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KES’ SHRI JAYANTILAL H. PATEL LAW COLLEGE

TITLE OF THE PROJECT: Essential Elements of Valid Contract

SUBJECT: Contract

A project submitted in partial fulfillment of the requirements for

The First Semester of the LL.B 3yrs Course

BY:

NAME OF THE STUDENT: Nitin Vithoba Thakur

DIVISION: C

ROLL NO.: 48

SUBMITTED TO:

Mr. Harshil Gandhi Asst. Prof.

DATE:
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ACKNOWLEDGEMENT

I along with my team members would want to convey our sincere gratitude to Asst. Professor Mr.
Harshil Gandhi for providing us an opportunity to work on this project and to allow us to learn and grow
during the preparation of this project.

We would also like to thank our professors, for sharing their knowledge and expertise in the subject
matter, which helped us to shape our ideas and concepts, our batchmates, for their constructive feedback and
suggestions that helped us to improve our work, the library staff, for providing us with access to research
materials and resources that were critical to the completion of the project, our family and friends, for their
unwavering support and encouragement, without their support and contribution, this project would not have
been possible. We are deeply grateful to each and every one of them for their invaluable assistance.
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Essential Elements of Valid Contract

Introduction
Object of the Act
Definition of Contract
Classification of Contract
Essential Elements of a Valid Contract
Suggested Readings

INTRODUCTION

We enter into contracts day after day. Taking a seat in a bus amounts to entering into a
contract. When you put a coin in the slot of a weighing machine, you have entered into a contract.
You go to a restaurant and take meals; you have entered into a contract. In such cases, we do not
even realize that we are making a contract. In the case of people engaged in trade, commerce and
industry, they carry on business by entering into contracts. The law relating to contracts is to be
found in the Indian Contract Act, 1872.
The law of contracts differs from other branches of law in a very important respect. It does not
lay down so many precise rights and duties which the law will protect and enforce; it contains rather
a number of limiting principles, subject to which the parties may create rights and duties for
themselves and the law will uphold those rights and duties. Thus, we can say that the parties to a
contract, in a sense make the law for themselves. So long as they do not transgress some legal
prohibition, they can frame any rule they like in regard to the subject matter of their contract and the
law will give effect to their contract.

OBJECT OF THE ACT

The main objective of the Contract Act is to ensure that the rights and obligations arising out of
a contract are honored and that legal remedies are made available to an aggrieved party against the
party failing to honour his part of agreement. The Act is of great importance to businessmen a site
enables them to plan ahead with the knowledge that what has been promised to them will be
performed by the promisors failing which they will be liable for the loss suffered.
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DEFINITION OF CONTRACT

A contract is a legally binding agreement, that is, an agreement which will be enforced by the
courts. Salmond defines contract as, “an agreement creating and defining obligation between the
parties.” Halsbury defines a contract to be, “an agreement between two or more persons which is
intended to be enforceable at law and is constituted by the acceptance by one party of an offer made
to him by the other party to do or abstain from doing some act.”

The definition of the term ‘contract’ given in the Act is based on the definition given by
Halsbury. Section 2(h) of the Indian Contract Act defines a contract as, “An Agreement which is
enforceable by law.”This definition has two important components which constitute the basis for a
contract. They are :

Agreement : An agreement gives birth to a contract. An agreement is defined as, “every

promise and every set of promises forming consideration for each other.” (Section 2(e)). A proposal
when accepted becomes a promise. Thus an agreement is an accepted proposal. An agreement
comes into existence only when one party makes a proposal or offer to the other party and the other
party signifies his assent thereto. In short, an agreement is the sum total of offer and acceptance.
The following are the characteristics of the definition of agreement as given above :
Plurality of persons : There must be two or more persons to make an agreement because one
person cannot enter into an agreement with himself.
Consensus ad-idem: An agreement is necessarily the outcome of consenting minds or
consensus ad-idem, i.e., the two contracting parties must agree as regards the subject-matter of the
contract at the same time and in the same sense.

