The law relating to the contracts is contained in the Indian Contract Act. 1872.It is that branch of law which lays down the essentials of a valid contract, thedifferent modes of discharging the contract and the remedies available to theaggrieved parts in the case of breach on contract. It is the most importantbranch of business law. It is of particular importance to people engaged intrade, commerce and industry as bulk of their business transactions are basedon contracts.A contract is an agreement made between two or more parties which the lawwill enforce Sec. 1 the of the Indian Contract Act defines it as “An agreementenforceable by law” Sec 10 lays down that “All agreements are contracts if theyare made by the free consent of parties competent to contract for a lawfulconsideration and with a lawful object and are not hereby – expressly declaredto be void.
A valid contact must have the following essentials1.
for a valid contract, there must be two parties2.
There must be an offer and acceptance One partyhas to make an offer and the other party has to accept it.3.
The parties to the contractmust have agreed about the subject matter of the contract at the sametime and in the same sense.
A has two houses, one at Chennai and another at Coimbatore. Hehas offered to sell one to B. B accepts thinking to purchase the house atCoimbatore, while A, when he offers, has in his mind to dispose of house atChennai. There is no Consensus-as-idem.