The Indian Contract Act provides the basic rules that govern agreements and contracts in business. Every business transaction—purchase, sale, service, employment, partnership, etc.—involves contracts in some form. This topic explains what a contract is, the essential elements of a valid contract, and the main types of contracts asked in exams.
So, all contracts are agreements, but all agreements are not contracts.
Offer is a proposal; acceptance is agreement to the proposal. Valid acceptance must be:
Consideration is “something in return.” It may be:
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Agreement vs contract (any three points):
Essential elements (any three):
(Also: free consent, lawful object, certainty, possibility, not expressly void.)
Business law encompasses all of the laws that dictate how to form and run a business. This includes all of the laws that govern how to start, buy, manage and close or sell any type of business. Business laws establish the rules that all businesses should follow.
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The Indian Contract Act provides the basic rules that govern agreements and contracts in business. Every business transaction—purchase, sale, service, employment, partnership, etc.—involves contracts in some form. This topic explains what a contract is, the essential elements of a valid contract, and the main types of contracts asked in exams.
So, all contracts are agreements, but all agreements are not contracts.
Offer is a proposal; acceptance is agreement to the proposal. Valid acceptance must be:
Consideration is “something in return.” It may be:
Competent parties are those who:
Consent is free when it is not caused by:
An agreement is unlawful if its object or consideration is:
Contracts are commonly classified as:
Quasi contracts are obligations imposed by law to prevent unjust enrichment, even without an agreement (e.g., finder of goods).
Case: A agrees to sell his bike to B for ₹20,000. B pays ₹5,000 advance. Later A refuses to sell without any valid reason.
Legal view: If essentials of valid contract are present, the agreement is enforceable and B may seek remedy (specific relief/damages depending on law and facts).
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A contract is an agreement enforceable by law. For a contract to be valid under the Indian Contract Act, certain essential elements must be present. If any essential element is missing, the agreement may become void, voidable or unenforceable.
Essential elements of a valid contract:
Thus, a valid contract requires both mutual agreement and legal enforceability with all essential conditions satisfied.