Legal Obligation : Although every contract is an agreement, there are many kinds of
agreements which are not contracts. An agreement to become a contract must give rise to a legal
obligation. Obligation is an undertaking to do or to abstain from doing some definite act. The
obligation must be such as is enforceable bylaw. In other words, it must be a legal obligation and
not merely moral, social or religious. To take an example, “Please, come to my house”, says P to D,
“and we shall go out for a walk together”. D came to the house of P but P could not leave the house
because of some important engagement. D cannot sue P in damages for his not fulfilling the
promise, the reason being that there had been no intention between D and P to create any legal
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obligation by the engagement as made between them. In the circumstances, there was, in the eye of
law no contract between P and D. Contracts must not be the sports of an idle hour, or mere matters
of pleasantry, never intended by the parties to have any serious effect whatever.
Another kind of obligation which does not constitute a contract is the arrangement made
between husband and wife. Such agreements are purely domestic and are not intended to create
legal relationship.

The Leading case on this point is Balfour V. Balfour. The points decided were: Agreements

which do not create legal relations are not contracts.Agreement between husband and wife in

domestic affairs is not a contract.

Facts of the case are :

Mr. Balfour was employed in Ceylon. Mrs. Balfour owing to ill health, had to stay in
England and could not accompany him to Ceylon. On the occasion of leaving her in England for
medical treatment Mr. Balfour promised to send her £30 per month while he was abroad. But Mr.
Balfour failed to pay that amount. So Mrs. Balfour filed a suit against her husband for recovering
the said amount. The court held that it was a mere domestic agreement and that the promise made
by the husband in this case was not intended to be a legal obligation. Hence the suit filed by Mrs.
Balfour was dismissed since there was no contract enforceable in a court of law.
In Balfour v. Balfour, the intention not to create a legal obligation was clear from the
conduct of the parties. On the other hand the parties may make this intention clear by an express
statement in the contract.
The main distinction between a legal obligation and a social or religious obligation is that
the former involves money value but the latter does not. In order to constitute a contract an
agreement must create legal obligation. It is this theme which has given rise to the popular saying :
“All contracts are agreements but all agreements need not be contracts.”
It may be noted that the law of contract deals only with such obligations which spring from
agreements. Obligations which are not contractual in nature are outside the scope of the law of
contract. For example, obligation to maintain wife and children, obligation to comply with the
orders of a court and obligation arising from a trust do not fall within the scope of the Contract Act.
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CLASSIFICATION OF CONTRACT

Before dealing with the various essentials of a valid contract one by one in detail, it is
desirable to discuss the “various types of contract,” because we shall be using terms like ‘voidable
contract’, ‘void contract’, ‘void agreement’, ‘unenforceable contract’, etc., very often in the course
of our discussion. The classification of contracts from the various points of view may be discussed
as follows :

From the point of view of enforceability

Contracts may be classified according to their enforceability as (i) valid (ii) void contracts or
agreements (iii) voidable (iv) illegal and (v) unenforceable.

Valid Contract : A valid contract is one which satisfies all the requirements prescribed by law for
the validity of a contract, i.e. the essential elements laid down in Sec.10. A valid contract creates in
favour of one party a legal obligation binding upon the other.

Void Contract : A contract which was legal and enforceable when it was entered into may
subsequently become void due to impossibility of performance, change of law or other reasons.
When it becomes void the contract ceases to have legal effect. In other words, a void contract is not
valid from its inception but subsequent to its formation, it becomes invalid and destitute of legal
effect because of certain reasons. [Sec. 2(j)]

Void Agreement : “An agreement not enforceable by law is said to be void.”—Sec.2(g). A void
agreement has no legal effect. It confers no rights on any person and creates no obligations. An
agreement made by a minor; agreements made without consideration (except the cases coming
under Sec.25); certain agreements against public policy; agreements in restraint of trade or in
restraint of marriage or in restraint of legal proceedings, etc. are examples of void agreements.

Voidable Contract [Section 2(i)] : A voidable contract is a contract which can be avoided or set
aside at the option of one of the parties to the contract. It can be set aside at the option of the party
defrauded. Until it is avoided or rescinded by the party entitled to do so by exercising his option in
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that behalf, it remains valid. But the aggrieved party must exercise his option of rejecting the
contract (i) within a reasonable time and (ii) before the rights of third parties intervene, otherwise
the contract cannot be repudiated.

Example. X threatens to kill Y if he does not sell his new Ambassador car to X for Rs.12,000. Y
agrees. The contract has been brought about by coercion and is voidable at the option of Y, i.e. the
aggrieved party.A, with the intention to deceive B, falsely represents that fifty lakh bulbs are made
annually at A’s factory, and thereby induces B to buy the factory. The contract has been caused by
fraud and as such is voidable at the option of B.

