A contract is a consensus of mind of two parties to an agreement. Indian Law of Contract is governed by Indian Contract Act, 1872. The word 'contract' had its origin from a Latin term "Contractum" which means 'drawn together'. The word Contract is defined in the Indian Contract Act in Section 2(h). It is an agreement enforced by law as per the definition. So only agreements enforced by law are termed Contract. This means that there should be backing of law. An unlawful agreement will not be considered valid according to Indian Contract Act. Hence we can say that there are certain requirements or ingredients which forms a valid contract. Section 10 of the Indian Contract Act defines that "all agreements are contracts if they are made by the free consent of parties, competent of contract for a lawful consideration and with a lawful object and are not hereby expressly declared to be void". The requirements of a valid contract are as stated in the above definition. They are as noted below:
An agreement is defined in Section (e)of the Indian Contract Act. To constitute an agreement two parties are necessary viz the offeror and acceptor. There must be a promise and acceptance. There must be valid consideration also.
(2)Free Consent of parties
Free Consent is one of the essential ingredient required for a contract to be valid in the eye of law. It must be made with a free mind. As per Section 13 of the Act two or more persons are said to consent when they agree upon the same thing in the same sense. There must be 'consensus ad idem' or meeting of minds which are identical. Section 14 of the Act further says that consent is said to be free when it is not caused by coercion, undue influence, fraud, misrepresentation and mistake. This means that the contract should not be entered upon as a result of the above things. If it is so entered it is not with a free mind and not a valid contract.
(3) Competency of Parties
The parties must also be capable in the eye of law to enter into a contract. This rule is contained in Section 11 of the Act. It says that every person who is of the age of majority according to the law to which he is subject and of sound mind and is not disqualified from contracting by any law to which he is subject is competent to contract. The parties must be capable of understanding and forming a rational judgement of the effect of the contract.[Sec.12]
(4) Lawful Consideration
There must be consideration to make a contract valid. The term is defined in Section 2(d) of the Contract Act. If a person has done anything according to the wish and requirement of another or promises to do so, such act or promise forms a consideration. A contract without consideration is a nullity.[Section 25]
(5) Lawful object
The purpose of the contract must be to do something lawful. There must not be an intention to do an illegal act. The object must capable of lawful achievement. According to Section 24 of the Act unlawful agreements are void.
(6) Not expressly void
There are some agreement in the Act which are expressly declared void. Agreement in restraint of marriage[Sec.26], agreement in restraint of trade[Sec.27], agreement in restraint of legal proceedings[Sec.28], agreements whic are uncertain[Sec.29], Agreements by way of wager[Sec.30] etc. An agreement must be one apart from the above to form a valid contract.
Thus a Contract to be valid must contain the above requirements. Unless they will either be void or voidable as per the Indian Contract Act.
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