1. What are the essentials for a Valid Contract? Describe them in details.

Ans. Essential Elements of a Valid Contract:-

A contract has been defined in section 2(h) as “an agreement enforceable by law.” To be
enforceable by law, an agreement must possess the essential elements of a valid contract
as contained in sections 10, 29 and 56. According to section 10, all agreements are
contracts if they are made by the free consent of the parties, competent to contract, for a
lawful consideration, with a lawful object, are not expressly declared by the Act to be
void, and where necessary, satisfy the requirements of any law as to writing or attention
or registration. As the details of these essentials form the subject matter of our subsequent
chapters, we propose to discuss them in brief here. The essential elements of a valid
contract are as follows.

1.Offer and acceptance. There must a ‘lawful offer’ and a‘lawful acceptance’ of the
offer, thus resulting in an agreement. The adjective ‘lawful’ implies that the offer and
acceptance must satisfy the requirements of the contract act in relation thereto.

2.Intention to create legal relations. There must be an intention among the parties that
the agreement should be attached by legal consequences and create legal obligations.
Agreements of a social or domestic nature do not contemplate legal relations, and as such
they do not give rise to a contract. An agreement to dine at a friend’s house in not an
agreement intended to create legal relations and therefore is not a contract. Agreements
between husband and wife also lack the intention to create legal relationship and thus do
not result in contracts. Try to work out the solution in the following cases and then go to
the answer.

3.Lawful consideration. The third essential element of a valid contract is the presence of
‘consideration’. Consideration has been defined as the price paid by one party for the
promise of the other. An agreement is legally enforceable only when each of the parties
to it gives something and gets something. The something given or obtained is theprice for
the promise and is called ‘consideration’ subject to certain exceptions; gratuitous
promises are not enforceable at law. The ‘consideration’ may be an act (doing something)
or for bearance (not doing something) or a promise to do or not to do something. It may
be past, present or future. But only those considerations are valid which are ‘lawful’. The
consider-ation is ‘lawful’. unless it is forbidden by law; or is of such a nature that, if
permitted it would defeat The provisions of any law; or is fraudulent; or involves or
implies injury to the person or property of another; or is immoral; or is opposed to public
policy (sec.23).

4.Capacity of parties. The parties to an agreement must be competent to contract. But

the question that arises now is that what parties are competent and what are not. The
contracting parties must be of the age of majority and of sound mind and must not be
disqualified by any law to which they are subject (sec.11). If any of the parties to the
agreement suffers form minority, lunacy, idiocy, drunkenness etc. The agreement is not
enforceable at law, except in some special cases e.g., in the case of necessaries supplied
to a minor or lunatic, the supplier of goods is entitled to be reimbursed from their estate
(sec 68).5.Free consent. Free consent of all the parties to an agreement is another
essential element. This concept has two aspects.(1) consent should be made and (2) it
should be free of any pressure or misunderstanding. ‘Consent’ means that the parties
must have agreed upon the same thing in the same sense (sec. 13). There is absence of
‘free consent,’ if the agreement is induced by (i)coercion, (ii)undue influence, (iii) fraud,
(iv) mis-representation, or (v)mistake (sec. 14). If the agreement is vitiated by any of
thefirst four factors, the contract would be voidable and cannot be enforced by the party
guilty of coercion, undue influence etc. The other party (i.e., the aggrieved party) can
either reject the contract or accept it, subject to the rules laid down in the act. If the
agreement is induced by mutual mistake which is material to the agreement, it would
bevoid (sec. 20)

6.Lawful object. For the formation of a valid contract it is also necessary that the parties
to an agreement must agree for a lawful object. The object for which the agreement has
been entered into must not be fraudulent or illegal or immoral or opposed to public policy
or must mot imply injury to the person or the other of the reasons mentioned above the
agreement is void. Thus, when a landlord knowingly lets a house to a prostitute to carry
on prostitution, he cannot recover the rent through a court of law or a contract for
committing a murder is a void contract and unenforceable by law.

7.Writing and registration. According to the Indian contract Act, a contract to be valid,
must be in writing and registered. For example, it requires that an agreement to pay a
time barred debt must be in writing and an agreement to make a gift for natural love and
affection must be in writing and registered to make the agreement enforceable by law
which must be observed.

8.Certainty. Section 29 of the contract Act provides that “Agreements, the meaning of
which is not certain or capable of being made certain, are void.” In order to give rise to a
valid contract the terms of the agreement must not be vague or uncertain. It must be
possible to ascertain the meaning of the agreement, for otherwise, it cannot be enforced
Illustation:- A, agrees to sell B “ a hundred ton of oil” there is nothing whatever to show
what kind of oil was intended. The agreement is void for uncertainly

.9.Possibility of performance. Yet another essential feature of a valid contract is that it

must be capable of performance. Section 56 lays down that “An agreement to do an act
impossible in itself is void”. If the act is impossible in itself, physically or legally, the
agreement cannot be enforced at law. Illustration.:- A agrees with B, to discover treasure
by magic. The agreement is not enforceable.10.Not expressly declared void. The
agreement must not have been expressly declared to be void under the Act. Sections24-30
specify certain types of agreements that have been expressly declared to be void. For
example, an agreement in restraint of marriage, an agreement in restraint of trade, and an
agreement by way of wager have been expressly declared void under sections 26, 27 and
30 respectively.