Discuss fully essentials of valid contract
11/September/2025 10:45
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Perfect — this is one of the most important questions from the Indian Contract Act, 1872. Let’s go in detail but in a structured, exam-ready format.
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Essentials of a Valid Contract
(As per the Indian Contract Act, 1872)
? Section 2(h): “An agreement enforceable by law is a contract.”
This means Contract = Agreement + Legal enforceability.
For an agreement to become a contract, it must fulfill certain essentials.
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1. Offer and Acceptance (Sec. 2a & 2b)
There must be a lawful offer by one party and a lawful acceptance by the other.
Both must be clear, definite, and communicated properly.
Example:
A offers to sell his car to B for ₹3,00,000. B accepts → valid offer and acceptance.
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2. Intention to Create Legal Relationship
Parties must intend that their agreement should create legal obligations, not just social or domestic promises.
Example:
A invites B for dinner → not a contract (no legal intention).
A agrees to sell goods to B → contract (legal intention).
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3. Lawful Consideration (Sec. 2d)
Consideration = “something in return.”
Must be real, lawful, and have value in the eyes of law.
Consideration may be past, present, or future.
Example:
A sells his bike to B for ₹50,000 → lawful consideration.
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4. Capacity of Parties (Sec. 11)
The parties must be:
Of the age of majority (18 years or more),
Of sound mind,
Not disqualified by any law (e.g., alien enemies, insolvents).
Example:
Contract with a minor is void.
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5. Free Consent (Sec. 13 & 14)
Consent must be free and genuine. It should not be caused by:
Coercion
Undue influence
Fraud
Misrepresentation
Mistake
Example:
A threatens B to sell land at a low price → not free consent → voidable.
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6. Lawful Object (Sec. 23)
The object (purpose) of the contract must be legal.
If it is illegal, immoral, or against public policy → contract is void.
Example:
A promises to pay B ₹10,000 to smuggle gold → void agreement.
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7. Certainty and Possibility of Performance (Sec. 29 & 56)
Terms must be clear, definite, and certain.
The act to be performed must be possible.
Example:
A promises to sell “100 kg of rice of best quality” → uncertain (not specific).
A promises to bring stars from the sky → impossible → void.
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8. Not Expressly Declared Void
The agreement should not be one that the Act expressly declares void.
Examples of void agreements:
Wagering agreements,
Agreements in restraint of marriage,
Agreements in restraint of trade, etc.
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9. Legal Formalities
Some contracts must be in writing (e.g., lease, sale of property).
Some must be registered under law.
If required formalities are not followed, the contract may not be valid.
Conclusion
For a contract to be valid, it must satisfy all essentials under the Indian Contract Act, 1872.
If any essential is missing, the agreement may become void, voidable, or unenforceable.
Hence, these essentials form the backbone of contract law.
