

X     Not expressly declared Void. For a valid contract agreement must not be declared void by any other law at the time of agreement.

 Example: A promises to pay Rs.2,000 if Pakistan win the wold cum final. The agreement is void be and expressly declared void under run.

Conclusion.

Thus we concluded this, from above discussion that a contract is enforceable under law only if it is valid and not declared void or unlawful. However, it is necessary that for valid contract that it must be made with free consent of parties with lawful consideration and with a lawful object.