The Indian Contract Act has laid down certain other situations also under which a contract
becomes voidable. They are :

When a contract contains reciprocal promises, and one party to the contract prevents the
other from performing his promise, then the contract becomes voidable at the option of the party so
prevented (Sec.53).

Example : A, contracts with B that A shall repair B’s house for Rs.1000. A is ready and willing to
execute the work accordingly, but B does not supply him material and thus prevents him from doing
so. The contract is voidable at the option of A.

When a party to the contract promises to do a certain thing within a specified time, but fails
to do it, then the contract becomes voidable at the option of the promises, provided at the time of
entering into contract, the intention of the parties was that the time would be the essence of the
contract (Sec.55).

Example: A contracts with B that A shall whitewash B’s house for Rs.1000 within fifteen day. But
A does not turn up within the specified time. The contract is voidable at the option of B.

Consequences of Recession of Voidable Contract: Section 64lays down the rights and
obligations of the parties to a voidable contract after it has been rescinded. The section states that
when a person at whose option a contract is voidable rescinds it, the other party thereto need not
perform any promise therein contained in which he is a promisor. If the party rescinding a voidable
contract has received any benefit under the contract, he must restore such benefit to the person from
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whom it was received. For example, when a contract for the sale of a car is avoided on the ground
of coercion, any advance received on account of the price must be refunded. The object of this
refund of money is to ensure that the parties are placed on the same footing in which they would
have been without the contract. However, it must be remembered that the benefit which is to be
restored must have been received under the contact. If a certain amount has been received as a
security or as an earnest money for the due performance of the contract, such deposit is not to be
returned if the promisor fails to fulfill the promise because it is not a benefit received under the
contract.

Illegal or Unlawful Contract : The word illegal means ‘contrary to law’ and the term
contract refers to an agreement enforceable by law. Therefore to speak of an ‘illegal contract’
involves a contradiction in terms as it amounts to saying that an agreement contrary to law is
enforceable by law. Thus it will be appropriate to use the term illegal agreement in place of illegal
contract. An illegal agreement is one which is against the law enforceable in India. The term ‘illegal
agreement’ has a wider conception than ‘void agreement.’ All illegal agreements are void but all
void agreements are not necessarily illegal, e.g., an agreement with a minors is void but not illegal.
Unenforceable Contract : A contract may be valid, but it may not, at the same time, be
given effect to in a court of law. The statement is paradoxical; but it is nonetheless true. The
contract is valid, because judged by the canons of law which are applied to test the validity of a
contract, the contract is flawless; but it cannot be enforced because of certain technical defects such
as absence of writing, registration, requisite stamp, etc., or time barred by the law of limitation.
Suppose A gives a loan of Rs.1000 to B. The contract of loan, let us assume, is valid in this case;
but if A does not sue on the contract within the period prescribed by law and allows his claim to be
barred by time, he cannot afterwards recover it fromB. He cannot recover it, not because the
contract was invalid, but because the Statute of Limitation bars the suit. Similarly, an oral
arbitration agreement is unenforceable, because the law requires an arbitration agreement to be in
writing. It is important to remember here that some of the contracts can be enforced if the technical
defect is removed. For example, if a document embodying a contract is under stamped, the contract
is unenforceable, but if the requisite stamp is affixed (if allowed), thecontract becomes enforceable.
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Difference between void and voidable contracts : A void contract is one which is
unenforceable by law. It has no legal existence and, therefore, is destitute of legal effect, whereas a
voidable contract is that agreement which is enforceable by law at the option of aggrieved party
thereto, but not at the option of the other or others. It is valid so longas it is not rescinded or
impeached by the party entitled to do so, i.e. the aggrieved party. If the party fails to use his right of
avoidance within a reasonable time, the agreement would be binding.
Difference between void and illegal contracts : In all contracts there must be legality,
otherwise they are void and hence destitute of legal effect. Some contracts are illegal in themselves,
e.g., contracts of immoral nature, contracts against public policy, contracts in restraint of trade. All
illegal contracts are void but all void contracts are not illegal. An illegal contract or agreement is
destitute of legal effect ab-initio. The difference between void and illegal contracts is significant in
cases of collateral transactions, e.g. A,aperson, who lent money to another to pay bets already made
or lost is not precluded from recovering it; but money advanced for illegal transactions cannot be
recovered. Thus the term‘illegal’isnarrowerinmeaningthan‘void’or‘voidable’.Allillegalcontractsare
void, but all contracts which are void are not necessarily illegal.

