Essential Elements of a

Contract
What is offer and Acceptance?

 Offer- When a person (offeror) expresses the willingness to do or

not to do something to obtain the assent of another person
 Section 2(a) of the Contract Act,1872
 Acceptance- When the person (offeree) accepts the proposal
 S- 2(b) of the Contract Act of 1872
 Offer + Acceptance = Promise
 Promise + Consideration = Agreement
What is Consideration and Agreement?

 Consideration- Value of the contract

 Any act or abstinence done by the promisee (offeree) at the
desire of the promisor (offeror)
 S- 2(d), the Contract Act, 1872
 Agreement- Every promise and set of promises forming the
consideration for each other is an agreement
 S- 2(e), the Contract Act, 1872
Let’s see an example…
 Mr. Simon offers Mr. Diamond to sell his guitar for
5,000 taka. Mr. Diamond accepts the offer.
 Now, they have an agreement
 Is this a contract?
 What does it take to consider an agreement as a
contract?
 What is the difference between an agreement and a
contract?
What is a Contract?
 An agreement enforceable by law is a contract
 S- 2(h) of the Contract Act, 1872
 What is ‘Legal Enforceability’?
 There are some criteria those make an agreement as legally
enforceable
 If one or more of the criteria are not fulfilled the contract is not
a valid one
 Legally enforceable agreements are valid contracts
 Agreements not legally enforceable are just void agreements
Legal Enforcement Criteria
 Intention to create a legal relation (not social or moral in
nature)
 Capacity of the parties (Age, mental state, not prohibited by
law)
 Free consent of the parties (not forceful or fraudulent)
 Legality of consideration
 Legality of object
 Not declared by law as void
 Possibility of performance
Example of a void agreement

 Mr. Simon offers Mr. Diamond to sell his guitar for 10

gram of cocaine. Mr. Diamond accepts the offer
 This is an agreement between Mr. Simon and Mr.
Diamond which is not enforceable by law
 A void agreement due to illegal consideration
Types of a Contract
 On the basis of legal enforceability or legal validity a contract is of three types
 Valid Contract- Enforceable by law
S- 2(h) of the Contract Act, 1872
 Voidable Contract- Depends on the party whose consent was not free
S- 2(i) of the Contract Act, 1872
 Void Contract- Not enforceable by law
S- 2 (j) of the Contract Act, 1872

 All contracts are agreements, but all agreements are not

contracts
Thank You!