What is a Contract? — KSLU Contract 1 Notes

What is a Contract?

The Indian Contract Act, 1872 builds a contract in two steps: an agreement (Section 2(e) — “every promise and every set of promises forming the consideration for each other”) that is enforceable by law (Section 2(h)). The parties must reach the same understanding — consensus ad idem [meeting of minds].

Essentials of a valid contract (Section 10): (1) free consent of (2) parties competent to contract, for a (3) lawful consideration and a (4) lawful object, (5) not expressly declared void — plus an intention to create legal relations, certainty of terms (S.29), and possibility of performance (S.56). By enforceability, agreements are valid, void (2(g)), voidable (2(i)), illegal, or unenforceable.