From the point of view of creation:

From the point of view of creation, contracts may be two types : (i) express contracts, and
(ii) implied contracts.

Express Contract : Contracts entered into between the parties by words spoken or written, are
termed as express contracts. For example, if X tells Y on telephone that he offers to sell his house
for Rs.20,000 and Y in reply informs X that he accepts the offer, there is an express contract.

Implied Contract : Where the offer or acceptance is made not by words, written or spoken, but by
acts and conduct of parties, it is termed as an implied contract. Thus, where X, a coolie, in uniform
takes up the luggage of Y to be carried out of a railway station without being asked by Y, and Y
allows the coolie to do so, the law implied here that Y agreed to pay for the services of X, and there
is an implied contract between X and Y. Similarly, when A takes a seat in a bus, an implied contract
comes into being—a contract according to which A will pay the prescribed fare to the
conductor(i.e.,theagent of the bus company) for taking him to his destination.

From the point of view of extent of execution or classification according to performance : On

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the basis of extent to which the contracts have been performed, we may classify them as (i)
executed contract, and (ii) executory contracts.

Executed Contract : An executed contract refers to that contract in which both the parties have
fulfilled their respective obligations. In other words, an executed contract is one where nothing
remains to be done by either party.

Example: X agrees to paint a picture for Y for Rs.20. When X paints the picture and Y pays the
price, it becomes an executed contract.

Sometimes though the contract mayappear to be completed at once yet the effects of it may
continue, e.g., when a person buys a bun for a penny and subsequently breaks his tooth due to a
stone in it, he has a right to recover damages from the seller.
Executory Contract : An executory contract refers to that contract in which both the parties to the
contract have yet to perform their respective obligations. In the example referred to above, the
contract is executory, if X has not yet painted the picture and Y has not paid the price. Similarly, if
A agrees to engage M as his servant from the next month, the contract is executory.

A contract may sometimes be partly executed and partly executory. Thus if Y has paid the price to
X and X has not yet painted the picture, the contract is executed as to Y and executory as to X.

On the basis of execution, the contracts may also be classified as (i) unilateral contracts,
and (ii) bilateral contracts.

Unilateral Contract: A contract is said to be unilateral where one party to a contract has performed
his share of obligation either before or at the time when the contract comes into existence. It is only
the obligation of the other party which remains out standing at the time of formation of the contract.
Such contracts are also termed as contract with executed consideration. Thus, a contract of loan,
where money has been advanced by the credit or is an example of unilateral contract, because the
creditor has done what he was to do under the contract, it remains for the debtor to repay the debt.
Bilateral Contract : In a bilateral contract obligations of both the parties are outstanding at the
time of the formation of the contract. They are, executory contracts or contracts with executory
consideration. In other words, in a bilateral contract, there is only a promise for a promise. For
example, where X promises to sell his car to Y after 15 days and Y promises to pay the price on the
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delivery of the car, the contract is bilateral as obligations of both the parties are outstanding at the
time of formation on the contract.

It is to be remembered that a contract comes into being on the date on which it is entered into
between the parties. The date of its execution is immaterial for determining the validity of the
contract. In other words, a contract is a contract from the time it is made and not from the time its
performance is due.

From the point of view of form or mode of the contract : There are four kinds of
contracts : formal contracts, contracts under seal or specialty contracts, simple contracts and quasi-
contracts.

Formal Contracts : These are in vogue in England. These have not received recognition by the
Indian Contract Act. Their validity depends upon their form alone. Considerationis not essential in
such contracts. They are required to satisfy certain legal formalities.
Contract under seal or speciality contracts : These contracts are those contracts, the terms of
which have been written down on a paper and are signed, sealed and delivered. The following
contracts must be made under seal, otherwise they will not be valid :Contracts made without
consideration. Contracts of lease relating to and for more than three years. Contracts entered into by
corporations or
companies. Contracts relating to transfer of a British shipor any share therein.

Simple Contracts : Contracts which are not formal are known as simple contracts. They are also
known as ‘parole contracts’. They are made by words, spoken or written. They are to be valid only
when they are supported by consideration.

