1.

0 Introduction
A contract is known as covenant, agreement and pact that meet the legal requirement. In
further, the agreement will create rights and obligations which is enforceable by law in
Section 2(h). The contract comprised 4 basic constituting elements which includes of an
offer/proposal, acceptance, consideration and intention to create legal relations. If the
main elements are not in contract, it would be an invalid contract. An agreement is
formed by one party make an offer, another party accepts the offer, and both of the party
achieves consensus and idem. Every person is competent to contract who is of the age of
majority according to the law to which he is subject, and who is of sound mind, and is not
disqualified from contracting by any law to which he is subject under Section 11. The
notion of the contract is that the parties have to enter into the agreement freely. The
purpose of the agreement must not be unconstitutional or illegal.
On the other hand, the essence of a contract is doing an exchange of a promise between
the parties. The promise can be action, money, rights, property, services and almost
anything. The agreement can be unilateral, bilateral or involved more parties. However, a
contract must be communicated by any method. It could be verbal, written or by conduct,
as long as it has the effect of communicating it. But for the purpose of validity under the
Contracts Act, the additional elements under the Section 10(1) stated that all agreements
are contracts if they are made by the free consent of parties competent to contract, for a
lawful consideration and with a lawful object, and are not hereby expressly declared to be
void.
Depart from it, the contract can be rescind when consent to an agreement is caused by
coercion, fraud, or misrepresentation, the agreement is a contract voidable at the option of
the party whose consent was so caused which stated in the Section 19(1). Besides that,
the contract can also be revoke if a party to a contract, whose consent was caused by
fraud or misrepresentation, may, if he thinks fit, insist that the contract shall be
performed, and that he shall be put in the position in which he would have been if the
representations made had been true under Section 19(2). In addition, the contract will be
void where both the parties to an agreement are under a mistake as to a matter of fact
essential to the agreement in the Section 21.