PROPOSAL/OFFER [SECTION 2(a)]:
A person is said to make a proposal when he signifies toanother his willingness to do or to abstain from doing anything with a view to obtaining assentof that other to such act or abstinence
CONSIDERATION [SECTION 2(d)]:
When, at the desire of the promisor, the promise or anyother person has done or abstained from doing, or does or abstains from doing or promises todo or to abstain from doing something, such act or abstinence is called consideration. In otherwords, consideration is something in return.It should be noted that the term agreement as defined in Contract Act requires mutualconsideration. - - Thus, if A invites B to dinner and B agrees to come, it is not an agreement asdefined in Contract Act.
on the basis of following following essentials are needed to make all the agreements tobe a contract.According to
All agreements are contracts if they are made by free consent of parties, competent to contract, for a lawful consideration and with a lawful object and are nothereby expressly declared to be void. The essential elements of a valid contract are:
To constitute a contract there must be an agreement. There must be two partiesto an agreement, i.e. one party making an offer (offeror) and the other party accepting theoffer (offeree).
Intention to create legal relationship:
When the two parties enter into an agreement, theremust be an intention by both parties to legally bind the other as a result of such agreement.Thus, agreements of social or household nature are not contracts.
Capacity of parties (competence):
The parties to the agreement must be capable of enteringinto a valid contract. According to Section 11, every person is competent to contract if he orshe,1. is of the age of majority;2. is of sound mind; and3. is not disqualified from contracting by any law to which he is subject.
: An agreement to form a valid contract should be supported byconsideration. Consideration means something in return (quid pro quo). It can be cash, kind,an act or abstinence. It can be past, present or future. However, consideration should be realand lawful.
To constitute a valid contract there must be free and genuine consent of theparties to the contract. It should not be obtained by misrepresentation, fraud, coercion, undueinfluence or mistake.