Quasi-Contracts:Contractualobligationsaregenerallycreatedvoluntarily;butthere are some

obligations which are not contractual, but which are treated as such by law, that isto say, there is no
contract in fact, but there is one in the contemplation of law. Such contracts are called quasi-
contracts. Thus, if X pays a sum of money to Y believing himto be his creditor, while as a matter of
fact he was not, he is bound to return the moneyto X on the assumption that the above sum was
given to him by way of loan. The Contract Act has rightly named such contracts as “certain
relations resembling those created by contract.”
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ESSENTIAL ELEMENTS OF A VALID CONTRACT

We know that there are two elements of a contract : (1) an agreement; (2) legal obligation.
Section 10 of the Act provides for some more elements which are essential in order to constitute a
valid contract. It reads as follows :

“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 not hereby expressly declared to be void.”
Thus the essential elements of a valid contract can be explained as follows :

1. Agreement : As already mentioned, to constitute a contract there must be an agreement. An

agreement is composed of two elements – offer and acceptance. The party making the offer is
known as the offerer or, the party to whom the offer is made is known as the offeree. Thus, there
are essentially to be two parties to an agreement. They both must be thinking of the same thing in
the same sense. In other words, there must be consensus-ad-idem.

An offer to be valid must fulfill certain conditions, such as it must intend to create legal
relations, its terms must be certain and unambiguous, it must be communicated to the person to
whom it made, etc. An acceptance to be valid must fulfill certain conditions, such as it must be
absolute and unqualified, it must be made in the prescribed manner, it must be communicated by an
authorized person before the offer lapses.

Thus, where‘A’ who owns 2cars ‘X’and‘Y’ wishes to sell car ‘X’ for Rs.30,000. ‘B’, an
acquaintance of ‘A’ does not know that ‘A’ owns car ‘X’ also. He thinks that ‘A’ owns only car ‘Y’
and is offering to sell the same for the stated price. He gives his acceptance to buy the same. There
is no contract because the contracting parties have not agreed on the same thing at the same time,
‘A’ offering to sell his car ‘X’ and ‘B’ agreeing to buy car ‘Y’. There is no consensus-ad-idem.

2. Intention to create legal relationship : As already mentioned there should be an intention

on the part of the parties to the agreement to create a legal relationship. An agreement of a purely
social or domestic nature is not a contract.

However, even in the case of agreements of purely social or domestic nature, there may be
intention of the parties to create legal obligations. In that case, the social agreement is intended to
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have legal consequences and, therefore, becomes a contract. Whether or not such an agreement is
intended to have legal consequences will be determined with reference to the facts of the case. In
commercial and business agreements the law will presume that the parties entering into agreement
intend those agreements to have legal consequences. However, this presumption may be negatived
by express terms to the contrary. Similarly, in the case of agreements of purely domestic and social
nature, the presumption is that they do not give rise to legal consequences. However, this
presumption is rebuttable by giving evidence to the contrary, i.e., by showing that the intention of
the parties was to create legal obligations.

Example: There was an agreement between Rose Company and Crompton Company,
whereof the former were appointed selling agents in North America for the latter. One of the clauses
included in the agreement was : ‘This arrangement is not…. a formal or legal agreement and shall
not be subject to legal jurisdiction in the law courts.”

Held that: This agreement was not a legally binding contract as the parties intended not to have
legal consequences (RoseandFrankCo.v.J.R.CromptonandBros.Ltd.(1925)
A.C.445).

3. Competency of parties : The parties to the agreement must be competent to contract. If

either of the parties to the contract is not competent to contract, the contract is not valid. According
to Section 11 following are the persons who are competent to contract –
Who are of the age of majority according to the law to which they are subject; who are of
sound mind; Who are not disqualified from contracting by any law to which they are subject.
Examples A patient in alunaticasylum who is at intervals of sound mind may make a contract
during those intervals. A same man, who is delirious from fever or who is so drunk that he cannot
understand the terms of a contract, or form a rational judgment as to its effect on his interests, cannot
contract whilst such delirium or drunkenness lasts.

4. Free Consent: An agreement must have been made by free consent of the parties. A
consent may not be free either on account of mistake in the minds of the parties or on account of the
consent being obtained by some unfair means like coercion, fraud, misrepresentation or undue
influence. In case of mutual mistakes, the contract would be void, while in case the consent is
obtained by unfair means, the contract would be voidable.
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Examples X has two scooters, one is blue and the other green. He wants to sell his blue
scooter. Y who knows of only X’s green scooter offers to purchase X’s scooter for Rs. 5,000. X
accepts the offer thinking it to be an offer for his blue scooter. Held, consent is not free since both the
parties are not understanding the same thing in the same sense. An old man executed a sale deed
thinking it to be a power of attorney and the deed before execution was not ready over to him. Held,
there was no free consent of the man and the contract is not binding on him.

