Nature of Contract

Dr.Aditya Tomer
Amity Law School,
Noida
 Introduction

 Definition

 Essentials

 Classification
 Definition of Contract
 According to Sec 2 (h)- “an agreement
enforceable by law”.

 Two basic elements of contract are:-

1. Agreement
2. Enforceable by law
 Agreement
 Agreement- defined under sec 2 (e) –
 Agreement = Offer + Acceptance
 Agreement is a very wide term i.e it may
social or legal
 The essence of an agreement is
“Consensus ad idem”- means meetings of the
minds against the subject matter in the same
sense and at the same time.
 Enforceability by Law
 Also known as Legal Obligation.
 An agreement must give rise to legal
obligation to become a contract.
 An agreement which give rise to social
obligation is not a contract.
 Conclusion:-
“All Contracts are Agreements but All
Agreements are not Contracts”.
 Essentials of Contract (Sec. 10)
 Lawful Offer
 Lawful Acceptance
 Lawful Consideration
 Lawful Object
 Capacity of Parties
 Free Consent
 Intention to create Legal Relations
 Legal Formalities
 Classification of Contract

 1. Classification according to Formation

 2. Classification according to Performance

 3. Classification according to Validity

Classification according to Formation

 1. Express Contract- when the offer or

acceptance of any promise is made in
words.

 2. Implied Contract- when the offer or

acceptance of any promise is made
otherwise than in words.
 Classification according to
Performance
 1. Executed Contracts- both’ve fulfilled

 2. Executory Contracts- both’ve to fulfill

 3. Unilateral Contracts- only one has

fulfilled
Classification according to Validity
 1. Valid Contract Sec 2 (h)

 2. Voidable Contract Sec 2 (I)

 3. Void Contract Sec 2 (J)

 4. Illegal Agreement
Thanks!