CONTRACT

(THE INDIAN CONTRACT ACT ,1872)

CONTENTS :

• INTRODUCTION

• MEANING

• DEFINITIONS

• ESSENTIAL ELEMENTS OF A VALID CONTRACT

• KINDS OF CONTRACTS
INTRODUCTION :

• Contracts are in every aspect of our everyday lives. When you rent a home, you
have to abide by the terms of a lease.

• If you have a mortgage on your home, you essentially have a contract with your
bank to pay back the money they lent you.

• When you go to work, the terms and conditions of your employment are likely
outlined in a written employment contract.

• You are under a contract whenever you use your mobile phone or queue up your
favorite show on your television subscription service.
MEANING :

• What is a contract?

A contract is a type of agreement where there is an exchange of legally enforceable promises

between parties.

• A contact is a legally binding agreement.

• All contracts are agreements but all agreements are not contracts.

• Contract must have the following two elements :

1. An Agreement , and
2. Enforceability of an agreement
DEFINITIONS :

• According to section 2(h) of the Indian Contract Act , 1872;

“An Agreement enforceable by law is contract.”

• According to SIR FREDRICK POLLOCK ;

“Every Agreement and promise enforceable by law is a
contract.’’
• According to Salmond ;
“A contract is an agreement creating and defining
obligations between the parties.”
 ESSENTIAL ELEMENTS OF A VALID CONTRACT :

1. Two or more parties

2. Proposal and acceptance Two or more
parties
3. Intention to create Legal Relationship
Intention to
4. Free consent Free consent create Legal
Relationship
ESSENTIAL
5. Competent parties ELEMENTS OF A
VALID
6. Lawful object CONTRACT

7. Lawful consideration Competent

Intention to
create Legal
parties
8. Certainity and Possibilities of Performance Relationship

9. Agreements not declared Void Lawful

object
10. Legal formalities
 KINDS OF CONTRACTS
1. On the basis of mode of Formation :
a) Express Contract : A contract is said to be express where it is entered
into by words or written.
b) Implied Contract : A contract is said to be Implied where no words are
conducted.
c) Quasi Contract : Quasi Contract is created by law.

2. On the basis of Performance of contract :

a) Executed Contract : When both the parties fulfilled their obligation ,
then, it is known as an executed Contract.
b) Executory contract : A contract is said to be Executory contract when it is
not yet executed.
c) Unilateral contract : A contract in which only one party has to perform their obligation
at the time of formation of contract , is known as Unilateral contract .
d)Bilateral contract : In these contracts , both the obligation are outstanding.
3. On the basis of the Form of contracts :
a) Formal contracts : A formal contract is a contract where the parties have signed under seal.
b) Simple contracts : All contracts other than formal contracts are termed as Simple contracts.

4.On the basis of the validity :

a) valid contract : A valid contract is an agreement which is binding a
enforceable.
b) Voidable Contract : A valid contract which may be either affirmed or reje
option of one of the parties.
c) Void contract : A contract may be deemed void if it is not enforceable as it
originally written.
d) Illegal contract : All illegal contracts are void but all void contracts are not necessarily
e) Unenforceable Contract : A contract which is not valid due to technical defects is known as
Unenforceable Contract.
f) Void agreement : An agreement not enforceable by law is said to be void.
THANK YOU !!