5. Lawful consideration : All contracts must by supported by consideration. Gratuitous

promises are not enforceable at law. An agreement made for an unlawful consideration is void.
Lawful consideration requires both the presence of consideration and the lawfulness of
consideration.

Example: A promises to obtain for B an employment in public service and B promises to pay
Rs. 1,000 to A. The agreement is void as the consideration for it is unlawful.

Lawful object : The object of an agreement must be lawful. Object has nothing to do with
consideration. It means the purpose or design of the contract. Thus, when one hires a house for use
as a gambling house, the object of the contract is to run a gambling house. According to Section 23,
the object is said to be unlawful if –
It is forbidden by law;
it is of such nature that if permitted it would defeat the provisions of any law;
It is fraudulent;
It involves an injury to the person or property of any other;
the court regards it is immoral or opposed to public policy.

Examples A, B and C enter into an agreement for a division among them of gains acquired, or
to be acquired, by them by fraud. The agreement is void, as its object is unlawful (Illustration (e) to
Sec. 23).A promises to obtain for B an employment in the public service, and B promises to pay Rs.
1,000 to A. The agreement is void as the consideration for it is unlawful (Illustration (f) to Sec. 23).
A promises B to drop a prosecution which he has instituted against B for robbery, and B promises
to restore the value of the things taken. The agreement is void, as its object is unlawful (Illustration
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(h) to Sec. 23).

6. Agreements not expressly declared void : The agreement must not have been declared to
be expressly void. Agreements mentioned in sections 24 to 30 have been expressly declared to be
void.Under these provisions, agreement in restraint of marriage, agreement in restraint of legal
proceedings, agreement in restraint of trade and agreement by way of wager have been expressly
declared void.

Examples A makes a contract with B that he will marry nobody except B, and if he marries
somebody else, he will pay a certain sum of money to B, the contract is void; because there is no
promise of marriage on either side and the agreement is purely restrictive (Lowe v. Peers).An
agreement made by a married man that after the death of his wife, he will marry the plaintiff is void ;
because it interferes with the security of marriage.
Where X and Y enter into an agreement which provides that if England’s cricket team wins
the test match, X will pay Y Rs.200, and if it loses, Y will pay Rs.200to X. Nothing can be recovered
by the winning party under the agreement as it is by the winning party under the agreement as it is a
wagering contract.

Where A and B enter into a wagering agreement and each deposits Rs.200 with C
instructing him to pay or give the total sum to the winner, no suit can be brought by the winner for
recovering the bet amount from C,the stake-holder. Further, if C had paid the sum to the winner, the
loser can not bring a suit, for recovering his Rs.200, either against the winner or against C, the
stake-holder, even if C had paid after the loser’s definite instructions not to pay.
7.Certainty and possibility of performance : The terms of the contract must be precise and
certain. It cannot be left vague. A contract may be void on the ground of uncertainty. Thus a
purported acceptance of an offer to buy a lorry ‘on-hire-purchase terms’ does not constitute a
contract if the hire-purchase terms are never agreed. (Scammell (G) and Nephew Ltd. v. Ouston
(1941) A.C. 251). Similarly an agreement ‘subject to war clause’ is too vague to be enforceable.
(Bishop and Barber Ltd. v. Anglo- Eastern Trading and Industrial Co. Ltd. (1944) K.B. 12). The
terms of the agreement must also be capable of performance. An agreement to do an impossible act
cannot be enforced.
8. Legal formalities : An oral contract is a perfectly valid contract, except in those case where
writing, registration etc. is required by some statute. In India writing is required in cases of sale, mortgage,
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lease and gift of immovable property, negotiable instrument; memorandum and articles of association of a
company, etc. Registration is required in cases of documents coming within the scope of Section 17 of the
Registration Act.

All the elements mentioned above must be present in order to make a valid contract. If any one of them is
absent the agreement does not become a contract.

SUGGESTED READINGS

Gulshan & G .K. Kapoor, Business Law, New Age International Publishers, New Delhi.
S. C. Kuchhal Mercantile Law, Vikas Publishing House, NewDelhi.

S. S. Gulshan, Business Law, Excel Books, New Delhi.

Akhileshwar Pathak,Legal Aspects of Business Tata McGraw Hill PublishingCo. Ltd., New Delhi.